Okay, anyone who knows me understands two things 1) I’m assertive and really don’t mind if the opinions I share go against the grain. I don’t expect people to think like me, but I think it’s important to share all sides of a debate (as evidenced by this post). And 2) I hate it when I don’t understand something.

So when I kept hearing about the Department of Justice’s (DOJ) lawsuit against Apple and 5 of the big six publishers my spidey antennaes started twitching. But I’m not pubbed with the Big 6 (Harper Collins, Hachette, McMillan, Penguin Group, Random House, Simon & Schuster) nor do I have any manuscripts languishing, being held captive sitting on the desk of any editor or agent who will pitch my story to the big guns. So I was just kind of ignoring the tingle.

Then I noticed many authors were becoming impassioned by this discussion throwing around terms like “Agency Model”, “Author’s Guild”, “Collusion”, and “World Domination”, errr … I mean “Amazon Monopoly” and the twitch became a slow, burning vibration that could no longer be ignored. I’ve spent a good part of the last 3 days scouring the internet and annoying other writers to figure out what all the hoopla is about. And what I discovered is that this issue is a lot like taking a wild ride standing on top of a bi-plane… lots of wind with dips, twists and gasping that completely mess up your hair, but don’t seem to go anywhere. It’s very confusing and did I mention emotional? Yep, a bunch of “agreeing to disagree” stuff going on with this one.

First let me start with a couple of definitions:

Wholesale Model (or the way the big guys do it):
Publisher sets price ———-> Retailer gets book at 1/2 publisher’s price ————> Customer pays price RETAILER sets

Agency Model (Digital pubs & Self-Pubs):
Publisher sets price ———-> Retailer sells at set price (but receives 30% of sale) ——–> Customer pays price PUBLISHER set

That’s it in a nutshell. But if you’re like me and want a more indepth explanation check out Macstories. Yeah, I know the graphics on that blog are waaaay better, but I’m so much cuter. 😉

Anyhoodles.

Now the author’s guild (of which I’m not a member) and John Konrath are really slamming the whole Agency model of doing business. Why? Because if hardcover publishers use this model it really screws an author out of royalties. Mr. Konrath has a great post HERE about why it sucks (his words not mine).

For me, I repeat … For ME who is self-published and published through digital publishers, the agency model makes all kinds of sense. I know what royalty rate I’m making and whether it’s on net or cover price when I sign the contract. There are no questions.    Number of books X Royalty Percentage = Royalty Payment    Every. Single. Time.

So what’s all the hoopla you ask? Well, if you’re still with me I’ll explain. (In my terms and with a bit of humor NOT legaleze so hang tight.)

The DOJ is alleging that 5 of the big six publishers and Apple got together over double double lattes and scones to discuss how Amazon was soooo big they could undercut prices of books and sell them at a loss. If left unchecked this bully could eventually push other publishers out of business and become the only game in town. So these 6 discussed banding together and adopting the Agency Model of selling books. If they all agreed to a particular price for books as publishers, then through the agency model the retailer would have to sell them at that set price. No one could undercut. Unfortunately it’s illegal for a group of friends to make these sort of deals  lounging at the spa getting facials. Collusion is a bad thing and it’s the sort stuff that’ll get you a spanking (and not the good kind) and a hefty fine.

Jane from Dear Author has a very nice explanation of the whole lawsuit if you’d like more detail.

So how’s this affecting you as an author? Hmm, well, guess it depends on where your career fits in the publishing spectrum. The publishing landscape is changing faster than Cher at a concert and it’s important we all stay informed. Emotions run high when it affects our business. The trick is to gather all the information and make the best decision for you and your books. What makes sense for me might not be a good marketing strategy for you.

But I’m going to go out on limb and say … regardless of how the DOJ decides this case, I’m not placing bets on Amazon’s bid for world domination. Yeah they’re moving their armies across the proverbial Risk board. But see that strong hold over there at Kobo and the small armies sitting at Barnes & Noble? I’m betting that the next roll of the dice  will bring them right back into the game. What do you think?

 

0 Responses to A Whole Lot of Research in a Tiny Little Post

  • It will be interesting to see how it affects us, won’t it!?! Good breakdown, Nina.

  • Thanks for the run-down. I didn’t even know this was going on. Although I did realized that the big six were not happy with Amazon.

    • Janice – I just kept bumping into it and needed to do some research. I’m sure most readers aren’t aware this is going on and when it’s all said and done hopefully they won’t even feel a hiccup in their book-buying. It seems to be authors who are vaguely aware it’s going on and it could change how their books are contracted and published.

  • Nina, thanks for this clear explanation and for the links. You’re so right that we need to keep abreast of these suits and all the changes going down.

    • Susan – Whether traditionally pubbed or self-pubbed this could affect the publishing landscape. *Now where’s that crystal ball…*

  • Great post, Nina! Thanks for doing all that research to get to the bottom of what’s going on. Like many, I had this issue at the edges of my radar screen, but wasn’t really paying attention. It still amazes me that the Big Six apparently thought they could get away with the collaboration. But I can’t really say I blame them for trying –the Amazon gorilla is making everyone nervous!

    • Gail – Amazon is making everyone nervous. It appears B&N has now asked DOJ to rule in favor of the publishers. Though they weren’t part of the original collusion, it seems they too think what the publishers were trying to accomplish would benefit them as well. Very interesting …

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