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. 😉
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?
Bill Gates reportedly compared the computer industry with the auto industry and stated, “If Ford had kept up with technology like the computer industry has, we would all be driving $25 cars that got 1,000 miles to the gallon.”
In response to Bill’s comments, Ford issued a press release stating:
If Ford had developed technology like Microsoft, we would all be driving cars with the following characteristics:
1. For no reason whatsoever, your car would crash………Twice a day.
2. Every time they repainted the lines in the road, you would have to buy a new car.
3. Occasionally your car would die on the freeway for no reason. You would have to pull to the side of the road, close all of the windows, shut off the car, restart it, and reopen the windows before you could continue. For some reason you would simply accept this.
4. Occasionally, executing a maneuver such as a left turn would cause your car to shut down and refuse to restart, in which case you would have to reinstall the engine.
5. Macintosh would make a car that was powered by the sun, was reliable, five times as fast and twice as easy to drive – but would run on only five percent of the roads.
6. The oil, water temperature, and alternator warning lights would all be replaced by a single ‘This Car Has Performed An Illegal Operation’ warning light.
7. The airbag system would ask ‘Are you sure?’ before deploying.
8. Occasionally, for no reason whatsoever, your car would lock you out and refuse to let you in until you simultaneously lifted the door handle, turned the key and grabbed hold of the radio antenna.
9. Every time a new car was introduced car buyers would have to learn how to drive all over again because none of the controls would operate in the same manner as the old car.
10. You’d have to press the ‘Start’ button to turn the engine off.
PS – I ‘d like to add that when all else fails, you could call ‘customer service’ in some foreign country and be instructed in some foreign language how to fix your car yourself!!!!