Big Six Archives - Black Mask

DOJ files antitrust lawsuit against publishers

Alexandra Sokoloff, amazon, Apple, April Hamilton, Big Six, collusion, Department of Justice suit, e-books, Joe Konrath, publisher price fixing Comments Off

Apr 272012

by Alexandra Sokoloff

Last week there was some publishing news so big that I've been wondering ever since why we haven't been talking about it here. But it's like that classic left-wing admonition: "I looked around me at what was happening and wondered why somebody wasn't DOING anything about it... and then I realized I WAS somebody."

Oh, that's right.

So, unqualified as I am to write this post, today I'm posting about it. I'm going to keep it short and mostly link to more qualified sources so that you all can use your Murderati time today to catch up, if you haven't been following along. The news, of course, is that the Department of Justice has filed an antitrust lawsuit against Apple and five of the Big Six publishers, alleging collusion in e-book prices and sales models.

If you haven't read about it, do that first, here.

So what does this mean for us as authors, exactly?

I have no idea.

I can't imagine it's going to be good for advances for traditional book contracts, which have been dropping steadily over the last few years even before this. Damages are being claimed for consumers of e books and not for the authors who have suffered from publishers fixing prices far too high for e books, so there's no restitution coming there.

What I do know is that it's going to mean SOMETHING.

Joe Konrath tends to be right about these kinds of things, so I'd highly recommend reading this blog of his and subsequent ones as this case progresses. And April Hamilton has summed up quite a few of the arguments going on in the publishing world over all this.

What I DON'T recommend is ignoring it as if it's some esoteric business thing that has nothing to do with you.

Writing a book is so hard all on its own that it's very distracting and anxiety-provoking to have to speculate on how something like this lawsuit may affect your own ability to make a living. I know.

When I was a screenwriter, the life was so 24/7 crazy that I adopted the head-in-the-sand attitude of most screenwriters: "Oh, I don't have time to keep up with union issues, I am Too Busy with Very Important Writing."

That is, until an assault by some highly-paid screenwriters on the WGA credits rules so floored and angered me that I got politically involved, so involved that I ended up running for and winning a seat on the WGA Board of Directors.

Now, that wasn't the brightest career move I could have made, because in truth NO ONE has the time to write and serve on a union Board of Directors at the same time. But being on the board did put the reality of the business changes that were going on in the film industry right in my face. Unignorable.

And what I realized was - I've got to get out of this. It's not sustainable. If the film business model is going to keep changing in this direction, I personally won't be able to make a living as a screenwriter in five or six years. Which were remarkably coherent thoughts for such a right-brained person as I am, actually. Absolutely not anything I wanted to think about, much less have to act on, but I knew I couldn't not act.

And I started putting my eggs in other baskets and writing novels while I watched things steadily get worse for screenwriters.

Now I'm making a comfortable living as an author, while a lot of my screenwriter friends have lost their houses and/or haven't had a film job in years.

I'm not trying to sound dire, especially when I'm being so vague about what all this will mean for us. And of course the news that the publishing industry is undergoing a massive sea change is no news at all for anyone who's been paying any attention over the last few years. But I do find some authors' reactions to all of this perplexing, and the idea of silence on the issue alarming. I may not be an expert, but I know this is not a good time to stick my head in the sand.

So I urge you to click through some links, do your own Googling, and be informed. It IS our business.

- Alex

Jockeying for Position in the Muddy Publishing Future

agency model, amazon, Apple, Barnes and Noble, Big Six, Department of Justice, Mike Shatzkin, self publishing, steve jobs Comments Off

Mar 112012

James Scott Bell
Twitter.com/jamesscottbell

His father was a mudder. He loves the slop. Cosmo Kramer, Seinfeld

The future of the book industry got a little murkier this week. The Department of Justice, no less, thickened the soup with its announced intent to go after five of the "Big Six" publishers -- plus Apple -- on charges of collusion. The alleged nefariousness dates back to the wholesale versus agency controversy at Amazon.

Amazon was setting e-book prices lower than the big publishers desired. The pubs were afraid consumers would get used to lower prices, thus cutting into their margins. Also, there was major concern about undercutting a big cash cow for traditional publishing: hardcover frontlist titles. And, of course, they all worried about the future of brick-and-mortar stores as Amazon gobbled up more of the distribution pie.

So Steve Jobs comes along (allegedly) with a plan to take major e-book business away from Amazon. With the iPad just getting fired up, Jobs (allegedly) went to the Big Six and proposed going into an e-book agency model agreement with them (Random House didn't join the circle then, so is not part of the DOJ lawsuit). In return, the publishers would agree to keep their books off Amazon if it sold them at a lower price. In effect the five big publishers, as one, told Amazon You give us the agency model or you don't get our books.

The players, IOW, were jockeying for position with the future in mind. This is what big business does. It's understandable and even desirable in a free market economy so long as the businesses are not running afoul of anti-trust laws.

Amazon, not happy with being forced into agency, decided to take on the publishing industry directly by mimicking it. So they went out and hired industry veteran Larry Kirshbaum to head up the effort. Amazon subsequently made some big name signings – Deepak Chopra and Barry Eisler, for example.

More jockeying.

And now comes a dark cloud dumping rain -- the United States Gummint. The track is suddenly soaked and the mud is kicking up all over everybody.

Who is going to be the best mudder? Who is going to be left behind?

That remains to be seen. But right now it looks like agency pricing will be escorted off the track. If publishers are forced back into wholesale, Amazon will be sitting even prettier than it is now, prices will once again trend downward, and publishers' margins will shrink. There will be renewed howls of "predatory pricing," but the DOJ well knows that's a much harder case to make. So Amazon goes back to selling at loss-leader prices which, in turn, will trickle down to brick-and-mortar stores where margins are razor thin anyway. More stores will probably close. Your local Barnes & Noble, for instance. There is a whole interlocking spiral here that is beyond the scope of this post.

My main interest is in what this all means for writers. For the last couple of years the self-publishing boom has been a net-gain for writers, especially those with a track record. And a backlist. But even new writers who haven't been able to get inside the gates of the Forbidden City are seeing real money as independents.

But in gazing at the horizon in light of the DOJ's action, some are saying that things don't look so rosy. Here is what Mike Shatzkin, the Insightful One, has to say:

Over time, the biggest losers here will be the authors. The independent authors will feel the pain first. Agency pricing creates a zone of pricing they can occupy without much competition from branded merchandise. When the known authors are only available at $9.99 and up, the fledgling at $0.99-$2.99 looks very attractive and worth a try. Ending agency will have the “desired” effect of bringing all ebook prices down. As the big book prices are reduced, the ability of the unknowns to use price as a discovery tool will diminish as well. In the short run, it will be the independent authors who will pay the biggest price of all. But, in the long run, all authors will just get less. They will join the legion of suppliers beholden to a retailer whose mission is to deliver the lowest possible price to the consumer.

I am going to take issue with Mr. Shatzkin on his characterization of writers as the "biggest losers" in all this. Not so. This is simply another development in a long and ever changing contest. Writers who produce, consistently and well, will always have a shot at the rewards of a race well run.

We didn't create the Big Six or Amazon. But we will use them just like they use us. We will make strategic decisions, as they do. It's called doing business, and writers are better positioned than ever to do it in creative ways.

So get on your horse, writer. Learn to ride in the mud. Don’t trust your fate to anybody else. You are responsible for your future, and you need to grab the reins and get into the thick of it.

For example, if you pursue a traditional contract, take a hand in negotiations. Learn what contract terms mean. Negotiate a way to produce non-competing works on your own dime. Don't just blindly hand the reins of your very life and career to somebody else. Ever again.

Have courage. There is a lot of bumping going on in the turns. Don't be timid. Bump back. Hang tough in the saddle. If somebody tries to hit you with his riding crop, take it from him.

While the overall effect may be greater challenges vis-à-vis "discoverability," so what? Facing and overcoming obstacles has always been the lot of the writer. Nothing's different now. You must produce quality, and a lot of it, for the rest of your life to have a writing career. You must add a long tail to your horse. If you do, you have a chance to cross the finish line and get pelted with flowers.

And why, as a writer, wouldn't you do this anyway? We write. Even if some of the big publishers fall off their horses, we writers will still be in the race. Even if bookstore shelf space continues to dry up, we writers will still be coming at you.

Because we are creating stories, which is what people want and need in this crazy world. We are weaving dreams, getting under your skin, keeping you up at night, making you laugh and cry and maybe sometimes throw our books across the room.

We are storytellers.

And we are not going away no matter how hard it rains.