Why Amazon Lowering eBook Prices Is Shit For Authors – and What Readers and Authors Can Do About It

Let me just start with “Oh, I hope I’m wrong.”  Because if I’m wrong, then I’m on the winning side. But I’m strongly figuring that I’m right, and it’s not going to be pretty for us writing types.

Hopefully you’re a writer – or reader – who gives a damn about that. Give me a moment to explain why this anti-trust crap is going to bork us writing folks over, and what you – as an author OR reader – can do about that.

Amazon is ready to drop eBook prices in the wake of publisher settlements. First, I don’t bloody well buy that there was collusion, and secondly, DoJ better bring some anti-trust suits against Amazon right damn quick if they’re willing to call this unfair trade practices. I mean, one of the things in the settlement is that they not “offer a price-matching program to keep e-book prices lowest on one platform (currently Apple’s iBookstore)”. You mean, like Amazon currently does, and has borked over authors with?

Okay, background.  I do digital publishing.  As an author and publisher I usually charge about $5 for a book-length work, $2-3ish for a novella-length work, and a buck for a single short story.1 As a publisher, I give 2/3 or more of the net profits of each book to the authors.2

So here’s the three big ways this will bork authors and small/indie publishers and authors… and ultimately you.

1. That author publishes with one of the “Big 6” New York publishing houses. If those publishing houses can’t make the same profits off of eBooks selling through the Wal*Mart of book retailers, someone is going to not get paid as much. I can damn near guarantee you that the authors will see their percentage of eBook royalties shrink.

I mean, seriously, folks.  We see this all the time.  Businesses lose money, but CEOs get multi-million dollar golden parachutes.  School districts lose levies, and while teaching positions get cut, administrator jobs somehow stay untouched.  You get the idea.

2.  Amazon gets to be the bully a hell of a lot more.  Amazon’s been a real dick this year – the market equivalent of a jock pushing around everyone smaller than him in high school.

DoJ just gave this guy a nerd-hunting license.

Seriously.  This is the equivalent of saying “Hey, local business association, quit picking on Wal*Mart by not selling them stuff as cheap as they want you to.”

This is seriously messed up.  And if you think we’re done with this, you’re being hopelessly clueless. Anyone taking bets on how long that 70% royalty is going to stay in place? Anyone?

And sooner or later, they’ll go after their customers as well. Again, look at Wal*Mart – they raise prices faster than their competitors, and the higher their market share in an area, the higher their prices. Amazon is following Wal*Mart’s business pattern, and that’s not a good story for anyone but Wal*mart.3

3. Your author publishes with a small publisher or is an established self-published digital author. If so, they were probably (unless they published non-fiction) already pricing their books below $10. (So much for the Big Six and Apple controlling all eBook prices, huh?) So now, the price on all eBooks will shrink… and your favorite author and small publisher will get screwed.

See, I figure the Amazon cheerleaders are busy thinking that only the upper ceiling of prices will come down, and their precious $9.99, $4.99, or $0.99 eBook will get to stay right at the same price point. That is not how shit works in economics, people. It’s all about perception. Sure, the top price may be too much, but it’s still the standard for “top of the line”. Common perception is that all other prices are set proportionately to that top price.

For example, I recommend movies based on how much people should pay for them – full price at midnight, full price, matinee, second run (or rent/DVD/stream). And that roughly maps to the book market as well.

Notice how much lower those black hash-marks are?  That’s authors getting paid less.  That ain’t whining folks, that’s economics.

So Amazon is talking about taking that $15 new-release blockbuster eBook and lowering it’s price to that of a feature eBook.  I would expect market forces to shrink all other eBook prices by a third.  Maybe the Big Six won’t notice that as much, but the rest of us aren’t exactly playing with huge per-book profits here.  And with KDP Select – and yes, I know, I know, that post goes live tomorrow – has already established that “free” is the new “$0.99”.

There is a bottom line for creating a good eBook.  Even if you’re talking about doing all of it – art, editing, conversion, uploading – on your own and not paying anyone, it’s a crap-ton of time.4

I think that time – whether for the author, publisher, artist, layout folks – is worth something.  And folks, I did my ramen-eating time.

What You Can Do

Readers: learn to sideload eBooks onto your readers. Don’t let one store dictate prices to you. Buy books from DRM-free sources, like the author or Kobo. Buy your eBooks directly from authors and small publishers whenever possible. Know that once the DRM is off (hint: search “remove DRM eBooks Barnes & Noble nook”, even if you have a Kindle), you can convert an eBook from ePub to Kindle format simply using Calibre (no matter what you’re running on your computer), or even Amazon’s own Kindlegen. Yes, it’s easier (I hear) to buy an ePub from B&N, download it, break the DRM, and then convert it to Kindle format than just break the Kindle DRM. Just pointing out that it’s possible to buy from ALL sources and use them on your Kindle.

Authors: KNOW HOW TO BE INDEPENDENT OF ANY ONE RETAILER OR ONE CONVERSION METHOD. Because you don’t know when the folks you’re relying on will notice, and start raking you over the coals.

Everyone:  Spread the word about this.  Spread the word that authors deserve to be paid.  And then do what you can to pay them.

1 Don’t bitch until you quit buying soda at restaurants or as single servings EVER again. Economy of scale, y’know.
2 This is because I’m well aware how limited of services I offer; other publishers may be well within their rights to offer less. That’s a different post.
3 Worth noting – I think Barnes & Noble would kill for an opportunity like this, as would any other retail company. Amazon just got there first.
4 And yes, Amazon does charge a per-download fee for that 70% royalty rate. So the per-unit cost does not shrink to zero.
Folks, this post took me a good hour and a half to write, link, and proof. If you find this useful, buy the current version of my HOWTO make an eBook or toss me a few bucks in the coffee cups to the side there. Thanks.

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