Filed under: Bookselling, ebooks, Publishing.
Amazon.com is playing hardball with Hachette, one of the big-5 traditional publishers; it’s previously done such things with Macmillan (the big-5 publisher of which science-fiction giant Tor is part).
Note the template, folks: when Amazon feels it’s got a de facto monopoly, it goes after its suppliers, big and small (what Bill Gates, at Microsoft, used to call “cutting off their air supply”).
Right now, Amazon is luring tens of thousands of independent authors with 70% of gross royalties (and Amazon’s competitors, such as they are, have been forced to match that rate). But when Amazon decides to turn its attention to self-published and independently published authors, I doubt the 70% royalty will stand. Once independent authors are entrenched in that business model, and once their customers are overwhelmingly reading via Kindle devices and apps, the squeeze will begin there, too. Why offer 70%, when you can offer 60%, or 50%, or less? Why only charge big publishers for featured listings (co-op advertising), when you can start asking for money up front from indie authors, too?
Right now is the time that authors’ representatives and writers’ groups should be pushing hard, hard, hard for higher ebook royalties from traditional publishers, who are standing pat at 25% of net (effectively, a 17.5% royalty), because right now may be the only time in history in which we can say we DO have a better-paying alternative, and you HAVE to negotiate if you want to keep us.
Because if we don’t, the traditional publishers know they just have to wait it out until Amazon starts lowering their self-published ebook royalty. Remember, 30% — the current cut Amazon takes on an ebook sale — is way less than the cut they, the chains, or independent bookstores take on non-discounted physical-book sales, and no company in any aspect of publishing has ever said, “Oh, you know those economies that come from electronic distribution and new production methods? Let’s pass those saving on to the author, so that they’ll make more.” The current Amazon epublishing model, like everything else that company or any other publicly traded company does, is a part of a long-term strategy with a single goal: maximizing shareholder profit; generosity or fairness doesn’t figure into the equation.