[ed. I can't attest to the veracity of this, but it sounds just dumb enough to be true.]
Actually, entertaining isn’t the right word. It’s been insane, but the kind of insane that’s unreasonably fun to watch from a safe remove. Like watching a man stop traffic to cross against a green light by shouting, “I’ll bite your car!” As long as it isn’t your car he’s threatening, it’s sort of funny.You might imagine that as an author with published works for sale, I am not at a safe remove when it comes to the publishing industry. That’s sort of true, but only sort-of.
Here’s a superb example of the madness of which I speak, and why I’m not concerned that anyone will be biting my car.
In 2014, there was a drawn-out dispute between Amazon, and Hachette. The latter is one of the largest publishers in the world, and Amazon is a company that sells things, such as books. The essence of the dispute was that Hachette—and all the other publishers we affectionately refer to as ‘the Big 5’—wanted more control over the list price of their e-books on Amazon.
That sounds thoroughly reasonable, and it sort of is, but please let me explain because the crazy is in the details. What was happening was that Amazon was discounting the price of the ebooks, and it may seem like this is something the Big 5 would want to stop, except the markdown was coming off of Amazon’s end. In other words, if Hachette wanted to charge $15.99 for an ebook, and Amazon marked it down to $9.99, Hachette was still paid their cut of the full price of the book.
More people will buy a book at $9.99 than at $15.99, so essentially, the Big 5 was coming out ahead in this arrangement in every conceivable way. They collected royalties at an unreasonably high price point while moving the number of units that corresponded to a lower price point.
So of course that had to be stopped right away.
Hachette fought for, and won from Amazon, the return to something called the Agency Model, whereby they set their price and Amazon wasn’t allowed to reduce that price. So that $15.99 book stayed at $15.99 until Hachette decided to change it.
Soon after that contract was signed, the other Big 5 contracts came due, and they all asked for the same Agency Model arrangement. Thus, the finest minds in publishing—or one might assume—negotiated themselves out of an arrangement whereby they sold more units at a lower cost without suffering the financial impact that comes with a lower unit cost.
On purpose.
This isn’t even the crazy part.
by Gene Doucette | Read more:
Image: Gene Doucette
