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Amazon and the Big Six – Part 4
July 27, 2012
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I promised to give my thoughts on what this all means to indie authors. My answer is…it depends.

Right now Amazon is extremely friendly to the self-publishing author. The royalty rates offered are over and above what anyone could ask for. The ease of publishing to the Kindle store cannot be matched. The market one can reach is world-wide. There’s no arguing any of this. To that extent we should all be eternally grateful to Jeff Bezos for giving us the opportunity. He has supplied the tools needed to get our work out there where the customer can reach it, without having to go through the traditional gatekeepers of the entrenched publishing houses.

So thanks, Mr. Bezos, I, for one, appreciate it.

Is he doing this to help the little guy out? Yes, I want to believe he is and have no reason to think the contrary. Does it also help him and his company? You bet it does.

Right now the self-publishers and Amazon have a symbiotic relationship. The work of one benefits the other. Great, I’m all for that. If Amazon can help me be a successful writer and get my work out to people who like it, than I have no problem supporting him with a cut of the profits. It’s a good deal and we should all take it. If it also supplies him with a little more leverage against the Big Six, well; that’s called business.

The question we all have to ask ourselves is whether we want to go all-in with Amazon, or be a contract worker? Do I enlist in the Amazon army, or am I working for Blackwater? Am I a loyal soldier or a mercenary? Just how good is that Amazon Kool-aid?

It depends on where you see the future heading.

Let’s say you open your e-mail tomorrow and there’s an offer from Thomas-Mercer and an offer from St. Martins Press. You’re already indie published through all the major channels and doing well enough that you caught the attention of both parties. One has a big advance and a decent marketing plan. The other has a smaller advance, but the player is dominant in the business. What do you do?

You’ll need to evaluate where these two companies are going to be in a few years. If the Big Six strip DRM and get their game together, their overall share of the market will increase. If they don’t, Amazon will continue to garner more market share. If Amazon overshoots the mark and attracts the attention of the DOJ, they may loose their dominant player status. If you sign with Amazon it’s an exclusive deal. The only place your fans can get your work is from Amazon. SMP is offering e-book availability from other sources plus their huge print market. With SMP you loose all control for the duration of the contract. Amazon allows you make some decisions and to do a little steering. SMP offers their way or nothing.

So what do you do? You run the numbers and pick the best deal you can. Just like Barry Eisler and Amanda Hocking did. That’s all you can do. Either way, make sure you have the freedom to continue working, and keep an eye on the future at all times.

While you’re waiting for those offers to come, you can be getting ready.

Despite the hype I don’t see print books dying a quick death. I believe e-books will continue to gain a percentage of the market to a certain point and then level off, with print still holding a large chunk of the audience. Then I see e-books slowly gaining more ground over several years as the population ages. Print will then become a specialty item, something reserved for a favorite author that someone collects. I see the hardcover returning in popularity as a purchase by collectors or given as gifts. But that’s years down the road in my opinion.

But what’s happening right now?

Amazon pulled all of IMG’s titles recently while they hammered out a contract dispute. Over 5000 titles were unavailable for a short time. Will it happen again? Who knows? We don’t know if it was Amazon swinging their big stick, or IMG being pig-headed. Either way, those authors lost sales.

Never put all your eggs in one basket.

 I don’t know who said it first and I really don’t care. But it rings true for people like us self-publishers. If you decide to go all-in with Amazon through one of their programs, that’s fine. A bold bet on your part, but I can see why you would be tempted to do it. Without seeing the contract, I would beware of such a business move. Putting all your work in someone else’s hands, under contract, is not something to be done lightly.

But there’s nothing stopping the self-publishing author from having the best of both worlds.

The safer route requires a little more effort, but also gives you more options. That would be forming your own publishing company, licensing your e-books yourself, and moving your print books through a third source. This way you’re selling in every format and from multiple retailers, including yourself, without relinquishing control. Your books will always be available. You’re not at the whim of any particular publisher or retailer. From a purely business sense, it’s the logical choice.

Let’s say you somehow insult Amazon and they pull all your titles. It would have a huge impact on your availability to your fans, but they can still get your books from other sources.  Having options is the best leverage if an offer does show up in the inbox.

Fortune favors the prepared.

I like that one too.

So what would I do? If the offers were essentially even, I’d go with Amazon. They’re on offence, they have the better tools, and above all, they’re innovators. The Big Six are playing catch-up, and not doing it very well. Amazon seems to be the better long-term choice right now.

But in the mean time, I’m getting ready.

About author

Randall

Randall Wood is the author of the popular Jack Randall series of thrillers as well as several short stories surrounding the main characters.

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There are 4 comments

  • There’s a lot more to an author’s choice to accept an offer from SMP or Thomas & Mercer than the size of their advance or even the likelihood of the “Big 6” (which include St Martin’s parent company, Macmillan) pulling their heads out of their nether orifices long enough to make good business decisions while simultaneously under the shadow of the Justice Department lawyers who’ll be looking over their shoulders for the next five years. And that’s if they’re NOT required to pay damages to bilked book buyers.

    But forget all that for a moment, and take a look at the contracts. Big 6 contracts have changed in lockstep with one another for decades in regards to royalty percentages, size of advances, and author-unfriendly clauses that most agents can’t or won’t do anything about. The last couple of years have seen publishers unilaterally add noncompetition language that can effectively hold an author’s career in thrall to one company while the company does little or nothing to promote the author’s success.

    Even if the money and chances for success were equal, Amazon contracts seem to be (if you can take a writer’s word for anything 🙂 ) far, far more author-friendly than anything the Big 6 has on offer. Size matters in advances, but it doesn’t matter more than your career unless this is the only money you ever plan to make from it.

  • admin says:

    Well said, Bridget,

    The situation is so volatile right now that I know some authors who have just taken a “wait and see” attitude. I hope they don’t wait too long and maybe miss out on a great opportunity.

    I think a hybrid model could work if done right. That way the author could have the advantage of Amazon, and its brethren, for the e-book market, but also the distribution advantages of the Big Six for print. Something along the lines of what Amanda Hocking did. I plan to push print myself through my own publishing house, but that’s a platform that is slowly built. I think there’s quit a few out there who are making the mistake of ignoring print. But that’s a whole other blog post in itself.

    Did you happen to see Kris Rush’s recent blog on contracts? http://kriswrites.com Well worth a read.

    If I HAD to choose one over the other, it certainly wouldn’t be a hard choice to make.

    • Yes, I have read a number of Kris’s articles on contracts; they’re damning in the extreme, including that one and the one not too long ago on noncompete clauses. New York seems to have all the crazy the last couple of years.

      And you may recall Dean Wesley Smith reporting a conversation with a publisher in a bar at a convention, where the publisher said “You know why I’m still in business in ten years? I’m still in business in ten years because 99% of writers aren’t as smart as you are.” There seems to be a nearly infinite number of writers queueing up for this kind of abuse because they believe it’s a) “industry standard” abuse, because that’s what they hear from their agents, or b) they believe it’s the only way to a “real” writing career.

      Well, I had a “real” writing career, and it was a great feeling while it lasted, but as with most other midlisters, they jacked me up and put a hungrier writer where I used to be. Now I’m taking a different path, and I have to admit I like this one a lot better.

  • admin says:

    I follow Kris and Dean closely. I think it would just be foolish not to. People with their experience are treasure troves of information. On top of that, I used to be one of those naive authors! And I have business experience! If you’ve read my first post you’ll know that I tried the trade route before jumping in with Trafford. (Before they were a part of Author Solutions) You should always check the depth of the water before you jump right? I quickly saw my mistake and did my due diligence. I now have my own publishing company, and I did it for a fraction of the cost. Lesson learned the hard way. Those authors that Dean met, they’ll learn too, I just hope it’s not as expensive a lesson as I had. If Dean and Kris (or I) can help them avoid that, well, so much better.

    What amazes me the most is the authors out there that DO know what’s happening, yet still wonder if they should form a business or not. Something I see you covered at your blog a short time ago. I have an entry in the works that covers the various tax advantages alone. (I’m being very careful with that one) If that isn’t incentive enough I don’t know what is! I like your blog by the way.

    Another thing I want to do is write my own boilerplate contract. I mean, why should I sign their contract when I already know its crap? In the Army they taught me that the best way to avoid an ambush is to not walk into it in the first place. I mentioned this to Kris and she called me Harlan Ellison. I’ll take that as a compliment of course.

    I like my path better too.