A heated dispute between Amazon and the publisher Hachette over the price of e-books has raged the past several months. Now some 900 authors, including bestsellers Stephen King and John Grisham, are weighing in with a letter to Amazon urging fair treatment for Hachette titles. They charge Amazon with selectively blocking pre-orders and delaying delivery of Hachette books. We explore the issues in this dispute and what it means for book lovers.

Guests

  • Carolyn Kellogg Staff Writer, The Los Angeles Times

Transcript

  • 13:06:39

    MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. Later in the broadcast, rolling back law enforcement's ability to use your email as evidence against you in court. But first, the battle royale over e-books. Hundreds of authors are taking on the biggest name in online commerce over how e-books are priced and sold. A large group of writers, including Stephen King and John Grisham, signed on to a letter this weekend accusing Amazon of discriminating against titles published by the Hachette book group.

  • 13:07:19

    MR. KOJO NNAMDIAt the heart of the dispute is a disagreement over the wholesale and retail prices Amazon sets for e-books. The writers also charge that Amazon's blocked pre-orders for Hachette titles and made the publishing house's books difficult to find on the Amazon site. Amazon, in turn, says e-books should be less expensive and published a letter of its own, claiming to represent what's in the best interests of consumers, that is, people who read books.

  • 13:07:46

    MR. KOJO NNAMDIJoining us this hour to explain how this disagreement heated up this much and what's ultimately at stake for those who write books and for those who read them is Carolyn Kellogg, staff writer for The Los Angeles Times. She joins us by phone. Carolyn Kellogg, thank you for joining us.

  • 13:08:00

    MS. CAROLYN KELLOGGThank you for having me.

  • 13:08:01

    NNAMDIYou, too, can join the conversation. Give us a call at 800-433-8850. What do you think is a fair price for Amazon to charge for e-books? Do you sympathize with the publishers who feel Amazon's e-book prices short change the writers who create those works themselves? 800-433-8850. Shoot us an email to kojo@wamu.org. Carolyn Kellogg, there was a volley of letters this week between some 900 authors.

  • 13:08:27

    NNAMDIThey have accused Amazon of discriminating against books by the publisher Hachette in Amazon itself -- a volley where one group is claiming to represent the interest of writers, the other the interest of readers. At its core, what is this dispute all about and when did it start?

  • 13:08:45

    KELLOGGWell, it started back in May. And it's about how e-books are bought and sold by Amazon, which is such a big bookseller that what Amazon does has a huge effect on the publishing industry, even if all it does is look at one publisher like Hachette, which is why, of the 900 authors, most of them aren't published with Hachette.

  • 13:09:09

    NNAMDIHow did things escalate this severely? As you mentioned, a lot of the authors who signed this letter are not even published by Hachette. But they point out that disagreements over issues like these happen all the time in the business world without boiling over quite like this in such a public way.

  • 13:09:26

    KELLOGGIt's really interesting. Amazon is a very private company, more so than most. It's -- they don't reveal what's going on behind the scenes. So I think in one way, because the dispute started back in May when Amazon was negotiating with Hachette over e-book prices. Now we don't know what the details of those negotiations are. But we do know that it has something to do with how much e-books are going to cost and how much of -- if there is a cost savings -- will be borne by the publisher versus being borne by the retailer.

  • 13:10:04

    KELLOGGAnd when -- so Amazon was just doing their normal business negotiations. But they stopped making it easy to buy Hachette books from their website, they made it hard. And so the authors realized that now it's been months and months, and authors like Sherman Alexie, who's a National Book Award winner and a regular Amazon critic -- their books are harder to find on Amazon. You might be able to find like a used copy. But Amazon is putting artificial, like, two- to five-week delivery delays on these books. And these 900 authors are frustrated. They see that if it can happen to Hachette, it can happen to their publisher as well.

  • 13:10:41

    NNAMDIWhat is Amazon's core argument for why an e-book should cost less than even a paperback book?

  • 13:10:48

    KELLOGGWell, I think there's two separate things happening. The argument that they publically make is that e-books should be less because it doesn't cost any money to print them. And while that's true, the real bulk of what it costs to make a book is the creation of it. Somebody spends years writing a novel or years researching a nonfiction book. And they get an advance from their publisher. And then there's a bunch of steps in the creation of the book that don't have anything to do with printing it. All of that cost is borne by the publisher.

  • 13:11:19

    KELLOGGSo Amazon, on the surface, is making a claim that seems pretty obvious. Like, yeah, I don't have a print book, so it's got to be cheaper. But there's another -- there's a secret thing inside of this, which is that Amazon has found a way to become part of the publishing slipstream. And publishers are sort of in the way. So anything it can do to put pressure on traditional publishers' bottom line, it's started doing that more and more in its business practices.

  • 13:11:50

    NNAMDIIn case you're just joining us, we're talking about the dispute between Amazon and writers and talking with Carolyn Kellogg, staff writer at The Los Angeles Times. Inviting your calls at 800-433-8850. You can send email to kojo@wamu.org. For purposes of clarification, Carolyn Kellogg, I'd like you to go over a little bit again what you have already gone over. Amazon makes the argument that e-books help publishers to avoid the costs associated with shipping and printing. But how do those costs ultimately compare to the cost of creating the work and paying the writer who makes what's being sold in the first place?

  • 13:12:31

    KELLOGGWell, it varies author to author. But the CEO of Hachette made a case in another one of these letters -- it's just been, like you said, a volley of letters back and forth -- he makes the case that when they are -- when they're producing their books, he says, we set our e-book prices far below corresponding print-book prices, reflecting the savings in manufacturing and shipping.

  • 13:12:59

    NNAMDIHmm.

  • 13:13:00

    KELLOGGBut he makes the case that, yes, there are -- that they invest heavily in individual books, sometimes it's years that there are advances against royalties. They pay for editing, design, production, marketing, warehousing, shipping, piracy protection. Because even if -- and that piracy protection is for e-books -- even if it doesn't cost anything to print the e-book, the publisher is still making a print copy of the book. So it's not that those costs have gone away. It's all part of how you figure out the end cost of a product, is all the costs that it takes you to make it.

  • 13:13:34

    NNAMDIThere's the author. There's the author's agent. There's the editor who works on the book, assistant editor, proofreader, copyeditor, fact-checker, cover designer, layout person, marketing department, dedicated publishers. Hachette makes the argument that all of those people are still a part of the process, whether you're publishing a hardcover book or an e-book. And they have to be a part of the equation, correct?

  • 13:13:57

    KELLOGGYes, that's pretty much part of the case, yes.

  • 13:14:00

    NNAMDIApparently, Amazon's letter leaned on the legendary writer George Orwell. But people have pointed out that Amazon may not have exactly understood Orwell himself all that well. Can you tell us what happened?

  • 13:14:13

    KELLOGGWell, as you know, Orwell was a satirist. "Animal Farm" wasn't really about animals.

  • 13:14:21

    NNAMDIAll right.

  • 13:14:21

    KELLOGGIt was about political systems. And so in -- the quote that they pulled from Orwell is from a 1936 book review, where he was reviewing a group of 10 paperbacks by Penguin, which was -- it was new in England then, then Penguin paperback. And he said, oh, if -- something like, sorry I could find their letter. He said something like, if publishers knew what was good for them, they would get rid of paperbacks entirely, because they're cheap and they're going to ruin publishing.

  • 13:14:56

    KELLOGGBut it's sort of like me saying, this cake is so good, they should ban cake.

  • 13:15:02

    NNAMDIAmazon didn't get that subtlety did they?

  • 13:15:07

    KELLOGGThey didn't. They did not. They just saw him say, it should be banned. If publishers had any sense, they would combine against them and suppress paperbacks.

  • 13:15:17

    NNAMDINow, tell us about Readers United. What is that? Is it fair to describe Readers United as kind of Astroturf for Amazon?

  • 13:15:26

    KELLOGGI would call it that. It's, you know, the astroturfing is when a big campaign makes something look like it's a grassroots campaign. So Amazon's -- readersunited.com sounds like it's a group of readers, but when you go to it, you get the little Amazon logo with the smiley face up in your browser. And it was just created by the Amazon Books team to be a counterpoint.

  • 13:15:50

    NNAMDIAs a response to the 900 authors describing themselves as Authors United.

  • 13:15:54

    KELLOGGYes. And they were actually authors.

  • 13:15:57

    NNAMDIIn this case, Readers United is a front for Amazon.

  • 13:16:01

    KELLOGGIt's true.

  • 13:16:02

    NNAMDI800-433-8850. How has the advent of Tablets and E-book Readers changed your book purchasing habits? Are you less willing to pay more than $20 for a new hardcover book than you were five years ago? Or let's cut to the chase, do you think all e-books should be the same price, $9.99, or not? 800-433-8850. Send email to kojo@wamu.org. We're talking with Carolyn Kellogg. She's a staff writer for The Los Angeles Times. Carolyn Kellogg, what glimpses have we been getting into what the e-book world would look like without the middle-man of a publisher at all?

  • 13:16:37

    NNAMDIWe had Pulitzer Prize Winning author Tony Horwitz on this show a few weeks ago. He had a rather nightmarish experience when he recently published an e-book about the Keystone Pipeline, even though that e-book turned out to be a quote, unquote, "digital bestseller." Can you tell us a little bit more about what's going on in the e-book publishing world?

  • 13:16:56

    KELLOGGAnd what he saw was very low revenues, if I remember correctly. Is that right?

  • 13:17:01

    NNAMDICorrect. Correct.

  • 13:17:02

    KELLOGGWell, there are always a couple of e-book publishers who have really struck it big. You know, self-published authors, one is Hugh Howey, who wrote a great sort of science-fiction dystopia thing called "Wool," which was, as a e-book was sort of a serial. But was then -- the rights were then purchased by, I think, Simon & Schuster. And it was published as a couple of hardcover books. And it's a great book. And Hugh Howey loves Amazon. And he's somebody that people look to as an example of how an independent author, like, operating outside of the publishing system can find readers and make a really tremendous living, you know? He's doing great.

  • 13:17:46

    KELLOGGBut for every one Hugh Howey, there are 100, 200, 400, 1,800 people who've made, you know, less than $100 in revenue from their e-books.

  • 13:18:00

    NNAMDIDo the writers that you've talked to care about how people consume what they write? It seems their biggest concern is just making sure they have the resources that they need to make sure that the content that they produce is good.

  • 13:18:14

    KELLOGGI think most authors that I've talked to think the expansion of readers is great. So if more people are reading because of e-books, that that's wonderful. And, yes, they're just trying to guard their own -- guard their own living. I mean most writers don't make a living from their books. Most writers make a living from having a teaching appointment. Somebody like Scott Turow -- he does make a living from his bestselling books, but he's also an attorney. So he's got something to fall back on.

  • 13:18:46

    NNAMDIWell, we got a tweet from Raymond, who says, "I've owned a Kindle for three years and I now refuse to pay more than $6.00 for an e-book, and that's if I really like the series' author." Are we, in a way, talking about a labor dispute here, in which on the one hand, people have been encouraged to go for what the lowest possible price is and not be too overly concerned about how that affects the compensation for the person whose labor provided this?

  • 13:19:17

    KELLOGGI think that's a very astute observation. I -- people have compared Amazon's business practices with Hachette to that of Wal-Mart, which, you know, has never really been a strong place for labor unions or workers' rights. And I don't think it's a great model for sort of how we create an American society, you know? Like we want people who are working full time to be able to not have to rely on public assistance, which is, or...

  • 13:19:48

    NNAMDISo.

  • 13:19:48

    KELLOGGSo, yes. I think it does sound like a labor dispute. And I think that's why so many authors have stepped to sort of -- even if they're not directly affected -- to step up and say, you know, we want people to pay attention to this.

  • 13:20:01

    KELLOGGI mean, I know how convenient Amazon is. I can't talk my sister out of using Amazon. I don't expect anybody to stop using Amazon because a couple of authors said, hey they're kind of being jerks. But it's great that people are talking about it.

  • 13:20:15

    NNAMDIAnd I think one of the aspects of this that does need exploration is the author saying that, look, if you simply say it's going to be a certain price, let's say 9.99, as Amazon said, for every single eBook, that ignores the discrepancies over what went into the preparation of the book, what went into the writing of the book. And if you're buying a hardcover book, those discrepancies are obvious. One person takes five years researching and writing a book, another person throws out a book in three months that poses as a memoir, and you expect readers to pay the same price simply because it's an eBook? Is that the argument -- the kind of argument the authors are making?

  • 13:20:52

    KELLOGGYeah, yes. I mean, do you -- when Kim Kardashian's book of selfies comes out, should that be the same thing as the next book by Pulitzer Prize winner Lawrence Wright?

  • 13:21:02

    NNAMDIGot it. On to Phyllis in Falls Church, Va. Phyllis, you're on the air. Go ahead, please.

  • 13:21:07

    PHYLLISHi. Yes, I really like hardcover books but I also like the convenience of eBooks. And I often find myself frustrated having to choose between just for economic purposes. So what I'm wondering is why is it not feasible economically for publishers to set up a special one-time use code that could allow a purchaser to download a version of an eBook along with a hard copy purchase? And that way, you know, the reader would really benefit by having an electronic version as well as a nice paper version to read at leisure.

  • 13:21:45

    KELLOGGCarolyn Kellogg, hadn't heard that before.

  • 13:21:47

    KELLOGGThat's a great point. I don't think the problem is actually the economic feasibility so much as nobody's really quite sure how to make it happen. For the last couple years publishers, internally at least, have been talking about bundling. That's what they call it, the idea of if you buy the hardcover that for a few dollars more you should be able to download an eBook copy of the same book. It's a great idea. I understand HarperCollins is trying it now but I'm not sure -- I know it's not across all of its titles.

  • 13:22:17

    NNAMDIWe got this -- and thank you very much for your call, Phyllis. We got this email from Matt. "This sounds like Amazon using its market power in a monopolistic way. A publisher can set a price. Amazon can take it or leave it. Instead Amazon is cherry picking. Why are the publishers bringing up antitrust?" Or maybe, why are the publishers not bringing up antitrust?

  • 13:22:38

    KELLOGGWell, the publishers -- five of the six major publishers, two of them have now combined, a couple years ago were the subject of a lawsuit brought by the Department of Justice. And they were accused of colluding on aligning against Amazon and with Apple. And they lost that case. They're appealing it now. So the publishers can't even talk to each other. That's why they're not trying to cite Amazon together. They can't collude. They were found guilty of collusion. So now they can't do that anymore.

  • 13:23:13

    KELLOGGBut it's very interesting. Amazon does have such a large market share. Like in March, it says of new books, print and eBooks, Amazon has 41 percent of the market.

  • 13:23:26

    NNAMDIWe got this email from Constance. "It's nice to have low eBook prices for consumers but writers need to get a fair price for their work. We writers don't live on moonbeams and dewdrops, you know. If we can't get paid for writing books we will have to do something else to buy groceries and pay the rent. In the long run, this will mean that you will read fewer books by your favorite authors no matter how low the price you wanted to pay. Your favorite author wasn't writing. He or she was working in an office somewhere or serving you a mocha latte at Starbucks." That, I guess, underscores the point that the 900 authors united are trying to make, Carolyn Kellogg.

  • 13:24:03

    KELLOGGYeah, that was very well put, very well written. You know, it's interesting. I think when you talk about a business that operates on selling creative content, you need to have a big stable where there's always going to be a breakout hit, right. That's the hope. Like you publish ten books and everybody's making an okay -- is getting by okay. But that tenth book -- like nine out of ten authors are doing sort of okay but that tenth book is a runaway hit. And that way you can expand the amount of creative risks you take the next year, hoping for another runaway hit.

  • 13:24:40

    KELLOGGAnd we've seen things like "Girl With a Dragon Tattoo" and Dan Brown's thrillers, "Fifty Shades of Gray" that come out of nowhere and make a ton of money. And what they do is they enable a company to take more creative risks and help more authors, like, try to write your favorite books.

  • 13:24:58

    NNAMDII'm afraid that's all the time we have for this segment. Carolyn Kellogg, thank you so much for joining us.

  • 13:25:03

    KELLOGGThank you for having me.

  • 13:25:04

    NNAMDICarolyn Kellogg is a staff writer for the Los Angeles Times. We're going to take a short break. When we come back, rolling back law enforcement's ability to use your email as evidence against you in court. I'm Kojo Nnamdi.

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