Friday, October 03, 2014

The Publishers Guild Strikes Again!

Contrary to what some may think, I don't hate anyone.

There are certain folks in the industry whose actions I don't like. And I'm often vocal about that.

But disliking what someone does or says doesn't mean disliking the person. And disliking how an organization conducts itself doesn't mean I dislike the organization, or the members.

I simply want those members, and their organization, to stop harming authors.

So when I read the latest letter from the Authors Guild to their membership, my immediate reaction was sadness, not anger. Why don't they understand how they are harming the very authors they purport to protect and defend? Why can't they see the side they're taking is the opposite of what the majority of authors actually need?

There is some of Pournelle's Iron Law in play, of course.

There's Bookholm Syndrome.

There's Konrath's Law (folks would rather defend their beliefs to the death rather than admit they might be wrong.)

There's also self-preservation, and the ignorance it breeds. If you listen to an opposing point of view that makes sense, you must confront why you aren't acting on the point of view. So it is much easier to ignore it, or disregard it.
As Upton Sinclair said, "It is difficult to get a man to understand something, when his salary depends upon his not understanding it."

Which brings us to Amazon vs. Hachette. Those who need a primer can start reading my blog post from May 24 and just keep reading until present. I link to many relevant posts and articles about the subject.

So what did the latest Authors Guild letter say? I'll repost it here. My comments in regular font, AG ridiculousness in bold italic.

I also want to invite any member of the Authors Guild to post in the comments, or email me, and explain where I'm wrong. I don't hate you, I won't attack you, I won't censor you. My readers and I want to hear you defend yourself, or the Guild. If we can get a dialog going, we can learn from each other.

The Authors Guild’s mission, since its founding in 1912, has been to support working writers.

All working writers? Or just the upper echelon writers who kowtow to legacy publishers?

I have taken the AG to task for this numerous times (often with assistance from Barry Eisler), and we've gotten no response.

Barry and I don't do this because we enjoy shaming authority figures. We truly want the Authors Guild to actually do what it said in that opening sentence: support working writers. But not just 1% of them. All of them.

Here are some previous posts that show bad AG behavior:










Those above examples, and the many more those posts link to, show that the Authors Guild doesn't have the interests of the majority of its members at heart. It cares more about rich authors, and protecting the status quo.

The fact that no member of the Guild has responded to the many accusations that I, and other working writers, have leveled at it, is extremely troubling.

The Guild has consistently opposed Amazon’s recent and ruthless tactics of directly targeting Hachette authors, which have made these authors into helpless victims in a business dispute between two big corporations. 

For the eyerollingenth time, Amazon isn't targeting Hachette authors.

Amazon is negotiating with Hachette. Hachette wants to control the retail price of ebooks, and prevent Amazon from discounting. Hachette illegally colluded with other publishers in order to do this. 

Amazon and Hachette no longer have a contract. Amazon is under no obligation at all to continue to sell Hachette's books. It is certainly under no obligation to sell them while also giving them perks such as warehousing, pre-order buttons, and discounting. 

Can anyone at the Authors Guild, or Authors United, give me an example of how Amazon is supposed to negotiate without any leverage?

A contract involves two parties trying to get what is best for them. This is called business. It isn't targeting authors, or engaging in censorship, or boycotts, or sanctions, or disappearing authors, or any of the other nonsense that AU and AG are whining about.

Authors are indeed being harmed. But they aren't the target. Hachette is the target. Authors are collateral damage, and Amazon has tried, THREE TIMES, to compensate authors during this negotiation. But Hachette doesn't want to do that. Neither does the Authors Guild, or Authors United.

And the Authors Guild wonders why many authors call them the Publishers Guild?

These harmed authors have no contract with Amazon. Amazon doesn't owe them anything. Amazon never promised them anything.

These harmed authors have signed contracts with Hachette. Hachette is supposed to exploit the rights they bought. That's the main reason authors accepted all of those shitty contract terms. Hachette gets those rights for the life of the author plus 70 years, pays low royalties, doesn't allow authors to publish competing works, and in return authors get widespread distribution of their work to sell to as many customers as possible.

But Hachette is unable to come to terms with the biggest bookseller on the planet.

Why aren't these harmed authors angry at Hachette? They're not living up to their end of the deal. Has the Authors Guild even asked Hachette what's going on? Has Authors United?

Let me make this even easier to understand.

I sign a contract with a landscaper to mow my lawn.

The landscaper needs a lawnmower to do this. But the landscaper has been haggling with the lawnmower dealer for eight months, and still hasn't gotten a mower. And all this time, my lawn isn't being mowed.

Do I get mad at the lawnmower dealer?

Of course not. That would be ridiculous. It isn't the dealer who is preventing my lawn from being mowed. It's the landscaper's fault. He promised to cut my lawn, and it isn't getting done. He's the one I signed the contract with.

Now let's take it a step further. I live in a townhouse, so I'm part of a townhome association. It isn't only my lawn that isn't getting mowed, it's all homes in the neighborhood. The townhome association needs to do something. That's what we all pay them to do. They need to step in and fix this.

Should the association:

a) Talk to the landscaper and try to force him to settle his differences with the lawnmower dealer, so he can then cut everyone's lawns like he is contractually obligated to do.

or

b) Ask the government to force the lawnmower dealer to sell its lawnmowers to the landscaper under the terms the landscaper wants.

Why can't the Authors Guild see how ridiculous this situation is?

This action has caused thousands of writers to see a significant drop in their royalty checks. 

I have to point out, yet again, that Amazon offered to compensate authors monetarily during the negotiation period.

Why isn't the Authors Guild pressuring Hachette to accept this offer?

Quote AG prez Roxana Robinson:

“But this seems like a short-term solution that encourages authors to take sides against their publishers. It doesn’t get authors out of the middle of this — we’re still in the middle.”

Actually, Roxana, Amazon's offer DOES get authors out of the middle of this. And authors SHOULD be taking sides against Hachette, for not only getting them into this mess, but also refusing to compensate them as Amazon offered.

How could she say that with a straight face, let alone believe it? And why didn't the reporter who took that quote point out how stupid it is?

Here's another analogy to make this simpler to comprehend.

Godzilla and King Kong are duking it out on the streets of NY. Citizens are getting trampled, and their property is being destroyed.

Godzilla says, "If King Kong agrees, we'll move all the people out of harm's way, and each chip in half for all the damage we cause."

King Kong says, "Nah."

And we should blame Godzilla? Seriously?

The Authors Guild challenges this threat to the literary ecosystem, one that jeopardizes the individual livelihoods of authors.

I'll opine that the business threatening the livelihood of authors is Hachette. It falls on Hachette to make its authors' books available in as many venues as possible. It's failing to do that.

What the Authors Guild could be doing is providing lawyers to unhappy Hachette authors to get them out of their contracts, so these authors could then self-pub.

The Guild started its own initiative to invite governmental scrutiny of Amazon’s outsize market share and anticompetitive practices in the publishing industry. Last summer the Guild prepared a White Paper on Amazon’s anticompetitive conduct, circulating it to the United States Department of Justice and other government entities. As a result of our request for the initiation of an investigation of Amazon, we hosted a meeting with the DOJ in our offices on August 1 so that a group of authors could make their case directly to the government, as the Wall Street Journal reported today.

Buttery Jesus on toast, the Authors Guild was vehemently against the DOJ when they went after five major publishers for collusion against Amazon, now they expect the DOJ will finally see their side of things?

Their side of things amounts to this, a Robert A. Heinlein quote from 1939, which Marc Cabot posted on Passive Guy's blog

“There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back.”

What the Authors Guild, and Authors United, want the DOJ to do is investigate Amazon for violating antitrust laws. According to the article, Publishers and authors say Amazon has too much power and needs to be reined in.

I agree Amazon has a lot of power in the book world. But is it too much power?

Amazon has stated that, "If we want a healthy reading culture, we have to work hard to be sure books actually are competitive against these other media types, and a big part of that is working hard to make books less expensive."

So it appears Amazon is using its power to lower the price of books.

Yeah, I expect the DOJ to jump all over that. Let us, for a moment, imagine the conversation that took place.

INT. DOJ OFFICE, DAY

A serious-looking DOUGLAS PRESTON, 58, is sitting at a board room table in deep discussion with a DOJ official.

Douglas Preston: Amazon wants to discount Hachette books.

DOJ: And how exactly is this bad? Aren't lower prices good?

Douglas Preston: It's hurting authors.

DOJ: Authors make less money when books sell for less?

Douglas Preston: Actually, authors make more money. Amazon wrote a letter explaining it

DOJ: So how are authors being hurt?

Douglas Preston: Right now, Amazon is boycotting Hachette books.

DOJ: It refuses to sell Hachette titles? Do Amazon and Hachette have a contract?

Douglas Preston: They actually don't have a contract. And Amazon is still selling Hachette books.

DOJ: So how is that a boycott?

Douglas Preston: Well, they removed pre-order buttons.

DOJ: So Amazon is refusing to sell books that aren't available?

Douglas Preston: When you say it that way, it makes me sound stupid.

DOJ: I'm not sure we can help with that.

Douglas Preston: The Amazon part?

DOJ: The you sounding stupid part.

Douglas Preston: Amazon also stopped discounting Hachette titles.

DOJ: Weren't you against Amazon discounting titles? Isn't that what this negotiation is about?

Douglas Preston: Stop it. You're confusing me.

DOJ: What exactly do you want to happen here, Mr. Preston?

Douglas Preston: I want Amazon to do what I tell them to.

DOJ: Perhaps you should become a majority stockholder in Amazon, then. Hey, here's a nifty idea--have you tried sending a Fed Ex to Amazon's Board of Directors?

...

Kidding aside, there was some interesting chatter on Passive Guy's blog about this. Is it possible the DOJ will investigate Amazon? Here are some comments I found interesting:

Randall J. Morris: Here’s how the Sherman Act defines a monopoly (which is what the DoJ will look to):

“Monopolization requires (1) monopoly power and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.”

And Wikipedia clarifies it a bit:

“Section 2 of the Act forbade monopoly. In Section 2 cases, the court has, again on its own initiative, drawn a distinction between coercive and innocent monopoly. The act is not meant to punish businesses that come to dominate their market passively or on their own merit, only those that intentionally dominate the market through misconduct, which generally consists of conspiratorial conduct of the kind forbidden by Section 1 of the Sherman Act, or Section 3 of the Clayton Act.”

I think Amazon falls into the category of dominating the market based on their own merit.

Nirmala: The word monopoly generally refers to suppliers not retailers. But there is a word for a retailer with unusually large market power or “buyer power” as it is called: monopsony.

DEFINITION of ‘Monopsony’: A market similar to a monopoly except that a large buyer not seller controls a large proportion of the market and drives the prices down. Sometimes referred to as the buyer’s monopoly.

I found this article (from the Financial Times) which suggests that Amazon does not have much to worry about:

“There lies Amazon’s advantage – it need not form a cartel to squeeze its suppliers because it is already large. With a 30 per cent share of the physical book market in the US and more than 60 per cent of ebooks, it clearly has market power in the antitrust sense. But there has never been a case in US competition law of a single company being declared an illegal monopsonist.

“In the US, the simple use by one company of monopsony power to extract lower prices from suppliers is not illegal. There is general intuition that buyer power means lower prices and lower prices are good,” says Jonathan Jacobson, an antitrust lawyer at Wilson, Sonsini, Goodrich & Rosati in New York.”

Nirmala: Here is another longer exploration of monopsony and anti-trust law.

I am not a lawyer (although I did stay at a Holiday Inn Express last night) but one thing that stood out in the above link was it suggests that while it is hard to prove harm from a monopsony consisting of one large company, that a collusive monopsony or ogliopsony (a group of buyers that control the market) is by definition illegal as a form of horizontal price fixing.

Now the publishers have already settled the charges that they acted illegally by colluding as suppliers to fix prices. It seems to me that they might also be guilty of setting prices illegally as buyers by colluding to set the royalty rates given to authors at their current low rates. As others have noted, the AG and AU may be opening a can of worms for the publishers by inviting more DOJ examination of the publishing industry.

Joe sez: Big 6 (now Big 5) publishing contracts have been notoriously one-sided in favor of the publishers for decades, and I think a smart lawyer would be able to make a case that they are unconscionable and therefore null and void.

Besides being one-sided, these contracts are all remarkably similar. Same lockstep royalties. Same lousy terms. And before Amazon, authors had no choice, because the publishing oligopoly controlled paper distribution. It was accept the terms or don't get your book into stores. If publishers also fit the definition of an oligopsony, and the DOJ becomes interested in exploring this, the Authors Guild and Authors United may be unwittingly bringing about the downfall of the very industry they're trying to protect.

But let's get back to the AG letter...

The Guild has been working closely with the grassroots group Authors United—founded by Authors Guild Council Member Douglas Preston—which will be making another request to the Department of Justice to investigate Amazon for potential antitrust violations.

So the Guild supports a petition with 1000 signatures, while ignoring the opposing petition with over 8600 signatures.

This is your Authors Guild. Fighting for the privileged status quo at the expense of the unwashed masses.

I've wondered before it the Authors Guild and Authors United know that they're full of hooey, and are actually doing these silly things to get media attention and try to turn public sentiment against Amazon. If that's the case, it isn't working. Amazon's customer approval rating is high, and more and more authors are figuring out that this is all pretty silly.

Our mission is to protect and support working writers. When a retailer, which sells close to half the books in the country, deliberately suppresses the works of certain authors, those authors are harmed, and we speak out. 

They speak out and oppose retailers who harm authors? Where was the Authors Guild when:

Bookstores removed erotica?

PayPal withdrew its services from erotica?

B&N manipulated erotica bestseller rankings?

Bookstores boycotted Amazon published titles?

Amazon removed reviews?

You know what, Authors Guild? All you have to say is, "The system, as it stands, earns some of us a lot of money. So we're going to support the system."

I can't argue with that. Hell, I'd respect that.

But the "support working writers" line is worthy of public ridicule and disdain.

Also, since you apparently don't know it, here's the definition of the word "suppress": verb (used with object)
  1. to put an end to the activities of (a person, body of persons, etc.):to suppress the Communist and certain left-leaning parties.
  2. to do away with by or as by authority; abolish; stop (a practice, custom, etc.).
  3. to keep in or repress (a feeling, smile, groan, etc.).
  4. to withhold from disclosure or publication (truth, evidence, a book, names, etc.).
  5. to stop or arrest (a flow, hemorrhage, cough, etc.).
  6. to vanquish or subdue (a revolt, rebellion, etc.); quell; crush.

Amazon hasn't put an end to the work of certain authors. They haven't done away with it. They haven't repressed it. They haven't withheld it. They haven't stopped it. They haven't vanquished it.

Amazon doesn't have a flotilla of war ships around Hachette's warehouse, preventing books from reaching the outside world.

Amazon hasn't even stopped selling Hachette titles, even though there is no contract that requires it to do so.

And you went to the DOJ with this? Really? When you left, did you hear giggling behind you?

We will continue to oppose any business tactics, from publishers or retailers, that interfere with working writers’ ability to present their products in a fair marketplace and to flourish within their chosen field. 

Continue to oppose tactics from publishers?

Why aren't you opposing Hachette's tactics? Hachette is reportedly delaying negotiations. Hachette is refusing to compensate authors. Have you even been in contact with Hachette? Do you even know what terms Hachette and Amazon are fighting about?

Our goal is to ensure that the markets for books and ideas remain both vigorous and free.

Okay, let me get this straight. You want to ensure the book market remains free by forcing a retailer to sell books according to your rules.

Would you also like to ensure freedom of speech by forcing people to say what you want them to say?

How about you ensure freedom of religion by making everyone go to the church of your choosing?

How can a guild made up of authors write nonsense like this?

That's a question I'd love to have answered. The ball is in your court, Authors Guild. My blog is yours.

Defend yourself.