Amazon Offers Writers E-Book Proceeds Amid Dispute

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

July 9 (Bloomberg) -- Amazon is offering authors caught up in its dispute with Hachette Book Group all of the proceeds from the sale of any digital book, seeking to bypass the publisher and appeal directly to the writers. Bloomberg’s Tom Giles reports on “Market Makers.” (Source: Bloomberg)

Live from bloomberg headquarters in new york, this is "market makers" with erik schatzker and stephanie ruhle.

Game showtime.

Deal or no deal?

We will see who is likely to have m&a on the menu.

Tries to resolve a dispute with publishing by going directly to the authors.

Youtube, the company that gets online video so well that disney spent half $1 billion to buy it.

Welcome back to "market makers." we will begin this hour with the newsfeed.

These are the top business stories from around the world.

An investment -- investor has put a lifeline for american apparel.

American apparel will get $25 million from standard general, and that will let the company pay off a loan.

Standard general will get three seats on american apparel's board.

Ford says that years of losses in europe are coming to an end.

The automaker is forecasting a smaller loss this year than last and a return to profitability in 2015. ford's sales in europe are up more than six percent this year.

And finally, brazil's crushing defeat to germany in the world cup may be felt far beyond the stadium.

Ubs says the loss will likely hurt the reelection chances of president dilma rousseff.

Losing by a lot more than six goals.

If you're looking for media mogul or tektite in this week, you will not find them in their offices.

They are at the annual sun valley summit.

Our senior west coast correspondent is lucky enough to be there.

Jon erlichman, yesterday you are in washington state, standing outside the first weed store and now you are river rafting with warren buffett.

What gives, brother?

I should have brought them samples from washington or seattle.

That would've made white water rafting more enjoyable.

[laughter] it is always a wild experience here at sun valley.

You has so many high-profile people in a very casual setting.

Don't get me wrong, there's massive security everywhere.

But just this morning alone, to see people like sheryl sandberg and reed hastings, bob iger, the murdochs casually walking around -- you get the idea of the power players who are here.

In terms of who we spoke to so far, some of the more interesting comments have come from the billionaire barry diller, who is the backer of the aereo startup service, which just had a major loss at the supreme court.

Here is a brief soundbite from barry diller.

What do you think about aereo?

I think we fought the good fight.

Brief comments -- we may get more from barry diller as the week progresses.

Those were interesting comments, in the context of where areo stands right now.

The company itself has not said they are throwing in the towel.

They have suggests that despite that big loss at the supreme court, they are figuring out next options.

When your big backer says we fought the big fight, it suggests new throwing in the towel.

Are there any new attendees this year we have not seen before that speak to what is important now in the world of media?

Yeah.

You do see a number of tech ceo's that are coming here more frequently.

I believe the ceo of shutter stock is one example.

What allen and company does, these days they have two conferences.

This is the big one.

They also have one in arizona, where they have a lot of younger tech ceo's gathering.

They do presentations there, and eventually some of them make their way here.

They need to do that, because otherwise you have a lot of aging media executives here and not enough of a new generation of technology players.

Now you have a pretty interesting mix of people.

Maybe we will see some deal activity.

Certainly last year people thought we would see the sale of hulu, and the owners of hulu decided not to sell.

The reason they were all gathered at sun valley, the owners -- including disney and fox -- could actually talk about why they did not necessarily want to sell the business and get on the same page and make news or no news.

Besides the conference, besides meetings, what is it actually like their?

-- there?

Do you have white water rafting with les moonves?

What happens?

I still get the sense that you have a bit of a divided line between traditional media and tech.

They are different worlds, and some of the mix and some of them don't. for some of the media executives who have been coming here for a long time, is a way to catch up.

Sometimes they do white water rafting.

Sometimes the gulf.

Late at night they do some drinking, and sometimes that is where the bigger conversations come from.

The randomness of doing different stuff at different times is where these deal discussions to come out of.

We ran into the former ceo of disney last year.

He is well known for running into warren buffett in the parking lot one year, and that eventually led to the sale of abc capital cities to disney.

. thank you, john.

Paul sweeney is here.

He runs bloomberg industries and is a senior analyst covering media.

Jon points out that a lot of the attention is on the younger, more at vanguard tech guys.

Those older media execs still have big wallets with which to spend.

Do people look at sun valley is the place where deals are born?

What kinds of deals might be born there this year?

One of the things we will probably see is a lot of people in the content side of the business will have to have conversations this year.

What we have seen over the last several months is a lot of consolidation.

If you are a content producer, a cable network, you need to step back and say, it looks like the distributors have up their leverage as we go through our -- who are we talking about?

Some of the smaller cable networks trade -- networks, like amc.

Some of these companies that are fully profitable in and of themselves, but as they step back and think about who their quote unquote partners are on the distribution side, they recognize the balance of power might be getting out of whack.

These old, jowly media titans -- are they intoxicated by these young hipsters?

Later we will be seeing the ceo of maker studios.

He may be the smartest guy out there by selling short form video to millenial said disney.

Do these icons believe in whatsapp?

If i am bob iger les moonves, i need to protect my existing ecosystem, where i get paid by the distributors and subscribers and advertisers.

At the same time, i also have to lay out some bets on the transformation of media towards a more digital business.

I have to go out there and make the bet here and hopefully i won't make a bad bet like news corp.

Did with myspace years ago.

You look at disney buying maker studios for upwards of $1 billion.

That is a bet from bob iger and disney saying, we know our consumers are consuming our content and other video content away from the traditional cable network broadcasting we need to be there.

That may not prove to be a great deal.

$950 million if you include all the earn outs is a lot of money for a profit challenged businesslike maker.

About myspace, it is hard to criticize rupert murdoch for doing the myspace deal.

Myspace could have been a facebook.

He made a bad and he lost.

In retrospect, he had the right idea.

These media companies certainly have the right capital to place a lot of bets out here.

The stocks have done great over the last four and a half, five years.

They are returning a lot of cash to shareholders.

Despite that, they are still making bets on digital.

An example would be netflix.

That is a friend and not a foe for most of these media companies.

A year ago, we were not really sure.

People could look at like aereo, what a miss for barry diller.

It's not.

He's not going from flying first class to coach, that's for sure.

A lot of these media companies can afford to put the bets out there.

They will certainly pay off in a big way.

We will see what happens with some of these deals we have seen over the last couple of weeks.

You mentioned the maker deal.

More of these companies that produce content for youtube.

A lot of these companies are the subject of speculation.

To shareholders want to see ceo's like eiger doing deals like maker?

A billion dollars is a lot of money.

They have to be very careful.

Media investors have become very accustomed over the last five or six years to paid back a lot of cash through dividends.

They do not want to see that gravy train and.

They recognize that certain investments need to be made.

Thank you so much for giving us the latest.

Security is always try -- always tight at sun valley.

Staff members at the conference are keeping a close eye out for drones that could photograph, harass, or harm these media moguls.

No one involved, commenting for the record the faa does point out the commercial use of drones like for news photography is prohibited.

You have a lot of drone enthusiasts out there.

I'm a joint enthusiast.

So is -- drone enthusiast.

So is jeff bezos.

A chef says that amazon's latest move will not be a best seller.

Targeting millenials, the digital video company gets one of youtube's biggest producers.

Now owned by disney.

This is "market makers." hear stories and interviews at bloomberg.com/tv and on bloomberg tv plus on your tablet and streaming on your apple tv and amazon fire.

If you're asking the question, what media and technology company is hitting on all fronts, bloomberg.

? welcome back to "market makers." it is time for some "bloomberg west" headlines.

Global spending on advertising is on the rise.

According to a survey by e-marketer, media spending will increase 5.7% this year, double the pace of 2015. more money being spent on digital and mobile marketing.

A whole new medium.

The world cup, germany trouncing brazil.

Footer says more than 35 million tweets were sent out about the match.

That is the most ever for a sporting event.

There is nothing magical about the long lines at universal studios.

The new harry potter attraction in orlando, in some cases fans of the teenage wizard waited more than seven hours to get on a ride.

Universal is escalating the battle between two rivals in orlando.

Disney's magic kingdom and seaworld.

Seven hours?

If you are willing to wait in line for seven hours, you deserve it?

It is barely worth it to wait in line seven hours for anything.

Seven hours for a harry potter ride?

You could read through the brooks in that time -- books in that time.

Amazon in its battle with a book publisher.

The two companies have not been able to agree on e-bokok pricing.

Amazon has put a squeeze on, blocking orders of some of its most popular books.

Amazon has tried an end run.

What is happening?

What is amazon trying to do?

They are ramping up the pressure on the publisher.

It is negotiating how much of a cut it gets from e-books.

It is taking the deal directly to the authors and saying, we are on your side and will pay you the full proceeds from all sales of e-books.

Let's cut the publishers out right out of the middle of the picture.

Does amazon have complete control here?

They have a very strong hand here.

The biggest growth in publishing is on the digital side.

We were talking about the steps from bloomberg west.

Everybody wants to read e-books on their kindle, smartphone.

They are not buying books as much anymore.

You are seeing revenue drop as far as physical books.

That is where amazon has a huge share of the market.

They have a lot of negotiating power.

Where do all the authors stand on this?

It's hard for the authors to see amazon as the friend here.

It's a very complicated relationship.

They are the 800 pound gorilla that has turned their business model on its head.

Book pricing has changed dramatically, largely as a result of the impact amazon has had.

Amazon is giving them great exposure.

If everybody wants to read a book on their kindle and smartphone, where are they going to get it?

Amazon.

You need to be on amazon's side here.

It's tough not to be.

Enemy or friend me -- frenemy, i'm not sure.

You never say the word fr=enemy.

[laughter] a lot of people say the publishing world needs to be dragged into the 21st-century first century and they are cheering amazon on in that regard, without killing publishers altogether.

Isn't amazon's strategy a little bit risky, inasmuch publishers still play a role, right?

They have a bunch of editors who receive manuscripts, read through them and decide who will be the next great author, then make that book available.

If amazon gets rid of that, i don't know where the future books come from.

They can be the rainmaker.

Publishers are the ones who back the authors.

Some of these authors are saying, we cannot give the proceeds directly to amazon.

We owe our publishers money.

They have given us an advance.

They are in a tight position.

Some of them.

On the other hand, you have to look at what is happening in publishing.

How much is the publisher doing for me as the author?

There's a lot of doubters out there who are saying, i'm not getting a lot of marketing.

I have to go and do my own marketing.

What is my publisher doing for me?

That business has been in place for ages.

The fact that they are suddenly going to [indiscernible] the publisher, that is hard for others.

I think it is hard for readers to mac.

We kind of need the publishing world to weed out -- all the people who think they have the world's next greatest novel -- we want to read the books that the publishers are publishing, that they are vetting.

They are this important go-between and they are helping to determine who the best authors are.

We trust them.

The ones that michael lewis writes.

And then they make hollywood movies based on them, stephanie.

Tom, thank you.

Tom giles -- what is your current job?

Managing editor for u.s. company news.

There you go.

He's got a big job.

Coming up, the score was 7-1. it wasn't really that close.

After that shocking game between germany and brazil, we will see what to expect from today's world cup match.

? the brazilian national team lost 7-1 against germany at the world cup.

This was all happening in brazil, on its own soil.

On the left, the brazilian fans.

Germany going bananas on the right.

What are the chances of something like this happening today with argentina squaring off against the netherlands?

Eric chemi is back.

If i had said here yesterday and said the score will be 7-1, it would have seemed completely ridiculous.

Goldman sachs predicted brazil would win the whole thing.

The vast majority of our terminal bracket competition, for example.

Just the fact that result lost -- brazil lost by so much -- the chance of it being this extreme was one in 20,000. that is the problem with these extreme scores.

You did talk about the unpredictability of soccer matches.

We saw spain get trounced by the netherlands in almost the very first match -- second match of the tournament.

Let's talk about today's game.

What are the chances?

Who is predicted to win?

Argentina.

I don't even know what to say anymore because of scores like this.

What are the odds of argentina winning?

61% for argentina versus 39. the voting is much more in favor of argentina.

People like to go for the favorites, and people vote for them much more.

Most people on the argentine camp buy in vast majority.

I have been in the argentine camp with my bracket from the beginning.

It's doing worse now that brazil lost.

Stephanie is number one in a tiny eight-member sub selection.

It doesn't matter.

I'm still number one in that country.

Eric, what you are going to be doing at 4:00 as well -- eric chemi coming up.

Disney bets on youtube will be speaking -- ?

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change