Authors Weigh In on Amazon-Hachette Feud

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July 9 (Bloomberg) –- Authors Douglas Preston and Hugh Howey discuss Amazon’s attempt to bypass Hachette by offering authors e-book proceeds. They speak on “Bloomberg West.” (Source: Bloomberg)

Live from pier three and 10 pence's kokomo welcome to "bloomberg west," -- pier three in san francisco, welcome to "bloomberg west." i'm emily chang.

Many authors are speaking out against it as well.

We will tell you where the talk stand and how the stalemate is impacting the businesses of both companies.

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Among them, sheryl sandberg, dick costolo, reed hastings, bob iger, warren buffett.

So far, no major deals have come out of the conference, but consolidation, especially in the pay-tv industry, is excited to be a major focal point.

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Now to the lead story of the day.

It is the latest chapter in amazon it or battle with bloodshed publishing.

Amazon is proposing letting has shut -- hachette keep all royalties until a deal is done.

It appears now that hpg cut off its own revenue from e-books on amazon, which would be a suicidal action.

Amazon responded with its own statement.

But here we are six months later and the renewal has come and gone.

From my perspective, it is more amazon, i believe, by trying to take a greater share of the dollars.

But probably, to lower the overall pricing for e-books to give back to the consumer.

I focus on what consumers can do.

It is that impasse where we are now.

Would you echo that, paul?

Is amazon being the bully?

Amazons value proposition to its customers have always been very low price, great selection and customer service and those types of things.

Clearly, amazon is under pressure, certainly in the last couple of quarters.

There has been pressure on the margins, or lack thereof.

It is a company that has been focus on growth and not necessarily profit margins.

They are looking to play a tougher role in negotiations when it comes to their "partners pier." is ithachette or the author?

But i would say it is the authors.

There are simply popular authors on hachette and working with hachette.

For consumers not able to get those titles, that is probably the biggest thing.

Frankly, i would say it is the authors and the consumers.

And from the amazon perspective, media is an important part of the overall business.

Though they do project them -- it is all about selection and convenience for consumers and that is what they are going after.

Really, when you take a look at the publishing business, it is a tale of two cities.

The book publishing, the traditional ink on paper, that is misses dying.

It is down about 25% of book sales over the last five years.

However, the growth of e-book sales in the last five years is up about a fold.

The future of publishing overall is in the e-book business.

Hachette will have to do business with the amazons of the world.

But they and other publishers will have to hold hard line with amazon in terms of pricing and margins.

Are we going to see more of these kinds of content disputes in the future?

We know that amazon had a similar dispute with time warner over me the distribution.

I think the goal is that it's not growing at all.

We are in a digital world.

Every device is going to be connected.

People will be connected on digital, whether tablets or the phone that amazon launched a few weeks ago.

This region as we've known it in the past several years is completely changing -- distribution as we've noted in the past several years is completely changing.

Every publisher needs to be on amazon and work with amazon and make sure that consumers get the content.

The overall media business is disrupted.

We will see multiple of these associations going forward, but the reason being that consumers are consuming content more and more online.

That is not changing.

Who is going to win in the end?

Who will get their way?

Amazon is the giant.

At the end of the day, amazon really has the leverage here.

Just give in their 60% share of the electronic market.

There will have to be compromised down the road.

I think hachette is fighting the fight not just for itself, but the industry overall.

We will have to see these other publishing houses follow up with deals of their own in the next couple of years.

The industry is going to look at this hachette-amazon deal as a template going forward.

Thank you both for joining us today on "bloomberg west." what do the authors impacted by this battle think echo we have vocal critics on both sides joining us with their take on this, next addition of "bloomberg west." ? welcome back.

I'm emily chang.

The race is on between amazon and hachette, but it is the authors caught in the middle.

Amazon recently offered the authors all the proceeds from the book.

What do they think of this fight?

Joining me now, two others on both sides of the debate.

From new york, the co-author of the upcoming hachette book, lost island.

And a self published author of several books on amazon as well.

-- joins us as well.

You wrote his letter about this that went viral.

You got support from very notable authors, malcolm gladwell, stephen king, james patterson.

What do you think about amazon's move to offer you -- offer you guys 100% of the proceeds from the book sales?

It seems like an effort to divide authors and their publishers.

It's not a serious offer.

They are offering us a lot of money.

We will be getting a large amount of e-book income, but i have a large advance for my new book coming out and would not be fair for me to take that money.

That money should be going to my publisher, hachette.

Also, the whole offer seems to assume that offer -- authors are primarily motivated by money.

Actually, we want an audience.

That is what amazon is stopping right now.

They are taking us away from our audience.

They are blocking our books and making it difficult for their own customers to order our books and taking away our audience from us.

In response to your letter that you wrote to your readers, amazon had something to say, saying this -- easy for him to say.

We should not stand in the way of other offers -- authors.

How do you respond to that from amazon?

I think that is ironic because the people really being crushed by amazons what cut of the books -- boycott of the books are the smaller authors.

Those who will be affected most are the mid-list and debut authors, those who are struggling to try to find an audience.

That is rather ironic for amazon to make that statement.

You are an author on the other side of the debate.

Where do you stand?

I think we should stop calling this a boycott, because the only books available are pre-orders.

Those books are not even out yet.

All of the other books are already on amazon.

I am blacklisted because i publish with amazon.

I find it disingenuous that we call this a boycott when no books are actually available.

It's just pre-orders.

It's hard to take the complaint seriously and it's hard to listen to it called a boycott.

It is the small and debut authors -- as to the other statement that it is the small and debut authors being heard here, we will hurt more because we earn more money on e-books at amazon, select split it 50-50. and for the authors that do not need the money, like douglas, i would say, turn around and hand 100% of that back to hachette.

You would be taking some of amazon's money and giving it to your publisher, but meanwhile the small authors who, i'm sure, don't have the freedom to speak up because their careers could be harmed by siding against their publishers, i think they could benefit.

I think what amazon is doing is -- because they have offered this just about a month or two ago.

They offered a 50-50 split, and hachette rejected that.

There is no way for amazon to negotiate and harm hachette without harming authors, which is a pr nightmare.

This is like a nasty divorce where the kids are going to be heard.

Amazon is saying, let's keep the kids at their aunt's house and get them to where they will not listen to a squabble.

The other thing that came out yesterday is that hachette has not even been negotiating with amazon, from what it sounds like.

The deal they have now, they are holding out until they can force prices of e-books even higher.

But it sounds like you think the brochures are a big part of the problem.

But this is being framed as if the authors are against amazon.

We are not against amazon at all.

What we're asking for is for jeff bezos not to hurt us in his negotiations.

Amazon and hachette can do get out.

We do not know exactly what the dispute is, but all we are saying is, please don't hurt us.

We are in is -- an innocent third party.

We have helped amazon become one of the largest corporations in the world, and authors have contributed so much to amazon over the years.

I personally have written blogs and reviews and all kinds of ways that i have helped amazon with no compensation at all, and i'm very grateful to them for selling my book.

Please, amazon, can't you just -- resolve this dispute like to large corporations without involving and hurting authors?

That is all we are asking.

We are not against anybody.

We are not for hachette either.

We just want amazon to stop retaliating against authors who have nothing to do with this dispute.

In fact, we would consider ourselves to be amazons loyal business partners.

And we do not think this is the way you treat your business partners.

Co-author of the upcoming hachette book, and a self published author.

Thank you both for weighing in.

Still ahead, can the publishing industry survive without amazon?

We explore options and one of them is being called the netflix of books.

? welcome back.

I'm emily chang.

We turned back toward conversation on the amazon-hachette dispute and whether they can survive without amazon.

Is this model any better for writers?

And can publishers afford to not be on amazon?

To help us answer these questions, we turn to mark coker , and e-book the streeter and small press literary agent.

He is joining us through skype from las vegas.

And also, rafi mohammed.

I will start with you.

What does the publishing world look like without amazon?

Clicks the publishing world has really put themselves -- the publishing world has really put themselves, gotten themselves into the situation where amazon is now the walmart of retail.

They can dictate price.

What is interesting is that publishers actually have it shipped -- a chit and if hachette and other publishers do not come to an agreement with amazon, that is a mark against amazon.

Because it is known as the place where you can get out.

If they were to leave amazon, it would hurt their stock price and i bet you amazon would settle very quickly.

Mark, you are on the other side and you think that authors can live without amazon.

Y echo -- why?

Amazon controls 65% of the e-book market, but it is possible to earn a living outside of amazon.

There are multiple retailers selling e-books for self published authors.

Apple ibooks, barnes & noble, and you mentioned oyster sauce script -- oyster, and script.

There are multiple other channels.

This blowup between hachette and amazon is reminding authors that they need to diversify their distributional and support multiple retailers.

Looking at available book sales in the u.s., they are projected to fall to 19 billion this year from 26 billion.

And e-book revenue is the postage -- is supposed to jump.

Do they have a choice?

That is a great point.

Reportedly what this skirmish is about is one number, $9.99. that is reportedly what amazon want e-books to be retail that.

And hachette is saying this is not really profitable for us and that is what this permission is about permission is about?

I'm hoping that hachette holds the line and maintained control over the pricing.

Clicks -- how do you think this actually will play out?

By holding out and training to become it put hachette in a bad position.

And they do not have the financial resources to hold out.

And it will make it less attractive for authors to work with a major publisher because they're royalty rate will go down due to lower list price is and it will push people more toward self-publishing.

Do you think you will see more authors self-publishing instead?

Yes, we have seen a big boom in cell publishing.

There is strong economic incentive force -- for authors to self publish.

And this all plays into amazon's hands.

And as mark says, if you are a small list author, you are in charge of marketing the book for yourself.

It is a risk, though.

We got to leave it here.

Thank you both for joining us.

We will continue to follow this battle and bring you the next chapter as it is written.

Germany's 7-1 win over brazil had millions of fans flocking to twitter, helping it become the most weird about sports event in history.

We will go inside the numbers next.


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