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“E” Doesn’t Stand For Ethical

In case you haven’t followed the news on the internet recently, the big story in the publishing industry is all over the Web.  On Wednesday, April 11, the Department of Justice charged Apple and five of the largest publishing houses with conspiring to raise the price of e-books.  Apparently, in a move reminiscent to the General Electric/Westinghouse/Allis-Chalmers affair of the 1950s, they all met in secret and decided to “set” the price of e-books.

Not cool.  Seriously, how can you not know that price fixing is against the law in America?  Of course it seems they did know since three of the publishing companies threw their hands up right away and admitted guilt, rather than even try to prove their innocence.

I had noticed that most of the big name e-books were priced at $9.99 on Amazon.  I thought it strange that they were all the same price, and even stranger that this often meant the e-book was priced higher than the mass-market paperback.  But an even stranger twist is this—even at $9,99, Amazon, to retain control of the e-book market, was selling e-books for less than what they were buying them from the big publishing  houses.

Think about what that means for a second.  That means that the publishing houses were selling e-books, which almost always are also released as a hardcopy book, for over ten dollars.  These are books that they have already paid for editing and cover designs, and books that have zero overhead in the form of printing, stocking, or shipping.

It gets worse.  All this money they were making on e-books, how much of it do you think they were paying their high-valued authors?  Their royalties were a measly 17.5%.  If you consider that Amazon and B&N pay 70% on e-book sales, it’s a disgrace.  The publishing companies were pocketing 52.5% of this outrageous price, the price they illegally got together to fix, and on e-books, which take a mere Word file to set up.

Gee, who am I leaving out?  Seems like some other party is getting the short end of the stick here.  Oh yeah, the freaking consumers, the readers who keep these sorry publishing companies in business.

That’s it; I’m throwing my Kindle away.  Well, as soon as someone buys me one (my birthday is August 1), I’m throwing it away.  Well, after I try it out a few times, it’s gone.  Well, when the screen wears out, I’m definitely tossing it in defiance.

The only bright side is that it has bridged the gap of traditional and Indie authors in at least one area.  Many big name authors have told their publishing company “no thanks” when it comes to releasing their hit titles as an e-book, and are deciding they can take care of that themselves.   And why not?  They can pay for their own editing and book cover design and make 70%, instead of 17.5%, from a title in which the publishing company has already publicized.

Wow.  Turns out famous authors might be smarter than we thought.  Who knew?

 

Neal Wooten, Publisher/Indie Author/Illustrator/Cartoonist

Managing Editor; Mirror Publishing, Milwaukee, WI, www.pagesofwonder.com
Author of Reternity, www.nealwooten.com

Posted by on April 17, 2012. Filed under Books,Business,Indie News,Neal Wooten. You can follow any responses to this entry through the RSS 2.0. Responses are currently closed, but you can trackback from your own site.

22 Responses to “E” Doesn’t Stand For Ethical

  1. Concetta Payne

    April 17, 2012 at 2:04 pm

    Yes, I heard and read all about it. Unreal! You covered every detail, my friend. The word is greed and more greed. Thank you for another article that is worthy of a read.

    I would love to read your comments and thoughts on reviewers asking to be paid for a review. I would think that a reader would think twice whether the review was an honest one.

    Thanks again.
    Concetta

  2. Sandra Fishel Brandon

    April 17, 2012 at 3:48 pm

    Excellent article, Neal. You clarified some of what I found a little fuzzy in the news reports. Thanks for your thoroughness.

  3. Laura Marlowe

    April 17, 2012 at 5:07 pm

    Your wonderful article puts everything in perspective; glad you wrote it.

    (And you are very welcome!)

  4. Carol McLernon

    April 17, 2012 at 6:24 pm

    Technology is a wonderful thing. It’s the people.
    Like Concetta said, “Greed!”

  5. John L Hoh Jr ("An Angel Named Carol")

    April 17, 2012 at 8:34 pm

    This is similar to those old “vanity” publishers that wanted authors to pay 50% of the costs upfront–only to give the author a measly royalty. Wait, I put up 50% but get maybe 15%? What’s up with that? Yep, I’d personally put my eBook on Kindle myself for the better return. Thanks for sharing, Neal!

  6. Rebecca Fronzaglio

    April 17, 2012 at 9:35 pm

    I never read about this subject. Thank you for the great info. and for the laugh. Your articles aren’t only informative, they are also hysterical. I should know by now not to read them with a full bladder. Keep them coming. Some of us need all the info. and advice we can get.
    By the way, has everyone read “Reternity” ??? If not, you’re missing out.

  7. Jodi Fiore 'Lia-Ria Adventures'

    April 18, 2012 at 3:09 am

    Thanks Neal for sharing this important information, I had no idea how unfair it is! Someone suggested I look into making my children stories available as e-books and I really did not know anything about how e-books work on the author/publishing end. Thanks again Neal for keeping a novice author like me in the ‘know!’

  8. Mark W Wells

    April 18, 2012 at 4:24 am

    We humans, aren’t we somthing. Many of us let others tell us what is good, what we like. The latest, the greatest thing to hit the market is what we should all have, what we must have. Reading is enjoyable for many of us no matter the form it takes. Still, to hold that book in your hands, to turn those pages to find the next treasure among those wonderful words is magical. Reading a hard bound book allows me a chance to get away from the fast paced world in which I exist. Money or not, for me it is about feeling alive, lost in the story of my beloved book.

  9. Irma Jacobs Tirro Author of The Lonely Snowflake and It's Almost Friday

    April 18, 2012 at 4:28 am

    Neal,
    Thank God we have you! I hope the kindle advocates are aware of this information. Personally, I like to take my hard copy book, sit on the back porch, and feel each page when I turn it, as I sip my coffee. I have a friend that I shall make sure reads this.

  10. Dianna Skidmore, author of "Can You Be Like Me?"

    April 18, 2012 at 5:53 am

    This article came just in time for me! It is a shame what has happened with e-books and famous authors…however, I recently discovered author Karen McQuestion on Kindle e-books. An excellent author who, after almost 10 years of trying, could not get her books published soooo….she put her books on Amazon herself and is doing great. She is my writing super hero (next to you Neal). In fact one of her books was optioned for film! It has given me hope that my book, which is in the works after sitting on the back burner for too long, can at least get e-published, by me. I can truly appreciate a 70% royalty…Dianna

  11. Sarah Mamika

    April 18, 2012 at 7:07 am

    Interesting article, Neal. Last year at an event I was attending the co-owner of a marketing company stated that putting your books on an electronic website is more effective than sending in queries as traditional publishers are scanning the sites every day looking for self-published books.

  12. Cathy Kennedy

    April 18, 2012 at 9:08 am

    How crooked is that? I wondered why e-books, sometimes were just as much as the hardcopy. This may account for that.

    Neal, mega thanks for directing me to your article, again. This was insightful. I am looking forward to getting my book,The Tale of Ole Green Eyes, in e-format now. It’s the wave of the future.

  13. Karen

    April 18, 2012 at 9:35 am

    Thanks for the article. Who are the publishers named? As an avid reader of mysteries on Kindle, I have been appalled at the prices of ebooks. Most are priced more than the trade paperback version, in some cases, several dollars more. Penguin Pulishers is one of them. Random House another. Who are the rest? I hope they have to reimburse readers who have paid Amazon excessively ;)

    Karen

    • Neal Wooten

      April 21, 2012 at 9:25 am

      The five publishing companies are: Hachette Book Group, Simon & Schuster, HarperCollins, Macmillan, and Penguin Group USA.

      Hachette Book Group, Simon & Schuster and HarperCollins, have already agreed to a settlement.

  14. Victoria Williams-Fisher

    April 18, 2012 at 11:09 am

    I don’t really feel sorry for those “big name authors” who have surrendered their work over to the “big publishers” to be sold as an e-book. Most of them have agents. Where were they in all of this? “Oh my!You mean I (I mean my assistant) can do this all by myself!” Come on! How much thought does that take? Hats off to those who said “NO!” Shame on those publishers!
    By the way, the woman who wrote “Fifty Shades of Grey” (the book that is selling at the rate of one per second)were originally printed on demand by a small publisher in Australia.Congrats to E.L. James for getting huge on her own! What an inspiration!

  15. There is something about the tactile experience of opening a book, turning the pages, smelling the inks and breathing in the essence of
    the author that brings books to life for me. Then there is the practical side of me that looks at my shelves of books, and the weight of carrying around my latest book… So far I have resisted ebooks. And as a children’s book author I have resisted publishing as an ebook. What if the learning to read process is hindered by ebooks? If I publish my children’s book as an ebook, would I be contributing to the decline of literacy? I do hope my worry is invalid.
    Thank you Neal.

  16. Lisa Sarver

    April 19, 2012 at 11:49 am

    I did recently read a snippet on this and shook my head. Your details have enlightened me as to what is really transpiring in the electronic arena. When I thought about the individuals involved and not the employers, I pondered how each person could even sleep at night. That person must lie down, rest his head on a pillow while his conscience “scrolls” out the window.

  17. Ruth Anne Meredith "The Lands of Forever"

    April 19, 2012 at 5:53 pm

    Wow, I had no idea this was going on! That’s amazing the difference in royalties – I really feel for the people who were getting ripped off. But you know … what goes around comes around. Everything these guys do now is going to be answerable to God when they pass into the next realm of life.

  18. Jen Wallis

    April 19, 2012 at 7:55 pm

    Yet another excellent article. The title does a great job summarizing it all.

  19. Lonnie McKelvey

    April 23, 2012 at 9:52 am

    I had no idea. Who would have thought? Greed by big companies? Jeeez!

  20. Becca Mills

    April 26, 2012 at 12:33 pm

    Neal, thanks for this great article. Interestingly, the $9.99 price wasn’t the result of the publishing companies and Apple’s price-fixing scheme. That scheme was motivated by Amazon’s $9.99 ceiling for ebooks. One executive apparently referred to it as “the $9.99 problem.” As you note, Amazon was selling ebooks below its own wholesale cost in order to build market. This tactic is unacceptable to the publishing companies because it draws readers away from paper books and toward ebooks. Ebooks are much cheaper to produce, as you note, but publishing companies aren’t set up to produce ebooks; they’re set up to produce paper, and paper books cost way more (the paper, the printing pressed, the transportation, the storage, the huge number of remaindered books that get returned to publishers for a 100% refund … it’s a very expensive industry). So, if market moves away from paper books and toward ebooks, publishers won’t make enough to support the massive paper-book infrastructure they have in place. So they wanted to be able to sell their ebooks for something closer to the paper-book price, rather than letting Amazon undersell them for $9.99. After the price-fixing scheme, new ebook releases went way up in price, including on Amazon, which was forced to go along with the new model. Want to buy the new J. K. Rowling book on Amazon? It’ll set you back $19.99, less than a dollar less than the hardback, even though it cost so much less to produce, ship, and store. Traditional publishing probably works well for Rowling, but most authors could make a lot more money going indie. Thanks for bringing attention to this issue!

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