 The next panel is going to be a couple of authors and one agent. And I will leave it up to John, Rick MacArthur, to introduce everybody. But Rick MacArthur is going to be the moderator this next panel. Rick is the president and publisher of Harper's Magazine. And I am somebody who is absolutely thrilled to have gotten to know Rick at an early point in my career. In fact, I think Rick's Magazine, Harper's was largely responsible for my career because the first major piece that I published was in 2002 in Harper's. So it's really, and Rick has really made, he's striven over the years to keep this magazine alive and vibrant. And anyway, it's great to have Rick here. And I'll let Rick introduce the rest of the panel. Where's our Skype participant going to appear? Oh, there he is right here. Oh, hi. OK. Which one do you want? I guess I should sort of sit in the middle. I don't know. You want to sit there? Susan, go ahead. Good. Yeah, you're going to go first. Hi, everybody. Welcome. I'm Rick MacArthur. Barry has already revealed one of my many conflicts of interest here today. And I'll just list them quickly because I think it's going to be instructive for you. I mean, I'm an author. First of all, I'm on the board of the author's guilt. So I'm like everybody else, pressured, threatened, hostage to the Amazon monopoly. But I'm also a magazine publisher, desperately dependent on single copy sales at Barnes & Noble. And so when you think about Barnes & Noble's survival, also think about the survival of many independent magazines like Harper's and not so independent magazines, which are very dependent on sales there. The closure of borders, which is directly attributable to Amazon's monopoly power, was devastating for American magazine publishers, which brings me into a third conflict of interest, which is that Amazon is so arrogant after we published one of Barry's pieces killing the competition. What year was that? 2012. Amazon continued to advertise in Harper's. They don't care. But they're so arrogant that they just don't care. And I'll get to why they're so arrogant. But I'm also now part owner of an independent bookstore in New York City called Book Culture on Columbus, where we're trying to keep the flame alive. And the problem is, for me, is not only the pressure that Amazon's putting on independent booksellers, because I can talk about that later when we get into specifics, but also that paradoxically, if Barnes & Noble were to go out of business at 82nd and Broadway, two blocks away from where Book Culture on Columbus is thriving, we'll get a windfall. But Amazon will get a much bigger windfall. And my magazine will suffer. So it's not a healthy situation on any of these counts. Finally, I'm a journalist and a press critic. And I want to remind you and try to answer Scott's question or the previous moderator's question, why isn't the Justice Department doing anything? And one reason might be that on July 30, 2013, President Obama helped inaugurate the new state-of-the-art Amazon warehouse in Chattanooga, Tennessee. About six days later, I guess that's August 5th, it was announced that Jeff Bezos was buying the Washington Post. So I don't think it takes a genius to figure out that there is politics in the enforcement and application of antitrust law, and that right now we have a White House administration that's not sympathetic to our case and is more sympathetic to the interests of pleasing Jeff Bezos in the Washington Post. And now may I ask, is there a Washington Post reporter in the House? Of course not. So what, am I wrong? They're invited. OK. So and I ask you, I mean, imagine John D. Rockefeller buying the New York Times in 1905. It's unthinkable, right? But it happened, right here in the nation's capital. So now we're going to get to the specific pressures on authors and agents. And we have a very good panel here. Frank Ford was written a lot about it. He's going to start. Frank is the author of How Soccer Explains the World. And he's the former editor of the New Republic. And Frank is now working on a book on online monopolies. Mark Hoker behind me, where is he? He'll come back. Mark is the founder and CEO of Smashwords. And he's a pioneering self-published author of Boob Tube and Secrets to E-Book Publishing Success. Susan Cheever, who I've known a long time, who's you're still on the board of the author's guild on the author, the counsel. And she's a very good author. And one of my favorite newspaper columnists. I'm not going to go on at length about what she's written, but she used to write a great column for Newsday, which I thought was terrific. And then Eric Simonoff, who's a literary agent at William Morris Endeavor. I didn't know they'd added Endeavor to the name. So I've learned something today. And we'll start with Frank. And I'm going to also ask you at some point to talk about the piece you published on the cover of the New Republic. When was it about Amazon? Because in your experience, Amazon kept advertising after Barry announced them. In my experience, Amazon cut off all of our advertising and I think contributed to my getting pushed out the door. He answered the question. But they were very brazen about it, too. Because they sent a letter to us saying, you wrote a cover story about us that was critical. Therefore, we will not advertise with you. But writers like to think that we're special. And Scott makes a very compelling argument for why we might be. But I don't think that we're that special. And I think that we're really an object lesson in the way that Amazon does business. How does Amazon do business? Well, it always starts off nice and friendly. Hey, booksellers, here's a cool way to sell your product. And they came to us and they said, they're going to break the stranglehold of Barnes and Nobles and borders. And they said that we're on your side. And that seemed great at first. But we all know that Amazon's ambitions are enormous. It wants to be the everything store. It's named for the largest river in the world for goodness sakes. Its logo has an arrow pointing from A to Z. Its aspirations for dominance are total. It wants to be the epicenter of our retail lives and our consumption and our leisure lives. So after it invites you into its store to sell your stuff, it plays a really patient game. It gathers data. It builds infrastructure. And along the way, it comes to be the dominant seller. But then it buys an opportunity to make even greater profits. It won't just sell your product. It will compete against you. And it will beat you. And we saw this with the Amazon Marketplace, where grandmas were able to sell pillow pets on their site. And Amazon performed this wonderful service for them. And it allowed these grandmas to reach a wide audience. And it helped them fulfill their orders. And it only took 6%. But once Amazon's algorithms figured out that pillow pets were a hot item, watch out grandma. Amazon began to sell those pillow pets themselves. And it had the scale to price them far cheaper. And it had the data to sell them much better. And so the once wonderful marketplace of Amazon becomes a vertically integrated juggernaut, and grandma gets bulldozed. And what's true for pillow pets is that true for Proust. Amazon has become the dominant, single dominant player in the book business. And Amazon is in the process of vertically integrating that business too. And it has two strategies. The first is that it's created its own publishing imprints, and it's created a flourishing, self-publishing business. And the point of these businesses isn't to publish great literature, although they may publish some good books. The point is that they recruit authors who know that they can't afford to sell their books at the same price that Scott Thoreau and Doug Preston do. They're undercutting the market for those players. And it gives those books privileged positions and promotes them in ways that are not always obvious to us, but are obvious to people inside the book business. It front-loads its best-seller list so that those items shoot to the top of the best-seller list, and that gives them the added visibility and marketing power that comes with that. And the second thing is that it's gone to war on traditional book publishing, and it's set out to crush that business, to wring as much profit out of that business as possible. And I've spoken, and for my book, I've spoken with the people who sat across the table from Amazon, and they're bastards. They are explicit about how they will deny placement in emails. They will shaft publishers in their algorithms if they don't agree to their terms. And we saw the way that they treated when Hashed didn't agree to its terms. And so Amazon has already, it's won the book-selling market, and now it's set up to dominate book publishing too, because it's adjacent, and it's a way for them to further their dominance. So why does this matter? Well, the first is that we know what book publishing does in response to dominance. It does what other industries do. It huddles, it seeks safety in numbers. And so the book publishing business used to have a bunch of big houses, and now that's shrunk to five. You won't always see it because they're all these imprints and these names on the back of the books, but they're really only five companies that do that, that sell books. And that creates the opacity of options for the author when they wanna go sell their wares. The second thing is that Amazon is destroying the culture of book publishing. Book publishing was always a different sort of industry. It was commercial, yes. But the people who ran book publishing understood that they were dealing with precious cargo, and they treated that cargo fairly well. They understood that they played an important role in our democracy, in our literary culture, and the culture of those publishing houses is slowly being eroded. It was being eroded before Amazon, but Amazon is doing its best to send that to the graveyard too. And the ethic of quantification, where the only thing matters are numbers, which is the Amazon ethos, is coming to be the prevailing ethos in book publishing too. I don't wanna, I just wanna wrap up by talking about, but just mentioning one other point. So why does this matter? Well, Amazon is a damn important part of our economy. It's surpassed Walmart now, and it keeps on going, and its aspirations keep on growing. Now it wants to control the skies, and it's seeking to deregulate the drone business so that it can control that business too. UPS was a partner to Amazon, and now Amazon has decided that they wanna take over that business too, so they need the government to not regulate drones. We know that Amazon treats its workers fairly badly. Where's the discussion of this? Barry talked about this before. Because of Amazon's dominance in the marketplace of ideas, they've managed to create an environment where there's a chilling effect. It's great that so many people have come here today to criticize Amazon, but we all know authors who went with us to the FTC in the Justice Department to talk about prosecuting Amazon, and they were afraid to come here because they understood that it's career, it's potentially career suicide to criticize Amazon. The Washington Post has done a lousy job of criticizing Amazon. It's been a pale shadow of what the New York Times has done. It's tiptoed around Jeff Bezos. Jeff Bezos owns a company called Business Insider, which is just filled with gushing press about Amazon. And so books matter, Amazon matters, and it's a matter of democracy that we'd be able to have an open conversation about this. And it's just not going to be possible if that marketplace of ideas is dominated by one corporation. Okay, sounds like a great company. Susan. I think I'm gonna go home now. Yeah, no, but I'll just get right to it. Let's talk about author's vanity. Susan and I and Frank are, I'm sorry. Oh, we're gonna go with, you wanna go second? Oh, I'm sorry, okay. Sorry, Mark, you're at a disadvantage because you're behind me. Talk to us about Amazon and its relationship with self-published authors. All right, can you hear me all right? Can you hear me? Yeah, okay. All right, well, yeah, thanks for inviting me to participate in this panel. Today I'm going to share my perspective on Amazon's e-book business, and I'm going to draw on my experience supporting thousands of self-published authors and small independent presses, as well as my experience as a self-published author. I'll start off by saying that I'm an Amazon customer. I admire their innovation, their tenacity, and long-term focus. Amazon deserves a lot of credit for helping to popularize e-books and create exciting new opportunities for authors and publishers alike. Yet I'm concerned Amazon's business practices have become harmful to authors, publishers, consumers, booksellers, and to the future of books. They're salting the fields and making unfair, they're making fair competition impossible. If left unchecked, Amazon's actions will bring harmful long-term effects long-term consequences to the global book trade. There's tremendous innovation taking place today at publishers large and small, at startups such as my own, and it retails everywhere, retailers everywhere. There's tremendous opportunity for all of us to continue innovating for the benefit of consumers and for the benefit of book culture. But the other half of the story is that Amazon has tilted the playing field to the point where it's no longer level. They're leveraging their dominant power as both a monopolist and a monopsonist to bully, coerce, and extort authors and publishers. In books, Amazon has created an integrated network where they operate over a dozen traditional publishing imprints. They own Audible, the world's largest audiobook publisher which has exclusive supplier agreements with Amazon and iTunes. And last but not least, they operate KDP. KDP is Kindle Direct Publishing. It's their self-publishing platform. And I'm going to focus most of my comments today on KDP. It's what I understand the best. KDP, in my opinion, is the lynchpin of a strategy to marginalize publishers, subjugate authors, control what readers can read, and eliminate current and future retail competitors. Amazon launched KDP in November 2007, concurrent with the launch of the Kindle. And this was just two months before we launched Smashwords. So KDP liked Smashwords, made it possible for any writer anywhere, really anywhere in the world to self-publish an e-book. And this is good. This is beneficial. Finally, all of those rejected authors, such as myself, had an outlet, had an opportunity to reach readers on the same virtual shelves as the large publishers. In fact, our shared authors between Smashwords and Amazon were among the first self-published authors to sell millions of books. Now in December of 2011, Amazon switched up the game. They announced KDP Select. KDP Select is an opt-in option in which authors agree to make their books exclusive to Amazon for a period of at least three months. And under this program, self-published authors are not allowed to distribute their books to other retailers, and they're not even allowed to make their books available on their own websites. In exchange for making Amazon their exclusive retailer and de facto publisher for three months, Amazon gives these books special merchandising advantages in the Kindle store. And these merchandising advantages make these books more discoverable and more desirable to Amazon's customers. Within weeks of Amazon launching KDP Select, it became clear that books enrolled in KDP Select received tremendous merchandising and sales advantage over these non-exclusive books. And since the number one objective of most authors is to reach more readers, thousands of authors removed their books from competing retailers so they could go exclusive to Amazon. Now the flip side of this coin is it also became immediately apparent that Amazon was punishing the books of authors who refused to go exclusive. These books received less merchandising, less visibility, and fewer promotional tools and fewer sales. So in other words, Amazon created a caste system where KDP Select exclusive authors and authors published by Amazon's own publishing imprints received preferential sales and marketing advantage while authors who sought to make their books globally available to readers around the world at all retailers were marginalized. So imagine if a large bookseller with over 70% market share held a gun to the heads of authors and told them, if you don't make your book exclusive, we're going to stock your book in the downstairs basement, in the unlit closets. Authors were faced with a simple choice. Did they want to reach more readers at the world's largest e-book store or not? So today, KDP Select boasts over 1 million exclusive books, almost entirely provided by self-published authors. Readers cannot purchase these books at other retailers. Nearly one quarter of Amazon's e-book inventory is exclusive. In July, 2014, Amazon announced Kindle Unlimited. Kindle Unlimited is an e-book subscription service where readers pay $9.99 a month and can read an unlimited number of books. And nearly all of these books are supplied by the inventory of KDP Select. Non-exclusive authors who want to make their books available in Kindle Unlimited are not allowed to do so. You can only make your books available in this service to those readers if you are exclusive. So with Kindle Unlimited, they changed how author royalties are calculated. The conventional method of compensating authors who self-publish is to pay them 70% of the list price for every single copy sale. Yet with Kindle Unlimited, Amazon paid out of a pool. And it worked out to about $1.40 for each qualified read, where a qualified read was basically determined by after a reader downloaded the book and read past the first 10% or so. So in essence, Amazon was basically telling authors, we don't care what your list price is, it's irrelevant. We're gonna, it doesn't matter if your book is priced at $2.99 or $12.99, you're gonna make the same low royalty. In June 2015, so just about six, seven months ago, Amazon changed the payout formula. So rather than paying for a full book, they changed the payout to about one half cent per page. So if you're an author of a 200 page book, you'd earn about a dollar. Whereas, if you think about it, the typical self-published e-book author is selling single copies at around $3.99. So they're earning over $2.50 for every unit they sell. So here's Amazon saying we're only gonna pay you a dollar. So that was about a 60% drop in author payments. And KDP select authors have no control over what Amazon pays. Amazon determines what they're going to pay the author in the month following the month that the book was read. So by any conventional measure of what e-books cost, both at Amazon and at other retailers, Amazon is dumping product on the market at prices that are dramatically lower than the production costs of traditional publishers and dramatically lower than what even low-priced self-published books from self-published authors typically earn the authors. When I speak to authors who've enrolled in KDP select, they tell me almost universally that they hate the idea of exclusivity and they resent Amazon for making them enroll. But many of them feel like they have no choice. For many of these authors, Amazon accounts for 70 to 100% of their sales. These authors have families to feed, mortgages to pay, and readers they need to reach, they feel trapped. They feel trapped because they are trapped. So at the heart of Amazon's self-publishing strategy, I believe is a plan to bludgeon the businesses of its retailer and publisher competitors. If Amazon continues with this strategy unchecked, eventually healthy competition will collapse. Amazon is sucking the oxygen out of the air. Unlike its pure play competitors, the publishers and the book retailers, Amazon doesn't need to make a profit with books. Yet publishers and book retailers and authors too, they need to make a profit on books. They're entirely dependent on book sales. And Amazon has the power to place its exclusive books in front of customers and bury the non-exclusive books that dare not bend to Amazon's will. So Amazon's competitors cannot survive if the foundation of their businesses, their readers and their authors, are being eroded away through unfair business practices. So for Amazon, it's a simple strategy of divide and conquer. Once the authors are separated from their publishers, once authors are forced to self-publish with Amazon, either through KDP Select or even through Amazon's own publishing imprints, these authors are divided and conquered. They've lost their collective bargaining power that a publisher provides. They've lost their negotiating power and they have become entirely dependent upon the whims of a single retailer and their monopsynistic control over customers. So we face the very real possibility that authors will be writing fewer books or that offers orphaned by failed publishers simply stop writing because not every author wants to self-publish. So I believe unless there's some form of government intervention, we face the prospect of a nuclear winter in book publishing where most books are produced and retailed by the same company. Thanks. Thank you, Mark. Mark's metaphor just went to the top of the Amazon bestseller list, nuclear winter and publishing. We haven't heard that before, have we? That's the best I've heard lately. I really want to hear Susan Schieffer talk, I'm serious about this, authors vanity because it's not easy, first of all, to get authors organized to do anything, highly individualistic, egocentric types who used to blindly look at their Amazon number and oh look, I made it to, we can't all be Scott Tro. I made it to the top 10,000 or I made it to the top 500, which is even more exciting. And that war is against a rational approach to fighting Amazon. We're not blind anymore, we know what's going on, but I want Susan to talk a little bit about what it's like to be, because she's an authentic, self-supporting, independent author, what's it like in this atmosphere? How do you suppress your fear, for one thing, that the whole thing is going to collapse? But I want to make this personal, so I grew up in a household supported by a mid-list author, John Gever, and it was very obvious when the money came in, where it went, when I needed braces, he wrote a short story called The Housebreaker of Shady Hill, when my brother had to go to private school, it was very, very clear to all of us that we were living from check to check, and that's how we did it, and it worked. And then I raised my children the same way on that same, whatever you're gonna call it, trajectory, and I was able to somehow miraculously by producing a book every two or three years, for the last 30 years, able to support them, and they are now sort of estimable adults. Now, so that was the family thing. And in 2016, it's no longer possible to do that. That way of life is gone, the way of life of the family dependent on the mid-list writer. And I don't know, vanity? I don't know, it's just, it's over. It's like covered wagons now. And as you all have heard, author's income for people like me has gone down 30%. So fortunately, my children are adults, but it's a disaster for us. It's not good for us. And there are many, many reasons why author's income has gone down so fast. But the frustrating thing for me is, one of the reasons is not that people have stopped reading. They're reading more. They wanna be writers. They're more interested in literature than I can remember. So it's not that. It's not that, you know, it's not that reading is gonna take the place in the graveyard next to television. And what was once this vibrant competitive marketplace, my father had six publishers. I've had six publishers. You know, you go from publisher to publisher, or you went from publisher to publisher and found the publisher that was the right fit for your mid-list idea so that you could get your mid-list advanced so that you could live for the year and a half it took you to write your mid-list book. And as I said, that's over. Amazon has just completely changed the marketplace. You can't do that anymore. Everybody's scared, as you've heard a lot, nobody wants to, and you know, can you blame Hachette's fear on Amazon? Hard to know. But I'm a Hachette author. I had a book come out in October and it was very weird. I had big audiences and almost no sales. That's never happened before in 30 years. So that's what's happening. People are still interested. They wanna come, they wanna talk about books, but they don't wanna buy the book at a bookstore. They wanna go to Amazon where instead of paying $28 for it, you can pay $14.50 or 78 cents if you don't mind. It's already been read by someone, or if it's a review copy. So they've just blown a hole in this whole way of life with their heavy discounts. And you know, there are thuggish business practices. I mean, any businessman will tell you, well, that's how business is in America. But it isn't how the publishing business was. The publishing business is the only business where your word is your bond. If your editor says they're gonna buy your book, they buy your book. Does that happen in real estate? I don't think so. So, you know, this was a little island of passion and production that existed. And now, you know, Amazon's business practices are also blowing its guy high. I feel as if the last thing I wanna say, besides ouch, Amazon, is, you know, lower consumer prices seem like a really good idea. But they're not a good idea at the expense of the producer, of the consumer goods. So we writers are getting squeezed. Our editors are getting terrified. Our few remaining publishing houses are getting terrified. And that's not gonna end well. So that's what I have to say. Okay, we'll come back to you. Eric talked about the other side of the business, the agent side of the business, because it used to be a very profitable business. I don't know if it's profitable anymore, but tell us about what pressures you're under. Be selling to publishers. The three or four publishers, it still exists. Exactly, so for one thing, I should explain what it is literary agents do. We search for the talent. We cultivate the talent that is the writers. We work with them pre-editorially to make either their book proposals or their manuscripts the best they can be. And then we matchmake. We find the best possible publisher and the best possible deal for the author. In the best of cases, it's a very, very long, very stable relationship. I have the honor to represent Doug Preston among others, and we've been together since the mid-90s. And in many cases, it's a very intimate relationship. The agent's not just a deal-maker, not just a go-between is an advocate in all aspects of the publishing process, but is often a shoulder to cry on, is often the person you call during the long dark night of the soul as many authors have. And the person you call when you wake up one day, check Amazon to discover that your book is not for sale because you're published by Hachette. In 2009, Amazon flew a bunch of literary agents to Seattle, including me. Around the time that Kindle was taking off and publishers were doing something called windowing, that is they were not releasing the e-books at the same time. The covers in Amazon was extremely eager to have them stop the practice of windowing so that they could sell Kindle editions much more cheaply, as Scott mentioned, at a loss, in fact, copy by copy. And I think they presume that agents were influential enough in the ecosystem of publishing that they wanted to talk to some agents and get them on Amazon's side. It was very informative. It was interesting to be in the belly of the beast. In Seattle, they insisted that they were perfectly happy to lose between $2 and $5 per underpriced Kindle edition because they were making it up in back list, that overall they were making money even if they used front-list titles as lost leaders, et cetera, et cetera, et cetera. And a number of us basically expressed skepticism, if not disbelief, and said we believe that you're doing this to gobble up market share. And that eventually, when market share is great enough, you will come to publishers. Pardon me, and dictate terms. Very different than the terms you're currently selling under. And they said in 2009, no, no, absolutely not. That is absolutely not what we intend to do. We promise you we're making money, losing money on the front-list and making money in the back list. It's not part of our plan. It's not part of a short-term plan. It's not part of our long-term plan. And nothing much was resolved in the 2009 Agent Amazon Summit in Seattle. Flash forward to the day Doug called to say my books aren't for sale anymore on Amazon and other of our clients, Malcolm Gladwell and Trenton Lee Stewart and James Bradley and God knows how many other Hachette authors we represent, couldn't sell to their readers books from Amazon. The Hachette dispute went on for how many months? Do you know how many months that actually lasted? It was a very, very long, drawn-out process. Five or six, right? Okay, five or six months. Yeah, it had to be at least six months, I don't know what I'm saying. It was almost 11 months. Oh, really? It was three, two months. Doug pointed out that it was 11 months. So if you're an agent and you're representing a fairly diverse group of authors, some like Doug who publish a book or two a year and some like, for instance, Washington's own Edward P. Jones who publishes a book every 10 years, it's your baby. It's this project you worked on in many cases just you and a computer screen for years and years at a time. And imagine, if you will, pouring your heart and your soul and your artistic effort and risking, in many cases, the financial security of yourself and your family and having your book come out during that 11 month window. It's devastating, personally, to all the authors who lost sales during the Hachette dispute. But I think what hasn't been pointed out is that it doesn't stop after the 11 month dispute ends. That is, every book that is put into the marketplace has a track record and builds an author's track record. So the next time you go to sell a book, if your previous book sold 12,000 hardcovers and your most recent book sold 2,000 hardcovers because it was published in the teeth of the Hachette dispute, your agent takes that book to market and the publisher says, well, look, we can't really pay you nearly what we paid last time, we only sold 2,000 copies to which the agent says, yes, but that was the middle of the Hachette dispute to which the publisher says, sorry, your last book sold 2,000 copies. It is hung around an author's neck, not just for that book, but for the book after that and the book after that and the book after that. So it has this very long tail influence on the economics of any individual's publishing career because that book was not available for the 11 months of the Hachette dispute. Not unlike the 2008, 2009 economic crisis, although it's over, nothing was done to prevent it from happening again. So the spigot could be turned off again on Hachette or Harper Collins or McMillan or Penguin Random or Simon and Schuster. Whenever trade terms are not to Amazon's pleasing and it is this constant low level anxiety that lingers over publishing. I'll reiterate what a number of people have said too, Amazon has been fantastic for publishing and for authors in all kinds of ways. The sale of backlist alone, that the availability of an author's backlist is absolutely revolutionary. Even the biggest superstores during the go-go days of Barnes & Noble could not possibly match the breadth of opportunity Amazon has given authors in terms of deep backlist. We would like to have a happy and healthy and give and take relationship with Amazon. We don't currently, it is a relationship that's predominantly marked by fear. And that's our data to reality. Fear, it's not something we usually associate with book publishing and books, but it is a frightening situation. Are we gonna wanna take questions at some point? Okay, but before we get to questions, I wanna ask Mark and I wanna have a little discussion here if we could, Mark, Susan, Eric and Frank to talk a little bit about what looks like an inherent conflict between self-published authors and conventional authors who have been signed up through a literary agent. Could you talk a little bit about it? Is there gonna be, can we have a solidarity between self-published and conventional authors or is there an inherent problem? Well, in my view, I see the two publishing options as mutually complementary. I think the more publishing options that authors have, the better. You know, the great thing about self-publishing is that any writer around the world can start writing a book today and with 100% assurance, they know that that book is going to get published one way or another. But it's great to have options. Not all writers want to self-publish. Many writers want the support and the services that come with working with a traditional publisher. You know, in our experience over the last eight years, we see that it's actually quite beneficial for authors to straddle both worlds. You know, these authors are called hybrid authors. They're self-publishing and working with traditional publishers. You know, an author that's working with a traditional publisher can use self-publishing to drive up the sales of their traditional books and vice versa. So I think they're very complementary. I think they work well together and it's not an either or situation. You agree? Who wants to go first or disagree? I do want to say that one of the most troubling things about the climate around the Hushed dispute was the vitriol that was being thrown around by the independent author community that is a self-publishing author community. They had been enlisted as sort of shock troops to take down traditional publishing, which those of us who are part of traditional publishing never quite understood. But we understood the frustration of bumping up against what seems like a very forbidding industry that has established publishing. But I totally agree. It's great to have both possibilities, independent self-publishing and traditional publishing. Well, it's worth pointing out that that vitriol came from really a small segment of the self-publishing community. And I agree that it was an ugly chapter in the short history of the indie author movement. But you had a few influential authors, including some authors that I really like and I really respect, who are exclusive to Amazon. Their wagon is hitched to the Amazon horse and they chose to take any question of Amazon's business practices as a direct assault on their own personal welfare and the welfare of their fellow authors. But it certainly didn't reflect the opinions of all self-published authors. I also think they provide very different things. In other words, if you're going with a conventional publisher, as I always have, they give you the money you need to research the book. So self-publishing is great, but if you're writing serious non-fiction, you have to find that resource somewhere, the hours that you're gonna spend in libraries, reading, et cetera, et cetera, et cetera. Whereas the conventional publishers give you an advance. So they're different things. The more the merrier, absolutely. But they do provide different services. What's Amazon's end game? And it's something that's really very confusing. Are they aiming to dominate the market so that they can set monopolistic prices? Or are books just a pawn to get people addicted to Amazon devices and to keep them within the Amazon universe? They're a pawn, I know that. And they're a pawn. And the point is that they were pitting self-published authors against other authors, where in the long run, both parts of the industry are gonna be subjected to the same force, which is that Amazon wants to deflate prices of books in order to keep people circulating through their devices, through their stores. And so even in the short term, our interests may not be aligned. I think what Mark really persuasively showed is that in the long term, our interests are entirely aligned because we're gonna be victims of the same tendency that Amazon has. Amazon understands that really the three strongest drivers of consumer behavior are price, selection, and customer experience. And when you look at what they're doing in eBooks and specifically in self-published eBooks, they've assembled a selection of books that can't be found anywhere else. And they've devised a method through Kindle Unlimited to drive producer prices unrealistically lower by dumping these products on the market. If Amazon understands that if they can offer greater selection and lower prices, books that can't be purchased anywhere else, that the customers are their competitors and the authors of their competitors will have no choice but to migrate in their direction. Okay, let's open it up to questions. Right, I see you there. You do have a... Hi, Son. My name's Josh New. I'm with the Center for Data Innovation. So I'm new to this. I'm not an anti-dress person, so I'm sorry if this question is completely uninformed. So you mentioned that with the new Kindle Unlimited program, authors can realistically expect to make $1 per sale per book. What were they making before from traditional selling? And then I have a quick follow-up. Okay, well, there were two methods that authors were selling previously. There are two types of authors. There's a traditionally published eBook author. So that author was earning 25% of the publisher's net. So that worked out to about 10 to 17% of the book's list price. And then there are the self-published eBook authors who are typically earning 60 to 80% of the list price as their royalty. Okay, so but there's not like a realistic way to compare dollar sale amounts, how they've changed over time. But you're saying it's less. I think net net, it's less. If you're a self-published author selling a 99 cent eBook, what Amazon pays you in Kindle Unlimited is probably more. But it's also interesting how they moved to paying per page. We know that through all time, readers don't read everything that they purchase. Reading is often an aspirational activity. You buy books that you want to read or maybe you only read the important bits. And so by paying per page, it's really an interesting model. So the authors of books that aren't fully consumed and just partially consumed are going to make dramatically less. Authors of shorter books, erotica authors, children's book authors going to make a lot less when they're only paid by the page. If you write- This is a really important point. Just that the form of, that the economics of book making shape the actual books themselves. And that once quantification is something that publishers start caring about and forcing writers to start caring about, it's going to change books. I mean, novels will be forced to have more tension or what we'll do to a canal scarred book. Or we could think of any other sorts of examples. And once you start to have to care about the ratings, you become like television, where you can't afford to watch the ratings drop over time. So I guess then a quick follow up to that. So if- Sorry, what? A quick follow up. So if authors are making less per book, I'm assuming that we'd see, I'm assuming that the amount of market expansion, the increased exposure that publishing on Kindle or e-publishing in general, gives to an author would make up for that, an economy of scale question, making less per unit, but they're selling more units and it's easier than ever for them to reach wider audiences. It's easier for them to, it's aligning supply and demand much more effectively than traditional book selling ever could. So have book sales declined? Have authors been dropping out or have more authors come into existence and overall book consumption increased? Well, it's all anecdotal. I mean, a lot of authors are up against it. I mean, I know personally a lot of them and they're in a lot of trouble. I mean, they have to work at other jobs where they have to quit writing altogether. They just don't have time. It used to be, as a mid-list author, you could hustle a lot of freelance work to get you through the bumpy patches between book advances. There is no freelance work anymore. Everybody's asking you to write for free if they're asking you to write at all. So, but that's why I was trying to get to authors vanity. It's a factor. You have to factor in authors vanity. You couldn't come up with a better group of people to exploit and to pit against each other than authors because we are all desperate to be read, right? And so, and, well, okay. I think it's part- In my case, it's altruism. It's altruism, but it's easy for me to call it authors vanity, but Amazon has done a brilliant job of exploiting this and of pitting the self-published against the traditionally published and the precursor to the by the page model, to some extent, is the rating system. Who knows if they're telling the truth, Amazon, about whose book is selling best? You don't know. It's unverifiable. Totally unverifiable, right? But it already got people interested and excited. Oh my God, my number went up to 500. Sorry. I was just going to add, we're in a market that's characterized by a glut of high quality, low-cost e-books. There are simply too many books out there that could then can be read by readers. It's quite possible that the supply of books is growing faster than the supply of readers. So it creates a perfect environment for Amazon to exploit. You've got all of these writers who are desperate to reach readers and they're looking for every advantage they can get. And with KDP Select, Amazon says, look, we will put you in a privileged class here. You will be in the upper-cast. Your books will be more visible, more discoverable than the authors of other books. And it's been very effective because of their commanding market share. But it's been devastating to the authors who are trying to maintain broad distribution at multiple retailers. This is only anecdotal, but I've heard dozens of stories from our authors who saw their sales drop 50, 80% after the introduction of Kindle Unlimited. And imagine you're an author who's putting food on the table one month and the next month you can't make your rent. Another question. In fact, there, anybody, you pick them. I can't see. It's my understanding that a lot of publishers sell to booksellers on consignment, which causes them to increase the cost of their book to cover the cost of excess inventory. I feel like that might have relevance in this conversation when we're talking about where to cut costs of books and to increase efficiencies. Do you guys have any comments on whether the publishing industry should be changing when it comes to selling on consignment or what bearing that has? The publishing industry has always operated in a really stupid way. And one of the many stupid things, right, their word is their bond that right away, as I mentioned before, is stupid. One of the stupidest things they've ever done was to agree that any bookstore could return unsold books. So it isn't called on consignment, but you can sell 60,000 books and have 40,000 of them be returned and you don't get paid and nobody gets paid for that 40,000 books. So every hardcover you buy from a bookstore is on consignment. And that's one of the reasons why Amazon has been able to take advantage because the publishing industry has always been this horse and buggy, we do what we say we do kind of place and too bad for us. The other thing I wanted to say in response to your question was, I think book sales are down. I certainly know many writers who are stopping writing and I also am unable to say to my students anymore, you will be able to make a living at this, not a great living but a living, but the thing that's happened that's noticeable even to me is the fear. When I called my editors to ask them about did they have anything to provide for me because I was coming here, they hung up. You know, I mean, there's a tremendous, right? There's a tremendous atmosphere. I was alarmed by the number of emails they got from people praising me for attending. Well, right, exactly. That's good. I suppose so. And so if somebody's afraid they're gonna take fewer chances, they're gonna pay less money, et cetera, et cetera. I would say that it's not that book sales are down because they're actually basically flat, it's a winner take all environment where first of all, there's a tiny percentage of Americans who actually read one book a year, let alone 12 books a year or 20 books a year. Everyone watches TV, everyone listens to music, everyone goes to movies, not everyone reads books. And then there's a big subset of that group of people who just want to be told what one book to read, which is why Girl on the Train is the book to read or The Boys in the Boat is number one for three years running. So certain titles rise to the top, stay at the top and become the noteworthy conversation pieces and the vast pool of the rest of the books tend not to get the sunlight at the top of the canopy of the forest is soaking up. Can I just make one last point on this? Yeah, go ahead. So just professionalism is an important aspect of the conversation that in order to produce a work of nonfiction, it takes dedication over years, it has to be basically your full-time job. And if you don't work for a university or a think tank, the only way that you can support yourself through that process is to get an advance from a publisher. An advance is essentially a form of venture capital where they give you the seed money to be able to live your life, to be able to execute your project. And without it, you're not able to pull that off. And one thing that's changed significantly in the last couple of years is the way in which advances get paid out. So not only have advances probably shrunk for a certain set or it's kind of skewed like the rest of the American economy into vast inequality where superstar writers get big advances and the mid-last writers get the smaller advances. The advances get paid out in different chunks. So whereas before, your advance would get paid out in maybe three chunks. When you sign the contract, when you hand it in the manuscript and when the book turned to hardcover, now it gets paid out in four advances that get spread out over immense periods of time. So even if I got $600,000 for a book, that I wouldn't see the last check there possibly for five or six or seven years after I wrote it. So it might sound like a healthy sized advance, but the way that the publishers are managing costs really does screw me as a writer. What? We have time? Oh. Mary Risenberg, Executive Director of the Authors Guild. I just wanna make people aware of a survey that Doug alluded to earlier. We actually do have survey evidence to support the anecdotal evidence of authors' incomes declining. The survey is available on our website, authorsgale.org. We found that the mean income, annual income for authors has gone down 30% since 2009, which was really the beginning of the e-book era. And for authors who have been writing books, and this is full-time authors, full-time for more than 15 years, it's gone down 70%. So it's, I'm sorry, 50%. It's a huge decline. And for the very top tier authors, the 1%, the advances are still higher or even higher. For the other 99%, advances are way down. So, and they are, as Frank said, being paid out later, which is another initiative we have is the Fair Contract Initiative, where we're actually talking to publishers right now and saying advances have to be advances. You've gotta pay authors enough so they can actually not have to have other jobs while they're writing a book. Anyway, this is all on our website. To be specific, it's from about 12,000 a year to 7,000 a year. Well, that's for all writers. For all writers. For full-time writers, it's gone from 24,000 to 17,500. So we weren't getting rich before. Nobody's talking about making a lot of money here. We mid-list authors. Okay, one more question. Way and back, because you're so far back. Why not? I know that this notion has come up before, but I'm wondering if there's a continuing thought about what the potential might be for a boycott and Cesar Chavez would tell us it worked for grapes. Yeah, I love the idea of it. I love it. But why can't we do it? Tell me why. Where are the lawyers? The legislation. Where are the lawyers? Why can't we do that? What? You know what? We can't. There's some kind of a regulation that, I'm not a lawyer. My feeling is that, I mean, let's be real about Amazon. I mean, Amazon is an incredible convenience, and all of us on the stage, I would hesitate to say, have been our hypocrites on this question. None of us are pure. We've all hit. Not anymore. We've all hit the one click button. And if we're not using it on books, we're probably using it to buy razor blades or something. Not me. I'm not buying razor blades. But the point is, is that it's a noble idea, but what we really need is regulatory action. And that in a consumer society like ours, where Amazon represents such a tremendous convenience, I think we're not gonna get anywhere with a boycott. We need to apply political pressure on the government to take action. This prompts me. We have to bring this to a close. But how many of you know about the French, the Jack Lang law in France, the No Discount Law? How many of you know about it? You know what the system for bookselling is in France? Okay, you're not allowed to discount more than what? 5%? I think, I don't even, anyway, Amazon in France has about 1% of the book, the hardcover book market. It's not a hardcover culture, but 1% of the new book market and independent booksellers still have 80% of it. Because they're not permitted to discount. So Amazon, to fight back, offered free shipping, okay? And so the French parliament passed a law banning free shipping. Amazon responded by charging a penny, okay? And still it hasn't caught on because the bookstore culture there is strong thanks to this No Discounting Law. So when we, we're all obsessed with antitrust and we would love to see the Justice Department Act. In France and Germany, they have addressed it in a different way and very effectively, they've kept the independent bookstore culture alive. You will go into a city in France, Bordeaux is a good example, where the local independent, which is like a cathedral of books, it's incredible, put the local Virgin Atlantic out of business, okay? That's the difference. If we had the political culture here that would address this kind of thing, we might be able to pass this kind of legislation. I don't know if it's legal, but I'd like to see it discussed. And thank you very much.