Thursday News: Amazon’s pricing, Hollywood’s (lack of) diversity, Latin America’s publishing and America’s orphan fantasy
Escape from Stalag $7: Why Amazon’s Pricing Box Is Bad for Indies – Rich Chapman’s essay on Amazon’s pricing strategies and what he refers to as the AAAG’s (Aggregated Amazon Ankle Grabbers) is both amusing (the questions he asks of the AAAG’s at their own blogs) and interesting (the reasons he gives about why Amazon’s pricing hurts self-publishing authors). Actually, the 10 reasons he gives for his main argument are worth some serious discussion, because, as he notes, there really hasn’t been a lot of this discussion forthcoming from those authors who have been most publicly supportive of Amazon’s pricing (aka those who are clearly and disproportionately benefitting from their relationship with Amazon).
But after all the fireworks and fun, the one thing I never ever received from AAAG were coherent answers to my questions, particularly the most important one of all. And that is: Why has Amazon placed indies in a $7 dollar pricing box? Why does it grab 65% of your revenue (not counting its transmission fees, which it charges on every transfer and which vary based on book size) if you price under $2.99 and the same if you charge over $9.99? This is an issue of critical importance to indies because it is not financially feasible to hand over that level of margin to a reseller for a download service. (And if you think Amazon is paying you a “royalty” when you fork over that 65% operating expense, please stop reading now. You are incurably ignorant and I cannot help you.)
The most coherent answer I ever received from AAAG acolytes was “because they can.” When I’d respond that Hachette was therefore perfectly justified in providing that same answer to Amazon over the issue of agency pricing, AAAG people became very unhappy, though never informative or more coherent. –Rule-Set
Diversity in Film: The audience speaks – Although not a scientific study of the relationship between the disappointing premier of Ridley Scott’s Exodus and the campaign to boycott the film for its lack of diversity, this is a thoughtful piece about how many of the presumptions about how movies are sold and how audiences carry them may very well be unsound. In particular, the idea that white audiences bring the money to Hollywood via ticket sales is not necessarily supported by the performance of Exodus, especially in the context of some of the ongoing research around the impact of racial and gender diversity as they are represented in films.
Between financial data and the demographics, producers have plenty of reasons to invest in more movies about women and minorities. Would Exodus have done better if it starred minority characters, instead of being plagued by a whitewashing controversy? We’ll never know for sure, but Ridley Scott insisted he needed white people in order to sell the movie and then failed to really sell the movie. At the very least, it wouldn’t have made a difference. And ultimately, movie studios are in the business of giving us what we want. No matter how gross the people are who run the studios, if the audience tells them with their cold hard cash that they want more diversity in their movies, then the studios will follow the cash. –Lainey Gossip
Top 12 Articles on Publishing in Latin America of 2014 – A nice round-up from Publishing Perspectives of their top 12 pieces related to publishing — the business, the practice, the elements — in Latin America, from self-publishing to digital books in education to the industry’s major players.
From ebooks to textbooks, rights sales to mergers, the Latin American publishing industry has seen plenty of change recently. New opportunities for international and local players are emerging, while companies are also looking to address challenges of distribution and access. –Publishing Perspectives
OUR OBSESSION WITH ORPHANS: A SHORT HISTORY FROM JANE EYRE TO ANNIE – With the new Annie, starring Quvenzhané Wallis and Jamie Foxx, due out this weekend, JSTOR has this short but pithy analysis of the enduring appeal of orphans in film and literature, with a specific focus on how 19th and 20th C American society has represented the experience of orphans, often in contrast to a much less favorable reality. Little Orphan Annie, in particular, was first published in 1924, making a comparison between the original strip and the new film, 90 years later, a telling endeavor.
At first glimpse, there are plenty of upsides to orphans. A fictitious orphan’s appeal is easy to grasp: mysterious in origin and open to limitless potential, an orphan could do, be, or mean anything. As Nina Auerbach argues in “Incarnations of the Orphan,” the orphan is one of those rare creatures that belongs only to herself. She is a survivor, “the primary metaphor for the dispossessed, detached self,” a self we all embody as members of a disconnected, ahistorical world. No wonder we identify.
Orphans are also a boon for authors—they come with lots of baggage, but few family ties. In 1924, comic artist Harold Gray was reminded of this potential when he ran into a ragamuffin girl named Annie while scouring the streets of Chicago for story ideas. “She had common sense, knew how to take care of herself. She had to,” he recalled. “[I] made her an orphan, so she’d have no family, no tangling alliances, but freedom to go where she pleased.”* A comic strip juggernaut was born—one that spun the adventures of the spunky, redheaded Annie into syndication for a whopping 85+ years. –JSTOR Daily
I wonder how many Amazon-successful authors are afraid that if they bad-mouth Amazon, the algorithms will “mysteriously” change to drop them from also-bought lists, or their buy buttons will be removed “in a glitch.” (Or just because they feel like it.) The amount of power that Amazon has over an indie author, with their take-it-or-leave-it,-no-human-intervention-required contract, is… well, directly proportional to the amount of sales one does through them.
If all my buy-buttons vanish tomorrow, I’ll come back and mention it. *wry*
My understanding of why Amazon forces prices into that range is that Amazon has deduced that’s the range in which they maximize their profits. I really would be stunned if the policy was really just to bring the publishers to their knees unless they were playing a long-game to buy up the other houses.
Having said that, I’d love to see the policy change, particularly for bundles.
I wonder how much of Hollywood’s desire for white chars is because sales outside the US are very important to the bottom line and they suspect (based on probably zero marketing research) that black actors don’t sell well in places like Poland or China.
My observation as an expat American is that Obama has changed a lot of people’s views of African-Americans, the less familiarity people had with America and African-Americans, the easier it was for President Obama to be a significant part of their idea of what African-Americans are like.
I could kiss him for this. I’ve been saying this for the last five years, and got shot down (nastily) by people who are completely and totally in love with the word “royalties” because they’re still emotionally invested in traditional publishing and its trappings.
But Amazon issues 1099s on that, so…
As for Amazon’s hold. It is true that if you sell directly from your site, your odds of making good money are 0.00000000001%, but you do have recourse.
@Moriah Jovan: Yeah, the royalty argument is kind of ridiculous. Let’s just call the 30- or 65!- percent they take a service fee and move on.
Ridley Scott not only angered some minorities with his comments, but since he changed a number of things from the biblical text for the film (God represented by a kid, for example) a number of Christians didn’t flock to see the film. It will probably do well overseas, much like Will Smith’s After Earth was a success overseas.
Denzel Washington and Will Smith seem to be bankable artists outside of the US (Denzel’s last few films according to Box Office Mojo.com did relatively sound business both domestically and overseas).
Depending on the subject matter, if a star picks her/his project well (Denzel wisely switched to action films, so he brings the acting chops, which are an added bonus) then the enduring myth still being spread by those running studios and approving Hollywood budgets about a minority lead not doing well in certain markets will continue to crumble.
Will Smith was smart to combine his son Jaden and Jackie Chan for the 2010 Karate Kid remake, and also film scenes in China:
Domestic: $176,591,618 49.2%
Foreign Gross $182,534,404 50.8%
Total Worldwide: $359,126,022
So finding a suitable, well liked older movie and updating it with charismatic, diverse stars to attract a diverse audience can be done. Even original films with the right stars paired together (I’m thinking of The Bodyguard with Keven Costner and Whitney Houston) can become a hit at home and overseas. Seventy percent of the gross from The Bodyguard was from overseas, where it made $289 Million vs. $122 million domestically.
Everytime I hear Hollywood’s “This won’t sell!”, I remember how Nickelodeon said “Boys won’t watch a female-led cartoon”. And I go look at Korra’s ratings for the first season.
And then I daydream about smashing those figures into the execs brain.
IDK, the studios haven’t followed the money so far. They still buy into ridiculous stereotypes about characters of color and women even though they’ve been proved wrong time after time.
This won’t change until Hollywood itself becomes more diverse (and possibly more concerned about artistic issues than repeating the same old same old). So color me cynical on this topic.
“But Amazon issues 1099s on that, so…”
I’m a Canuck, so I’m not familiar with the various US tax forms and laws, so please excuse me if this turns out to be the Stupid Question of the Day.
So if they issue tax forms for the payment element of their service, are you able to claim the 65% as a professional service – hosting, distribution, etc. – in your taxes? It seems that whatever definition that claim falls under should put paid to the royalties description.
No, because what they tell the IRS they paid me is already minus those fees. The problem is that Amazon knows very good and well they’re not royalties, but they’re calling it that anyway. I can’t change that.
If I were more prone to consider Amazon evil, I’d say they call them royalties as a marketing ploy to authors who would rather get “royalties” than have revenue to actually account for or, you know, act like businesspeople.
@lawless: Agreed. I see no evidence that this:
“No matter how gross the people are who run the studios, if the audience tells them with their cold hard cash that they want more diversity in their movies, then the studios will follow the cash.”
is any more true for Hollywood execs than for any other group that allows their own prejudices to hurt their bottom line. We have civil rights laws in part because people do this all the time.
You can also sell through Smashwords, Barnes and Noble, I think ARe (?) Authors could get together and form a site with much smaller service fees than Amazon charges – people would go if enough talent was represented. Small publishers do this.
Amazon seems to be good at figuring out how much authors will put up with before going to the trouble of finding another option. As long as there are other options, I don’t see that as evil so much as common business practice.
My point was that when all options are exhausted, you can still sell on your own site. It’s just that Amazon IS their only option for actually making money.
When Amazon amounts to 95% of income, as opposed to the rest scrabbling for the 5% among them, then this isn’t advice to bank money on.
The problem is that I for instance notice standard diversification for what it is: diversification according to what is politically correct, opportune and typical of the US society only. It doesn’t mean automatically that I will like it, or not mind having this foisted on me. I actually do and I think that this reaction, which isn’t that rare, may be a reason for Hollywood practices.
I agree with another poster that Denzel Washington and Will Smith are great to watch in their respective movies. But that is because Washington is droolably hot and a good enough actor on top, and Smith is funny. They are not exchangable on their ethnicity alone.
I hope Mr. Chapman’s post sparks some discussion, because this topic has been on my mind for a long while now. I had to pull most of my book bundles from Amazon for this very reason. I’d dearly like to see Amazon take into account various factors when deciding on service fees.
(Incidentally, Mr. Chapman seems to have missed the discussion at David Gaughran’s blog and Hugh Howey’s blog over whether Amazon should lift the 35% rule for under-$2.99 ebooks, in cases where the ebook was a short story.)
@Deborah Nam-Krane: Your understanding is wrong. From the article:
Amazon’s statement that the optimum price point for E-books is $9.99 is utter nonsense. It’s what people who conduct statistical research call a “median stew.” $5.99 might indeed be the optimal price point for a self-published book about proper etiquette when dating a member of the undead. However, a book by Stephen King on the same subject may sell very well at $12.99. This is because King is a well-known brand and you’re not, though one day you want to be one. OTOH, suppose the major book reviewers state the Master of Horror’s latest opus stinks worse than a Florida mullet left on the bank of a Ft. Lauderdale canal all day in August (this is a smell I’m personally familiar with). All of a sudden, you and Stephen are on the same pricing curve. Refer back to point one to understand how this applies to other categories of books. Amazon’s stated “research” incorporated none of these variables and is as useful as the above unfortunate mullet.
@Moriah Jovan: +++ I could kiss him for this. I’ve been saying this for the last five years, and got shot down (nastily) by people who are completely and totally in love with the word “royalties” because they’re still emotionally invested in traditional publishing and its trappings. +++
A wonderful thought, but my wife would probably object. No, actually, I’m sure she’d object.
But I have also had people incredibly enough argue that Amazon pays royalties despite the fact that this is completely absurd. And people who know better have also advocated for this ludicrous argument. Fro instance, Hugh Howey:
+++ New York Publishing once controlled the book industry. They decided which stories you were allowed to read. They decided which authors were allowed to publish. They charged high prices while withholding less expensive formats. They paid authors as little as possible, usually between 2% and 12.5% of the list price of a book.
Amazon, in contrast, trusts you to decide what to read, and they strive to keep the price you pay low. They allow all writers to publish on their platform, and they pay authors between 35% and 70% of the list price of the book.
You probably aren’t aware of this, but the majority of your favorite authors can’t make a living off their book sales alone. Very few authors could when New York Publishing was in charge. That is changing now that Amazon and other online retailers are paying authors a fair wage. +++
All of you who think that Amazon is “paying” you a dime (errr. pound) when it’s charging for its download service raise your hands. We’re running a long term program to improve the intelligence of the human genome and we want YOU to participate! Just step into that chamber over there and wait for the very very bright light to shine on you all.
@Rick Chapman: I read your article. I didn’t find your assertion or hypothetical scenario compelling enough to dispute Amazon’s statement about their own business.
As I indicated, I have no great love for the price points they’re locking indies into.
@Rick Chapman: I’m hardly a cheerleader for Amazon and I loves me some good Internet hyperbole, but your nasty personal eliminationist rhetoric over a *disagreement about business tactics* isn’t nearly as funny as you apparently think it is.
@hapax: +++ I didn’t find your assertion or hypothetical scenario +++
I’m not sure what “assertion” you’re referring to. My statement about the uselessness of their research because it’s a median stew is factual. Anyone with some basic experience in this area will confirm this. It’s not a hypothetical.
But you certainly have a right to your opinion!
@hapax “nasty personal eliminationist rhetoric”
I have to admit it’s not as funny as the above! As a writer, I’m going to store that one for the future.
I guess you don’t want to guess me like the other charming lady?
My loss, I bet!
Here’s a great video about why it’s important for Asian Americans to become actors, writers, and producers. http://youtu.be/qOwBGPkY0ZU