Elites or freedom fighters: How the Amazon-Hachette battle took on the rhetoric of class warfare

One side defends the ideals that this nation was founded on: Independence and freedom from tyranny. The other side is made up of elites who keep the little people down and take the money that is rightfully theirs in an attempt to control the message and maintain the status quo.
I’m talking not about the Tea Party and big government, but the worlds of self-publishing and traditional publishing. Yet the rhetoric in both debates often sounds very much the same. In 2009, the Tea Party movement took shape in the United States. At just around the same time, ebooks began gaining in popularity, and as the digital publishing revolution took off, so did the once-stigmatized practice of self-publishing. Authors were suddenly able to get their ebooks to large audiences without going through traditional publishers. On January 20, 2010, Amazon (s amzn) began offering 70 percent royalties on self-published Kindle books (priced between $2.99 and $9.99.) In doing so, it opened up a new revenue stream for thousands of people.
In the summer of 2014, the battle between traditional publishing and self-publishing has hit fever pitch as Amazon and Hachette wage a fairly public battle over their contract negotiations. On one side is Amazon, which is demanding a larger commission on ebook sales. On the other side is Hachette, which argues that Amazon’s demands would be ruinous for it and its authors. While the fight itself is not directly about self-publishing versus traditional publishing, that’s one of the things it’s come to stand for. It has deepened the sense of division between the two worlds.
The wildly differing rhetoric used on each side provides some insight into why the negotiations seem so momentous, and it is one explanation for why it can be so difficult for the supporters of each side to find any common ground. Some of the most outspoken leaders of the self-publishing movement have adopted Tea Party-like rhetoric benefiting Amazon that can make it difficult for those from the “elite” world of traditional publishing to sympathize. Those traditional publishers, bestselling traditionally published authors and literary folk, on the other hand, tend toward anti-Amazon arguments that the self-publishing movement finds preposterous.
Amazon, meanwhile, has capitalized on many self-published authors’ sense of disenfranchisement to advance the idea that it is the champion of the underdog, despite the fact that it is a multibillion-dollar corporation.

Don’t tread on me

Amazon is a larger company than any of the publishers it works with. Its revenue in 2013 was $74.5 billion. By contrast, the revenue generated by Hachette’s entire parent company, Lagardere, was $9.8 billion in 2013, with Hachette’s U.S. revenue totaling about $640 million. Though it is a much larger company than the publishers it does business with, Amazon has nonetheless successfully portrayed itself as the champion of the little guy.
Amazon’s ability to pull this off reflects an underlying trend in the self-publishing movement: Its reliance on Tea Party-esque, “freedom fighter” rhetoric. Earlier this year, self-publishing site Smashwords published “The Indie Author Manifesto,” modeled after the Declaration of Independence and including the line “I shall not bow beholden or subservient to any publisher.”
indie author manifesto
Similarly, self-published author Joe Konrath, who runs a blog that promotes self-publishing, wrote in a post last week:

“When in the Course of publishing events, it becomes necessary for writers to sever their ties with the industry that is supposed to have ‘nurtured’ them, a decent respect to the opinions of mankind requires that we should declare the causes which impel those writers to the separation.”

The language of Amazon supporters is often an odd combination of both Tea Party and Occupy Wall Street-type rhetoric, with allusions to class warfare and elite one-percenters. In early July, Konrath and self-published author Hugh Howey published a pro-Amazon petition on Change.org. (As of Sunday, it had been signed by over 7,000 people.) “We don’t celebrate…the tactics being used by Hachette, a publisher owned by the multi-billion dollar French company Lagardere,” they wrote (freedom fries, anyone?) and went on to write of “millionaire author propaganda,” “chattel,” “small business owners” and “independence.”
“While most of the major publishers are owned by large media giants, we are small business owners who work from our homes,” the petition states. “While Hachette has TV personalities and millionaires taking out ads in major newspapers, we have only a chorus of voices and an appeal for sanity and clear thinking. … Boycotting Amazon is preventing us from reaching you. It is an end to our independence.”
Meanwhile, statements that Hachette and Amazon released last week illustrate the ways in which Amazon has picked up on the voice of the self-publishing movement, while Hachette’s language is stilted and formal:

“Amazon has just sent us a brief proposal. We invite Amazon to withdraw the sanctions they have unilaterally imposed, and we will continue to negotiate in good faith and with the hope of a swift conclusion. We believe that the best outcome for the writers we publish is a contract with Amazon that brings genuine marketing benefits and whose terms allow Hachette to continue to invest in writers, marketing, and innovation.  We look forward to resolving this dispute soon and to the benefit of the writers who have trusted their books to us.”


“We call baloney. Hachette is part of a $10 billion global conglomerate. It wouldn’t be ‘suicide.’ They can afford it. What they’re really making clear is that they absolutely want their authors caught in the middle of this negotiation because they believe it increases their leverage. All the while, they are stalling and refusing to negotiate, despite the pain caused to their authors. Our offer is sincere. They should take us up on it.”

“We call baloney” is the master stroke: Brief, folksy and eminently tweetable. “Our offer is sincere. They should take us up on it.” Just 51 characters — easy to share that!
Hachette’s statement is written with more complex language and can’t be distilled into a single phrase; there is nothing there that you want to tweet and I had to think for a second about what they meant by “sanctions.” Both sides argue this is war, but Amazon is more charming about it and makes its message easier to spread.

You’re entitled to your own facts

One of the key questions in the traditional-vs.-self-publishing debate is how traditional publishers add value. In a world where physical bookstores are closing and retail is moving online, the argument that publishers are able to get physical books into bookstores becomes ever less relevant. Marketing support is intangible. So the debate often comes down to the advances: The money that traditional publishers pay authors before their books are published. Advances, arguably, allow for the existence of books that would not otherwise be written by allowing authors to sustain themselves as they write and research. Robert Caro, author of the multivolume Lyndon Johnson biography, is constantly trotted out as the example of the kind of author who would not have been able to do his work without advances and years of support from publisher Knopf.
[pullquote person=”” attribution=””] In a world where physical bookstores are closing and retail is moving online, the argument that publishers are able to get physical books into bookstores becomes ever less relevant.[/pullquote]
The flip side of advances, however, is the fact that traditional publishers pay low royalties on ebooks — 17.5 percent for books sold under the agency model, where the publisher gets 70 percent of an ebook’s list price and the retailer takes 30 percent. Combined, the notion of advances and low digital royalties can seem outdated and inefficient and Amazon’s Kindle Direct Publishing, with its 70 percent royalty on books between $2.99 and $9.99, seems more forward-thinking. Attempts to modernize the concept of advances — publishers are venture capitalists, taking on risk! — tend to fall flat in traditional vs. self-publishing debates. (Amazon’s more traditional publishing imprints, by the way, pay a 35 percent digital royalties and advances.)
There are valid financial arguments for both the traditional publishing model and the self-publishing model. But when it comes to a war of words, Amazon’s model sounds simpler and is easier to explain.
This is especially relevant when it comes to the “proposal” that Amazon floated last week, in which it suggested that Hachette authors receive 100 percent of the royalties on each ebook sold during the contract negotiations. Amazon wrote in its letter:

“If Hachette agrees, for as long as this dispute lasts, Hachette authors would get 100% of the sales price of every Hachette e-book we sell. Both Amazon and Hachette would forego all revenue and profit from the sale of every e-book until an agreement is reached…
Here’s an example: if we sell a book at $9.99, the author would get the full $9.99, many multiples of what they would normally get.”

This would actually hurt Hachette much more than it would hurt Amazon — but explaining how is complicated. Here is an attempt from book publishing consultant Mike Shatzkin:

“So we have a $10 ebook. Normally, Amazon would pay $7 to Hachette and keep $3. Hachette would notionally divide the $7 as $5.25 to Hachette and $1.75 to the author. What Amazon proposed was that the author would get the whole ten dollars, Amazon would give up its $3 and Hachette would give up its $5.25…
But the math is worse than that because Hachette has already paid the author’s $1.75 in the advance for the lion’s share of the sales that would be made under this deal if it were agreed to. So Amazon is giving up $3 and Hachette is giving up $7 on most of the books. And many of the authors, frankly, aren’t entitled to even their own share on those sales (they already got it), let alone Hachette’s (or Amazon’s).”

That makes sense, if you read the fine print, but terms like “100%” and “the full $9.99” are a lot easier to understand or to explain in one sentence.
In another example, here’s Amazon’s Russ Grandinetti on the company’s demand for a higher commission on ebooks sales:

“This discussion is all about e-book pricing. The terms under which we trade will determine how good the prices are that we can offer consumers.”

And on the other hand, here’s Michael Cader at Publishers Lunch, explaining:

“On a 30 percent retailer commission and 70 percent publisher split, a standard author agreement allocates the equivalent of 17.5 percent of the consumer price to the author. A 40 percent commission turns that into 15 percent of consumer price (a 14 percent reduction in author share); a 50 percent commission turns that into 12.5 percent of the consumer price — a 28.5 percent drop in author share. And yes, the big publishers ought to have increased their royalties for ‘hardcover’ ebooks long ago — but on a 50 percent commission split, a 35 percent royalty would leave the author standing still, while reducing the publisher’s final net by 38 percent.”

Explanations like these are essential — but they’re not sexy or simple. Amazon wins the public messaging war, repeatedly, and it does so with clear messaging that seems simple on its face.

Who exactly is the underdog here?

One of the main reasons that charges of “elitism” rankle the traditional publishing world, I think, is that most people who work in the industry — whether they are publishers, independent booksellers, editors or authors — don’t feel like one-percenters. And most of them aren’t: Book publishing pays notoriously low salaries and most authors — whether they are traditionally published or self-published — will never get rich.
Supporters of Hachette and traditional publishing fear Amazon’s growing power. They worry that its business practices will drive publishers into the ground, forcing them to consolidate or go out of business, and leading to a less competitive and vibrant marketplace for books.

Gigaom illustration by Biz Carson, adapted from Shutterstock.

Gigaom illustration by Biz Carson, adapted from Shutterstock.

But I think that many members of this group fear the loss of the “right” kinds of books. Thus far, all of the greatest self-publishing successes have been in genre fiction — thrillers, mystery, romance, science fiction — rather than literary fiction or narrative nonfiction, the types of books that win the biggest prizes and get serious reviews. There is a fear that in a world dominated by self-publishing and Amazon, it’s not just “books” that wouldn’t get published, it’s the “important” books that wouldn’t get published. (Robert Caro, anyone?)
There is, too, a fear that Amazon does not value or respect books as cultural objects. “To our knowledge, Amazon has never clearly and unequivocally stated (as traditional publishers have) that books are different and special, that they can’t be treated like the other commodities they sell,” the Authors Guild’s Richard Russo wrote last week. “This doesn’t strike us as an oversight.”
Barry Eisler, an author who has published books both traditionally and with Amazon and is on Amazon’s side in this debate, speculated last week on the sense of “sacredness” he perceives in many arguments against Amazon: “I’m not saying these people view Hachette authors literally as the apostles and Hachette literally as Jesus Christ. But they do seem to think the author/publisher relationship properly goes far beyond just business. For the references to be coherent, there has to be a perception of a substantial degree of intimacy, even of sacredness, in these relationships. Meaning, apparently, that by not buying into the faith, Amazon must be committing heresy.”
Supporters of Amazon, on the other hand, fear the power of media conglomerates and decry a publishing landscape dominated by Manhattan elites. They, too, worry that big publishers’ business practices will lead to a less competitive marketplace for books by forcing out the little guy — but in their view, the little guy is the “small business owner,” and the notion that a book publisher or traditionally published author like James Patterson or Douglas Preston or Stephen Colbert could ever be the little guy is absurd.
To those taking sides in Amazon vs. Hachette, this fight isn’t simply a contract negotiation between two large corporations. It’s a clash of value systems; an actual example of class warfare. Amazon seems to understand that better than Hachette does, and it is successfully making Hachette seem aloof, snobbish and elite.
The book publisher, ironically, is not winning the war of words.