Hacker News Reader

Whoever owns the customer relationship will take the lion’s share of profit, true in books as in everything. Amazon takes 70% because people are willing to share 70% to get distribution, because Amazon is where anyone searches for books.

It raises interesting questions about the definition of monopoly. Especially as Google gradually fades the distinction between ads and results and starts to take over categories like travel.

(not proposing anything, just making an observation)

That is certainly not true of everything. Ask a car dealer how much commission/margin they get.

I would argue that reinforces the point. Car customers don't really have a relationship with a dealership until they're far into the process of selecting and buying a car. Even then the dealership doesn't own the relationship, there's lots of competition and the customer can play dealers against each other.

OTOH, a customer certainly has a relationship with the car manufacturer, through advertising and mental image.

When you shop for a car you choose the make and model first, then find a dealership that will sell it to you. If you get your media from Amazon, you go to Amazon to see what they have and choose from that. Amazon controls the relationship in a way the dealer does not.

IIRC, this is basically why car dealerships exist and you can't just order a car out of a catalog.

It's probably more accurate to say 'Whoever owns the numerically limited chokepoint will take the lion’s share of profit.'

There are many car dealerships. There are only a few car manufacturers. So the latter have forced the former into a bad deal.

I'm not sure it's a bad deal. New car dealership owners are often pretty successful and politically connected small local businessmen. It is generally true though that distribution isn't a business that the auto manufacturers wanted to be in at the time the current system developed. It's not a wildly profitable business to be in but, like other types of franchises, it's a decent enough living for many of the owners.

It's not that they didn't want to be in the business, but that manufacturers couldn't scale their own dealerships across the country fast enough. So they opened up ownership to third parties.

Tesla, however, was in the unique position of having enough capital to open their own dealerships, which has caused a lot of friction with more traditional, "family-owned" dealerships.

There are a lot of laws surrounding the selling of cars and dealerships, ask Elon.

70% commission might sound bad to you - but imagine an industry where the standard commission had historically been 85-90%.

Of course, historically an 90% commission on a print book would cover expenses like editing, printing, and marketing which Amazon doesn't provide; and the risk/cost of unsold copies, which ebooks don't have. Still, if you think your publisher wasn't putting much effort into the marketing anyway....

Yes, as you correctly point out, the economics behind that royalty structure became obsolete when the ebook came around. The new thing was the low unit costs. The other new thing was channel economics. The latter triumphed and gave Amazon the bargaining power they needed to make sure that none of the economic advantage of e-books would find their way into creators' pockets. That is what I'm lamenting.

And discounting generally. New book sales used to be pretty much a list price operation. Publishers did a lot more gatekeeping and tended to provide more services for the authors they selected.

I've gone both the indie route and the traditional publisher route and I'm honestly not sure the publisher is worth the other tradeoffs. TBH, the biggest value of the publisher was that it still carries a certain (not entirely warranted) gravitas.

Editing is still valuable, judging by the writing quality of self-published books.

You can hire someone to do that though--along with cover design etc. And publishers often don't do an awful lot of heavy editing in my experience.

(I'd argue that if you're doing a book by yourself without a co-author, you pretty much have to hire at least a copy editor but that's pretty inexpensive.)

As the partner of a copy editor, I'm intrigued you think this is inexpensive, because she's been doing this for years for PhD and scientific papers, and the book she did took a lot longer and cost several thousand dollars at her below market rate. Admittedly it was for an english as a second language author, but my observation is that for a work of any significant length, copy editing is not cheap. For a self published book, it might exceed the revenue: you'd have to sell thousands of copies to recoup the copy edit cost.

I guess I write fairly well; I'm a professional writer by most definitions. By copy editor I mean someone who mostly just fixes spelling and grammatical errors--and maybe flags stuff that doesn't make sense. When I hired a copy editor for a book, I paid a few hundred dollars to someone who had interned for a magazine editor friend of mine.

I don't doubt that even a few hundred dollars may exceed revenue for a lot of self-published works. But I'd argue that someone needs to do a careful read-through of a book. You simply don't see mistakes after a while and most friends just aren't going to do a careful enough read through for free even if they're otherwise qualified.

Well, I think you're right about needing a fresh pair of eyes. And, as a pro writer you probably made less mistakes than most.

You paid low-to-below market rate to an ex-intern early stage career and I compared to a 20+ year proofreader in academic for ESL. Probably fishes to bicycles. I think you got what you needed which was a light touch confidence spellchecker.

A new to writing solo author, bursting with ten years of bildungsroman, who got Scriviner and has dumped two thousand disjoint paragraphs of prose into word...

> You can hire someone to do that though--along with cover design etc. And publishers often don't do an awful lot of heavy editing in my experience.

I bought and read a few self-published books on Amazon. The lesson I learned was that you should never, under any circumstances whatever, pay for a self-published book. The average quality of writing is atrocious.

Publishers may not do much direct improvement of your writing, but even if they perform a purely censorious function of printing good writing and refusing to print bad writing, they're adding a lot of value.

(And my understanding is that they do in fact work with you to improve your writing, but I have no experience in the field.)

If you think 70% commission is high, you should look into the deals authors get from publishers. Typically author gets low single digits, the shop gets around 50% and the publisher gets the rest. Sometimes the author gets only a fee, then zero commission.

30% is the norm from Amazon anyway, though I agree the terms are onerous and a world in which Amazon (or any other large corp.) dominates distribution would not be a pleasant one for authors. The nice thing above the that though is that the Internet means that monopoly on digital distribution can be broken relatively quickly by a superior solution.

>>then Amazon will take 70%

You have a source on that? Everything I see and read shows amazon takes the "standard" 30% platform rate that Apple started years ago, I think 30% is way to high as well but I see nothing in any of Amazons documentation where they take 70% of revenue for selling an ebook

https://kdp.amazon.com/en_US/help/topic/G200644210

On the "70% royalty option" (=30% commission), the retail price of the ebook must not exceed $9.99

If you write a college textbook that normally retails at $80, that $9.99 will be a joke to you.

This way they keep prices down (at the author's cost), or when there is real profit opportunity on the table, take the lion's share.

Well IMO no ebook should be more than $9.99 in the first place, and no TextBook should be $80 either

The prices of TextBook has long been insane largely because they are "required" by the professors that write them or getting kickbacks from publishers

No Free Market will support $80 textbooks

I am sure we are not going to even come close to agreeing on this topic so....

as to 35% royalty, how do that compare to a standard publishing contract from a publisher? I have a feeling that is still more than what the Traditional Publishers give their Authors

I have as much beef with textbook prices as anyone else, but they have their own screwy economics.

I'd be 110% in favor of mandating open source textbooks, where available, for any course taken by a student receiving government educational grants.

Essentially, you get to have (a) high textbook costs, or (b) monopolies over categories (e.g. one single mathematics textbook publisher).

Legacy / static topics (intro linear algebra) and evolving topics (intro biology) also have very different economic models.

My own opinion is that I don't have a problem with a textbook costing around $80. I started buying college textbooks even before I was in college, and I still do now, 10 years after graduating, often even for topics that are quite remote to my actual profession.

When I was into sailing, I bought meteorology textbooks, because I reckon "What the heck, I pay $100 for a weekend on the water. For an extra $60 I might as well be able to read the skies and the synoptic charts for added pleasure." I recently bought the standard textbook on equine hoofcare, because a visit by the farrier costs $200 a pop, happens every 6 weeks, and I reckon "What the heck. For an extra $100, I want to be able to tell the difference between a good farrier and a bad farrier."

I think college textbooks provide extremely good value for money. Working though one attentively, including doing exercises and checking the answers etc is pretty much as good value as actually doing the course at university (if it's a theoretical subject; obviously you can't learn surgery that way). This is also reflected in the way that they are now routinely being up-sold from mere books into online courses. The market for online courses hasn't quite equilibriated yet. But it's not uncommon for authors of textbooks to recycle the book into a slideset, play the slides on video at the same time as reading the book into the audio track. Throw in a meaningless certificate, and, bang, your $100 textbook is now a $1000 online course. People pay it because, often times, it's actually still worth it. (Although I prefer the bang-per-buck ratio of textbooks to online courses).

The weird thing about textbook pricing is, to listen to debates on the internet, textbooks simultaneously cost $$ AND don't make the author any money AND the main market is people who've already paid $$$$ for an in-person college course.

> But it's not uncommon for authors of textbooks to recycle the book into a slideset, play the slides on video at the same time as reading the book into the audio track.

Examples? What you’re describing does not jibe with my experience doing MOOCs. Even the better ones cover a lot less ground than a textbook on the same topic, for the same reason a lecture course does.

The funny thing is that my experience has been that the static topics are just as bad or worse for students.

For my Newtonian Physics class, the textbook we were using was on its 14th edition and cost more than $100 new. I was fortunate that my professor asked us to use the 13th at the latest, and gave the mappings to the 12th edition problems (because the only difference between 12th and 13th was which order the problems were in). This for a subject that's been essentially the same for centuries.

Meanwhile my Computer Science classes all had $40 textbooks that were in at most the 2nd edition.

This is the one thing that should be made out and out illegal -- version churning without a fundamental reason.

Inclusive of: (1) altering problem sets or numbering, (2) reordering chapters, (3) organizing chapters.

Where if any of the above are done, a free mapping must be available on the internet.

I presume there are actual university guidelines prohibiting using older editions (i.e. ones the official college bookstore couldn't buy in bulk), but most professors just didn't seem to care (in between everything else they were juggling).

"Traditional Publishers" is a whole different game though: They will try to make money by moving huge quantities of something. So they start with something that has potential mass-appeal, like a cookbook, and then 99% of the value is a result of marketing. The publisher will have the ability to get the author on cook shows on television, will advertise it on billboards, will have the distribution power to get the book into the display window at bookstores etc etc. -- In such a case, the publisher is executing all of the strategically important functions, and the author is almost exchangeable.

Compare that to someone whose life's work is some academic area where their book has become the standard textbook. If it weren't for that person's work, there wouldn't be a product here. That person can choose between a handful of publishers, and whichever publisher they go with has a product, and the others don't have one. -- The recent backlash against Elsevier and the drive towards open journals is basically showing how different the economics are here.

But the fact is: There is a spectrum here, and the above are the two ends of the spectrum.

Amazon's model is basically encouraging the cookbook-stuff and being extremely hostile towards the latter kind of content.

Could you share some links regarding backlash against Elsevier?

https://news.ycombinator.com/item?id=20606718

https://news.ycombinator.com/item?id=19273955

https://news.ycombinator.com/item?id=6996052

As you can see they are much loved with the HN crowd ;-D

Some of the highest ranked top-level comments start like

"Man, I hate Elsevier with a passion. As well as being shady, dishonest, shifty, moneygrubbing toerags, they also [...]"

"Elsevier is really, really bad. At this point, I think they are already seeing the end and investors are trying to [...]"

"Elsevier employees should just quit and work somewhere else. It's just [...]"

How is author compensation for library ebook rentals like overdrive, or subscriptions like kindle unlimited?