basic maths

Amazon uses maths and logic in Hachette argument. Confusion ensues

So Amazon have released another of their rare statements regarding their ongoing dispute with giant legacy publisher Hachette.

So far, Hachette and a group of rich authors called Authors United have done a pretty good job at spinning the argument to make Amazon the big bad guy for controlling the terms in the bookstore they own. The one they built from scratch. To serve the digital publishing industry that they pretty much built from scratch.

The post does the maths for those too lazy or uninterested to think it through themselves, and it’s pretty damning.

On one side: Hachette and their quest to keep ebook prices high, and the percentage to their authors low.

On the other, Amazon, that is arguing for ebook prices under $10, where they sell more, bring in more total revenue for everyone, and keep prices lower for readers.

No brainer right? Well, not for Hachette, apparently.

Barry Eisler has done a good job of summarising the two stances, so I’ll quote quoting Amazon:

We’ve quantified the price elasticity of e-books from repeated measurements across many titles. For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000.

The important thing to note here is that at the lower price, total revenue increases 16%.

Barry: This is what Hachette opposes.  This is what the “Authors Guild” and “Authors United” are fighting to prevent.  More money for authors.
Not sure how Hachette are going to spin this one, but they’ll come up with something. Then I started wondering why Hachette would bother railing against this pricing model since they get more moolah, until Baz put me straight:
Because although the legacy industry offers various value-added services (at least in theory), the only critical service they’ve ever offered — the only one an author couldn’t get any other way — has always been paper distribution.
So Hachette aren’t fighting Amazon so much as digital in general, because more digital means less paper distribution. And, yes, they’re doing this rather than trying to innovate. Good luck with the first part (we know you’re good at avoiding the second part).
And yet people will still try to spin this, this mathematics.

Amazon runs the numbers to convince you that e-books should be cheaper

A fair and unbiased headline, no? Some jester called Daniel Cooper who writes for Engadget, has “reported” on Amazon’s post and calculations, and that Amazon is trying to drive a wedge between authors and Hachette by paying authors fairly and trying to suggest that Hachette do the same.
While you’re scratching your head on that one, get this. He also said that because Amazon didn’t say how many of their ebooks sell 100,000 their logic must be flawed, or they’re hiding something. Or something. Actually, he’s just insinuating something negative, I’m just not sure what it is.
I guess he missed the lesson on percentages in primary school.
UPDATE: Joe Konrath has weighed into the debate, as we knew he would. He’s added to Barry Eisler’s post on his blog A Newbie’s Guide to Self-Publishing, and followed that up with a withering counter-argument to bestselling author and legacy publishing spokesidiot Douglas Preston’s “replies” to Amazon. It’s rather good.
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