Price Wars for Books Are Probably Bad News for Authors

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Is heavy book discounting bad for authors? Matt Yglesias is puzzled:

Buzzfeed has a baffling article up about how Amazon and Overstock are waging a price war on physical books featuring deep discounting and huge wins for consumers. According to Andy Meeks this leaves authors “authors caught in the crossfire.”….[But] authors are paid by publishers, who hand out advances and royalty checks. The royalties are based on a percentage of publishers’ gross revenues so the retail price of the books sold doesn’t mean authors get less money. If anything, retailer discounting is good for authors and publishers because it boosts book sales.

I think there’s a fairly straightforward way that this could be bad for authors. Amazon has been waging a battle for years now to get consumers accustomed to low prices on both e-books and physical books. So far, this means only that Amazon doesn’t make any money on books. So far.

But what happens when Amazon drives everyone else out of business and there’s no one left but Amazon selling books? One possibility is that prices go back up to their old level. Another is that consumers have become so accustomed to price-war pricing that they just won’t pay more. Amazon, however, will no longer be willing to lose money on books, so it will demand lower wholesale prices from publishers. The publishers will have little choice but to agree, and authors will get squeezed.

Nobody knows if this is how things will eventually shake out. But there’s not much question that Amazon really, really wants to train consumers to expect low prices for books. Unless you believe that Amazon is doing this out of a sense of public spiritedness and will continue losing money on books forever, eventually the piper is going to be paid. That’s likely to be bad news for authors.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

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Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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