Blogger: Janet Kobobel Grant
You might have heard about the pitched battle between two giants in our book economy–Amazon and Hachette Book Group–on television news, in newspaper articles, through blogs or other online sources. Last week both parties took their pitched battle to the public through press releases and television interviews. What’s the fuss all about, and why does it matter to writers?
Hachette might not be a familiar name to you, but it’s one of the Big Five publishers in the United States; its multiple divisions carry a variety of names: Grand Central, Hyperion, FaithWords, etc.
As a result of the Federal government ordering publishers to renegotiate their e-book selling agreements with Amazon, Hachette is the first of the Big Five scheduled to do so. Everyone in the industry knew the negotiations would be tough because so much is at stake for each player: Amazon wants a higher percentage of each sale, and Hachette doesn’t want to give that higher percentage.
To leverage its distribution power, as negotiations faltered, Amazon at first delayed shipments to readers of some Hachette books 2 to 5 weeks, suggesting other books the buyer might want to purchase in light of the Hachette title “not being available.” Then Amazon ratcheted up the pressure by taking down pre-order buttons on Hachette books about to release, including JK Rowlings’ upcoming title. Some Hachette books aren’t available at all, some don’t have Kindle versions, and some don’t have print versions.
In 2010 Amazon used the tactic of having “buy” buttons disappear on MacMillan titles when the two companies were negotiating percentages. Amazon eventually gave in, as MacMillan chose to lose short-term sales for long-term higher percentages.
Why should writers and readers care?
If Amazon wins and receives that higher percentage, it sets precedent for that percentage with every other publisher when that publisher’s current agreement is set to be renegotiated. If each publisher gives in to Amazon’s pressure tactics, that means not only will every publisher make less money on every book sale, but authors also will take a hit in the royalties paid for every sale.
If Amazon wins, it has been rewarded for a tactic that has a tinge of censorship to it. Would we stand by if a library banned a book we wanted to read, offering us another in its stead? Why, then, is it okay for Amazon to censor Hachette titles and to state they aren’t available when they are? Since Amazon sells approximately 60% of all books and has always shown itself more interested in having the majority of a market over making money on the sale of each item, it can put a smaller company on its knees financially. (As it’s done in the past. Read The Everything Store for a deeper look into how Amazon gains control of a market segment.)
If Hachette wins, Amazon is in a weaker position for each upcoming negotiation, the publisher will be financially stronger, and authors will receive more royalties.
We don’t know if these negotiations will have any affect on the price the reader pays for a book on Amazon when negotiations end. But it’s hard to imagine how Amazon, the distributor, can present itself as serving its customers when it chooses not to fulfill its job of distributing. And that is how Amazon is positioning itself publicly.
Those who buy books on Amazon must decide if they will buy the substituted titles suggested to them, seek the book they initially wanted to buy elsewhere, or not buy anything. But it would be a naive buyer who thought whatever decision he/she makes doesn’t matter. That decision is casting a vote for Amazon or for Hachette.
As negotiations continued, Hachette sent out communications to authors and agents about the deadlock. Amazon kept silent for a couple of weeks and then wrote a blog post (with no comments allowed) saying they didn’t see the negotiations ending any time soon and offering to pay 50% of whatever monies Hachette believed authors had lost, with Hachette paying the other 50%.
As reported by Publishers Marketplace, the next day Hachette responded with this:
Once we have reached…an agreement, we will be happy to discuss with Amazon its ideas about compensating authors for the damage its demand for improved terms may have done them, and to pass along any payments it considers appropriate.
In the meantime, We will spare no effort to resume normal business relations with Amazon—which has been a great partner for years—but under terms that value appropriately for the years ahead the author’s unique role in creating books, and the publisher’s role in editing, marketing, and distributing them, at the same time that it recognizes Amazon’s importance as a retailer and innovator.”
Authors, with whom we at Hachette have been partners for nearly two centuries, engage in a complex and difficult mission to communicate with readers. In addition to royalties, they are concerned with audience, career, culture, education, art, entertainment, and connection. By preventing its customers from connecting with these authors’ books, Amazon indicates that it considers books to be like any other consumer good. They are not.”
Lest you think this sort of rough-and-tumble negotiations have never occurred outside Amazon, Barnes & Noble used the same approach of “greatly diminished” numbers of a publisher’s titles when it was negotiating terms with Simon & Schuster. That battle went on for almost a year, and neither party was forthcoming about how the disagreement was resolved. One thing is certain: Both companies lost sales during those long months, and authors’ income was diminished.
What are your views on the Amazon-Hachette dispute?
Why the Amazon-Hachette battle matters to writers. Click to tweet.