Amazon vs. Hachette: Theories and opinions

So, Amazon vs. Hachette. There’s a thing. One multibillion dollar company versus another in a contract negotiation, Amazon delaying availability of Hachette books, authors getting caught in the middle, and we’re supposed to root for the publisher because Amazon is, of course, evil. Right.

Publishers Weekly has a pretty informative and more or less neutral article looking at the matter and putting it in perspective of the publishers’ antitrust settlement and subsequent renegotiation windows. Hachette will be the first of the publishers to get to renegotiate its contract with Apple, in October 2015, and undoubtedly Amazon wants to lock in terms at least as favorable as Apple is likely to get. An agent puts into words the ambivalence with which the publishing industry regards Amazon:

Summarizing the feelings of many book publishing professionals, this agent added: "We as an industry are in the odd position of pushing Amazon away with one hand and hugging it closer with the other. We need them…but we need them to be reasonable.”

Good luck with that. Amazon is famous for its unyielding approach to negotiation, to the point where John Sargent of Macmillan said he was “off to Seattle to get my ass kicked” when he went to break the agency pricing news to them. And I get the feeling that, in the end, Hachette may need Amazon more than Amazon needs Hachette. It will be interesting to see where it goes.

The Publishers Weekly piece, and some articles I’ve seen in other places such as marketwatch site Seeking Alpha, put this in the context of Amazon finally starting to feel shareholder pressure to show a real profit, and looking at cutting expenses, raising fees (such as the recent Prime price hike), and squeezing more money out of publishers to be able to do that.

Meanwhile, Hugh Howey, he of the Author Earning statistics, noted that this particular squabble is getting a lot more press than one that affected him last year, when Barnes & Noble had a feud with Simon & Schuster over co-op money, the kickback that publishers pay bookstores to get their books prime placement. (Funny how pay-for-play was outlawed for radio stations but there’s no problem having it in bookstores, isn’t it?) Thanks to that dispute, when he was on book tour for Wool, “you couldn’t find the title in 99% of Barnes & Noble stores.”

What I find fascinating is the increased coverage this time around. The NYT and Publishers Weekly have published scathing reports accusing Amazon of being a bully. I would have loved some of that directed at B&N last year. You see, Barnes & Noble was holding authors and readers hostage in order to wring more cash out of publishers, because they are having a hard time making that money by actually selling books. They got a pass for this. What is Amazon up to?

Howey feels this can be explained by the NYT and Publishers Weekly both being influenced by their old-media ties. I suspect that publishers and their media allies might also be willing to cut B&N some slack because they’re a fellow enemy of Amazon. Whereas when Amazon does something, it’s because they’re flexing their monopoly muscle, B&N has to do whatever it can to survive and so gets a pass.

5 Comments on Amazon vs. Hachette: Theories and opinions

  1. “Publishers Weekly has a pretty informative and more or less neutral article looking at the matter ”

    Pffffft.

    That was pro-publisher propaganda, pure and simple. They left out B&N pulling the same trick last year but included a”will no on think of the authors” wail.

  2. Isn’t the judge in the DOJ lawsuit against Apple claiming that the six publishers must negotiate one after another so each doesn’t know the deal the other is making? So why this assumption that Amazon knows these deals? That supports my suspicion that the serial negotiation order exists only to benefit Amazon, which isn’t under any such limitation. In can choose when to apply pressure on each.

    I’d add that Amazon must be demanding what are presumably far better terms than the typical bookstore gets. Otherwise the intensity of this clash makes no sense. Given Amazon’s market dominance, that’s precisely behavior that ought to bring federal intervention, assuming, of course, what we don’t have–an honest DOJ.

    We may also be seeing the beginning of real trouble for Amazon. As you note, large publishers are typically located in NYC, as are the major media outlets. Assuming some socializing between the two, Amazon is likely to find itself getting the bad guy image.

    Politically and media-wise, Seattle is in a far distant corner of the country. Even Jeff Bezos’ acquisition of the Washington Post may not help.

    My own fear is that we’re headed for the worst possible scenario as writers.

    1. Amazon succeeds in dominating the book and ebook market, leaving everyone but itself powerless and impoverished. Independent authors get treated even worse than Hachette. Amazon already pays some of the worst royalties around for ebooks. That gets worse.

    2. A few years later, Amazon implodes for various reasons including bad press, rotten employee morale, growing public distaste, and eventually federal intervention.

    3. What’s left of retail book ebooks distribution after Amazon’s dominance and then decline isn’t able to recover quickly. The book and ebook market languishes for years.

    Not a pleasant thought.

  3. Let’s see, the publishers, when they went after Amazon, managed to kill a huge chunk of the independent eBook sellers (Fictionwise and Books on Board are gone) and basically left themselves B&N and Amazon as the major eBook outlets. B&N is, at best, lukewarm to eBooks, and Amazon is perfectly willing to cut-price the books (thereby cutting author royalties) while they use those same ebooks to attract eyeballs to the site.

    B&N will destroy themselves by being neither fish nor fowl, with poor treeware stocking in the stores and an eBook library management system that can drive you crazy trying to find one of your own books.

    If, as you say, Amazon implodes, there’ll be nobody left who can do a decent job of selling eBooks because the ones that went about it decently were destroyed, and the indie bookstores wiped out in the blast means there’ll be less exposure to new books than ever.

    So how do the publishers (at least the ones who don’t have their own well-run eBook sites like Baen and to a lesser degree Harlequin) benefit from living in the fallout of their own version of the Fukushima-Daichi meltdown? Or are they simply denying it’s coming?

  4. Remember the great novel The Painted Bird? The message of like attacks like? I have seen many gorillas in many industries and they will always butt heads in their attempts to increase domination. We live in a jungle and only the strongest survive. (Yes, I know, it stinks.) B&N was once a gorilla but is now an endangered species. Publishers and authors bemoaned them when they put the hurt into indie and regional chains decades ago. The amount of money and time lost on legal attacks is typically better spent trying to outsmart each other. Amazon is outsmarting most everyone these days because they are very well run and innovative. I used to attend vendor meetings (in the GPS category) at Amazon and they brought actual “editors” to get the product write-ups as good as possible. Imagine that!

  5. Gee, there’s a disagreement in negotiations between Amazon and Hachette and all the blame goes to Amazon. The Author’s Guild has hardly been neutral, they’ve basically been a sock puppet for the publishers position on all the disputes (even when it’s illegal conspiracy). Sorry, I don’t feel sorry for the authors that are temporarily impacted by this. It’s as much Hachette’s fault as Amazon’s.

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