Big Six publishers decline to renew contract with Amazon over unfavorable terms
April 10, 2012 | 3:39 am
Salon Magazine has an extremely lengthy story looking at Amazon, and bringing up a couple of points I hadn’t heard about before. In main, the article looks at Amazon’s habit of making quiet but substantial grants to various small independent publishing organizations, totaling about $1 million per year. Is it done to support indie publishing, or silence Amazon’s most strident critics? The Salon piece is more even-handed than the last article I covered on this theme.
But the really interesting part is actually buried in the second section of the article, which mentions something I hadn’t heard elsewhere: Salon claims that the Big Six publishers are taking a page from the Independent Publishers Group’s book and declining to renew their contract with Amazon over what they see as an Amazon price gouge.
Amazon is picking up its literary largess during an especially charged season in the company’s relationships with the rest of the book world. For the first time, the “Big Six” publishers — HarperCollins, Random House, Hachette, Simon & Schuster, Penguin and Macmillan — have refused to sign Amazon’s latest annual contract. The main sticking point is exorbitant increases in “co-op promotional fees” for e-books that the publishers see as an illegal gouge by another name. One person familiar with the details of the proposed 2012 contracts that Amazon has submitted to major New York publishers described them as “stupifyingly draconian.” In some cases, he said, Amazon has raised promotional fees by 30 times their 2011 cost. In saying no, the big publishers are following in the footsteps of the Independent Publishing Group (sic), a major indie distributor representing dozens of small presses that refused Amazon’s increases earlier this winter and soon saw the “Buy” buttons on more than 4,000 of their titles promptly delinked.
If the contracts are permitted to expire the way IPG’s was, will Amazon delist the Big Six publishers’ e-books the way it did IPG’s? That would be something to see. And of course this comes right when the publishers and Apple are under antitrust investigation for the agency pricing scheme they forced onto Amazon.
The rest of the article is long and very interesting, tackling the ambivalence organizations feel toward Amazon’s grants and the way that very few people are willing to go on the record either for or against Amazon’s grants (though plenty of people are willing to say bad things anonymously!) because they don’t want to upset either Amazon who offers them money or their own anti-Amazon compatriots. Even one publisher who does speak out largely does so alone.
[Melville House Books publisher Dennis] Johnson’s long crusade against Amazon has for the most part been a lonely one. “I admire Dennis’ rebel spirit,” said one small publisher who declined to go on the record. “It’s very brave. You can’t really speak out publicly against them. They’ll hear. It’s amazing. You say something in a short blog interview, and they know.”
So is Amazon making the grants with nefarious goals in mind? In the end, it may not really matter. Amazon is doing a lot of good with its grants…but it’s also helping to create the system where those organizations need the grants to keep going. And compared to the overall scale of its profits, $1 million a year is basically what Amazon finds going through the sofa cushions.