E-rights control squabble: Hachette pulling 'all of its titles from U.S. distributors'

Hachette Book Group USA, a major source of best-selling e-books from authors such as David Baldacci, is pulling “all of its titles from U.S. distributors” in a dispute over the issue of sales controls based on geographical territory. This “happened without notice over the weekend.”

So reported Bob LiVolsi, founder of BooksOnBoard, a major e-book retailer, in an e-mail to me last night, and I’d be very interested in hearing from other e-stores. At about 3 a.m. today I saw Baldacci titles still advertised at BOB, Fictionwise, Diesel eBooks, eBooks.com and the Mobipocket store. But they may not remain there for long.

“Overdrive, Mobipocket Paris, and Ingram Digital have all told us Hachette is pulling them from the feeds,” Bob told me in a 4:13 a.m. update. “All the resellers may not have completed all catalog updates yet. I know that we’re auditing our updates…to make sure all Hachette is gone—at least until they re-authorize the U.S. channel.  This has all happened very fast and there are many moving parts to make this happen in a way that doesn’t undermine the end customer, while at the same time honoring the intent of Hachette’s action. All three distributors are working on this in partnership with Hachette. Hope this helps clarify. …No bad guys—just a tough situation and a little tough love from Hachette, perhaps.”

Cosmic issue: Will territorial issues slow down global e-book biz?

At any rate, territorial rights and related technology could turn out to be a major consumer issue in an era of global e-books. I’m all in favor of local editions. But will onerous tech requirements crimp international e-commerce in books? And as with DRM in general, could big traditional publishers be less sensitive to the needs of E than e-only publishers are? Will e-book DRM end up with a bewildering maze of territorial restrictions, just like DVDs? Or what about complexities from sales controls not involving DRM? About all of this, the majors should beware. It is much easier for new rivals to create and distribute e-books than movies, and customers just might start favoring books and authors without the complexities that Hachette is pushing for. Meanwhile best of luck to Bob LiVolsi and the others caught up in the controversy, and I hope that all sides, including Hachette, will keep us posted via our comment section or otherwise.

In an update to his original comments, Bob says Hachette does have some legitimate reasons for concern over technology and territorial rights. Toward the end of this post, see the update he sent today with further specifics, in fairness to Hachette. Also of interest is that BOB says it’s now selling Mobipocket books in some formats but not others due to ripples from the Hachette action.

BooksOnBoard: Temporarily removed all Mobi PX titles

“We have temporarily removed all Mobipocket PX books from sale while we sort through problems created by Hachette, a major publisher that pulled all of its titles from the U.S. distributors, including Mobipocket PX format, without notice over the weekend,” Bob LiVolsi told me last night after I followed up on a rumor that customers couldn’t access various titles at BOB.  “We continue to sell all other formats as well as Mobipocket OD.  The Mobipocket PX situation should be resolved within the next 36 hours.”

“What customers are seeing is an automated error message from the Mobipocket PX server, not by BooksOnBoard, for those Hachette titles on customer bookshelves,” Bob told me.

“That message, as captured in the note you received”—actually I read it in a MobileRead forum—“is confusing to our customers.

“We chose to shut off Mobipocket PX sales until we can understand what’s happening specifically with Mobipocket PX, and how to adjust it. We also were concerned about a possible technology domino effect on non-Hachette PX titles.  The action was executed in order to protect our customers from paying for product that they may not receive.” See update at the end, reporting no domino effect observed so far.

“We have been in touch with Mobipocket on this matter and are working together to quickly and effectively resolve it,” Bob said, and in fact he wrote later that “We’ll have the Mobipocket PX non-Hachette product back up later today.”

“The surprise action by Hachette has created a difficult situation for Mobipocket, Overdrive, Ingram Digital Group, BooksOnBoard and for U.S. ebook resellers in general,” he said his original statement. “We are proceeding very cautiously with the first priority being to protect the ebook investments of our existing customers. We are hopeful that this situation will be completely resolved quickly.

“What’s happened is that U.S. distributors (Overdrive, Ingram Digital and Mobipocket) have not yet implemented systems to limit sales to assigned territories in a manner with which Hachette Livre (the French parent company of Hachette USA, formerly Time Warner books)  is comfortable, likely creating contract issues with their European resellers and some of their authors.

“Without notice, Hachette instructed U.S. distributors (include French-based Mobipocket) to pull all ebooks from U.S. distribution over the weekend. Hachette and the distributors are working hard to resolve this. Meanwhile, our support email is getting a huge number of extra inquiries because of the Mobipocket error message and the Hachette action.

“It is noteworthy that Mobipocket OD titles, sourced by Overdrive, are still available (except for Hachette titles which are a very small fraction of the nearly 300,000 titles of all formats that we carry).  Overdrive has a more robust system for handling this kind of situation and so they hold up well.  We do, however, expect to have non-Hachette Mobipocket PX available again within 48 hours.  Most major titles are available in the Mobipocket OD format, however.”

Isn’t this grand—especially in the wake of OverDrive’s action to yank zillions of titles from Fictionwise? OverDrive didn’t exactly help its credibility in the e-book community, and Hachette won’t be, either. But this is just my opinion.

Via a note received around 3:30 a.m., here are some nuances that Bob LeVossi himself wanted people to be aware of:

“My take is that Hachette probably did what it needed to do.  Whether or not you like how they did it, they certainly got the attention of the channel and will probably now find widespread enthusiastic support for setting up processes to honor territory rights. We need distributors bought in as well as resellers to make this happen effectively. My guess is that this will be the outcome.  Don’t know if you know Neil and Siobhan at Hachette, but they’re both very good folks and very supportive of the industry. Their leaders in Paris apparently ran out of gas with out of territory sales into the U.K. by U.S. resellers. I would bet money that Paris was getting hammered by concerned U.K. resellers about the imbalance in pricing. This recent action is neither a fun thing to do or experience, but the right business decision. In the end, resellers, distributors and end users all will benefit from a level playing field. ”

3:39 EST message from Bob: “One further note just in from the development team a few minutes ago.  We have completed testing on the Mobipocket PX titles and feed.  Short of the confusing message, all appears well with non-Hachette titles and we’ll have the Mobipocket PX non-Hachette product back up later today.  We’re still trying to see if we can get them to change the message coming from their server; if they can’t do it, we may try to intercept it with something that explains things a bit better to customers. There was, in fact, no negative domino effect on non-Hachette titles. Only real change for end users out of all this is that they cannot purchase Hachette titles from US resellers in Mobipocket, Microsoft Reader and eReader format until the US distributors and Hachette reach an understanding on territory controls. As a reseller, we’re keeping our fingers crossed that the discussion is proceeding well. We like working with Hachette USA and like their product. “

Reminder/disclosure: Like other major e-retailers, BooksOnBoard will be selling my novel The Solomon Scandals. The publisher is Twilight Times, which sells both E and P.