Publisher v Retailer
The row between Amazon and Hachette in the US is undoubtedly the most significant issue in publishing and bookselling right now—and it raises wider questions about digital delivery, e-book pricing and the publisher-retailer relationship.
Terms discussions between publishers and booksellers have always been tricky. But they have rarely been as acrimonious and protracted as this, and certainly never as public. The precise details of the dispute have been hard to come by, though they seem to revolve around negotiations on e-book terms and pricing, partly in the wake of some important US legal judgments on price fixing. Whatever the cause, it has had serious business and consumer implications, including delays in the delivery of some Hachette books from Amazon and the suspension of pre-orders.
In situations like these, working out who is in the right and who is in the wrong is very hard. The statements traded by Amazon and Hachette make good cases for both sides. Amazon argues that it is trying to get the best value for the people it sells to—“When we negotiate with suppliers, we are doing so on behalf of customers”—but Hachette argues that it must stand up for writers’ rights, and negotiate “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.”
There have been some signs this week that things might be returning to some sort of normality, with reports that a few Hachette titles are available on standard buying terms again—but that seems at odds with Amazon’s comment last week that “We are not optimistic that this will be resolved soon.” Either way, it won’t be the last we hear of big publishers and retailers disputing e-book terms. More US publishers will be negotiating with Amazon soon, and they may well be encouraged to be bold by Hachette’s resistance. It is no exaggeration to say this is a crossroads for the industry. “If Amazon wins, it will change publishing. If Amazon loses, it will change publishing,” one executive said at BookExpo America last week.
And just because the row is currently confined to the US, it doesn’t mean we won’t have similar situations here too. As one independent publisher said to the Bookseller recently: “I think people are very glad that Hachette is pushing back. Somebody has to. The discounts Amazon asks for get bigger and bigger—something has to give.”
In one sense, this sort of disagreement is a fact of life in publishing, and indeed, business. But it takes on added meaning because of the huge clout of both Amazon and Hachette now. It also prompts the questions of how e-book prices should be set and where the balance of power should lie when retailers and publishers join forces to sell books. It is undoubtedly very damaging for both sides, who are fast losing sales and goodwill.
But the people caught up most in the crossfire—through no fault of their own—are the very ones that Amazon and Hachette claim to be fighting for: book buyers and authors. Readers are facing delays in their orders that in this age of instantaneous delivery they will find unacceptable. Will they blame Amazon or Hachette for that? The truth is that most of them don’t care about terms negotiations and pricing models: they just want their books. It’s no surprise that canny booksellers in the US have spotted this as a good chance to win back some market share from Amazon.
Authors are understandably unhappy at the impasse too, and are losing thousands of dollars in royalties by the day. In an interview with the New York Times, Malcolm Gladwell said his sales through Amazon had been cut in half, and laid most of the blame for things at the retailer’s door. “My publishers, Amazon and I have been in business together, an extremely successful business. We should all be celebrating together instead of fighting.”
Elsewhere in the US, novelist Chuck Wendig summed up many authors’ ambivalent views of Amazon in an entertaining blog post. “I like a lot about Amazon… They’ve treated me well and treated my books well… But Amazon also scares me. They have a lot of power. They’re erratic. Some of the company’s behaviour could easily be called ‘bullying’, and who likes bullies?”
He makes another good point in suggesting that the answer to situations like these is diversification, for both buyers and publishers. “We should shop at multiple locations. Buy all kinds of books from all kinds of authors. Buy traditional. Buy indie. Publish that way, too. Go everywhere. Try it all.”
This is easier said than done, of course. But it is a reminder that publishers need to be ready to sell to every kind of reader on every kind of platform at every time of the day. It is always unwise to rely on one channel to market, because you never know when it might dry up for whatever reason. Instead, publishers must be super-flexible and prepared to experiment with fresh models, find and encourage new partners and think more carefully than ever about selling direct to their end-users. Perhaps the biggest long-term impact of this dispute is that it will encourage publishers to find more ways to cut out the retail middleman.
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