Hachette and Amazon. Let’s Talk About It.

3 Jun

Important Update (10:22 p.m.): Amazon seems to be loosening their grips, perhaps because of how readers have gone to other retailers to buy Hachette titles, but an agreement has not been made yet. Here’s the article: Amazon Is Now Re-Stocking Some Hachette Titles

If you haven’t heard, Cold War II is happening between publishers and distributers right now – specifically Hachette Book Group (Little, Brown and Company’s parent company) and Amazon – but there are others involved, including Wal-Mart, Barnes & Noble, and …oh, yeah…AUTHORS. (Because the fighters seem to forget to mention the authors.)

I am going to attempt to talk about it. But – here’s the most confusing part – since Amazon and Hachette are respecting their signed confidentiality agreements, neither is speaking specifics. They are talking in their secret club tree house, and you’re stuck on the ground because they are not going to throw you the rope ladder anytime soon. You are not invited. This “signed confidentiality agreement” is a fancy way to tell us that they aren’t allowed to be honest yet, even though they are quite possibly discussing a shift in the market that could affect dozens (probably hundreds) of publishers, distributors, and authors. Rumor has it that they are arguing about eBook prices, including revenue splits. Whatever mysterious, Illuminati decision they come to could set a precedent for all publishing houses and authors of the future. (Okay. So that might be a tad dramatic, but seriously – it could affect a lot of people.)

So what’s the big deal? This has happened before after all, but this – THIS – is different. How? If you want more specifics, here’s a bunch of articles that explain some of the dirtier details: Hachette Chief Leads Book Publisher in Amazon FightWal-Mart, Barnes & Noble, Slash Prices as Hachette-Amazon Feud Continues, Inside Amazon’s Battle with Hachette, Bringing Down the Hachette.

In summary: one of the five, BIG publishing houses is being threatened by one Amazon warrior. And Hachette is only the first…and they don’t look like they’re winning. In fact, Hachette seems to be retreating to protect their other retailers first. (Gaining alleys maybe?) But the terrifying part is the repetition of it all. Amazon has tried to take out publishers before – BIG publishers – and it seems that they want the five owners of the monopoly to fall to one. (One being Amazon, of course.) I know. I know. It’s easy to rejoice in the five falling, especially when you’ve been rejected by them one hundred and fourteen times, but allowing Amazon to take their place is more than a bad idea. It’s self-destructive. If you have ever played the family friendly game of Monopoly, it is not fun when your older brother owns every piece on the board. In fact, I’m pretty sure you’ve just lost the game when that happens.

Have I scared you yet?

I hope not.

I am going to sound like I just flipped 180 degrees, but I don’t think this is something we need to be scared of. (Not yet, anyway.) I don’t believe Hachette and Amazon’s high school drama is something we should obsess over. Should we watch it unfold? Yes. Understand as much as we can? Yes. Share the information as the two companies share it? Absolutely.

Since we don’t technically know anything, we can’t keep talking about nothing. We should share what we know with others, but we have to stop crowding our articles with theories and lies and lack of links for information. We’re only confusing one another. We can, however, talk about what has happened.

After Amazon blocked pre-orders of Hachette books (including the geniuses that are David Sedaris, James Patterson, and Robert Galbraith a.k.a. J.K. freakin’ Rowling) Barnes & Noble and Wal-Mart have stepped into the ring. Oh, did I mention that Wal-Mart is holding a %40 off sign? (on “select titles” of course.)

Yep. That just happened.

You can go to Wal-Mart right now and buy James Patterson (and whichever second author wrote his latest novel) for %40 off – and Amazon can’t do anything about it. Barnes & Noble can though. They are also displaying major discounts, even reportedly selling buy 2, get one free. FREE at certain locations.

As the reader inside of me rejoices, the author inside of me dies.

Why is no one talking about the authors? Granted, I know that Amazon and Hachette are on a Top Secret Mission to save or destroy their authors (who knows?) but every article discussing the latest events are focusing on the giant companies having their way, both claiming to help authors, neither explaining how because of the signed confidentiality agreements. (I can almost picture other publishing houses chanting, “Secrets, secrets are no fun, secrets, secrets, tell everyone!”) But Wal-Mart and Barnes & Noble are steering clear of the actual battle while still reaping the awards of it. In fact, Wal-Mart has reported a %70 increase in sales.

…sigh…

When two get in a fight, two others jumped right in. I guess I’m not against the brawl necessarily. I can’t pick a side when I don’t know what everyone is fighting for. But I am concerned about the authors – you know, the ones who actually WROTE the stories we’re trying to buy (or buying at a %40 discount.) And I am nervous to see the results of Amazon picking this battle with Hachette.

Will Amazon lose its reputation as a customer focused company? Will Hachette’s authors ever see their rewards? Will Amazon fight other publishers next? Will Barnes & Noble or Wal-Mart deepen their involvement now (or even in the future)?

One thing is for certain though.

Readers and authors are the innocent ones. They aren’t battling. They can’t. And they are the ones who are being affected the most.

~SAT

P.S. If you’re asking yourself, “What can I do about this?” – label this my call-to-action:

Stay informed, watch for new developments, and share the information with as many people as you can.

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27 Responses to “Hachette and Amazon. Let’s Talk About It.”

  1. Susannah Ailene Martin June 3, 2014 at 12:31 am #

    Thanks for the update. I’d heard something about this, but everything I knew was vague.

    • Shannon A Thompson June 3, 2014 at 1:41 am #

      Unfortunately, I think everything is vague because the situation has to be vague. That “signed confidentiality agreement” is forcing everything to be vague – but I think explaining that in the first place is a good place to start.
      ~SAT

  2. calmgirl06 June 3, 2014 at 3:29 am #

    Thanks. I’d heard about it but wasn’t sure what was going on. Interesting article.

    • Shannon A Thompson June 3, 2014 at 3:35 am #

      I’m glad you read it. I wish I had more information to share, but I thought admitting the lack of information we have been given was a good place to start.
      ~ SAT

      • calmgirl06 June 3, 2014 at 3:37 am #

        Definitely. Either I’ve been going around with blinkers on or it has not been widely reported on European news!

  3. Nel Ashley June 3, 2014 at 4:36 am #

    Hi Shannon, I don’t know if you follow David Gaughran, but he wrote an interesting post on the Hachette vs Amazon battle. You can read it here http://davidgaughran.wordpress.com/2014/05/26/amazon-v-hachette-dont-believe-the-spin/

  4. tjtherien June 3, 2014 at 5:17 am #

    Publishers, (like self published authors) earn 60% royalties on books, paying authors 25%, from what I understand Amazon is trying to take a bigger bite of the pie reducing the publisher to around the 40% range or less… and you should be scared because if Amazon is successful knocking off the big guys the self published author doesn’t stand a chance. If Amazon is negotiating to pay Hachette 25-40% the self published author will also be reduced in their percentage… so imagine cutting your earnings in half… because if they take down Hachette then all the Dominoes will fall including the lowly writer…

  5. Harliqueen June 3, 2014 at 5:30 am #

    It’s good to know what is going on, thanks for sharing. It’s hard to keep up with what is happening in the world publishing and writing, especially with so many giant companies seeming to want to decide what happens for us, instead of considering us!

  6. enkousama June 3, 2014 at 5:55 am #

    Reblogged this on Ryan Attard.

  7. Charles Yallowitz June 3, 2014 at 6:03 am #

    I keep reading bits and pieces of this, so I’m still a little lost on what’s going on. Though I did see that the authors were designated to an odd ‘property’ role. It’s kind of disturbing how we can be turned into commodities instead of people when a fight like this breaks out.

  8. enkousama June 3, 2014 at 6:06 am #

    This is age of Empires all over again (not the video game). We still haven’t realized that empires rise and fall – and the big five were headed for a slow but steady fall ever since ebooks came into existence. Amazon is better at being . . . oh what’s the word . . human. But the issue here is their willpower to dominate the publishing industry. They know that 52% of all writing income does not come from the Big 5 but from small presses and self-published authors. I won’t say whose fault that is (agents and editors) but the fact of the matter is that Amazon is now (or will be in a year or so) stable and strong enough to swing a giant member at the Big 5 and they will relent eventually.

    There are 2 options now:
    1. a treaty or agreement which will guarantee some profit for both. This will screw with authors who aren’t stable enough yet but it will be profitable in the future due to options.
    2. Amazon kicks everyone’s ass, dominates like a giant and eventually collapses under it’s own weight. This means there will be another Gold Rush in about 2 years time, and then a major flop.

    Personally I vote for the peace thing but I love watching a good empire fall.

    As for us authors – I’m not worried. We are survivors and all have our bag of tricks. After all, the true winners of every battle are the vultures who get a full meal.

  9. Kate Sparkes June 3, 2014 at 7:24 am #

    I like your “Don’t Panic” approach. Seems reasonable to me. People are freaking out on both sides, and I refuse to listen to anyone who sees this as a black and white issue. It’s two huge companies, each looking out for their best interests. Happens all the time.

    My approach is to pay attention to industry stuff like this (I don’t particularly care if big publishers fail, but I’d feel terrible for the authors who have contracts with them), but I don’t freak out about it either way. I’m publishing through Amazon, but not exclusively, because I feel like if we all do that we’ll reach a point where they’re the only option, and I don’t want that. Yes, I’ll probably miss out on sales I’d get through KDP Select. Yes, I’m grateful to Amazon for everything they do for authors. I’m just not willing to put all of my eggs in their basket. I’d rather be mobile in case another player jumps into the fray. :)

    As far as the pricing dispute, I’m torn. The reader in me refuses to pay high prices for an e-book, so Amazon winning would give me access to more books. The author in me, however, would be perfectly fine with big publishers keeping their e-books at $9.99 while I get to price lower. It’ll be interesting to see how it plays out.

    • Shannon A Thompson June 3, 2014 at 6:49 pm #

      Thank you for reading and commenting! I’m glad you enjoy the “don’t panic” approach. Who knows? I might press the panic button when they announce more news, but I don’t see how we can panic until we know more details. Thank you for also sharing your approach to Amazon. I completely agree.
      ~SAT

  10. A.M.B. June 3, 2014 at 8:54 am #

    It’s interesting to read your thoughts. I feel sorry for the authors caught in the middle of the battle between Amazon and Hachette, but I don’t feel sorry for Hachette. If Amazon were the one and only place where a person could buy books, I’d be deeply concerned about every negotiating tactic they used with publishers. But as Hachette’s own statement on the dispute says, their titles are available at many other outlets. Amazon is a major bookseller, but it’s not a monopoly the way Standard Oil was.

    Here, to the extent we can guess the details, Amazon is playing hardball with publishers to demand lower publisher royalties for books sold on Amazon, whereas Apple and five (of the six, at the time) publishers played hardball with Amazon to raise prices everywhere. That collusion was an antitrust violation (now on appeal), and from a consumer perspective, a really bad thing.

    What Hachette wants–higher prices on ebooks–won’t necessarily help authors. The question is whether consumers are willing to pay higher prices for what is essentially a computer file that they can’t loan or give away. Plus, consumers can always read out-of-copyright classics (usually for free) or less expensive indie books if the new releases from traditional publishers are too expensive. If Hachette wins (and insists on a price point that gets their books into fewer hands), it might actually hurt their authors.

    • Green Embers June 3, 2014 at 6:44 pm #

      Here is the thing, Amazon is deploying monopoly-like tactics in how they are handling this. They are raising the prices (Hachette is not the one raising the prices as you can get their products cheaper else where), they are delaying shipments to paying customers, they are refusing to stock items for paying customers, including ebooks. Somehow you are okay with this because they are not a monopoly, yet?
      Their tactics are hurting consumers more than the publishers or even the authors. Most authors don’t have a percentage of book sales, so whether Amazon stocks their book or not, they don’t care they’ve been paid.
      They own the majority of the book marketplace and that is rapidly growing not decreasing. Amazon is becoming a monster and it is hurting the consumers. The only way for evil to triumph is for good men to do nothing. Right now Amazon is being very despicable in their business tactics simply for how they are treating the consumer, what happens when they are the only game in town? Which you seem to be okay with and I don’t understand that at all.
      I love Amazon but I cannot agree with how their business tactics are hurting consumers, if they are so willing to push consumers down now to make a better deal… what will they be willing to do in the future?

  11. Val June 3, 2014 at 9:25 am #

    Well written, Shannon. Seems that authors are being forced to make other wages outside of book sales, but I believe that so many dedicated authors just have to write, and you will continue to write, because it is who you are! Maybe more Independent Sales Channels will develop as alternatives to Amazon. I hope so.

  12. Laura Lis Scott June 3, 2014 at 10:19 am #

    My first thought on this, for one, is that Amazon is not a monopoly. It’s not even that big of a publisher. It’s a big retailer, and even then it’s not the only one. People have been talking about the delays and lack of pre-orders on Hatchette books sold on Amazon. But I’ve wondering how Amazon chould take pre-orders on books that it may not even be selling. If these talks fail, Amazon won’t be selling Hatchette books and all those pre-sales would be void. Today I came across [a post by an author who worked in a bookstore that explains the financial, warehousing and delivery issues behind this quite well](http://www.hughhowey.com/another-explanation-for-the-hachette-delays/), I think.

    Does this mean I think Amazon is an angel? Of course not. But I’m not going to worry about what Amazon might do in the future. What Amazon has done so far is break open the stranglehold the big publishing cartel holds over books distribution by offering ways for all publishers, including indies, to sell directly to the public. To me, that’s a win for authors. Meanwhile Hatchette is part of a $10billion multinational corporation, the second largest publisher in the world, apparently. These aren’t the mom-and-pop publishers of a few decades ago. They’ve been playing hardball, taking out smaller publishers and squeezing authors all these years.

    There are lots of people talking about the authors, but they aren’t in the mainstream media. All the world’s biggest publishing companies are facing negotiating with Amazon, one of the biggest book retailers. Is it any wonder everything out there in the press seems to side against Amazon? I can recommend a few other voices for starters, who’ve offered some very interesting insights into the issues at play here, but I don’t want to link-bomb your post.

  13. Munazza Bangash June 3, 2014 at 3:27 pm #

    Reblogged this on DESIRABLE PURITY and commented:
    Stay informed, watch for new developments, and share the information with as many people as you can.

  14. debyfredericks June 3, 2014 at 10:46 pm #

    You’re absolutely right — all the coverage is about the two big companies, Amazon vs. Hachette. Nobody is covering authors whose livelihood is effected. Good post.

  15. kenthinksaloud June 5, 2014 at 5:45 pm #

    All very alarming…thanks for the heads up :-/

  16. Jeff Bezos July 8, 2014 at 5:15 am #

    A letter to our customers:
    Amazon has found itself involved in a commercial dispute with the book publisher Hachette, which owns Little Brown, Grand Central Publishing, and other familiar imprints. These sorts of disputes happen all the time between companies and they are usually resolved in a corporate back room.
    But in this case, Hachette has done something unusual. It has directly targeted Amazon’s customers in an effort to force the retailer to agree to its terms.
    For the past month, Hachette has been:
    –Boycotting the online retail platform, refusing to allow pre-orders on its books, forcing Amazon to state that they are “unavailable”.
    –Keeping the prices of many of its authors’ books so high that they are unattractive to customers.
    –Slowing the delivery of thousands of its books to Amazon, forcing the retailer to state that delivery will take as long as several weeks on most titles.
    As a retailer – which is only too willing to sell books published by Hachette – we feel strongly that no publisher should block the sale of books or otherwise prevent or discourage readers from ordering or receiving the books they want. It is not right for Hachette to single out a retailer, which does not want to be involved in any dispute, for selective retaliation. Moreover, by inconveniencing and misleading its former readers with unfair pricing and delayed delivery, Hachette is forcing Amazon to contradict its written promise to be “Earth’s most customer-centric company.”
    All of us supported Hachette from when we were kids. We cheered Hachette on. Many of our literary choices have made the publisher richer. We have made Hachette many millions of dollars and over the years have contributed so much, free of charge, to the publisher by way of cooperation, joint promotions, reviews and blog contributions. This is no way to treat a business partner. Nor is it the right way to treat your friends. Without taking sides on the contractual dispute between Hachette and Amazon, we encourage Hachette in the strongest possible terms to stop harming the livelihood of the authors on whose backs it has built its business. None of us, neither readers, authors, or retailers, benefit when books are held captive. (We’re not alone in our plea: both Techcrunch and Techdirt, which rarely report on the same things, have roundly condemned Hachette’s corporate behavior.)
    We call on Hachette to resolve its dispute with Amazon without further hurting authors and without blocking or otherwise delaying the sale of books to its readers.
    We respectfully ask you, our loyal customers, to email Tim Hely-Hutchinson, Chief Executive of Hatchette UK, at tim.hely-hutchinson@hatchette.co.uk, and tell him what you think. He says he genuinely welcomes hearing from readers and claims to read all emails from this account. We hope that, retailer and customers together, we will be able to change his mind.

Trackbacks/Pingbacks

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