Amazon and Hachette Go to War
Several of my friends are caught up in this battle between Hachette and Amazon. My heart goes out to them and to the readers who are impacted by this. The same thing happened to me last year as Simon & Schuster and B&N couldn’t agree on co-op money (the dollars spent to ensure high visibility placement of books in stores). While on book tour for WOOL, you couldn’t find the title in 99% of Barnes & Noble stores. It was a crushing feeling. And now it’s happening again.
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?
The best guess is that e-book discounting is at the heart of the negotiations. Amazon wants the ability to discount e-books as low as it likes, even losing money on the titles if they choose. The publisher (and author) get their full cut, but Amazon takes a beating. This is likely to out-compete other e-book distributors and to continue the adoption of e-books. Publishers want to keep e-book prices as high as possible. In dealing with my own publishers, I have learned that most of this pressure comes from brick and mortar bookstores, who are left out of the e-book revolution. (The PW article backs this up).
Bookstores threaten to not carry a publisher’s books if they price the e-book too low. Publishers demand that Amazon charge more for their e-books or limit the discounting, even though it doesn’t impact how much publishers or authors earn. So what you have is a company fighting for lower prices for customers, while keeping the pay for publishers and authors the same, and they are evil. While B&N holds publishers hostage just to rake in more cash to present customers not with what bookstore employees wish to highlight, but what they are paid to highlight. The backwardness of this PR war are baffling to me. Until you look at where it originates: PW is a weekly rag for bookstores. The NYT made their stance known when they stopped including the e-book bestsellers in their Sunday Book Review. The masses get their info from the traditional machine, and so they side with mafia tactics on the one hand and cry out against a distributor trying to keep their prices down.
The real losers are the authors and readers, of course. I hope this gets resolved soon. It’ll be a great day when publishers realize they stand to lose a lot by allowing bookstores to dictate their business decisions. Especially when it’s the large chains that put so many mom and pop joints out of business over the past decades.