As Amazon works to negotiate prices for e-books with Hachette, they are exercising a number of powerful tactics: pulling pre-orders, buying less inventory, extending shipping time, and not offering promotional pricing. You can still buy Hachette books from Amazon, it will just take longer and cost more. In a statement released today, Amazon said that if book buyers don’t like it, they’re welcome to shop elsewhere. They are flexing their business muscles. They’ve used that muscle before, and they’ll do it again.
Hachette’s authors are understandably upset, because this fight is hurting their sales. Now the seller is reminding Hachette and their authors why they wanted to do business with them in the first place: Amazon moves books. Negotiating for acceptable terms is an essential business practice that is critical to keeping service and value high for customers, both in the medium and long-term. Amazon is squeezing Hachette with all their might, because, as they said in statement today, “when we negotiate with suppliers, we are doing so on behalf of customers.”
Richard L. Brandt argues that the dispute will end well for consumers:
Jeff Bezos is once again using ruthlessly self-serving tactics to pressure book publishers into lowering prices. In an attempt to force Hachette to lower its wholesale price of e-books, Bezos has started delaying delivery of some hard- and soft-cover Hachette books and raising prices on others. Will his move further weaken book publishers, which are already operating under whisper-slim margins and are looking to e-books to save them? As the author of three books myself, all published by mainstream publishers, I worry about that myself.
But I very much doubt that will be the outcome. The ultimate winner of this battle will be buyers and readers of books. If Bezos wins this battle, I would bet that publishers and book authors may just come out ahead as well. And, yes, Amazon most certainly will, too.
But Jeremy Greenfield imagines “a scenario where [Amazon] controls three-quarters of all book sales in the U.S.”:
Long-time industry consultant (and partner in Digital Book World, my employer) Mike Shatzkin explained to me what would happen next:
Let’s say Amazon goes to 70 percent and they’re basically the pipes for everything and they’re indispensable and you can’t publish a book without them. So, what do they do then?
If they’re still trying to maximize profits, we’ll still have lots of romance books and James Patterson will still write his books. But serious nonfiction books won’t get published. Those are the books that will go first.
Nonfiction books, like Walter Isaacson’s biography of Steve Jobs, are expensive and risky to produce and rarely sell well, yet many of these books drive intellectual thinking in the U.S. Robert Caro’s latest book on Lyndon Johnson The Passage of Power: The Years of Lyndon Johnson took nearly a decade to write—and that means investment and risk.
Jack Shafer has decided to close his Amazon account:
[W]hile Amazon may have captured my wallet, its recent behavior has convinced me to take my business elsewhere. As long as the company’s high-pressured negotiating tactics served my interests — lower prices, expansive selection, superb service — I was on board. But the company has erred in this dispute. It would have been okay with me if it had hard-balled the publisher by refusing to discount its books or even insisted on selling them at a premium. In that case, I could do what I usually do — make individual decisions about where to buy stuff based on price and availability.
But by essentially banishing many Hachette titles from its stock, Amazon, which ordinarily puts its customers first, has put them last, telling them they can’t buy certain titles from it for any price. If Amazon prevails in this clash, will it put me and my material needs last whenever a supplier resists its will? I don’t know for sure, but I can guess.
However, Martin Shepard, a small publisher, gives Amazon “a four star review for not only their efficiency and work they do, but for leveling the playing field”:
In truth, everyone wants more of the pie. We’ve been publishing literary fiction for 35 years, and in the past found that the chain bookstores took few if any of our titles, that distributors like Ingram demanded bigger discounts from us than they charged the conglomerates, or that despite winning more literary awards per title than any other publisher in America we could not match the print review coverage afforded to authors of the five big conglomerates. But we’re not calling these other organizations Mafia inspired or asking for government intervention. Surely one must come to recognize that all these companies are—and should be—free to set their own terms based on their bottom-lines, and publishers like Hachette might consider tempering their complaints about Amazon’s discrimination or restraint of trade. Jeff Bezos didn’t create Amazon for Hachette, and Hachette isn’t forced to use Amazon for distribution. What is Amazon anyway, other than an incredibly successful on-line store that sells almost every product one can think of. …
I always have a lingering suspicion that when one of the large publishing cartels complains they are being treated unfairly by Amazon, it’s probably good for most all of the smaller, independent presses.