Amazon exploits book sales monopoly position in dirty war with Hachette (video)

Amazon is engaged in a “war” on publishers.  Currently in negotiations with publisher Hachette in the US, Amazon is refusing to accept pre-orders for Hachette books, delaying deliveries by up to 4 weeks and even advising customers to purchase books by the publisher in the second-hand market.

colbert amazon hachette delayed delivery

Hachette, which publishes books by J.K. Rowling and Stephen Colbert among others, is no minnow in the corporate world but Amazon’s control of 50% of the US book market and c.70% in the UK means that it cannot negotiate with Amazon on a level playing field.  It is alleged that Amazon is using this market dominance to force publishers into accepting a new sales agreement with terms that have been described as “assisted suicide” for the book industry.

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Video © Comedy Central

British authors have condemned as “deeply worrying” reports that Amazon is now pressing for improved terms from publishers in the UK, as its showdown with Hachette in the US continues to be played out in public.

According to book industry bible the Bookseller, to whom UK publishers spoke on condition of anonymity, Amazon is putting publishers under “heavy pressure” to introduce new terms. The Bookseller reports that these include the proviso that “should a book be out of stock from the publisher, Amazon would be entitled to supply its own copies to customers via its print-on-demand facilities”, and that “books cannot be sold for a lower price than Amazon’s anywhere, including on a publisher’s own website”.

The Bookseller’s editor Philip Jones said the ongoing negotiations “indicate a direction of travel that would see [Amazon] take a sizeable control over both a publisher’s inventory and its marketing”, and that “publishers spoken to – and obviously they will only speak on condition of complete anonymity – have every right to be concerned. This is a form of assisted suicide for the book business, driven by the idea that publishers are a sickly lot unable to run even the most basic operations efficiently.”

The Society of Authors chief executive Nicola Solomon called the print-on-demand clause “deeply worrying”, and said that Amazon was “already far too dominant in dictating ebook prices”. “No one company should have such dominance or be the principal commercial driver of an entire industry,” she said.

Although it is publishers who are currently feeling squeezed by Amazon, Solomon said the negotiations also “threaten” published authors. “Despite increasing profits, publishers are increasingly under pressure: they say, rightly, that even bestsellers tend to sell fewer copies than in the past (now readers have such a wide range of choice); their budgets will be under further pressure if they have to concede larger discounts to Amazon and pay for ‘services’. Authors will suffer as publishers claim that paying large advances is increasingly risky and, of course, authors are traditionally paid less on print books if publishers concede high discounts. On ebooks they are paid a proportion of net receipts so higher terms for Amazon will result in less money going to authors,” said Solomon.

The changes, she said, “highlight one wider, and growing, trend across allpublishing and bookselling. Namely, that the author is the only 100% essential component in the creation of a book. But retailers are taking a larger chunk of any income, and publishers are taking a larger chunk of any income, so the share of income which makes its way to the author is forever shrinking.”

The developments in the UK come against a backdrop of Amazon’s continuing negotiations in the US with the publisher Hachette, which have seen significant delays imposed by Amazon on what Hachette has said are thousands of its titles as the retail and publishing giants thrash out new terms.

The Guardian 25 June 2014

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