Hachette Puts out Response to Amazon Statement, Rejects Author Pool Before Agreement Is Reached

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Following Amazon’s first and only public statement on its contract dispute with Hachette, the publisher has put out its own statement, giving its side of the story and rejecting Amazon’s offer to create a payment pool for authors whose incomes have been affected by the negotiation:

It is good to see Amazon acknowledge that its business decisions significantly affect authors’ lives. For reasons of their own, Amazon has limited its customers’ ability to buy more than 5,000 Hachette titles.

Authors, with whom we at Hachette have been partners for nearly two centuries, engage in a complex and difficult mission to communicate with readers. In addition to royalties, they are concerned with audience, career, culture, education, art, entertainment, and connection. By preventing its customers from connecting with these authors’ books, Amazon indicates that it considers books to be like any other consumer good. They are not.

We will spare no effort to resume normal business relations with Amazon—which has been a great partner for years—but under 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, at the same time that it recognizes Amazon’s importance as a retailer and innovator. Once we have reached such an agreement, we will be happy to discuss with Amazon its ideas about compensating authors for the damage its demand for improved terms may have done them, and to pass along any payments it considers appropriate.

In the meantime, we are extremely grateful for the spontaneous outpouring of support we have received both privately and publicly from authors and agents. We will continue to communicate with them promptly as this situation develops.

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17 thoughts on “Hachette Puts out Response to Amazon Statement, Rejects Author Pool Before Agreement Is Reached

  1. It is extremely Amusing to note that what Hachette calls “limiting customers’ ability to buy” is in fact “making Hachette books available on the same terms as those of smaller publishers, including its own KDP authors.”

    KDP authors can’t set up for pre-orders nor can we expect steep discounts or large stock of our Createspace paper editions. You don’t see us b******g. Cry me a river, Hachette.

  2. Wow, so amazon did something really nice and offered to make sure authors get paid even while contracts are being argued and Hachette threw their authors under the bus. I think authors should be looking for a new publisher right about now…

    • Actually they weren’t just engaging in spin. Amazon’s actions are reducing authors’ first week sales, which affects their appearance on bestseller lists, which potentially limits sales for the life of the book, so there’s really no practical way to calculate the exact losses that any particular author may experience as a result of this fiasco.

      • >>Amazon’s actions are reducing authors’ first week sales

        There are two sides to a contract negotiation. It would be fairer to say Amazon and Hachette’s actions…

        • Is there some law saying Amazon has to carry Hachette’s books?

          No, then Amazon has done nothing wrong. Despite what Amazon acts like it thinks and what some out there believe, Amazon is NOT the only source of books in the world…

  3. “Amazon indicates that it considers books to be like any other consumer good. They are not.”

    Sorry, they are consumer goods. Consumers pick the ones that offer the most value, from the source that costs the least. A small bakery that sells eclairs, with a chef that puts in creativity and effort and decades of experience has to play by the same rules of the market as a writer.

    You’d think publishers would be more humble in a world of increasingly lower barriers to building an audience and being published. As Amazon notes – simply work with a competitor of theirs if you find it unfair – it’s their customer base and a privilege for you to be a part of that, not a right.

    • Well said. This is part of the mentality that put Borders out of business (among many, many, bad management decisions). *Most* modern books are not special as a class of consumer goods. Publishers pretend that they are passing down the wisdom of the Libray at Alexandria in the ghostwritten/co-authored works of their marquee brands, like James Patterson. Frontlist literary fiction is a minuscule portion of the “Big Five’s” revenue stream. Also, while Hachette pretends to be the poor, little, itty-bitty, publisher being bullied by big, bad Amazon, remember that Lagardere’s profits in 2013 were about the same as Amazon’s ($280mm).

      • Actually they are not quite the same as all other consumer goods in the sense that you don’t generally pre-order a can of green beans or a loaf of bread weeks or months in advance. Books, movies, music, electronics and other such goods are often ordered in advance of actual availability.

        The main issue I have with the whole debacle is that Amazon is singling out Hachette for this treatment. If you look at the Amazon Coming Soon page in the books department, you will see that they are offering other publisher’s content for pre-order.

        “We are currently buying less (print) inventory and “safety stock” on titles from the publisher, Hachette, than we ordinarily do, and are no longer taking pre-orders on titles whose publication dates are in the future.”

        So if they want to treat one publisher that way then they should treat them all that way. To do otherwise is applying an unfair constraint of trade solely to gain lower costs. That smacks of anti-competitive practices, especially given that Amazon has by some estimates garnered over 50% of the physical and electronic book market.

        • That’s because the other publishers, such as MacMillan have already agreed to their contracts on whatever terms they deemed acceptable. Hachette is responsible for presale not being offered on their product.

        • I disagree, I pre-order cans of beans all the time, they arrive and then are shelved until needed, sometimes for a year or more before I’m able to “consume” them. I pre-order books exactly the same way, sometimes a year before I can “consume” them.

        • Whether something is pre-ordered is irrelevant in terms of it being a consumer good. Cars are pre-ordered from dealerships, insurance is pre-ordered before it’s needed (if it’s ever needed), food products are pre-ordered as pointed out by Bob. It is just a consumer good.

          The problem is we’re not privy to the treatment of the other publishers – it’s possible the ones that are available on pre-order have acquiesced to the terms and it’s just Hachette trying to throw its weight around. With razor thin margins, Amazon has every right to control costs in a way that allows it to stay in business. Consumers – myself and probably yourself included – reap the benefit of good management and disruption of an aging industry.

  4. I have yet to run into any baker that ever has to compete with used copies of their work. The concept of first-sale doctrine is a rule that applies only to specific markets. It is only through a short sighted over-simplified view that you can compare the book industry as getting to play by the same rules of market as a bakery.

    Also, under exactly what terms should publishers humble themselves to? Amazon claims it is pushing for terms for \keeping service and value high for customers in the medium and long term. But what exactly those terms are is secret. Unlike Apple which has a specific fixed cut and terms applied equally, Amazon has left room for it to argue for more or less on a case by case basis. If they where really doing these action \on behalf of customers,\ wouldn’t they also be willing to share the exact terms they are backing and why it benefits the customers?

    Written between the lines of Amazon’s actions in the past is that the terms aren’t always to the customer’s advantage. Amazon creates features and bundle pricing structures to create a situation known as \vendor lock-in.\ If you want feature X or price Y then both items A and B must be bought from Amazon. If you buy the book someplace else, then Amazon offers to get the ebook at a lower price does not apply. If you use an Audible subscription to get the audio book, then whispersync won’t work with an ebook bought someplace else. If you get the book shipped from someone else, then you can’t leverage the Prime shipping subscription you already payed for. If they get an ebook from someone else then their Kindle won’t provide the X-Ray features for the book. The list of bundling of features only available by buying everything through Amazon goes on.

    So, while Amazon says that people are still free to by Hachette books from other third parties, in between the lines they are still shouting at their customers that doing so will loose them all the benefits of the Amazon ecosystem.

    Who is to say that part of the terms that Hachette is objecting to would not prohibit Hachette from creating it’s own eBook reader application and selling discounted eBooks directly? Would such terms really be for the customer’s advantage? Has Amazon denied putting such terms in?

    While I can’t say that I really feel sorry for Hachette, I do believe the authors and customers are on the loosing end of this fight. Amazon wants to focus on out of 1000 items ordered at this very moment would be impacted by this fight based on how many of them ship. My question is how many of the items that do ship are permitted to because the producer of the items gave in to terms that only benefited Amazon. Amazon might be correct that only at any given moment only 1.2% of the items desired are not available or delayed because Amazon is flexing it’s muscles to get it’s way. But if it is an unique 1.2% every week then 62.4% of the items that do ship make it to you because the producer gave in to terms Amazon bullied. And Amazon is not even willing to make public exactly what those terms are. Somehow, we are to take it on a leap of faith this is all for the consumer. I think there is good reason for me to have my doubts.

    • Really? You’ve never seen a bakery sell their products to another store and then have that store deal with the sales to actual consumers? It seems to me that’s the primary way that bakery’s work… Very few bakeries are direct to consumer any more. Most bake something, then send it to a market that ordered stock based on sales forecasts. Some of those customers buy the goods and then modify them and resell them. For instance, pie crusts manufactured by a bakery are sold to a pie shop on Capitol Hill in Seattle, who then adds ingredients and sells the pie. Perhaps the customer was a church and they bought 100 pies and sold them by the slice to other individuals for a charity… reselling goes on everywhere. It might even be true that the receipie for the pie crust as well as the pie were written down and sold… or heaven forbid, given away.

      Hatchette is the bad guy in this – and for the life of me, I can’t understand why anyone but anyone is on their side. They pay their authors too small a portion of the pie, they decided which authors don’t deserve to be printed, they force authors to release their ebook versions months after the first printing… they’re greedy, they’ve got a history of collusion and manipulation of the market, and then suddenly Amazon is the bad guy? Puh – lease.

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