Amazon v Hachette: The Basics

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I wanted to clue-in my non-writer friends and followers to an epic soap opera-like battle between bookseller Amazon and publisher Hachette Book Group, one of the Big 5 remaining traditional publishers. Basically, their current contract is up, and they can’t agree how to split the money in a new contract.

For now, Amazon has decided to carry less Hachette inventory than usual, meaning if you want to buy one of their books, Amazon may have to order it from Hachette, and then deliver it to you. This could cause longer than normal shipping times. Amazon has said if you need an affected Hachette title right away, you should consider buying it from a competitor. They have also removed the ability to pre-order books that will be published at some future date.

Amazon should be able to stock whatever they think they can sell for a profit. They should also be able to refuse to stock anything they don’t think they can sell on their terms. The same goes for any retailer. The risk for Amazon is that if they fail to carry the latest J.K. Rowling or James Patterson offering, book buyers will go to another vendor. From Hachette’s perspective, they should either convince Amazon to carry Hachette books, or sell them elsewhere. Amazon is the biggest bookseller, but not the only bookseller. Market forces, on both sides, have a way of working these things out.

There is a bigger dynamic in play. In the book business, you need writers and readers. Everyone else is a middleman, doing something for a piece of the pie. If what they do isn’t valuable enough, or if their fee is too high, they can be replaced. That goes for Amazon, Hachette, Penguin, Barnes and Noble, Left Bank Books, literary agents, and everyone else between writers and readers. I sense fear on the part of the old guard, based on more than just determining current pricing levels.

Big-5 publishers, including Hachette, offer writers what amounts to a packaged deal of services, including editing, cover art, formatting, proofing, marketing and advertising services. To some, their offering may be attractive. To me, they look like most mega-corporations: bloated and highly inefficient, offering poor value at grossly inflated prices. To each his own.

As a writer, I don’t see the value in a packaged deal from a traditional publisher. Instead, I can act as my own general contractor, and hire my own editor, cover designer, and other service providers as sub-contractors, and get the same or better quality work at a fraction of the price. I can also do it without signing highly restrictive, one-sided contracts that bind me to an old-school publisher.

Borders Books closed a few years ago. I like browsing at Barnes and Noble, but their days appear to be numbered too. Last summer, a federal court found Apple and the Big 5 colluded to increase eBook prices. Unless the traditional publishing industry comes up with a better value proposition than price fixing, or demonizing their main competitor, they’re going away too. It’s not surprising that most of the complaining about Amazon comes from those (writers and publishers) with a stake in yesterday’s model. Instead of complaining, the future of their business would be better served by finding ways to innovate (consider Steve Jobs’ Apple turnaround) and to better serve their core constituencies: writers and readers. (OP 5/28/2014)

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