The two-page ad that ran in the Aug. 10 issue of the New York Times, which more than 900 authors signed calling for readers to email Amazon CEO Jeff Bezos to air their displeasure at the company’s tactics in its terms dispute with Hachette Book Group, unleashed some of the harshest language yet in the months-long standoff.
Any pretense that this was a typical publisher-bookseller negotiation, as the parties said when news of the dispute first broke, has given way to statements by the Amazon Books Team in a blog post on Aug. 8 on the readersunited.com site that pointed to HBG’s role in colluding with other publishers to raise e-book prices. (The publishers’ switch to the agency model had the effect of setting prices for Amazon and all other retailers on many new titles at $14.99, well above Amazon’s preferred price of $9.99.) The Amazon post urged readers to email HBG CEO Michael Pietsch and ask him why the publisher was against lower e-book prices. Pietsch responded to the email campaign by noting that HBG sets its own prices, and saved his sharpest criticism for Amazon’s stance in the negotiations, writing that Amazon initiated the fight because it “is seeking a lot more profit and even more market share, at the expense of authors, bricks and mortar bookstores, and ourselves.”
“Once again,” Pietsch continued, “we call on Amazon to withdraw the sanctions against Hachette’s authors that they have unilaterally imposed, and restore their books to normal levels of availability. We are negotiating in good faith. These punitive actions are not necessary, nor what we would expect from a trusted business partner.”
For its part, the Amazon Books Team said it “will never give up its fight for reasonable e-book prices,” and said that it is HBG that has prevented a deal from getting done. According to Amazon, “Hachette spent three months stonewalling and only grudgingly began to even acknowledge our concerns when we took action to reduce sales of their titles in our store.” The company added that it is HBG that has rebuffed three attempts by Amazon to remove authors from getting caught in the crossfire.
The public fight over terms has caused a deep division between authors: those who believe the Amazon argument that lower e-book prices result in higher unit sales and thus more money for everyone, and others who support the HBG position that its ultimate goal in its discussions with Amazon is to preserve a bookselling environment that includes not just Amazon but a range of outlets including bricks-and-mortar bookstores.
Peter Hildick-Smith, president of the book research firm Codex Group, said that, given current market trends, the importance of the dispute between Amazon and HBG “goes well beyond a simple negotiation over selling terms.”
Based on Codex survey data, Amazon has more than tripled its book unit share, from 13% in 2008 to 40% in 2014, which has contributed to an estimated 30% loss of physical bookstore selling space over the same period. With that loss of bookselling space has come a 4% decline in U.S. households reading fiction from 2008 to 2012, according to research by the National Endowment for the Arts.
In Hildick-Smith’s view, just as Hollywood movie studios would be reduced to mere video producers without movie theaters to launch their latest blockbusters, trade publishers without physical bookstores to accelerate new book discovery would be robbed of their unique ability to make break-out bestsellers and author brands, and ultimately be reduced to the role of Amazon associates, reliant on daily deals to promote new titles.
Whether openly acknowledged or not, the book market is “now in a battle for both the survival of physical-world book selling and the trade publishing business model that depends on it,” Hildick-Smith said. “The choice is either to emulate the film industry, with its theaters and strong multiple channels of distribution, or else by default, go the way of the music industry, which has endured a massive revenue decline since it became dominated by digital distribution.”