The uneasy relationship between the retailer and the writing community, which needs Amazon but fears its power, immediately soured as authors took to Twitter to denounce what they saw as bullying.
Among Amazon’s tactics against Hachette, some of which it has been employing for months, are charging more for its books and suggesting that readers might enjoy instead a book from another author. If customers for some reason persist and buy a Hachette book anyway, Amazon is saying it will take weeks to deliver it.
The scorched-earth tactics arose out of failed contract negotiations. Amazon was seeking better terms, Hachette was balking, so Amazon began cutting it off.
Negotiating with suppliers for equitable terms and making stocking and assortment decisions based on those terms is one of a bookseller’s, or any retailer’s, most important jobs. Suppliers get to decide the terms under which they are willing to sell to a retailer. It’s reciprocally the right of a retailer to determine whether the terms on offer are acceptable and to stock items accordingly. A retailer can feature a supplier’s items in its advertising and promotional circulars, “stack it high” in the front of the store, keep small quantities on hand in the back aisle, or not carry the item at all, and bookstores and other retailers do these every day. When we negotiate with suppliers, we are doing so on behalf of customers. Negotiating for acceptable terms is an essential business practice that is critical to keeping service and value high for customers in the medium and long term.
They recommend this post from Martin Shepard:
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. When the Times allows a poorly researched, inaccurate anti-Amazon screed to appear, it makes me want to stand up for Jeff Bezos and Amazon, and present a very different point of view which I hope will balance out what I consider blatant propaganda. And I would encourage other publishers who feel similarly to email me and speak out as well.
The Everything Store is shrinking again. Amazon customers who want to order forthcoming Warner Home Video features, including The Lego Movie, 300: Rise of an Empire, Winter’s Tale and Transcendence, are finding it impossible to do so.
The retailer’s refusal to sell the movies is part of its effort to gain leverage in yet another major confrontation with a supplier to become public in recent weeks.
Update (2014-06-14): Joe Nocera:
The story really began some years ago, when Amazon began issuing a standard price for e-books of $9.99 — in some cases selling below cost. Publishers feared that they would become locked into the $9.99 price the same way the music industry had been locked into 99-cent songs by Apple’s iTunes service. They fought back by joining forces with Apple, cutting preferable deals to participate in Apple’s e-book-selling service, and then forcing Amazon to go along with the same terms. E-book prices quickly rose.
Unfortunately for the publishers, their brilliant idea turned out to be an illegal conspiracy, and the government forced them to settle on terms that had the effect of boosting Amazon. Although Amazon has not entirely reverted back to $9.99 e-books, it could if it wanted to, and it has in some cases.
Update (2014-06-18): Hugh C. Howey:
Ironically, the biggest losers in this shift have been yesterday’s villains. The massive brick and mortar discounters—who once were blamed for literature’s downfall, who sold “loss leaders,” who roughed up publishers in negotiations—have become the bulwark behind which all legacy hopes now hunker. Little explored is the possibility that Amazon is helping independent bookstores by clearing out these former predators.
Similarly, the merger between Penguin and Random House has created a mega conglomerate that accounts for half of the major publishers’ revenue. There was very little outrage at this merger, which will result in lost jobs and fewer places for authors and manuscripts to compete. Instead, we heard how greater efficiency will help these grand institutions compete with that evil company trying to lower prices and raise author pay. Again, who is the monopoly?
The real monopoly, once you start examining business practices and attitudes, is Big Publishing itself, a group so entrenched with one another and indistinguishable from one another that they simply go by the collective moniker: The Big 5.
Their contracts are functionally identical. Their e-book royalties (and most others terms and clauses) are lockstep and are not negotiable. They have a history of working together in a noncompetitive fashion in order to raise prices for their customers (prices that they would love to set at twice what mass market paperbacks formerly cost).
The response to this new competitor has been to blacklist Amazon-published books from brick and mortar stores and to collusion within the publishing monoculture. Where is the outcry for Amazon-published authors who are blocked from sale by practically every brick and mortar store? It doesn’t exist. The response is simply: That’s what those authors get for signing with Amazon. Imagine an observer today saying “That’s what those authors get for signing with Hachette.” The hypocrisy astounds.
Why show support for a corporation that may lower royalties to 30% in the future when you can celebrate a corporation that pays 17.5% today? Why show support for a corporation that may raise prices in the future when you can champion a corporation that colludes to raise them today?
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