This November, Amazon and Hachette end a near 6 month clash over e-book pricing that saw both sides feeling the heat from authors.
The dispute started when Amazon, after expressing their concerns over Hachette’s e-book pricing being too high, started restricting access to Hachette books. According to US writer Douglas Preston, Amazon have been ‘refusing to accept pre-orders on Hachette’s authors’ books’ and ‘slowing the delivery’ of Hachette titles as a way to pressure the publisher to agree to their terms (Preston, D. 2014).
Preston’s open letter called on authors to email Amazon’s CEO himself and express their anger at being used as hostages as a way to force Hachette to comply with their terms. Authors United ‘also took out a full page advert in the New York Times attacking Amazon’s actions’ (Ellis-Petersen, H, 2014).
But as with any dispute, there are always two sides of the coin. Amazon struck back with their own version of events and claimed they are merely protecting the readers from the price-fixing activities of Hachette. It’s true that Hachette, as well as HarperCollins and Simon & Schuster, was ordered to pay out collectively $69 million due to a price fixing lawsuit in 2012 (Toor, A, 2012).
Amazon argues, in their own open letter, that Hachette were just charging too much for their e-book titles, which should be considerably less due to savings in production, transportation and stock management (Readers United, 2014).
Furthermore, Amazon describes the e-book market as being price elastic. The market responds rapidly to price changes, therefore making cheaper e-books both better for the reader, but also for the writer as they receive more revenue and expose their book to a larger audience.
So who was the victor? In short, Hachette. They won the right to set the prices of their e-books as they see fit. However, Amazon have implemented incentives for the publishing company to sell books at discounted prices (Streitfield, D, 2014). Undoubtedly both companies took casualties. Amazon to its brand. By asserting its lumbering authority and holding authors hostage as a bargaining chip, they have undermined the trust between author and distributor, which may have ramifications in future. But Hachette also received criticism for being stubborn and refusing to talk to Amazon.
In the short term, it looks as though publishers are still going to maintain control over their e-book prices. They may have won the battle, but the war is still weighing in Amazon’s favour. Whether that's a good thing is up to you.
Word Count: 416
Bibliography
Authors Guild. (2014) Amazon-Hachette Debate Yields Diverse Opinions Among Authors. [Online] Available at: http://www.authorsguild.org/advocacy/amazon-hachette-debate-yields-diverse-opinions-among-authors/. [Accessed: 19th November 2014].
Authors United. (2014) Letter to Amazon.com, Inc. board of directors. [Online] Available at: http://authorsunited.net. [Accessed: 19th November 2014].
Ellis-Petersen, H. (2014) Amazon and publisher Hachette end dispute over online book sales. The Guardian. 13 Nov. [Online] Available at: http://www.theguardian.com/books/2014/nov/13/amazon-hachette-end-dispute-ebooks. [Accessed: 19th November 2014].
Jones, P. (2014) Child, Grisham, Patterson in Amazon protest. Bookseller, 3 Jul. [Online] Available at: http://www.thebookseller.com/news/child-grisham-patterson-amazon-protest. [Accessed: 19th November 2014].
Preston, D. (2014) A letter to our readers. [Open Letter]. Available at: http://www.publishersweekly.com/binary-data/ARTICLE_ATTACHMENT/file/000/002/2355-1.pdf. [Accessed: 19th November 2014].
Readers United. (2014) A Message from the Amazon Books Team. [Online] Available at: http://readersunited.com. [Accessed: 19th November 2014].
Streitfeld, D. (2014) Amazon and Hachette Resolve Dispute. NY Times. 14 Nov. [Online] Available at: http://www.nytimes.com/2014/11/14/technology/amazon-hachette-ebook-dispute.html?_r=0. [Accessed: 19th November 2014].
Toor, A. (2012) Ebook publishers agree to $69 million settlement in state price-fixing lawsuit. The Verge, 3 Aug. [Online] Available at: http://www.theverge.com/2012/8/30/3278701/hachette-simon-schuster-harpercollins-ebook-price-fixing-settlement. [Accessed: 19th November 2014].
The dispute started when Amazon, after expressing their concerns over Hachette’s e-book pricing being too high, started restricting access to Hachette books. According to US writer Douglas Preston, Amazon have been ‘refusing to accept pre-orders on Hachette’s authors’ books’ and ‘slowing the delivery’ of Hachette titles as a way to pressure the publisher to agree to their terms (Preston, D. 2014).
Preston’s open letter called on authors to email Amazon’s CEO himself and express their anger at being used as hostages as a way to force Hachette to comply with their terms. Authors United ‘also took out a full page advert in the New York Times attacking Amazon’s actions’ (Ellis-Petersen, H, 2014).
But as with any dispute, there are always two sides of the coin. Amazon struck back with their own version of events and claimed they are merely protecting the readers from the price-fixing activities of Hachette. It’s true that Hachette, as well as HarperCollins and Simon & Schuster, was ordered to pay out collectively $69 million due to a price fixing lawsuit in 2012 (Toor, A, 2012).
Amazon argues, in their own open letter, that Hachette were just charging too much for their e-book titles, which should be considerably less due to savings in production, transportation and stock management (Readers United, 2014).
Furthermore, Amazon describes the e-book market as being price elastic. The market responds rapidly to price changes, therefore making cheaper e-books both better for the reader, but also for the writer as they receive more revenue and expose their book to a larger audience.
So who was the victor? In short, Hachette. They won the right to set the prices of their e-books as they see fit. However, Amazon have implemented incentives for the publishing company to sell books at discounted prices (Streitfield, D, 2014). Undoubtedly both companies took casualties. Amazon to its brand. By asserting its lumbering authority and holding authors hostage as a bargaining chip, they have undermined the trust between author and distributor, which may have ramifications in future. But Hachette also received criticism for being stubborn and refusing to talk to Amazon.
In the short term, it looks as though publishers are still going to maintain control over their e-book prices. They may have won the battle, but the war is still weighing in Amazon’s favour. Whether that's a good thing is up to you.
Word Count: 416
Bibliography
Authors Guild. (2014) Amazon-Hachette Debate Yields Diverse Opinions Among Authors. [Online] Available at: http://www.authorsguild.org/advocacy/amazon-hachette-debate-yields-diverse-opinions-among-authors/. [Accessed: 19th November 2014].
Authors United. (2014) Letter to Amazon.com, Inc. board of directors. [Online] Available at: http://authorsunited.net. [Accessed: 19th November 2014].
Ellis-Petersen, H. (2014) Amazon and publisher Hachette end dispute over online book sales. The Guardian. 13 Nov. [Online] Available at: http://www.theguardian.com/books/2014/nov/13/amazon-hachette-end-dispute-ebooks. [Accessed: 19th November 2014].
Jones, P. (2014) Child, Grisham, Patterson in Amazon protest. Bookseller, 3 Jul. [Online] Available at: http://www.thebookseller.com/news/child-grisham-patterson-amazon-protest. [Accessed: 19th November 2014].
Preston, D. (2014) A letter to our readers. [Open Letter]. Available at: http://www.publishersweekly.com/binary-data/ARTICLE_ATTACHMENT/file/000/002/2355-1.pdf. [Accessed: 19th November 2014].
Readers United. (2014) A Message from the Amazon Books Team. [Online] Available at: http://readersunited.com. [Accessed: 19th November 2014].
Streitfeld, D. (2014) Amazon and Hachette Resolve Dispute. NY Times. 14 Nov. [Online] Available at: http://www.nytimes.com/2014/11/14/technology/amazon-hachette-ebook-dispute.html?_r=0. [Accessed: 19th November 2014].
Toor, A. (2012) Ebook publishers agree to $69 million settlement in state price-fixing lawsuit. The Verge, 3 Aug. [Online] Available at: http://www.theverge.com/2012/8/30/3278701/hachette-simon-schuster-harpercollins-ebook-price-fixing-settlement. [Accessed: 19th November 2014].