New chapter in anti-Amazon feelings as Hachette loses the plot over margins

Site’s bargain-basement business sense causing ructions in publishing world

Amazon’s dominance of the books industry may have reached a tipping-point.

For years, publishers in Britain and America have complained privately about the online giant’s tough negotiating tactics and relentless discounting, but few have been willing to speak out.

However, the decision by Hachette, one of the “Big Five” publishers, to refuse to agree to a new contract with Amazon in America in a row about pricing could be a seminal moment.

Hachette has gone public after customers began asking why some of its books have been unavailable to buy on Amazon. Other titles are being offered at full price, instead of on discount, or are taking many weeks to ship.

“By preventing its customers from connecting with these authors’ books, Amazon indicates that it considers books to be like any other consumer good,” says Hachette. “They are not.”

 

The impact has already been dramatic. A few weeks into the dispute that began a month ago, Hachette lost the number one spot on the Digital Book World bestseller list of ebooks in what news agency Bloomberg called “a palpable sign of Amazon’s dominance in the publishing industry”.

Authors are livid. US TV chat show host (and Hachette author) Stephen Colbert is so angry that he “gave the finger” twice to Amazon chief executive Jeff Bezos on his TV show this week.

“This is a big blow to my bottom line,” warned the waspish Colbert. “This has pushed me past my tipping point... so watch out, Bezos, because this means war.”

To make his point, Colbert urged viewers to buy the book California by Hachette author Edan Lepucki via an independent bookseller in Oregon. It instantly became a best seller.

Colbert, whose profile is sky-high after being named as the successor to talk-show legend David Letterman, also urged viewers to get a sticker saying “I Didn’t Buy It On Amazon” via his website. “We are going to prove that I can sell more books than Amazon,” declared Colbert. Other Hachette authors have felt similarly emboldened. JK Rowling, under her pseudonym Robert Galbraith, tweeted: “There are lots of ways to order (the Robert Galbraith book) #The Silkworm in US, as Amazon kindly suggest.”

Meanwhile, James Patterson published a post on Facebook under the headline of “Read four of the most important paragraphs I’ll ever write,” in which the author declared: “The press doesn’t seem to consider this newsworthy, but there is a war going on between Amazon and book publishers.

“This war involves money of course... Currently, Amazon is making it difficult to order many books from Little, Brown and Grand Central, which affects readers of authors such as Malcolm Gladwell, Nicholas Sparks, Michael Connelly, me and hundreds of others whose living depends on book sales.

“If the world of books is going to change to ebooks, so be it. But I think it’s essential that someone steps up and takes responsibility for the future of American literature and the part it plays in our culture.

“Right now, bookstores, libraries, authors and books themselves are caught in the crossfire of an economic war. If this is the new American way, then maybe it has to be changed – by law, if necessary – immediately, if not sooner.”

This dispute is far from being only an American problem. David Potter, chairman of Girl With The Dragon Tattoo publisher Quercus until April, revealed earlier this week that it was embroiled in a secret stand-off with Amazon in Britain for six months last year as the US giant demanded what he said was “constant discount, discount, discount”.

In a precursor to the Hachette dispute in America, some of Quercus’s books were unavailable to buy on Amazon and the small independent publisher lost revenue.

Combined with other factors, including its bank debt, Quercus fell to a significant loss and was sold abruptly earlier this year for £12.6m – ironically to Hachette.

Mr Potter says Amazon, with close to 90 per cent of the UK ebook market and 60 per cent in America, is too dominant.

“It is completely bizarre that it can behave like a cheetah which is grinding gazelles into the ground,” he declares.

“That shows to me that regulators and administrators have not caught up with how the internet is changing the books industry.”

Part of Amazon’s success has come from running at wafer-thin margins to keep prices low, helping to send its global sales soaring to $74.5bn last year.

“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,” explained Amazon, as it defended its behaviour in its dispute with Hachette.

Amazon says Hachette has acted in “good faith”, but adds pointedly that the French-owned publisher is “part of a $10bn media conglomerate”.

The implication is Hachette is able to absorb lower prices, though Amazon fails to mention its own $150bn stock market value.

At least one author, Barry Eisler, is standing up for Amazon, saying: “More people are buying more books than ever and more people are making a living by writing them. Why do millionaire authors want to destroy the one company that’s made this all possible?”

The problem for many in publishing is that the dominance of this one company, with its Kindle store, keeps growing. It is estimated that e-book sales will soar to almost $9bn this year in America, while print book sales fall below $20bn, down from $26bn in 2010.

The number of physical book shops has also dropped alarmingly – even if there are exceptions, like the long-awaited opening later today of a new flagship Foyles store on Charing Cross Road in London on the former site of the St Martins School of Art, with scarcely an e-book in sight.

Hachette could soon have more allies. Significantly, several other big publishers, Simon & Schuster and Rupert Murdoch’s News Corporation, also have Amazon contracts that are coming up for renewal in America.

These contracts are thought to date from 2012 in the wake of the US Department of Justice crackdown over alleged price-fixing, when five big publishers and Apple were punished for trying to increase the price of ebooks and stop Amazon discounting.

The publishers lost that battle spectacularly and that’s why Hachette’s stand-off matters so much now. Because the war with Amazon is not over.

Arts and Entertainment
Jamie Dornan as Christian Grey in Fifty Shades of Grey

film Sex scene trailer sees a shirtless Jamie Dornan turn up the heat

Arts and Entertainment
A sketch of Van Gogh has been discovered in the archives of Kunsthalle Bremen in Germany
arts + ents
Arts and Entertainment
Eleanor Catton has hit back after being accused of 'treachery' for criticising the government.
books
Arts and Entertainment
Fake Banksy stencil given to artist Alex Jakob-Whitworth

art

Arts and Entertainment
'The Archers' has an audience of about five million
radioA growing number of listeners are voicing their discontent; so loudly that even the BBC's director-general seems worried
PROMOTED VIDEO
Arts and Entertainment
Taylor Swift is heading to Norwich for Radio 1's Big Weekend

music
Arts and Entertainment
Beer as folk: Vincent Franklin and Cyril Nri (centre) in ‘Cucumber’
tvReview: This slice of gay life in Manchester has universal appeal
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment

ebooksNow available in paperback
Arts and Entertainment

ebooks
Arts and Entertainment
‘A Day at the Races’ still stands up well today
film
Arts and Entertainment
‘The Royals’ – a ‘twisted, soapy take on England’s first family’
tvAnd its producers have already announced a second season...
Arts and Entertainment
Kraftwerk performing at the Neue Nationalgalerie (New National Gallery) museum in Berlin earlier this month
musicWhy a bunch of academics consider German electropoppers Kraftwerk worthy of their own symposium
Arts and Entertainment
Icelandic singer Bjork has been forced to release her album early after an online leak

music
Arts and Entertainment
Colin Firth as Harry Hart in Kingsman: The Secret Service

film
Arts and Entertainment
Brian Blessed as King Lear in the Guildford Shakespeare Company's performance of the play

theatre
Arts and Entertainment
In the picture: Anthony LaPaglia and Martin Freeman in 'The Eichmann Show'

tv
Arts and Entertainment
Anne Kirkbride and Bill Roache as Deirdre and Ken Barlow in Coronation Street

tvThe actress has died aged 60
Arts and Entertainment
Marianne Jean-Baptiste defends Joe Miller in Broadchurch series two

tv
Arts and Entertainment
The frill of it all: Hattie Morahan in 'The Changeling'

theatre
Arts and Entertainment
Gillian Anderson and David Duchovny may reunite for The X Files

tv
Arts and Entertainment
Jeremy Clarkson, left, and Richard Hammond upset the locals in South America
TV
News
A young woman punched a police officer after attending a gig by US rapper Snoop Dogg
people
Arts and Entertainment
Reese Witherspoon starring in 'Wild'

It's hard not to warm to Reese Witherspoon's heroismfilm
Arts and Entertainment
Word up: Robbie Coltrane as dictionary guru Doctor Johnson in the classic sitcom Blackadder the Third
books

Arts and Entertainment
The Oscar nominations are due to be announced today

Oscars 2015
Arts and Entertainment
Hacked off: Maisie Williams in ‘Cyberbully’

Maisie Williams single-handedly rises to the challenge

TV
Arts and Entertainment
Eddie Redmayne in The Theory of Everything and Benedict Cumberbatch in The Imitation Game are both nominated at the Bafta Film Awards
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

    Isis hostage crisis

    The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
    Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

    The runaway buccaneers and the ship full of gold

    Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
    Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

    Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

    Maverick artist Grayson Perry backs our campaign
    Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

    Assisted Dying Bill: 'I want control of my life'

    This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
    Move over, kale - cabbage is the new rising star

    Cabbage is king again

    Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
    11 best winter skin treats

    Give your moisturiser a helping hand: 11 best winter skin treats

    Get an extra boost of nourishment from one of these hard-working products
    Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

    Paul Scholes column

    The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
    Frank Warren column: No cigar, but pots of money: here come the Cubans

    Frank Warren's Ringside

    No cigar, but pots of money: here come the Cubans
    Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

    Isis stands strong as its numerous enemies fail to find a common plan to defeat it

    The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

    Virtual reality: Seeing is believing

    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
    Homeless Veterans appeal: MP says Coalition ‘not doing enough’

    Homeless Veterans appeal

    MP says Coalition ‘not doing enough’ to help
    Larry David, Steve Coogan and other comedians share stories of depression in new documentary

    Comedians share stories of depression

    The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
    Has The Archers lost the plot with it's spicy storylines?

    Has The Archers lost the plot?

    A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
    English Heritage adds 14 post-war office buildings to its protected lists

    14 office buildings added to protected lists

    Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Scientists unearthed the cranial fragments from Manot Cave in West Galilee