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
Nick Hewer is to leave The Apprentice after 10 years

TV review Nick Hewer, the man whose eyebrows speak a thousand words, is set to leave The Apprentice

Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says

film George RR Martin owns a cinema in Santa Fe

Arts and Entertainment
Clued up: John Lynch and Gillian Anderson in ‘The Fall’

TV review

Arts and Entertainment
The Baker (James Corden) struggles with Lilla Crawford’s Little Red Riding Hood

film...all the better to bamboozle us
Arts and Entertainment
English: Romantic Landscape

art
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment

ebooksNow available in paperback
Arts and Entertainment

ebooks
Arts and Entertainment
Mark, Katie and Sanjay in The Apprentice boardroom
TV
Arts and Entertainment

Film The critics but sneer but these unfashionable festive films are our favourites

Arts and Entertainment
Frances O'Connor and James Nesbitt in 'The Missing'

TV We're so close to knowing what happened to Oliver Hughes, but a last-minute bluff crushes expectations

Arts and Entertainment
Joey Essex will be hitting the slopes for series two of The Jump

TV

Who is taking the plunge?
Arts and Entertainment
Katy Perry as an Ancient Egyptian princess in her latest music video for 'Dark Horse'

music
Arts and Entertainment
Dame Judi Dench, as M in Skyfall

film
Arts and Entertainment
Morrissey, 1988

TV
Arts and Entertainment
William Pooley from Suffolk is flying out to Free Town, Sierra Leone, to continue working in health centres to fight Ebola after surviving the disease himself

music
Arts and Entertainment
The Newsroom creator Aaron Sorkin

TV
Arts and Entertainment
Matt Berry (centre), the star of Channel 4 sitcom 'Toast of London'

TVA disappointingly dull denouement
Arts and Entertainment
Tales from the cryptanalyst: Benedict Cumberbatch in 'The Imitation Game'

film
Arts and Entertainment
Pixie Lott has been voted off Strictly Come Dancing 2014

Strictly
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.

    Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Could cannabis oil reverse the effects of cancer?

    Could cannabis oil reverse effects of cancer?

    As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
    The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

    The Interview movie review

    You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
    Serial mania has propelled podcasts into the cultural mainstream

    How podcasts became mainstream

    People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
    Jesus Christ has become an unlikely pin-up for hipster marketing companies

    Jesus Christ has become an unlikely pin-up

    Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
    Rosetta space mission voted most important scientific breakthrough of 2014

    A memorable year for science – if not for mice

    The most important scientific breakthroughs of 2014
    Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

    Christmas cocktails to make you merry

    Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
    5 best activity trackers

    Fitness technology: 5 best activity trackers

    Up the ante in your regimen and change the habits of a lifetime with this wearable tech
    Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

    Paul Scholes column

    It's a little-known fact, but I have played one of the seven dwarves
    Fifa's travelling circus once again steals limelight from real stars

    Fifa's travelling circus once again steals limelight from real stars

    Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
    Frank Warren column: 2014 – boxing is back and winning new fans

    Frank Warren: Boxing is back and winning new fans

    2014 proves it's now one of sport's biggest hitters again
    Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

    Jeb Bush vs Hillary Clinton

    Karen Tumulty explores the power dynamics of the two first families
    Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

    Stockholm is rivalling Silicon Valley

    The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
    Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

    Crucified Santa: Urban myth refuses to die

    The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
    Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

    The Boy in the Dress: On set with the stars

    Walliams' story about a boy who goes to school in a dress will be shown this Christmas