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
When he was king: Muhammad Ali training in 'I Am Ali'
film
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
film Ridley Scott reveals truth behind casting decisions of Exodus
Arts and Entertainment
An unseen image of Kurt Cobain at home featured in the film 'Kurt Cobain: Montage of Heck'
filmThe singers widow and former bandmates have approved project
Arts and Entertainment
Jake Quickenden and Edwina Currie are joining the I'm A Celebrity...Get Me Out Of Here! camp
tv
Arts and Entertainment
George Mpanga has been shortlisted for the Critics’ Choice prize
music
PROMOTED VIDEO
Arts and Entertainment
Scare tactics: Michael Palin and Jodie Comer in ‘Remember Me’

TVReview: Remember Me, BBC1
Arts and Entertainment
Scare tactics: Michael Palin and Jodie Comer in ‘Remember Me’

TVReview: Remember Me, BBC1
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment

ebooksNow available in paperback
Arts and Entertainment

ebooks
Arts and Entertainment
Carrie Hope Fletcher
booksFirst video bloggers conquered YouTube. Now they want us to buy their books
Arts and Entertainment
Damien Hirst
artCoalition's anti-culture policy and cuts in local authority spending to blame, says academic
Arts and Entertainment
A comedy show alumni who has gone on to be a big star, Jon Stewart
tvRival television sketch shows vie for influential alumni
Arts and Entertainment
Jason goes on a special mission for the queen
tvReview: Everyone loves a CGI Cyclops and the BBC's Saturday night charmer is getting epic
Arts and Entertainment
Image has been released by the BBC
tv
Arts and Entertainment
Will there ever be a Friends reunion?
TV
News
Harry Hill plays the Professor in the show and hopes it will help boost interest in science among young people
arts + ents
Arts and Entertainment
A Van Gogh sold at Sotheby’s earlier this month
art
Arts and Entertainment

MusicThe band accidentally called Londoners the C-word

Arts and Entertainment
It would 'mean a great deal' to Angelina Jolie if she won the best director Oscar for Unbroken

Film 'I've never been comfortable on-screen', she says

Arts and Entertainment
Winnie the Pooh has been branded 'inappropriate' in Poland
books
Arts and Entertainment
Lee Evans is quitting comedy to spend more time with his wife and daughter

comedy
Arts and Entertainment
American singer, acclaimed actor of stage and screen, political activist and civil rights campaigner Paul Robeson (1898 - 1976), rehearses in relaxed mood at the piano.
filmSinger, actor, activist, athlete: Paul Robeson was a cultural giant. But prejudice and intolerance drove him to a miserable death. Now his story is to be told in film...
Arts and Entertainment
Taylor Swift is dominating album and singles charts worldwide

music
Arts and Entertainment
Kieron Richardson plays gay character Ste Hay in Channel 4 soap Hollyoaks

tv
Arts and Entertainment
Midge Ure and Sir Bob Geldof outside the Notting Hill recording studios for Band Aid 30

music
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 Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

    Christmas Appeal

    Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
    Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

    Is it always right to try to prolong life?

    Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
    Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

    What does it take for women to get to the top?

    Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
    Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

    Knitting pretty: British Christmas Jumpers

    Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
    French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

    French chefs campaign against bullying

    A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
    Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

    Just what you need on a New Year hangover...

    Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
    Cuba set to stage its first US musical in 50 years

    Cuba to stage first US musical in 50 years

    Claire Allfree finds out if the new production of Rent will hit the right note in Havana
    Christmas 2014: 10 best educational toys

    Learn and play: 10 best educational toys

    Of course you want them to have fun, but even better if they can learn at the same time
    Paul Scholes column: I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season

    Paul Scholes column

    I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
    Lewis Moody column: Stuart Lancaster has made all the right calls – now England must deliver

    Lewis Moody: Lancaster has made all the right calls – now England must deliver

    So what must the red-rose do differently? They have to take the points on offer 
    Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

    Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

    It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
    Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

    Sol Campbell cries foul at Labour's mansion tax

    The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
    Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

    Sarkozy returns

    The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
    Is the criticism of Ed Miliband a coded form of anti-Semitism?

    Is the criticism of Miliband anti-Semitic?

    Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
    Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

    Ouija boards are the must-have festive gift

    Simon Usborne explores the appeal - and mysteries - of a century-old parlour game