Friday, June 6, 2014

Hash and Hachette

So it’s hard to decide where to land on the Hachette/Amazon problem.

Part of what’s making it hard is that exactly what the two companies are squabbling about is being kept secret – other than the fact that Amazon wants to offer deep discounts on Hachette’s electronic books and Hachette, obviously, doesn’t want those discounts offered.

But as the New York Times reports the discount debacle is the result of e-book price fixing involving Hachette, several other publishers, and Apple, it’s clear that Hachette can’t come into this argument with a mains propre et tete haute position.

Here’s what the NYT says:

As part of Hachette’s antitrust settlement with the government, the company agreed to allow Amazon to continue to discount the price of e-books for two years. That agreement has expired, and for some reason — no one is sure why — Hachette is the first publisher to find itself in the position of negotiating a new one.

And when even Europe’s regulators are reluctant to jump into the fight – citing it at a business dispute, per Reuters – you’ve got to wonder who exactly the devil is here.

Here’s what Amazon itself says of the “fight,” and from what I can tell it makes perfect sense:

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.

I, obviously, do not have a dog in the fight, and likely never will. When I publish the books I’m working on, it’ll be independent of any publisher – I’ll be going straight to Amazon and Apple and anyone else who’ll let me sell my wares. So I have no problem with Amazon wanting to reduce e-book prices. And as a reader, I’ve got to confess it’s been years since I purchased a new book. Most of the e-books I have are freebies, and most of the books on my shelves come from secondary sources.

I think it’s time we face facts as authors and readers: Publishing is going back to being a cottage industry, thanks to the Internet. And that’s not all bad, for the vast majority of readers and authors. As long as distributors like Apple and Amazon don’t choke off the supply from Joe Nobody, we’re golden.

And there might be the problem: What might trigger Amazon or Apple from cutting off the supply from Joe Nobody?

It’s easy to say it’ll come down to money, with Amazon and/or Apple not getting enough of it.
But I don’t buy that argument, at least on the part of Amazon. At the current time, Amazon seems far more interested in moving product than making money.

Then there’s Apple, of e-book price-fixing fame, in bed with the big publishers. (An interesting side note: There are many out there convinced the Amazon AND Apple were involved in price-fixing, when in fact Amazon was not; read this USA Today article as evidence that the conspiracy was hatched to thwart a discount push by Amazon.)

So I’m no genius; I don’t know what would cause Amazon or Apple to want to cut off independent publishers. I think it would take something spectacular, particularly for Amazon, to cut off the Joe Nobodies. I’m sure they don’t make a lot of money off the books these folks sell. But they gain customers. They gain people vigorously hawking their wares at, which is always there to sell these independents’ customers something else when they come along. Amazon is looking micro. Maybe it’ll end up as a Buy ‘n’ Large. Maybe not.

Amazon could conceivably monkey around with the systems used to pay independent authors, making them reach certain thresholds, say, before any cash is forthcoming. But that seems like cutting off one’s nose to spite one’s face. The ease of self-publishing on the Internet also leads to self-distribution on the Internet, and you can bet if Amazon pissed off too many independents there would be many, many businesses or locations out there ready to scoop up disaffected authors at a moment’s notice, Amazon be damned.

And I’m not the only one thinking so. Here’s what is said about the mess at The Cockeyed Pessimist (which Amazon cites as a counterargument to the brouhaha):

In truth, everyone wants more of the pie. We’ve been publishing literary fiction for 35 years, and in the past found that the chain bookstores took few if any of our titles, that distributors like Ingram demanded bigger discounts from us than they charged the conglomerates, or that despite winning more literary awards per title than any other publisher in America we could not match the print review coverage afforded to authors of the five big conglomerates. But we’re not calling these other organizations Mafia inspired or asking for government intervention. Surely one  must come to recognize that all these companies are—and should be—free to set their own terms based on their bottom-lines, and publishers like Hachette might consider tempering their  complaints about Amazon’s discrimination or restraint of trade. Jeff Bezos didn’t create Amazon for Hachette, and Hachette isn’t forced to use Amazon for distribution. What is Amazon anyway, other than an incredibly successful on-line store that sells almost every product one can think of.

So we’ve got an example of Hachette the squeezer being squeezed by someone, and they don’t like it.

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