Amazon vs Hachette

[Shane R]

Originally Posted by tubemonkey

I don't read Big 5 books unless they're free

What if it's something you really want to read?

[pwalker8]

Originally Posted by tubemonkey

End result.

In the meantime, Amazon and Hachette are negotiating and consumers still have access to Hachette titles. Life goes on.

Nope, it's not the end result. The end result could be many different things. In negotiations between two equals, typically both sides give something and get something. What that is depends on what's important to each party.

For example, while Apple initial preferred set price points (much like the music prices), they were willing to give the publishers agency pricing in return for a most favored nation clause. With the music prices, Apple preferred one set price per song (.99) however, they eventually negotiated a tiered price structure since it was important to the music companies to charge more for popular artists. These negotiations went on over the space of several years and eventually succeeded because the government did not interfere. All parties eventually got something that worked for them.

We may see something like agency pricing for the first six months and then Amazon can price it to whatever they like. We may see some sort of tiered pricing scheme where top tiered authors have a set minimum price and other books can be sold at a discount. There are all sorts of possibilities.

[fjtorres]

Originally Posted by pwalker8

. There are all sorts of possibilities.

Yup.
After the hysteria ends.
Not before.

Amazon simply cannot afford to agree to anything until the PR campaign is over.
Afterwards they can sit down to discuss warehouse rent, coop promotion, and whatever.

But once Hachette took it public the negotiations died.

[tubemonkey]

Originally Posted by Shane R

What if it's something you really want to read?

No such book exists. I move down the list until I get to one that's free. Life is simple.

[fjtorres]

Why Amazon is going to wait this out:
http://www.huffingtonpost.com/2014/0...books&ir=Books

And note, they're going by transactions not dollar value.

[fjtorres]

Originally Posted by tubemonkey

No such book exists. I move down the list until I get to one that's free. Life is simple.

KKR knows you very well:
http://kriswrites.com/2014/01/29/the....veCz4i1W.dpbs

So, the following categories are of people with cash in hand, people who buy books.

True Fans
Yep, they show up here again, because as Kelly says, they’ll fork out tons of cash for whatever project their favorite writer does. These people might not be rich, but they spend a disproportionate amount of what money they do have on their favorite writers.

Always Buys New
These brand-loyal readers will buy a book from their favorite author when they see that book. Not when the book is released, but the moment the fan discovers it exists. They’ll pay for the hardcover if the hardcover is out, the mass market if they missed the initial release. But they want a new copy for their shelves or their digital library.

Sometimes Buys New
The category title says it all. They’ll buy new when they see the book, but they might consider the purchase before doing so. Or they’ll buy the book at a used store as readily as they will from a new bookstore. Often, the readers buy these books to read and trade back in or give to friends.
My experience with Nora Roberts’ J.D. Robb pen name fits in here. I buy those books new or used, I don’t care. Usually I buy used. Why? because I’m not a huge fan of them. I like them, and I know they’ll provide a few hours of entertainment. I tend to read them on airplanes and then leave them behind when I’m finished.
I’m not sure if my J.D. Robb purchases will end now that I can read my e-reader throughout the flight. I didn’t read a J.D. Robb on this month’s trip to Vegas, and I would have last year.
I’m sure you have books/authors that you read the same way.

Always Buys Discounted Books
These readers never pay full price for anything, whether it’s because of their own financial situation or their own financial preference. They’ll find their books in the discount bin at bookstores or they’ll watch Amazon for sales. They’ll buy a lot of titles from used bookstore.
The key to these readers? They’re usually voracious readers, but they’re loyal to price.
In other words, they’ll buy Skippy or Jif, depending on which peanut butter is cheapest or on sale that week. They like peanut butter, but they don’t care what type they actually get.
They are probably more adventurous readers than the readers listed above, but they will rarely pay full price for anything. They will also bitch the loudest if prices that were traditionally low get raised.

Always Gets Free Books
These folks are the same as the discount buyers above. But for whatever reason, they don’t buy books at all, choosing only to get things available for free.
Again, these readers are loyal to price—or lack thereof, actually—rather than writer, subgenre, etc.
That sounds harsh, I know, and honestly, the 100% free folks are rare.
But again, when we’re talking purchasing strategies as reader/consumers, we each fit in all of the categories.

For example, I always buy Stephen King, Elizabeth George, Mary Balogh and several of my other very favorite authors new. Always, always, always. I already told you about J.D. Robb, whom I occasionally buy new. There are many authors that I occasionally buy new—and a lot of them are new authors, if the books sound interesting enough and they fit into my genre/subgenre preferences.
I am a discount book shopper of nonfiction in particular, when I need research material. I will occasionally try something for free if—oddly—I’d already heard of the author or book. But I will rarely get to those books first.
Those are my reader preferences on price. I’m sure yours are different, according to your circumstance.
When I was a very poor newly divorced woman, I had $10 per week I could squeeze out of my budget for books (and I did this by eating less). I shopped at used stores and rarely bought new. I went to the library weekly. My circumstances were different and so were my buying habits, but not my reading habits.

Much more at the source. Very educational, the discoverability arc.

This particular chapter of hers explains why Amazon customers by and large are not going to jump ship: Reading habits don't define buying habits.

[tubemonkey]

Originally Posted by fjtorres

Why Amazon is going to wait this out:
http://www.huffingtonpost.com/2014/0...books&ir=Books

And note, they're going by transactions not dollar value.

Are you trying to tell us that Amazon is a department store?

[tubemonkey]

Originally Posted by fjtorres

KKR knows you very well:
http://kriswrites.com/2014/01/29/the....veCz4i1W.dpbs

Always Gets Free Books

These folks are the same as the discount buyers above. But for whatever reason, they don’t buy books at all, choosing only to get things available for free.

Again, these readers are loyal to price—or lack thereof, actually—rather than writer, subgenre, etc.

That sounds harsh, I know, and honestly, the 100% free folks are rare.

Public domain and library books are free, so I'm very much a genre and writer type of reader.

[HarryT]

Originally Posted by tubemonkey

Public domain and library books are free, so I'm very much a genre and writer type of reader.

I'm entirely the opposite. I know what I want to read, and I'll buy it regardless of price. Time is more valuable to me than money.

[tubemonkey]

Originally Posted by HarryT

I'm entirely the opposite. I know what I want to read, and I'll buy it regardless of price. Time is more valuable to me than money.

I know what I want to read also; only I'm extremely flexible about it. My TBR list of free books is so large, I'll never finish it in my lifetime. That affords me the opportunity to be rather picky about my next read and not feel a sense of loss over something I might never read.

Result = I'm immune to any Amazon v Big 5 squabble

[Barcey]

Originally Posted by fjtorres

Yup.
After the hysteria ends.
Not before.

Amazon simply cannot afford to agree to anything until the PR campaign is over.
Afterwards they can sit down to discuss warehouse rent, coop promotion, and whatever.

But once Hachette took it public the negotiations died.

I'm not as confident as you are on this. It's true that Amazon can afford to not sell Hachette books and it's a small percentage of their total sales. It's also true that they've already taken the PR hit from the smear campaign so there's an argument that if you've already paid the price you might as well hold out. This hasn't impacted Amazon's customers yet though and Amazon's mantra has always been "focus on the customers and ignore the media". Beyond the $ value of losing the sale they really don't want to piss off their customer's that just wants to one click buy the latest JK Rowling's book.

I do believe that Amazon's BATNA (best alternative to a negotiated agreement) is stronger then Hachette's BATNA but I don't know what the disagreements are and how important they are to Amazon or Hachette in the long run. I'm sure that Amazon understands that they're really negotiating with all of the big publishers in this and they're all discussing terms in their NY lunches so it is possible they'll hold out. I don't buy from either of them though so I can just watch and laugh.

[Barcey]

Originally Posted by HarryT

I'm entirely the opposite. I know what I want to read, and I'll buy it regardless of price. Time is more valuable to me than money.

I know that I don't have enough time in my lifetime to read everything I want to read, so I'm not held hostage to buying a specific book. Time is more valuable to me than money too.

[sirmaru]

I only read history and biography books and am willing to pay the price. I get all of them through Amazon and never got one free.

Fiction publishers like Hatchette are not even a consideration for me.

[tubemonkey]

Originally Posted by tubemonkey

No such book exists. I move down the list until I get to one that's free. Life is simple.

Speaking of only getting free books, I just snagged two free audiobooks from Hachette and Harper. I'm not above downloading titles from the Big 5; just as long as they're free.

[fjtorres]

Originally Posted by Barcey

It's also true that they've already taken the PR hit from the smear campaign so there's an argument that if you've already paid the price you might as well hold out.

Ding! Ding! Ding!
Exactly.
Hachette and friends have already done their worse.
Other than pulling their books, Hachette has no more cards to play.
That is why I hope they do it.

Amazon still has moves but Hachette painted themselves into a corner by going public.

Originally Posted by Barcey

I don't buy from either of them though so I can just watch and laugh.

I haven't bought a single BPH title since the conspiracy kicked in. In doing so I verified my expectation that there is ample quality outside BPH land.
I don't pretend to be in the majority but as the KKR piece properly points out, true fans are rare.

So any expectation that Amazon customers are going to be aggrieved and stop buying there, en-masse, is sheer wishful thinking because people don't go to Amazon just to buy books or TVs or groceries or any of their thousands of products. They go to save money and time.

Odds are, that if Hachette pulls all their books, Amazon's financials will reflect a 24.8% year over year growth instead of 25%. And Amazon's indie authors will be laughing all the way to the bank because a good chunk of Hachette sales come from Amazon's alsobots and promos which will be aimed at indies and the other tradpubs. Anybody remember how RH made a killing on Amazon in summer 2010 because their books were the only BPH titles Amazon could discount? And because Penguin took months to set up their agency deal. That precendent says the customers won't walk; they'll just buy different books, for the most part. (Or they'll buy DVDs or console games instead.)

Hachette and supporters like to pretend all their sales at Amazon are from people who go there just to buy *their* titles, that Amazon does nothing to earn their share of the sale price other than take the orders and ship out the boxes, that Amazon brings no value to the distribution chain, and they should be happy to accept what Hachette grandly offers up. Yet, at the same time, they complain that Amazon is hurting their sales by not discounting their titles enough, not promoting them enough, not warehousing enough of them.

The Hachette supporters fail to acknowledge that Amazon isn't just a customer of Hachette (buying books to resell) but also a supplier of services to Hachette: warehousing, marketting, promotion, and distribution. (B&N, too.) And that they are entitled to charge for their services. All the talk of Amazon extortion and blackmail pretends the negotiation is about Amazon trying to take money for doing nothing.

Well, this Ayn Rand-ish slowdown Amazon has staged proves they actually do something of value to earn their share of the loot. Once the PR angst fest is over they can get back to dickering over the price of those prices.

So, no Amazon customers aren't walking over this and the promo efforts that Amazon is diverting to other titles will very likely make up for most if not all of the lost business that might go to Walmart or B&N.

And, BTW, what happens to Hachette when it's time to negotiate with Wal-Mart and B&N if Amazon isn't selling their pbooks?

I'm not sure, but I doubt it'll be pretty.