Amazon vs Hachette

[SteveEisenberg]

Originally Posted by BearMountainBooks

In some cases if you know your non-fiction subject well, you may be able to write it quite quickly if you are organized and dedicated.

This is true. And some fiction books are based on years of research.

Originally Posted by BearMountainBooks

That's not to belittle the effort that goes into them, but there is no reason these tomes can't be self-published.

The reason is that the cost of extensive travel, whether for interviewing or to visit libraries, can be prohibitive without an advance against a book proposal. Even before the current period of economic weakness began in 2007-8, the money often ran out before the manuscript was delivered. But a lot more time was spent on those books, I think, because the proposal was accepted and the advance given.

I don't claim everything will go kaput. New mechanisms will arise when old ones wither. At the same time Amazon is fighting to reduce Hachette's financial strength, Jeff Bezos's Washington Post has been going on an old-media hiring spree:

Washington Post hires 50 in five months

The benefits of the book proposal and advance system are so great than if they die, someone will at least partially reinvent them. I don't rule out foundations, funded by tech money, jumping it to un-do some of the damage their founders' business tactics caused.

[Manabi]

Originally Posted by SteveEisenberg

Adobe Digital Editions 3.0 is an example of technology moving forward. Who is it who likes, and dislikes, that? When posters here decry DRM technology, lately I'm seeing the caveat that it's fine for library borrowers like you and me. At least the big publishers aren't saying that affluent book collectors can get their books DRM-free while we hoi pollio get treated otherwise.

Adobe Digital Editions 3 DRM has gotten quite a bit of outrage, especially with its latest version, and has caused plenty of people problems with being able to access legitimately purchased e-books after its release. Making your DRM cause more problems than it did previously is hardly "moving forward". That's more moving backwards.

People are more understanding of DRM for library borrowing because they understand something has to be there to keep it from being a free e-book giveaway. (And even then, someone determined to pirate it can do so without much trouble, so it's not very effective.)

On the other hand, buyers almost routinely hate DRM of any kind. Hachette is infamously pro-DRM for their e-books, going so far as to tell their UK authors that they had to insist Tor keep DRM on their e-books in the US, because Hachette published them in the UK. And that in future contracts they'll require authors to go with a publisher in the US that does use DRM.

That's part of why I have trouble believing them in this spat with Amazon. It's very, very hard to believe Hachette's on the side of consumers or authors.

[Barcey]

Originally Posted by leebase

Amazon raises the ante - refusing to sell some Hachette titles like the latest one from JK Rawling: http://bits.blogs.nytimes.com/2014/0...ype=blogs&_r=0

Do you know when the existing contract ends? It could be that Amazon can't take preorders because the existing agreement ends before the release. Isn't it possible that Hachette is strong arming Amazon over J K Rowlings new book?

Unless both companies want to open their kimonos it's pointless to argue about who has more hair on their arse.

[Dopedangel]

Originally Posted by Manabi

Adobe Digital Editions 3 DRM has gotten quite a bit of outrage, especially with its latest version, and has caused plenty of people problems with being able to access legitimately purchased e-books after its release. Making your DRM cause more problems than it did previously is hardly "moving forward". That's more moving backwards.

People are more understanding of DRM for library borrowing because they understand something has to be there to keep it from being a free e-book giveaway. (And even then, someone determined to pirate it can do so without much trouble, so it's not very effective.)

On the other hand, buyers almost routinely hate DRM of any kind. Hachette is infamously pro-DRM for their e-books, going so far as to tell their UK authors that they had to insist Tor keep DRM on their e-books in the US, because Hachette published them in the UK. And that in future contracts they'll require authors to go with a publisher in the US that does use DRM.

That's part of why I have trouble believing them in this spat with Amazon. It's very, very hard to believe Hachette's on the side of consumers or authors.

Both companies are fighting for themselves we are just observers. The more interesting thing for me is how far Amazon is willing to hurt its customers and its customer service in getting its way.
The publishers like Hachette have shot themselves in the foot by keeping or forcing drm which allowed Amazon to get a virtual monopoly in the ebook market. Its a common problem taught in business studies about how companies trying to protect their cash cows let opportunities to innovate or change go by and are left behind by competitors.
To protect their cash cow (Physical Books) they did not go into ebooks all in and now are being crushed. If they had set up drm free ebook stores selling their own books or at least let other ebook stores sell drm free ebooks Amazon would have had competition and not the power it has today.

[SteveEisenberg]

Originally Posted by Dopedangel

The more interesting thing for me is how far Amazon is willing to hurt its customers and its customer service in getting its way.

I applaud you for, unlike some of the other anti-DRM posters, being unwilling to deny the obvious here. Amazon is using strong-arm tactics in a dispute with a supplier. There's nothing inherently evil about that. Amazon's long-term refusal to carry most Apple merchandise, reportedly due to Apple's refusal to allow deep discounting, is just fine.

But since Hachette mostly pays author advances, and Amazon, as a publisher, mostly doesn't, I still, as a mild fan of literature, root for Hachette. I'm sure that going indie benefits some authors (while hurting others). But what I see as a reader is that, as a publisher, Amazon favors quantity over quality. Maybe Hachette does as well, but not to that extent.

Originally Posted by Manabi

People are more understanding of DRM for library borrowing because they understand something has to be there to keep it from being a free e-book giveaway. . . .
On the other hand, buyers almost routinely hate DRM of any kind.

Do you have any polling information on this? I just tried to find it, and cannot.

Just guessing, I would think the opposite. Library borrowers don't like that the book disappears when the due date is reached. My biggest objection to the Overdrive/3M/Axis360 systems is that you can't pay a small fine to go a few days overdue, as with paper books. So while I don't hate the DRM on library books, I dislike it.

In contrast, as someone who only owns one device, and deletes a book after reading (and other family members here are the same way), how would I even know there is such a thing as DRM, if I wasn't following this board? To my Dad, if you buy it from Amazon, there is nothing on the book to worry about. That's why he will sometimes pay 99 cents for an Agatha Christie eBook that he can almost as easily get from the public library. I think you underestimate how common is his perception.

[Manabi]

Originally Posted by Dopedangel

Both companies are fighting for themselves we are just observers. The more interesting thing for me is how far Amazon is willing to hurt its customers and its customer service in getting its way.

The thing is, what Amazon has done so far can be explained one of two ways:

1. Strong-armed negotiating tactics
2. Unwillingness to keep pricing/availability the same until the new deal is done.

Things like the long-shipping delays: we only have Hachette's word that they're still shipping stuff as quickly, and someone earlier in this thread noted that Hachette's idea of "quickly" may not be what you and I think it is. The killing off of pre-orders may simply be Amazon doesn't know if they'll still have rights then because the contract expires before the book's release date.

So which is it? From the outside we simply don't know for sure. All the sources have a hat in the ring and a spin to push. I'm unwilling to take Hachette (or their authors, who may be getting much of their information from Hachette) at face value. I'm also unwilling to take Amazon's claims at face value, although they're mostly remaining silent.

Subtract all the biased claims and you get this: Hachette and Amazon are renegotiating a contract and it's contentious, as such matters tend to be. That's all we actually know for certain.

Originally Posted by SteveEisenberg

But since Hachette mostly pays author advances, and Amazon, as a publisher, mostly doesn't, I still, as a mild fan of literature, root for Hachette. I'm sure that going indie benefits some authors (while hurting others). But what I see as a reader is that, as a publisher, Amazon favors quantity over quality. Maybe Hachette does as well, but not to that extent.

It may be considered "Indie", but Amazon pays larger percentages of e-book sales than the BPHs to authors that go direct. So I'm not sure you can say definitely that they benefit from sticking with Hachette. It could go either way depending on the author and their situation. Also: quantity vs. quality does not have an absolute winner in the market. There are pros and cons to both.

Originally Posted by SteveEisenberg

Do you have any polling information on this? I just tried to find it, and cannot.

I just have history on my side, but what does that count for? Look at the digital music market, people most definitely did hate DRM, and it was hurting the music business far more than it was helping them. It ultimately died off, and the music business as a whole is doing fine. Why did they hate it? Interoperability problems with players. DRM'd music was mostly only playable from the store that was tied to your device (iPods and iTunes for example). People still hate it with videos too. You see so, so many complaints about not being able to play a video on certain devices because of it.

Originally Posted by SteveEisenberg

Just guessing, I would think the opposite. Library borrowers don't like that the book disappears when the due date is reached.

Err, they got a set check-out period for the e-book and they'd be surprised it goes away when that period is over? Do you seriously think library users are that stupid? By the same argument you could say people hate libraries because they have due dates and have to return the books. Does that make any sense to you?

Originally Posted by SteveEisenberg

My biggest objection to the Overdrive/3M/Axis360 systems is that you can't pay a small fine to go a few days overdue, as with paper books. So while I don't hate the DRM on library books, I dislike it.

Well, my state's e-book library will let you renew as long as there's not a hold on all available copies. But that's not unusual, my physical library is the same. You can even renew by phone, but if someone's got a hold on it, you can't and have to return it. That's not entirely a DRM issue, that's just how libraries work. Fines are intended as punishment for not following the rules, not a feature.

Originally Posted by SteveEisenberg

In contrast, as someone who only owns one device, and deletes a book after reading (and other family members here are the same way), how would I even know there is such a thing as DRM, if I wasn't following this board?

Depends on who you buy from. If you bought your e-books from Apple's store, then decide to get an Android tablet, you're going to be out of luck and DRM will ruin your day (and personal library). This goes back to my point about music and DRM. The same problem occurred but was more widespread because the dominant market player (Apple) wouldn't license their Fairplay DRM so other players couldn't play DRM'd iTunes music. (It also still happens with iTunes videos on any mobile platform besides Apple's own products.)

Amazon has actually done a great job there by making the Kindle app available for pretty much every device on the planet. So the DRM doesn't interfere. But it's not always that way. (Case in point: I can't stream my Amazon videos on my Android tablets other than my Kindle Fire. It's very annoying.)

Originally Posted by SteveEisenberg

To my Dad, if you buy it from Amazon, there is nothing on the book to worry about. That's why he will sometimes pay 99 cents for an Agatha Christie eBook that he can almost as easily get from the public library. I think you underestimate how common is his perception.

That's not really DRM either. That's just convenience. Getting it from Amazon is easier for him than going to the library, so he spends the cash. He'd do the same even if the book didn't have DRM. (And very possibly already has.)

What you're trying to say is that since many people don't notice DRM is there, they don't mind it. And that's true, as long as that assumption holds true. But try telling your dad he doesn't own those e-books and that Amazon can (contractually!) take them away from him at any time, even while he's in the middle of reading them, and see what he thinks about THAT.

If he's fine and dandy with that, then yeah, he likes DRM. I'm going to bet he won't like that idea though, I've yet to encounter anyone who does.

As for your little remark about "some of the anti-DRM posters". I would say to you: read the first part of my reply about what we truly know about the Hachette vs. Amazon situation and tell me how you're claiming everything Hachette has claimed is true without any way of proving it. I think the group you disparaged is doing a better job of pointing out real evidence (and lack thereof). We're withholding judgement till we actually have some unbiased facts to judge by. Either party (or even both, which is most likely) could be to blame.

[SteveEisenberg]

Originally Posted by Manabi

The killing off of pre-orders may simply be Amazon doesn't know if they'll still have rights then because the contract expires before the book's release date.

So two days ago, when Amazon was selling pre-orders for the Robert Galbraith book coming on June 19, this contract existed? And two days ago, Hachette abrogated it? If anything like this, the issue will be in the courts, and we will hear of it. In the meanwhile, you are ignoring the most obvious explanation in favor of the most convoluted and unlikely.

Originally Posted by Manabi

It may be considered "Indie", but Amazon pays larger percentages of e-book sales than the BPHs to authors that go direct.

You seem to be mistaking the experience of the few who earn out their advances for the majority who do not.

Originally Posted by Manabi

So I'm not sure you can say definitely that they benefit from sticking with Hachette. It could go either way depending on the author and their situation.

Agreed.

Originally Posted by Manabi

I just have history on my side, but what does that count for? Look at the digital music market, people most definitely did hate DRM, and it was hurting the music business far more than it was helping them.

The majority of listeners want to hear a given song multiple times. The majority of readers want to read a given book once (or less, as some many readers start a book and do not finish). I think this one time consumption norm is the main reason why DRM is more workable for books than music.

Originally Posted by Manabi

Fines are intended as punishment for not following the rules, not a feature.

US$0.25 a day, and, in many cities, an exemption for children, is a punishment? Really?

Suddenly stopping you from reading the book, with the only alternative (if no renewal available) being to pay maybe $9.99 to purchase it -- just to read the last chapter or two -- that's much closer to a punishment.

Originally Posted by Manabi

He'd do the same even if the book didn't have DRM. (And very possibly already has.)

That was my point.

Originally Posted by Manabi

But try telling your dad he doesn't own those e-books and that Amazon can (contractually!) take them away from him at any time, even while he's in the middle of reading them, and see what he thinks about THAT.

Although I'm not a big fan of Amazon, the idea that they are going to take a paid eBook away from my Dad's Kindle while he is reading is approximately as likely as that the credit card bank is going to send a repo man to take back a paper book he is reading.

[BearMountainBooks]

It's possible the contract was good until a certain day and in negotiations, no one agreed to extend it past its expiration or last extension so it's POSSIBLE Amazon then pulled pre-orders as they would have no rights to sell/collect or set a price that had been agreed upon.

[fjtorres]

Originally Posted by Manabi

We're withholding judgement till we actually have some unbiased facts to judge by. Either party (or even both, which is most likely) could be to blame.

That is only reasonable.
Of course, when it comes to discussions on Amazon and the holy publishers reason rarely enters into. It is all about emotions and especially fear (of Amazon domination of the poor pitififul glass tower multinationals who do carefully "nurture" their authors).

We do know some facts:

- Amazon is Hachette's most profitable distribution channel (via Shatzkin: http://www.idealog.com/blog/inevitab...ng-publishers/)

- Amazon normally places big books orders, presumably to cover long periods worth of sales (and make up for Hachette's normal fulfillment lag)

- Amazon does very little, if any, book returns so, as a rule, any books they order stay in their warehouses until they sell

- Amazon warehousing large numbers of books for extended periods shifts warehousing costs from the publisher to Amazon

- Amazon and Hachette have been quietly negotiating a new distribution agreement since at least November 2013 without reaching agreement.

- Hachette ended the quietly part, Amazon hasn't, so all we see in the media is Hachette's side filtered through channels with known Amazon antipathy (NYT, SALON, PW, DBW, etc).

- Hachette's friendly sources (PW in particular) have reported that Hachette's goal is to put limits on Amazon book discounting so that Amazon competitors can take market share from them. (Not too thinly veiled in the PW report. Worth reading.)

I would say that witholding judgment until we know more, preferably from unbiased sources (if any can be found).

That said, it can be safely inferred that Amazon does not like Hachette's negotiating position (I wonder why? ) and has adopted a pretty clear strategy of doing them no favors.

Doing them no favors means:
- reducing or eliminating discounts, which come from Amazon's share of the price, not Hachette's
- reducing (or eliminating?) the warehousing costs of stockpiling large Hachette book orders by switching to smaller book orders, possibly only ordering titles after on-hand stock is depleted
- reducing (or eliminating?) promotion efforts on behalf of at least some Hachette titles. This includes pre-orders, apparently.

It may very well that Hachette is, in fact, fullfilling orders as fast as they can and that the lag has been obscured in the past by Amazon's warehousing system. (The few times I special-ordered titles through my favorite, now dead, indie bookstore it took over a month to arrive and I've seen no evidence that BPH small order fullfilment processes have improved any.) There is a reason why the BPHs have for decades favored the big chains like Walden, Borders, B&N, and BAM with their centralized buying and warehouses over indie bookstores: they allowed them to outsource to them a good chunk of their warehousing and distribution costs.

So it may be that three to six weeks is as fast as Hachette's warehouses can get books to market when their retailers aren't helping out.

Getting large amounts of *any* product to market in a timely fashion across a market as big and decentralized as the US requires massive logistics efforts from the producer, the distributor, and/or retailer. Usually all three. When any of them slacks off, for any reason, the pipeline can easily be disrupted for months or even years. Which is why big retailers have so much power over their suppliers and suppliers learn it is not wise to antagonize them in private, much less in public.

In this case I, myself, think that Hachette--like the other BPHs--over the decades got so used to being the gatekeepers of books that they forgot that retailers are *their* gatekeepers until, in their finite wisdom, they helped Borders and B&N kill off hordes of indie bookstores and gave them, and later Amazon, shared control over their market access. And, of course, the BPHs compounded their problems by pushing Borders into liquidation and removing nearly a quarter of available market shelf space.

The result is a very asymmetrical negotiation. Hachette is trying to bell the cat without a collar or a bell.

(Seeing just how bad Hachette's negotiating position is, especially now that they took it public, requires a whole post of links. Maybe later.)

[BearMountainBooks]

You have a point--the one or two times I had to order a book via B&N it took about 2 weeks.

The last time this happened, indies, myself included saw noticeable sales jumps. I think to some extent that showing alternative books works for Amazon. The person looking for a particular book may hold off on buying it (if you have an Amazon gift card, you aren't going to necessarily buy elsewhere) or they may buy different books at Amazon and then go somewhere else to buy the book they were after. Of course if you are the average kindle owner...you may not know HOW to buy a book from elsewhere and read it on your kindle. So you don't buy it at all and you certainly won't bother to pre-order.

I can recommend and link to books all day long at Kobo books on my blog, but if half my blog readers have Kindles, they are going to click the kindle link. If the book isn't discounted on Amazon, they usually don't buy. Same is true in reverse.

With the advent of the Kindle, people are definitely more locked in to a particular retailer (unless you want to learn how to go hither and yon and most people can't be bothered. Mobileread readers are the exception, not the rule.)

[fjtorres]

Try this one:
http://www.lilithsaintcrow.com/journ...books-for-you/

Now it turns out that by Amazon shutting down pre-orders (of books they may not be contracted to sell when they are released) they are depriving Hachette of vital information they need to decide how many copies to print.

So they're dependent on Amazon's out-of-their-pocket-discounts to promote sales of books they need Amazon to warehouse to get them to readers in a timely fashion and need Amazon to tell them how many to print in the first place?

And they went public with their dispute? So everybody could see how useless they are to authors?

Oh, now I'm sure Nate was right when he said the acquisitions editors at the other BPHs, and especially the Randy Penguin, have to be laughing their heads off. What author would willingly sign with an outfit stupid enough to publicly go to war with somebody they are *that* dependent on?

Of course, that assumes the Hachette folks aren't making things up...
But they're manhattan publishers and they never lie... right? Right?

At least they launched their little soap opera of woe at the right time; it's mostly reruns on TV. Stock up on munchies, this is just getting good.

[sirmaru]

I read that article in the NY Times today about the Amazon / Hachette dispute. It appears that Amazon wants all books to end up as eBooks and do away with print books altogether. I notice in some cases the print books are not even being offered anymore at Amazon.

The NY Times article said that Hachette is a French publisher and another German publisher is being hit as well.

Frankly, that's just fine with me since I don't read any print books and have not done so for years. Plus, since I buy all my eBooks from Amazon, I'd like them to force publisher prices down.

My only concern is that after Amazon drives most of the publishers out of business, will they raise eBook prices for customers like me? That has happened in the past when even benevolent monopolies have gotten total control.

Of course the other danger is that Amazon may change their DRM procedures after obtaining monopoly control in order to block Caliber and Caliber look alike programs. Those buying at lower prices than Amazon or getting their eBooks free, may then be forced to buy them from Amazon. I doubt this would happen until the competing publishers are first driven down sharply.

[tompe]

Originally Posted by BearMountainBooks

It's possible the contract was good until a certain day and in negotiations, no one agreed to extend it past its expiration or last extension so it's POSSIBLE Amazon then pulled pre-orders as they would have no rights to sell/collect or set a price that had been agreed upon.

Yes, and it is possible that pigs can fly. So what?

[cfrizz]

Originally Posted by sirmaru

I read that article in the NY Times today about the Amazon / Hachette dispute. It appears that Amazon wants all books to end up as eBooks and do away with print books altogether. I notice in some cases the print books are not even being offered anymore at Amazon.

The NY Times article said that Hachette is a French publisher and another German publisher is being hit as well.

Frankly, that's just fine with me since I don't read any print books and have not done so for years. Plus, since I buy all my eBooks from Amazon, I'd like them to force publisher prices down.

My only concern is that after Amazon drives most of the publishers out of business, will they raise eBook prices for customers like me? That has happened in the past when even benevolent monopolies have gotten total control.

Of course the other danger is that Amazon may change their DRM procedures after obtaining monopoly control in order to block Caliber and Caliber look alike programs. Those buying at lower prices than Amazon or getting their eBooks free, may then be forced to buy them from Amazon. I doubt this would happen until the competing publishers are first driven down sharply.

God you people certainly like to worry about things don't you?

Don't you think that Amazon knows that the Justice Dept. is keeping just as close an eye on them as they are the BPH-5? Don't you think the JD would jump all over Amazon if they started acting as badly as the BPH-5?

One thing Jeff Bezos isn't is stupid. Besides which, books are not the only thing Amazon has on its shelves.

Yes monopolies have abused their power in the distant past, but the JD now jumps all over these companies that get too big for their britches. Just ask ATT, Microsoft etc.

There are plenty of books out there to be read that are not connected to Amazon or the BPH-5.

[pwalker8]

Originally Posted by sirmaru

...
My only concern is that after Amazon drives most of the publishers out of business, will they raise eBook prices for customers like me? That has happened in the past when even benevolent monopolies have gotten total control.

Of course the other danger is that Amazon may change their DRM procedures after obtaining monopoly control in order to block Caliber and Caliber look alike programs. Those buying at lower prices than Amazon or getting their eBooks free, may then be forced to buy them from Amazon. I doubt this would happen until the competing publishers are first driven down sharply.

And that is why a wise person removes the DRM when they buy the book.

Fortunately, putting together an ebook store takes a lot less resources. The issue is the contracts with the various authors and publishers. Long term monopolies simply can't last unless enforced by the power of the government. Thus, if Amazon starts to raise prices or use DRM to force people towards their proprietary devices, then existing ebook stores will start to pick up market share, or new ebook stores will start to open up.