Amazon vs Hachette

[SteveEisenberg]

Originally Posted by fjtorres

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).

The reporting from the Associated Press is about the same:

http://www.usatoday.com/story/money/...hette/9507621/

And it is also about the same at the newspaper Bozos owns:

http://www.washingtonpost.com/busine...527_story.html

[pwalker8]

Originally Posted by cfrizz

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.

Frankly, no I don't think the the Justice Dept. is keeping as close an eye on them as they are the BPH-5 and that they will jump all over Amazon any time they act as badly as we are told that the BPH-5 were (note, they settled out of court without admitting guilt so nothing was ever proven in court. Most of the reports on what the BPH-5 were doing was from reports being feed to the press by the prosecutors). The Justice Department seems to be a lot more worried about grabbing headlines and extracting money out of companies than they are about actual wrong doing and punishing the guilty.

Amazon keeps very little cash on hand, especially compared to companies like Apple. It's actually a pretty good strategy if you want to keep off the Fed's target list. I noticed this week that the Feds extracted another billion plus out of a Swiss Bank without ever actually prosecuting anyone or sending anyone to prison.

[fjtorres]

Here's an author's take:
http://writeitforward.wordpress.com/...n-darth-vader/

His point? Publicly complaining is no substitute for a business strategy.

Amazon doesn’t work for authors or publishers. It works for itself. For authors and publishers to whine that Amazon isn’t being fair is not a valuable use of time or energy. It’s business. Sort of like the Denzel Washington character in Man on Fire. It’s just business. That’s what everyone says. Even when you have that blasting cap in your fourth point of contact (Airborne school term, look it up).

Why do people think Amazon HAS to carry their product and price it exactly the way they want? When Amazon undercut prices, everyone complained. Amazon charges more, everyone complains.

Publishers have a choice. Don’t distribute through Amazon. If things are as you say, and they kind of are, then you are feeding the wolf while holding on to its tail. Sooner or later you’re going to lose your grip and the wolf will turn and devour you.

Same with those authors who whine about it while still cashing their royalty checks, a decent chunk of which comes via Amazon sales.

Oh, I forget. Those big name authors don’t control where their books are distributed because they signed those rights away for those big advance checks.

And those same authors’ agents, I guarantee, leverage their sales figures for better deals from their publishers than the average author gets. Higher royalty rates, etc. Isn’t the unfair? Wait, that’s business and your agent leveraged for the best possible deal they could get you because you earned that position. So that’s good business, but when Amazon does it, it’s bad business?

Mine is similar: going public is stupid because it shows you have no leverage and invites ratcheting-up.

Which is what we're seeing Amazon do.
They have the cards and are willing to play them. Quietly. No grandstanding, no name-calling.
It's not about "good" or "evil". It's a simple power play. Basic business negotiations.

It's all about leverage: Amazon moves a third of Hachette's US volume but Hachette sales add up to less than half a percent (and pbooks--the bone of contention--closer to 0.2%) of Amazon's sales. In business negotiations, the leverage lies with the numbers:

http://www.forbes.com/sites/jeffberc...y-the-numbers/

Public complaining is no substitute for leverage.
(Maybe Hachette can get Tim Matheson on the phone.)

[CommonReader]

The "it's just business" argument is as feeble as it gets. Running a protection racket is also "just business". Pushing dope is "just business". Having kids produce garments for 50 Cents/day is "just business". Publishers forming a cartel was also "just business".
Yet some business is not acceptable or illegal.
Call me old fashioned but I do expect a major bookseller to carry the books of major publishing houses. If I had to choose between Amazon and the publishing houses I'll choose the publishers any day of the week. Amazon is just a delivery platform that hasn't contributed any great book to literature. Yet with their grip on the market they can do a lot of damage.
They are just the typical ugly face of many new companies: hiding out in some tax shelter, mainly creating crappy, poorly paid jobs. If at some point some regulator or tax authority manages to grab them and to shake them down until the pips squeak I won't shed a tear. (And no, I have no interests in the publishing industry)

[BearMountainBooks]

I hope authors are paying attention to this battle (especially indie authors). This is a large red flag --take it as a suggestion. Get your books on as many retailers as possible. Maybe open your own store. Maybe gain some knowledge about other readers/devices and do giveaways/gift certs for some other stores and not just Amazon. (I've actually seen a trend for the giveaways to include a paypal gift cert a the prize so that it can be spent at any retailer).

Because the day will come...when Amazon decides they can negotiate lower commissions for us indies.

[DiapDealer]

Originally Posted by BearMountainBooks

I hope authors are paying attention to this battle (especially indie authors). This is a large red flag --take it as a suggestion. Get your books on as many retailers as possible. Maybe open your own store. Maybe gain some knowledge about other readers/devices and do giveaways/gift certs for some other stores and not just Amazon. (I've actually seen a trend for the giveaways to include a paypal gift cert a the prize so that it can be spent at any retailer).

Because the day will come...when Amazon decides they can negotiate lower commissions for us indies.

Actually... do it just because it makes perfect sense to do so. Amazon or no.

[hoichi]

Originally Posted by CommonReader

The "it's just business" argument is as feeble as it gets. Running a protection racket is also "just business". Pushing dope is "just business". Having kids produce garments for 50 Cents/day is "just business". Publishers forming a cartel was also "just business".
Yet some business is not acceptable or illegal.
Call me old fashioned but I do expect a major bookseller to carry the books of major publishing houses. If I had to choose between Amazon and the publishing houses I'll choose the publishers any day of the week. Amazon is just a delivery platform that hasn't contributed any great book to literature. Yet with their grip on the market they can do a lot of damage.
They are just the typical ugly face of many new companies: hiding out in some tax shelter, mainly creating crappy, poorly paid jobs. If at some point some regulator or tax authority manages to grab them and to shake them down until the pips squeak I won't shed a tear. (And no, I have no interests in the publishing industry)

I don't think fjtorres was trying to debate whether Amazon is evil (who isn't, Google?). I think the argument was that Hachette is rather stupid. They didn't get into this trap because they're so nice and only care about art of literature and never about maximizing their profit and got sneaked up on by monsters in human disguise. They lost their leverage through they own shortsightedness, to a great extent, and now they're kind of left with no other options but crying foul.
Whether or not 'wild capitalism' will ever be tamed and whether 'just business' will come to only mean honest and friendly practices is another story.

[cfrizz]

Originally Posted by CommonReader

The "it's just business" argument is as feeble as it gets. Running a protection racket is also "just business". Pushing dope is "just business". Having kids produce garments for 50 Cents/day is "just business". Publishers forming a cartel was also "just business".
Yet some business is not acceptable or illegal.
Call me old fashioned but I do expect a major bookseller to carry the books of major publishing houses. If I had to choose between Amazon and the publishing houses I'll choose the publishers any day of the week. Amazon is just a delivery platform that hasn't contributed any great book to literature. Yet with their grip on the market they can do a lot of damage.
They are just the typical ugly face of many new companies: hiding out in some tax shelter, mainly creating crappy, poorly paid jobs. If at some point some regulator or tax authority manages to grab them and to shake them down until the pips squeak I won't shed a tear. (And no, I have no interests in the publishing industry)

Did you ever miss the point! ALL major corporations want to be the ONLY game in town....this INCLUDE the publishers! They will do whatever they have to, to screw over the consumers and drive other businesses out of the market so that they are top dog. NONE of them are operating out of the goodness of their heart because business has no heart it is all about higher stock prices, profits and power!

The sooner everyone understands that the better off they will be.

[BearMountainBooks]

Originally Posted by DiapDealer

Actually... do it just because it makes perfect sense to do so. Amazon or no.

Well, yes, but it makes sense now more than ever! When Amazon wanted lots of books in their catalog they helped by helping indies get noticed. They offered this and that. They still try to convince indies to go exclusive with free days and countdown days. But they don't do anywhere close to the marketing/placement and so on. They aren't as eager for indies. In the past it *may* have made sense to do some exclusive marketing and listings with Amazon. That is not as true these days and the sooner authors spread out, the better for them, retailers and readers. This little scuffle could be a bit of a harbinger if people haven't been considering going to all retailers.

Hachette could have done more. Indies can do more. If you want to remain independent and successful you have to remain nibble and moving all the time. Because as so many have pointed out: Hachette is in this for Hachette. Amazon is in this for Amazon.

Wide partnerships are not a bad idea.

[CommonReader]

Originally Posted by cfrizz

Did you ever miss the point! ALL major corporations want to be the ONLY game in town....this INCLUDE the publishers! They will do whatever they have to, to screw over the consumers and drive other businesses out of the market so that they are top dog. NONE of them are operating out of the goodness of their heart because business has no heart it is all about higher stock prices, profits and power!

The sooner everyone understands that the better off they will be.

That's a bit of pseud insight. Yes, all major corporations want to expand their business, but the business culture of companies can be markedly different.

I'm not so sure that Hachette's decision is so bad, either. Public complaints by major companies about Amazon abusing its market position will at some point motivate regulators to take a much closer look at Amazon. In my perception it's also more damaging for Amazon's brand, as it shows that they put their squabbles with suppliers ahead of serving their customers.

[cfrizz]

Originally Posted by pwalker8

Frankly, no I don't think the the Justice Dept. is keeping as close an eye on them as they are the BPH-5 and that they will jump all over Amazon any time they act as badly as we are told that the BPH-5 were (note, they settled out of court without admitting guilt so nothing was ever proven in court. Most of the reports on what the BPH-5 were doing was from reports being feed to the press by the prosecutors). The Justice Department seems to be a lot more worried about grabbing headlines and extracting money out of companies than they are about actual wrong doing and punishing the guilty.

Amazon keeps very little cash on hand, especially compared to companies like Apple. It's actually a pretty good strategy if you want to keep off the Fed's target list. I noticed this week that the Feds extracted another billion plus out of a Swiss Bank without ever actually prosecuting anyone or sending anyone to prison.

The Feds have no one to prosecute because the guilty parties almost always settle for paying out a big chunk of money to make the whole thing go away supposedly without admitting guilt. But the fact they are settling pretty much means they know they are guilty and if found to be so at trial, would cost them a whole lot more than what they settled for.

Of course there are exceptions like Apple, who was found guilty anyway and now will be under scrutiny for years to come.

[pwalker8]

Originally Posted by cfrizz

The Feds have no one to prosecute because the guilty parties almost always settle for paying out a big chunk of money to make the whole thing go away supposedly without admitting guilt. But the fact they are settling pretty much means they know they are guilty and if found to be so at trial, would cost them a whole lot more than what they settled for.

Of course there are exceptions like Apple, who was found guilty anyway and now will be under scrutiny for years to come.

No, they settle because it's cheaper and less risky to settle than to take it to trial. One never knows how a jury or judge is going to decide, which is why the vast majority of cases, both criminal and civil are settled before coming to trial. It's a racket that prosecutors have run for years, both on the Federal as well as the local levels. It's actually not unknown for a defense attorney to tell an innocent client to take a plea bargain as long as it doesn't involve actual jail time because of this.

There really is no downside for the prosecutors. First you go for the shake down. Have a big press conference announcing the accusations, make sure that you accuse them of anything and everything you can with the hopes that at least something will stick. If the company doesn't settle, then they let things drag out. If it becomes apparent that the judge is skeptical of your claims, then just quietly drop the case and move on. If the judge buys into your narration, then you get a major object lesson to intimidate the next target with. No matter which, you win. People remember the initial press conference and you get to move up the political ladder.

Every so often a judge gets wise and throws the case out of court with a blistering rebuke to the prosecutor, but even then, there is little actual downside for the prosecutor.

There are plenty of honest prosecutors out there, but the vast majority of major cases with big press conferences have little to do with justice or actual crimes being committed.

[eschwartz]

Originally Posted by CommonReader

That's a bit of pseud insight. Yes, all major corporations want to expand their business, but the business culture of companies can be markedly different.

I'm not so sure that Hachette's decision is so bad, either. Public complaints by major companies about Amazon abusing its market position will at some point motivate regulators to take a much closer look at Amazon. In my perception it's also more damaging for Amazon's brand, as it shows that they put their squabbles with suppliers ahead of serving their customers.

You are still missing the point. Amazon is not doing anything wrong. Their only crime is apparently being more interested in themselves than their customers and suppliers... which shouldn't come as a shock to anyone... because SURPRISE Hachette does the exact same thing!

No business culture is different, because that would require them to be a charity.

Again, Amazon has done everything by the books, aboveboard and legal. In doing so, they have simply proven to be better at business than the publishers. In what way is that wrong or evil or in any way even remotely objectionable?

[hoichi]

Originally Posted by eschwartz

No business culture is different, because that would require them to be a charity.

I guess there are examples of a different business culture, but not in a company the size of Amazon or Hachette. You don't get to be this big without eating someone.

[CommonReader]

Originally Posted by eschwartz

You are still missing the point. Amazon is not doing anything wrong. Their only crime is apparently being more interested in themselves than their customers and suppliers... which shouldn't come as a shock to anyone... because SURPRISE Hachette does the exact same thing!

No business culture is different, because that would require them to be a charity.

Again, Amazon has done everything by the books, aboveboard and legal. In doing so, they have simply proven to be better at business than the publishers. In what way is that wrong or evil or in any way even remotely objectionable?

Squeezing five extra bucks out of Hachette may be a very costly extra profit if regulators start seeing Amazon as a company that abuses a dominant market position or suppliers start to see doing business with Amazon as bad business.