You may have heard about Amazon’s dispute with traditional book publisher Hachette over how to share profits on eBooks, and today that dispute was stepped up a notch as Amazon released a statement saying that while they hope to be able to resolve the problems eventually, they don’t expect it to be happening any time soon.
The US federal government has recently settled an eBook antitrust pricing settlement with publishers which stipulates that publishers supply their eBooks to retailers at a price set out by the publishers, but that the retailer can discount. The disagreement Amazon and Hachette came about due to the profit split after the sale of eBooks, of which Amazon currently gets a cut of about 30% of the fixed price. But should Amazon want to discount the price of the book, which they usually do, then that discount will come out of their profit.
Amazon’s stance in this disagreement comes from their seeking a higher percentage split, which Hachette aren’t willing to give them. Therefore Amazon are currently listing all Hachette books at full retail price on their US website, despite selling them for a much discounted price on their counterpart website in the UK.
The question is here, who should gain the majority of the profits from the sale of an eBook, for which the typical margin is around 75%, should it be the publisher, who took the time to nurture the author and produce the book itself, or should it be the company that takes the time and makes the effort to distribute it? Can that decision be made? By the looks of the standstill that Amazon and Hachette have come to, it looks unlikely.
Amazon released a statement on May 28th which essentially said that customers wishing to purchase or pre-order Hachette books should consider shopping at a competitor’s website. The retailer said that it is “negotiating on behalf of customers,” but said that it is not optimistic for the results.
With Amazon having a monopoly on book sales, in fact that company is responsible for approximately one third of all book sales in the US, chances are that Hachette will do worse out of this dispute than Amazon will, and the retailer was careful to mention in its statement that only around 1% of its books are published by Hachette. But chances are also strong that it is the authors who will suffer from this cold war, as not allowing customers to pre-order Hachette published books will make a huge dent in any opportunity the author has of getting their new title to the top of the bestseller list.
Hachette insist that they are working tirelessly to improve their relationship with Amazon and get their books selling as normal once more. In a letter to authors, the chief executive wrote that they are doing everything possible to find a solution to the problem, “one that best serves our authors and their work, and that preserves our ability to survive and thrive as a strong and author-centric publishing company.”
All we can do is wait to see what the outcome of this battle will be, but as Amazon are being labelled as bullies by authors and publishers alike, here’s hoping that it’s not the writers that come out of this as the losers.