In a Kindle Forum Post, Amazon Speaks Up About Hachette
In its inimitable way, yesterday Amazon finally commented publicly on its dispute with Hachette Group. A post from "the Amazon Books team" on its Kindle forum acknowledged that the company is "buying less (print) inventory and 'safety stock' on titles" from Hachette and not offering orders in advance on forthcoming titles. Amazon said customers will be able to order titles on or after pub date, at which point the e-tailer will place orders with Hachette if it has no stock on hand. "Once the inventory arrives, we ship it to the customer promptly." Although Amazon didn't mention it explicitly, it appears that shipping delays on published titles have been shortened significantly. The post continued: "If you do need one of the affected titles quickly, we regret the inconvenience and encourage you to purchase a new or used version from one of our third-party sellers or from one of our competitors."
The post said that "despite much work from both sides, we have been unable to reach mutually-acceptable agreement on terms. Hachette has operated in good faith and we admire the company and its executives." Amazon warned that "though we remain hopeful and are working hard to come to a resolution as soon as possible, we are not optimistic that this will be resolved soon."
Amazon called negotiations with suppliers for "equitable terms and making stocking and assortment decisions based on those terms... one of a bookseller's, or any retailer's, most important jobs. 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."
The post then goes on to give the usual rationale for whatever Amazon does: "When we negotiate with suppliers, we are doing so on behalf of customers. Negotiating for acceptable terms is an essential business practice that is critical to keeping service and value high for customers in the medium and long term."
The post made no mention of what terms Amazon wants, but did offer an unusual gesture for authors: "We've offered to Hachette to fund 50% of an author pool--to be allocated by Hachette--to mitigate the impact of this dispute on author royalties, if Hachette funds the other 50%." It asserted that this was done in 2010 when Amazon deleted buy buttons on Macmillan titles.
The post ended by saying that the dispute is attracting attention "presumably in part because the negotiation is with a book publisher instead of a supplier of a different type of product" and said some of the coverage "has expressed a relatively narrow point of view." It ended with a link to a "post that offers a wider perspective."
The link at the end of Amazon's post goes to "Who's Afraid of Amazon.com?," which appears on the blog of Marty Shepard, co-founder of the Permanent Press, and is a response to the New York Times's May 24 article "As Publishers Fight Amazon, Books Vanish." Calling the story "a one sided exposé that only exposes poor journalism," Shepard criticized the Times for speaking with just a handful of publishers and authors, all of them critical of Amazon. "In their alarmist zeal reporters David Streitfeld and Melissa Eddy conjure the dreadful threat that Amazon has inflicted upon the 'literary world,' causing a kerfuffle of rage and fear as exemplified by a dispute between the electronic superstore and one of the most robust publishers in the Western World."
Shepard also criticized large publishers, chain bookstores and wholesalers for their policies toward small presses, which he contrasted to Amazon, "the very best thing any small independent press could ask for." He gave four reasons for liking Amazon: 1) Amazon's returns are at most 1%-2% compared to 20%-80% for all other accounts; 2) Amazon posts reviews of Permanent Press books and lists other titles that might be of interest; 3) earnings from Kindle e-book sales are "excellent"; and 4) Amazon usually pays within 30 days via wire transfer, much faster than any other account.
The key problem leading to the Hachette dispute, according to Shepard, is that Hachette and other publishers "want more of the electronic pie, and if they can't get it howl and rage about it."
In conclusion, he wrote: "I always have a lingering suspicion that when one of the large publishing cartels complains they are being treated unfairly by Amazon, it's probably good for most all of the smaller, independent presses. When the Times allows a poorly researched, inaccurate anti-Amazon screed to appear, it makes me want to stand up for Jeff Bezos and Amazon, and present a very different point of view which I hope will balance out what I consider blatant propaganda. And I would encourage other publishers who feel similarly to e-mail me and speak out as well."
A quick response to Shepard came from Robert Rosenwald, publisher and president of Poisoned Pen Press, who wrote in part, "Do I think that Amazon has done much to improve book selling and distribution? Certainly. Do I think that Amazon has dramatically improved efficiency in our industry? Beyond any doubt. But your diatribe only speaks to how much better Permanent Press has done in certain areas of sales due to these increased efficiencies--not to the real and present threat of Amazon.com's actions against the reading public. How can you honestly not feel endangered by a company that is responsible for approximately a third of all book sales in the U.S. and heading towards half? Can you honestly ignore censorship under any guise?...
"Do you not see that once Hachette is subdued then the other big four are picked off next, one-at-a-time? And after that Sourcebooks, Poisoned Pen Press, Permanent Press, and every other independent publisher. Screw Hachette. I am not a fan of Hachette or of big publishing in any way. James Patterson is not an author Poisoned Pen Press would publish even if given the rights gratis, but I firmly believe that his books should be available for purchase everywhere books can be bought. And to hold his readers hostage as a byproduct of a disagreement between billionaire corporations is despicable....
"Ultimately I believe the only answer will be, like AT&T, to break up Amazon.com. I would argue that democracy is founded upon capitalism, and that capitalism cannot survive monopoly. In my opinion Amazon.com has become a de facto monopoly--at least with respect to bookselling--even if it is not in actuality. But if most small publishers are, as you postulate, unafraid of Amazon.com, then I fear I've lost my senses. And I fear for my business." He added that most small publishers don't want to speak publicly about Amazon because they fear retribution from the company.