Settle in and get comfortable, people. This one’s messy.
Before I started book-blogging there were many things unknown to me (actually, I’m pretty sure there are still many, many things unknown to me), but eventually I became keenly aware of the goings-on in book-world; from blogging plagiarism scandals, to highly anticipated new releases and from BEA #fails to the happenings in the actual industry (such as the Boycott of Full Fathom Five).
While browsing my inter-webby-waves for general news updates I spied this article titled, “Amazon blocks sale of new J. K. Rowling novel in row with her publisher over e-book prices”. I had to find out more at once. Why were Amazon doing this to the nation’s favourite author? Are they insane?? Is this issue really as black and white as it looks (with everyone hating on Amazon)? I dug a little deeper and decided to do a post on what I found…
Amazon has had its fair share of the media spotlight in recent years; they avoided paying tax in the UK, they have had undercover journalists report on their treatment of employees (also a great link to a BBC Documentary) and they are known for a history of aggressive actions with publishers, most dramatically in 2010 when they removed the “buy” button for releases by Macmillan. This issue was to do with the sale of eBooks; Apple were launching their iBook store and were working with the top five publishing houses on the “agency price model”, meaning the publishers would set the sale price. Amazon eventually relented to the deal but was left vindicated after the US Department of Justice sued Apple and the five publishing houses in 2012 for alleged fixed pricing. The publishers, including Macmillan and Hachette, settled.
Amazon’s latest attempt for world domination again regards the sale of eBooks, and in their pursuit for better terms, they have hit the publishers (and their own customers) where it hurts. Apparently, Amazon are struggling on an anaemic profit margin (guess that explains why they avoid Corporation Tax in the UK then *sarcasm*), and in an attempt to boost their bottom line, they want better price terms on eBooks from publishers. To pile the pressure on Hachette in particular, Amazon began removing the “pre-order” button for many Hachette titles (or making them unavailable altogether), and have also raised the prices of Hachette books while simultaneously recommending other titles from rival publishers more prominently on certain pages.
If this wasn’t bad enough, their hard-ball tactics aren’t just affecting best-selling authors such as James Patterson, Malcolm Gladwell and Nicholas Sparks, more importantly, it is affecting YOU – the customer, reader and book-lover. Not only are Amazon attempting to stamp their big feet to get what they want, they are willingly allowing their customers to suffer in the process (while still taking our money) as Hachette titles can now take up to 3-5 weeks for delivery. This is not due to a stock issue, the books are sitting in the Amazon warehouses – Amazon are intentionally delaying deliveries of Hachette titles to customers!
“We are doing everything in our power to find a solution to this difficult situation, 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.” Sophie Cottrell, Hachette Spokeswoman.
“Amazon clearly has substantial market power and is abusing that market power to maintain and increase its dominance, which likely violates Section 2 of the Sherman Antitrust Act.” Jan Constantine, General Counsel.
“It appears that Amazon is doing exactly that on the German market which it has been doing on the U.S. market: using its dominant position in the market to blackmail the publishers.” Alexander Skipis, President of the German Publishers and Booksellers Association.
Amazon declined to comment.
Amazon without-a-doubt have been innovative in their approach to on-line selling in the digital age and have been a relentless marketing machine in promoting and driving cheaper prices for books, which they would have us believe is good for consumers and for society; books are more accessible, new and modern formats are developed, and independent authors who couldn’t get their book looked at by one of the big publishing houses can self-publish to success (50 Shades of Grey, anyone?). However, what if this is all a rouse?
We’ve sadly witnessed the decline of so many bookstores, and I’m as guilty as the next consumer – I want to save money (recession, recession, recession) and I don’t want to feel “had” by paying more for an item than I need to (which is why I check a lot of retailers before making a purchase). Physical bookstores have to sell books at a significant mark-up to cover their costs and overheads, which reduces the number of books that people can afford to buy, and because of this more book-buyers than ever are taking to the Internet, and to Amazon, to make their purchases.
Recent estimates indicate Amazon controls 60% of eBook sales, and at least 1/3 of book sales overall – making them one of the biggest players in the market, if not the biggest. This amount of domination results in a market monopoly – which is bad for the authors, bad for the publishers and bad for us, the consumers. Just think, if Amazon have this much control and power, eventually they can charge whatever they like because they will have annihilated the competition. Then we all lose.
Ironically, Amazon’s current attempts to dominate the market may have done them more damage than good. The negative PR resulting from their negotiation (aka bullying) tactics has resulted in mass amounts of bad press and may serve to increase regulatory control of the market. Aside from this, Amazon are going against everything they stand for by
allowing encouraging such terrible customer service. Independent and local bookstores have been quick to recognise this opportunity, making it clear that Hachette titles are in-stock and available to purchase in-store, with some even reducing prices just for the occasion. Amazon have commented in their forum regarding their negotiations with publishers recommending that, “buyers look for Hachette books among its third-party sellers, or even buy from one of Amazon’s competitors”.
You know what Amazon? I think I’ll do just that.
The Works – The Book People – Book Depository – Books-a-Million – Waterstones
Or better yet, make a concerted effort to call in to your nearest bookstore and make a purchase. It may cost a couple of pounds more, but I’m beginning to feel that it may be worth it.
What have you heard about Amazon’s negotiations? What do you think of their tactics? And who are you supporting?
Great post. I was aware there was an issue, but I had no idea the details of what was going on. Pretty shady of Amazon, and I’ve always been a big Amazon supporter. I own several Kindles and get a lot of books and other non-book items from them. I admit that the affordability of eBooks on Amazon is the main reason I shop there because I can’t afford to buy physical copies of books all of the time. But there are other places to purchase eBooks and Amazon needs to have their ego knocked down a few pegs. I hope it gets worked out soon.
Hi Brandie, thanks for commenting. I didn’t know a lot of what was happening either and spent a few days trawling reputable newspapers and online sources to get a handle on it. I wouldn’t say Amazon is my first stop for physical books, but I have used them lately and I always found their service to be top-notch, and they’re on the ball with their service ideas and new features (like Prime). I would download quite a lot of eBooks on deals from them though, and I never really get round to reading them. I completely agree, Amazon definitely need knocked down a peg or two – behind all those A-Z smiles they’re coming across as very cold and ruthless, and today’s shoppers know the score and vote with their feet!! R x
Great post (and super well written)! I vaguely knew Amazon were up to something but I didn’t know a lot about it. Most of what they seem to be doing doesn’t make sense. Selling e-books costs Amazon almost nothing. The prices shouldn’t matter in the least. They’re acting like they already have a monopoly when they actually have a lot of competitors. Little stores all stepping up and discounting their Hachette books (as well as being a great idea business-wise) gives me this beautiful image of everyone joining together to take down the big Amazon enemy. I think businesses need to realise that in the days of social networking, PR is a massively important thing, and people will avoid businesses they think are unfriendly. There’s a phone company that is well known for over-charging and having terrible support here, and I (and many others) avoid it for the friendlier options. Why wouldn’t we do them same when buying our books?
Hi Anika, thanks for your (complimentary) comment! This post actually took me a couple of days to put together because I wanted to get it right. I still have to edit it to put in links to my sources. It doesn’t seem to make sense at all, seems like they’ve just gotten far too big for their boots. Another point I wanted to make in the post was that although they’re hassling publishers for cheaper eBooks, the saving isn’t being passed on to the customer, it’s just to increase their margins, and personally I think eBooks are overpriced a lot of the time! There’s no real production costs, no paper, no shipping etc. I once thought it would be an idea for publishers to offer an eBook code to download the eBook version when a customer purchases a hardcopy. That way we get the best of both worlds, publishers make sales, and it would help fight piracy. In the same way that the music industry had to free up the use of downloads and cds on multiple devices. As such a tech savvy and tuned in company, Amazon should be keenly aware of social media, blogs, news outlets etc. who would of course pick up on this. It’s a PR nightmare and consumers today more than ever expect businesses to conduct themselves with integrity and professionalism, which is why so many with corporate social responsibility policies are doing so well. This whole issue is sure to lose Amazon custom. I know I don’t intend purchasing from them until this is resolved in a proper manner. R x
Wow! I had no idea about any of this. I will probably still keep feeding the Amazon monster my money because I have a Kindle, convenient and I like that so many indie authors are on there but I’m not a fan of their tactics. Thanks for the eye-opener. This is giving me a lot to think about.
Thanks for commenting, Hayley. It’s kind of nuts what goes on behind the scenes! I have a Nook, but I use the Kindle app on my phone and tablet. The way I see it I have plenty of books to keep my occupied for at least a year, and if there’s something I really want I’m making an effort to get it somewhere else, I keep clicking that wee, “send to kindle” button and I never read them. Poor eBooks. R x
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I’ll stick with Amazon. Publisher are in the dark ages. Many still don’t allow ebook lending by libraries. No ebook is worth over $10. If that’s what they want to charge they can keep their ebook.
Hi, thanks for your comment. I agree eBook lending terms and conditions seem grossly unfair. Perhaps I’ll do a post on it next to highlight those concerns. I also agree eBook prices are too high in many cases. I can’t see the justification for an eBook price when there are no physical productions costs etc. However, in this case Amazon are not raising the prices of eBooks because of publisher demands, they will be selling eBooks at the same prices, but with a higher margin for themselves. While publishers may need to re-evaluate some of their industry’s methods, I have to say the greed and attitude of Amazon is very obvious, and pretty frightening really, I don’t think anyone wants a monopoly of the market – that’s just bad for business and bad for consumers.