November 14, 2014
Amazon and Hachette bury… something. The tomahawk? Yeah, that’s it: Amazon and Hachette bury the tomahawk.
by Alex Shephard
The biggest publishing story of 2014 appears to finally be over: Amazon and Hachette have agreed to new terms. Hachette books are now being sold with discounts and shipped without delays. The resolution was hinted at in this morning’s Shelf Awareness newsletter and confirmed shortly before noon.
The exact details of the deal aren’t clear, though both sides have indicated that they’re pleased. Hachette CEO Michael Pietsch described it as “great news for writers,” while David Naggar, an Amazon executive, indicated the company was “pleased with this new agreement as it includes specific financial incentives for Hachette to deliver lower prices.”
According to Publishers Marketplace, the new contract goes into effect in early 2015. There are indications that the deal with Hachette is similar to the one Amazon recently reached with Simon & Schuster. Both of these deals are believed to cover at least three years, which is a longer span than we usually see from Amazon. If the reports are accurate, that means we won’t have another blow up until at least 2018. Both deals mark a return to the agency model for ebooks, where publishers set prices and Amazon has some freedom to discount. The deal is undoubtedly welcome news for Hachette, which saw a nearly 20% drop in sales in its third quarter—having discounted books that ship immediately is undoubtedly a boon, as the holiday shopping season approaches. Whether these factors—the drop in sales and the coming of Christmas—played a role in the dispute’s resolution is unclear.
The dispute between Amazon and Hachette has dragged on for most of the year, though it only became apparent in May, when The New York Times’ David Streitfeld first broke the story. Even by the standards set by previous negotiations between Amazon and the publishers, it was unusually long and unusually nasty. In part, as Streitfeld explains in his report about the new deal, that’s because it took on the language of the culture wars: “Depending on which side you were rooting for, it was a struggle between the future and the past, the East Coast and the West Coast, culture and commerce, the masses and the elite, technologists and traditionalists, predators and prey.” As a result, the war was often fought as a kind of proxy war, with an array of irregular fighters with often loose connections to the two parties duking it out in public. On one side was a coterie of vocal self-published authors like Hugh Howey. These writers self-publish with Amazon, blog frequently in the company’s defense, and have emerged as its unofficial spokesmen—the most notable members of this group are all men, and remarkably skilled mansplainers at that—in the media.
The pro-Hachette camp included a number of bloggers and, it’s safe to assume, most of the publishing industry. (It’s probably unnecessary for me to disclose this but, as a blogger who works in the industry and writes from that perspective, I’m part of that camp.) But Authors United, which formed earlier this summer and consists of over 1,000 “traditionally published” authors, most of whom are not published by Hachette, has emerged as its most powerful and notable voice: over the past few months, they’ve garnered a great deal of attention by publishing two open letters about the dispute and are currently working on a third, which will ask the Department of Justice to investigate Amazon for antitrust violations. (For a more detailed discussion of Authors United, I wrote about the group’s evolution and how it’s affected the dispute a couple weeks ago.)
So what will happen to Authors United now that Hachette and Amazon have a new deal? The group’s leader, Douglas Preston, told Streitfeld that this isn’t over: “I’m relieved that Amazon and Hachette reached an agreement. If anyone thinks this is over, they are deluding themselves. Amazon covets market share the way Napoleon coveted territory.” But later in the day, he told New York‘s Boris Kachka that Authors United would be taking a break, if not quite disbanding: “The central problem, which is that Amazon controls 60% of the entire retail ebook market in the United States and is willing to harm authors to get what it wants—that is a problem still to be solved. But as it is now, I think we can sit back and relax.”
And what about Amazon? Should its critics also sit back and relax? Can we all happily click the buy button once more? Earlier today, The Stranger‘s Paul Constant said it best:
So now that the dispute is over, does this give your conscience the ‘all-clear’ sign to buy from Amazon? Not hardly. Though this long-running dispute is over, there’s no sign that Amazon is going to stop using these bullying tactics on publishers who refuse to sign contracts that heavily favor Amazon. These tactics use the consumer as leverage, and in so doing, they deny customers the books (and movies, and who knows what else) that they want to buy. Amazon still uses predatory pricing and encourages showrooming to close small businesses. Also, when you buy from Amazon, you’re putting money into the pockets of the company that wants to use Seattle as a test city for its drone delivery program. And while employees in South Lake Union may be well compensated for their time, it’s important to note that Amazon still mistreats warehouse workers around the world. If you refuse to buy products from Walmart on ethical grounds but you happily buy products from Amazon, you’re not making an informed decision. You’re allowing convenience to blind your moral choices, and you’re still buying from the Great Walmart in the Sky.
Hear, hear. Amazon hurts America.
One final thought that I hope to return to in the coming days: Did Amazon also hurt itself? Or, to put it differently, what was the point of all this, from their perspective? There was a lot of drama and bad PR and lost sales and now they’re back to agency? If the deal is, in fact “good” for both sides, why did this have to be so acrimonious and so drawn out? If you have any ideas, email me: alex [at] mhpbooks.com.
Alex Shephard is the director of digital media for Melville House, and a former bookseller.