August 1, 2014
Today in mergers and standoffs: Lagardère releases sales info (Updated)
by Kirsten Reach
You remember that Hachette recently acquired Perseus and changed distribution for 400 indie publishers. The sale wasn’t completed yesterday, as they’d initially announced, but the deal is expected to close at the end of August.
Shelf Awareness explains that Perseus selling distribution to Hachette, who then wants to sell distribution to Ingram, is as just as complicated as that sounds:
Under the deal, Perseus is selling its publishing and distribution operations to Hachette. In a simultaneous transaction, Hachette is selling the distribution operations to Ingram Content Group. Sources said that the closing delay reflects the complications of the three-way transaction compared to a simple two-party sale —and that because end-of-month closings are preferred, even a delay of a day or two in processing means the closing needs to move to the end of the following month.
Hachette’s still in a stand-off with Amazon, and in a report released yesterday, the company’s ebook net sales were “slightly lower” in the first half of 2014 than in the previous year. Net ebook sales were down to 29% (they were 34% last June).
Things are better in England: UK sales are considered “sustained growth,” since adult trade ebook sales were 36% (up 5% from last June). Ebooks were 11.3% of Lagardère‘s total net sales for the first half of 2014, exactly the same percentage as last year.
So what does all of that mean? Is the Amazon dispute costing Lagardère? Yeah, a little. Is it hard on Hachette U.S.? Yeah, they lost 5% of their net ebook sales. But if the terms with Amazon can be improved, this could be an investment in the long-term health of the company.
UPDATE: Not all the news is as sad as that pug’s face. The Wall Street Journal reports this morning that with the acquisition of Hyperion, taking over Disney’s distribution, and with the help of a few bestselling print titles — ever heard of this book The Goldfinch? — Hachette activity in the U.S. is still up 5.6%.
There are other factors in the ebook decline aside from Amazon. Industry-wide, the ebook market isn’t growing at the Olympic rate it had been for a few years; we can imagine most people who want to buy ebooks seem to have gotten their ereaders a few holiday seasons ago and are buying ebooks at a more stable rate.
Are we ever going to see numbers from Amazon showing how publishers hurt their profits? I wouldn’t bet on it.
(For the sake of full disclosure, I used to work for Hachette, which is why I’m reading about their annual sales reports in detail.)
There aren’t a lot of developments in the Amazon dispute this week, but if you’re following along at home, there is more than enough to read. Authors are taking a broad view of the ramifications across the book industry. (Plus, they’re mad. This is why you should never piss authors off.)
Our author and Porter Square bookseller Josh Cook wrote yesterday, “The conflicts around Amazon have never been about finding compromise; they are about publishers and bookstores trying to keep the lights on and Amazon trying to control the entire books economy.”
Saying he felt “betrayed” by Amazon’s action, Douglas Preston said in an interview with Porter Anderson, “We just want to be able to write our books, and have them sold fairly at the largest bookseller in the world and not have those sales blocked or impeded…. [Books] should not be treated as if they’re boxes of cereal occupying shelves.”
The ever-wise John Scalzi adds:
Killing off Amazon’s competitors is good for Amazon; there’s rather less of an argument that it’s good for anyone else…. I’m sure in a couple of years Amazon will release another spate of numbers that will show how much more profitable $6.99 eBooks are as compared to $9.99 eBooks, and so on. But at the end of the day there will be authors and publishers who can charge $9.99, forever, and they will. If you destroy the top end of the market, the chances you destroy the bottom end go up, fast.
Kirsten Reach was an editor at Melville House.