What the Amazon/Hachette dispute is really about

It wasn’t long ago that readers could walk into any bookstore anywhere in the country and have a reasonable expectation that they could get any book they wanted. The book might not be sitting on the shelves, but any bookseller — chain or independent — would without question take and fill a special order for anything published in the US. We booksellers could rely on wholesalers like Ingram and Baker & Taylor to help us fill those orders because they stocked books from wide range of companies. If a reader was looking for something that Ingram and B&T didn’t happen to have, we could go directly to publishers and be assured that they’d fill our order on equitable terms. Publishers even developed an easy, standard system — the Single Title Order Plan — to facilitate orders from stores with whom they may not have a regular relationship. STOP contacts and terms for all houses were a part of every company’s listing in the American Booksellers Association’s Book Buyer’s Handbook, so it was easy for booksellers to know how to get any book from any publisher.

Publishers and booksellers worked together because we all had the same expectation that readers did, that they would be able to get any book from any bookstore anywhere. We worked together this way not just because we had a common interest in serving the readers who are our mutual customers, but also because we understood that booksellers and publishers were fostering the free marketplace of ideas. We are among the vital institutions that make real the promise of the first amendment, a place where readers could access the free press that the framers held so dear. Selling books and, in particular, the filling of special orders — whether through wholesalers or STOP orders — has never been just about money. No one — not the publishers, not the booksellers — ever made real money from special orders, given the time and the shipping costs that go into them. But all publishers and all booksellers participated in this system.

That sense of common mission has frayed, and the policies and processes that enabled readers to obtain any book from any bookstore are in tatters. The reason is Amazon.

Amazon is engaged in negotiations with Hachette, one of the few remaining large publishers in the US, over terms of sale. While the details of the talks are not public (at least they’re not anywhere I’ve seen), we can surmise that Amazon is asking for terms that Hachette does not offer to other retailers and that Hachette has not agreed to Amazon’s request. We know that they haven’t because Amazon has made it more difficult for readers to obtain Hachette titles — removing pre-order buttons, delaying shipments, reducing or eliminating discounts.

It’s easy to see the Amazon/Hachette dispute as a petty business disagreement, and Amazon partisans have likened it to situations where Barnes & Noble or independent bookstores have not stocked particular books. A member of the DorothyL mystery genre discussion list writes: “Barnes & Noble can and does refuse to carry books because it doesn’t like the cover. Most independent bookstores refuse to carry books by Amazon Publishing, because they don’t want to support their competitor.”

Of course any business is entitled to make decisions based on what it thinks is best for that business. For bookstores there is no more crucial calculation than weighing whether to commit inventory dollars, shelf space and other limited resources to a particular book. Retailers rise and fall based on these decisions. If Barnes & Noble thinks that a cover for a book isn’t going to work, then they’re right to pass on it, and use their resources to stock an alternative that their experience tells them is more likely to lead to a sale — a better return on their dollar.

But here’s the difference. Barnes & Noble might decide not to stock copies of a title on the shelves of its stores based on its cover. Some independent stores might decide not to stock books from Amazon Publishing because Amazon won’t make its titles available to independents on the same terms that Amazon expects others to sell to it. However, in either case, if a customer walks up to the store’s special order counter, the booksellers will take the time to locate and order in a copy of that book with the hideous cover or that book published by the company that is the store’s fiercest competitor. Booksellers will take the time, every time, and they’ll do it happily. No “real” bookseller — chain store or independent — would let a business disagreement stand in the way of a reader who’s looking for a book. That’s just not in a bookseller’s DNA. The fact that Amazon is doing otherwise tells you that they’re made of different stuff, that they’re willing to impede readers trying to buy the books they want instead of just making books freely available to the best of their abilities.

I realize that sounds like an odd thing to say about a company that has genuinely done an enormous amount of good in enabling folks in remote and rural and isolated places to have access to a wider selection of books than they’ve ever had in the past. Through its CreateSpace and Kindle platforms, Amazon also offers countless authors and independent publishers (my own small publishing program included) access to readers that they would not otherwise reach so easily. There’s no question that Amazon has triggered revolutions in bookselling and in publishing that have lead to many positive outcomes for readers, writers and publishers — and even for other booksellers who have had to become more efficient and effective as a result of the changed landscape.

But even as we recognize the good that Amazon does, it’s important to recognize that what they’re doing is contrary to the bookselling ethos that grew up with and supports our democracy. In seeking preferential terms from publishers like Hachette, Amazon is seeking to bolster a monopoly position that threatens every other bookseller, a threat that puts Amazon closer to the position of being the only bookseller. Democracy is not well served by a marketplace of ideas that consists of only a few retailers; democracy is stronger when a level playing field supports a diverse marketplace made up of many retailers.

Even on its Kindle platform — a system that allows many voices access to readers — Amazon is making an effort to restrict the market. Through its KDP Select program, Amazon offers significant incentives to encourage authors/publishers to sell exclusively on Amazon, not allowing any other retail sale of a digital text — not even on the author/publisher’s own website. I can’t think of any other example in the recent history of publishing where any one bookseller has ever tried to prevent publishers from offering books to other retailers. CreateSpace is no better. Much of what is produced on this platform is unavailable to the trade through Ingram or Baker & Taylor. There’s no listing for CreateSpace in the Book Buyers’ Handbook. CreateSpace titles might be offered direct to other stores on terms that Amazon itself would find laughable, an effort to achieve de facto exclusivity on these books.

These kinds of exclusive arrangements are prevalent in other categories of retail. It’s not unusual for large stores to have their own “house” brands that are not offered to competitors. But that can’t happen in the book business because books are different. Booksellers and publishers have always worked together so that readers could walk into any bookstore and have a reasonable expectation that they could get any book they wanted. Bookselling has never been about exclusivity. If a particular brand of toilet paper is sold only in one store, that’s ok because toilet paper — as necessary as it is — is just toilet paper. Books are different because they embody ideas. If ideas are available from only one store, then the free marketplace of ideas isn’t so free any more.

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  1. You’re a bit off.

    Hachette wanted higher prices for ebooks, and Amazon said no, so Hachette started delaying shipments to Amazon as a negotiating tactic. Amazon had to pull the pre-order buttons for upcoming books since they couldn’t rely on Hachette to provide the books in a timely manner.

    Can you imagine the uproar if Rowling’s new book came out and Amazon couldn’t fulfill preorders?

    Hachette doesn’t have any respect for their authors, which isn’t a surprise since all NY publishers see authors as a “necessary evil” and the least important part of the publishing process, but they also don’t have any respect for readers. They want to charge $15 for ebooks so they can increase their corporate profits, and Amazon won’t let them, so they are throwing a fit and using the massive media ties to flood the market with misleading articles and anti-Amazon propaganda.

    Amazon has offered to pay 50% of authors lost royalties during this dispute if Hachette covers the other 50%, so we should see where Hachette’s loyalty truly lies soon enough.

  2. Barnes & Noble pulled almost this exact same trick with Simon & Schuster last year over what they deemed to be millions in unpaid co-op fees. Barnes & Noble refused to place orders for any Simon & Schuster author who wasn’t a guaranteed brand name bestseller and refused to give them co-op and in most instances pulled already published S&S titles from front shelves and displays. That’s not a store refusing to stock a title because they don’t like the cover. It’s a more weak-kneed version of this same negotiating tactic and no one spoke about it with the same level of outrage. At the very least, some address of this prolonged fiasco and its brutal effect on the publications of so many S&S authors was needed for the line you’ve drawn between Amazon and other retailers to make sense here.

  3. “Books are different.” Sorry, Jim, but I have to disagree with you. Books are widgets, no more and no less than any other commodity. Authors and bookstore owners tend to romanticize books, but they are business, short and sweet. And both Hachette and Amazon are fighting for what they think are reasonable terms for who they represent and how they want to do business. Takes place in every other aspect of business, and we need to understand that business is business. People enjoy pounding on Amazon’s back, as behemoth as it is, but as you stated, Amazon has done wonders, nay, performed miracles, for authors and publishers. Sorry, I’m on Amazon’s side.

    • One of my other laments about the business today is the commoditization of books — not a new issue nor one unique to Amazon, but certainly something Amazon participates in. You may not see that as anything to worry about, but I still think it’s significant that there are first amendment protections for what booksellers and publishers do, but none for the producers and sellers of widgets.

  4. Alas,Jim, it is new and scary world in which, increasingly business models are displacing older norms. It is a world in which becoming a prist or clergyman/woman is viewed as a “career track” and an MBA a looming requirement. It is world obsessed with process and not outcomes and marketing is now a featured topic at writers conferences. Amazon is about business. Independently publishing authors get a better cut from Jeff Bezos and they do not care that traditional publishers are being bullied. But…. If Amazon can screw over Hatchett (assuming that is the case), they can ultimate screw anyone and under the rubric that business is business, that means Anyone.

  5. Well done, Jim. The book business, for the most part, is an honorable one and I’m sorry to see readers dragged into this disagreement. Most writers don’t produce widgets. We love and care about the books we write.

  6. Without more details about what the dispute is about — and little has been revealed by Amazon, and less by Hachette — we can only make guesses about who is at fault. Is it discounting? Is it e-book prices? Who knows. If you want to find somebody who views books and their authors as commodities, look no further than big publishers. Any author who has sat in their editor’s office and been shown (or more likely only told) unpromising sales reports knows the cold hard facts of publishing in America. Your book is one of many to the publisher and it’s only value is how much money it can make for them. They may love your writing but if it doesn’t translate into dollars, well, here’s the door.

    • Nothing I’ve written should be taken as a suggestion that the book business isn’t a business. Businesses have to make decisions about what to invest in and what not to invest in. Resources are not unlimited, and they need to be allocated according to expectations of returns. We may not agree with those decisions, etc — when a publisher drops an author, when a bookseller passes on a title — but those decisions belong to those firms. It’s their money and their resources that are on the line.

      What I am saying is that there are ways to be in business and respect what books represent or to be in business and not respect what books represent. Regardless of who’s at fault, I believe that Amazon’s tactics — with Hachette titles, with exclusivity for Kindle and CreateSpace titles, etc — demonstrate that the company does not respect what books are about. I think we can agree that publishers have many faults — many, many faults — but I also agree with Elaine that the book business has been for the most part honorable, and that it has always tried its best to live up to its larger responsibilities.

  7. NYC publishers treat authors, designers and illustrators a heck of a lot nicer than Amazon treats ANY of its suppliers. This is about a corporate behemoth that has successfully evaded anti-monopoly punishment by purchasing protection at the Federal level and then decides to finance its blatantly monopolistic, nothing-but-loss-leaders strategy by squeezing its vendors to death. Where the heck is Teddy Roosevelt when we need him?

  8. NY Publishers treat most authors like crap, having been one for 20 years. Other than the elite 5% of authors, everyone else is a replaceable cog in a machine. The naivete of many of these comments is stunning. It also represents a pie in the sky mentality toward publishing.

    Publishers were never really concerned about readers. They were concerned about distribution. That’s why their antiquated business model is falling apart. They had plenty of warning about digital and completely ignored it. What were they all doing in 1994 when there was no Amazon? Business as usual with no thought to change.

    Here’s the deal– as long as there is an internet, I can reach my readers without having to go through the Big 5 (who by the way were found guilty of collusion and cheating readers of hundreds of millions of dollars– so much for honorable) or Amazon or iBooks or Kobo or Nook. I can sell directly.

    And, shocking as it may seem, I’ve been treated ten times better by Amazon, Apple, Nook, Kobo et al than I was treated by four of the big 6. And that’s not just my experience but the experience of almost every author who has had experience dealing with both camps.

  9. Absolutely on the mark. As a smaller publisher of non-fiction titles, with way too many of our “eggs” in the basket as it is, I can see the current tussle between these two behemoths inevitably trickling down the food chain – and it ain’t pretty.

    The Kenyon College Bookstore was a wonderful refuge during my years at Kenyon! Like the song says, “long may you run.” And prosper!

  10. I’m jumping right into this one. I’m very grateful for all this conversation and read anything involved with the Amazon controversy. I subscribe to the New Yorker and read “Cheap Words” immediately. For openers, I’ve decided to spare this group my first 30,000 words and focus on one point made by Jim Huang, whom I admire greatly. Jim, you are totally mistaken if you think you can actually walk to a bookstore in America and order a book. Pick one. Any one, I dare you. A place that doesn’t know who you are. B & N, an indie, any book at all, any store at all. It’s not gonna happen. The answer will be–we don’t have it in stock. If the store is really helpful, they will suggest you look for it online. Somewhere. Have you tried Amazon?

    • Well, obviously you’ve had some bad experiences in bookstores, Charlotte, and I’m sorry to hear that. Not every store is wonderful. But that’s not the experience you’ll have at the bookstore I manage, where we locate books for folks all the time. Special orders are a big part of what we do. Contrary to what you’re reporting, I think that most stores also understand that their livelihoods depend on filling customer requests, and you see evidence of this on hold shelves behind the front registers of many bookstores.

  11. “Amazon has made it more difficult for readers to obtain Hachette titles — removing pre-order buttons, delaying shipments, reducing or eliminating discounts.”

    — “Won’t pre-order the book,” “Won’t stock the book unless ordered,” and “Won’t discount the book” are completely different from “Won’t sell the book.”

    Generally speaking, bookstores don’t pre-order books like Amazon does – put your name on a list and we’ll charge you and mail the book when it’s published. They do it the way Amazon is doing now for Hachette – we’ll email you when the book is available. They also don’t necessarily stock a book and will special order it with a delivery time of 1-2 weeks – much like Amazon is doing now with many of Hachette’s books. Finally, they don’t discount at all.

    So Amazon isn’t doing anything different from what most independent bookstores are doing, and everyone is up in arms? Why?