Chip MacGregor

June 6, 2014

The latest on the Amazon/Hachette Fight


Since my blog post on Wednesday, there have been several new developments in the battle between Amazon and Hachette…

1. After delaying orders on Hachette titles, refusing to discount them as they have other publishers’ titles, and sometimes not even listing the ebook version on their site, Amazon is now using a new tactic: Halting all pre-orders of Hachette titles. That prevents authors from getting out of the gate fast with a big first-day hit — and it effectively will keep some titles from hitting the bestseller lists.

2. Amazon then released a statement in which it defended its tactics ( If you take a look, it will strike you as odd, since they argue they’re doing to “on behalf of customers,” and they propose some sort of “author pool” to help authors hit hard by their tactics. Um… I don’t mean to sound like I’m taking sides here, but if Amazon is delaying books or not making them available at all, how is that working on behalf of customers? And Amazon is worried about authors losing royalties? I don’t know if that’s EVER been on their list concerns in the past. Anyway…

3. Hachette then responded by rejecting that idea and sniffing that Amazon treats books as just another commodity, like everything else they sell on their site. You can read the response here: .

4. Talk show host Stephen Colbert, who is a Hachette author, chimed in by telling viewers he had a “little package” for Amazon (he opened a box, stuck his hand into it, and flipped them off), then told readers how they could get a free sticker from his website that reads “I didn’t buy it on Amazon.” And, try as I might, I can’t seem to import that sticker into this blog post. Sorry. But you can watch the clip here:–hachette

5. The debate has largely put authors into two camps — the pro-Amazon camp (this side treats self-publishing like it’s a religion — Amazon can do no wrong, Jeff Bezos is my savior, and all traditional publishers are evil and destined to failure) and the pro-Hachette camp (they see Amazon as the Great Satan, and believe that Hachette’s multi-billion dollar publishing corporation is struggling to make ends meet). Again, there aren’t heroes and villains here, in any great degree. This is a business negotiation, over millions of dollars. I don’t like some of Amazon’s tactics, but I tend to be on the side of authors, and what they’re doing isn’t helping authors one bit.

I did have someone write to me and argue that Amazon is on the side of consumers by offering low prices. A word about that… Low prices are great. Given a chance to buy Starbucks coffee at Starbucks for $14, or at the grocery store for $9, I tend to purchase the lower cost option. That said, I’m not going to buy coffee picked by slaves, or from a coffee grower known to rape the earth, even if it’s cheaper. Sometimes there are factors more important than price. I don’t buy shoes created by child labor, or products that contain harmful chemicals. Why? Because sometimes consumers have to think long term. And thinking long term in publishing, you have to admit that having one book retailer in this country isn’t good for authors or readers. Amazon is a great company, who sells my authors and helps us all make money. But I don’t want them to have a monopoly on book sales, because monopolies never are good for consumers.

So while I understand both sides of this debate, I’m not comfortable with Amazon pushing other people out of business. You can say its market forces, or capitalism at work, but it’s not — this is a retailer that has said they don’t care if their suppliers go out of business, so it seems like it’s an aggressive plan to take over an industry. And if that’s what is happening, this is the first in a HUGE fight for the future of publishing. If I were Hachette, I would not be satisfied with having Amazon try to push me out of business. As an agent, I’m not willing to let Amazon (or Hachette, for that matter) push me out of business. I think this is the start of a major war over the choices authors and readers have, and it’s why we need to pay attention to the discussion.

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  • Thanks–appreciate the well-informed feedback and reflections, Chip.

  • Nora says:

    As a writer, this concerns me. But, do readers care? If a reader cannot find the book on Amazon, they will find it somewhere. I realize that if Amazon becomes a monopoloy consumers won’t have a choice; but, what is the real probability of that?

    • chipmacgregor says:

      I think that’s the question of the day, Nora. Certainly there’s never been a day when we had anything quite like the current situation, with one company moving nearly half the books sold in America. So I would say the danger is real — have a look at the audio book situation in today’s market. Amazon bought up all the independent audio book companies, then sliced their royalties. That, to me, is a situation that creates concern.

  • Shaun Ryan says:

    “I did have someone write to me and argue that Amazon is on the side of consumers by offering low prices. A word about that… Low prices are great. Given a chance to buy Starbucks coffee at Starbucks for $14, or at the grocery store for $9, I tend to purchase the lower cost option. That said, I’m not going to buy coffee picked by slaves, or from a coffee grower known to rape the earth, even if it’s cheaper. Sometimes there are factors more important than price. I don’t buy shoes created by child labor, or products that contain harmful chemicals. Why? Because sometimes consumers have to think long term.”

    Integrity, gotta love it. We love to preach principles in the U.S., but they usually evaporate the moment a dollar comes into the picture. Unfortunate, given that our only real vote these days is our dollars.

    • chipmacgregor says:

      I think all of us at times make decisions that go beyond dollars, Shaun. If you found out your shoes were manufactured in a sweatshop, you’d be uncomfortable, right? It’s why boycotts work (though we may be tired of some people who seem to want to boycott everything). Nice of you to come on to the blog and comment.

  • Rachel Leigh Smith says:

    I’m with you, Chip. I’ve never been a fan of Amazon’s tactics, and what they’re doing right now is yet one more entry on a massive list of why I personally do not do business with Amazon.

    Is Hachette entirely in the right? No. But like you, I see this as a dangerous precedent. If Amazon gets away with it and makes Hachette bow at their feet thousands of authors are going to suffer.

    Both sides of the publishing fence have something to offer. I’m embarking on the indie side with a project not suited to traditional, but it doesn’t mean I’m giving up on traditional. I want to do both, because each has benefits the other doesn’t.

    • chipmacgregor says:

      Thanks for the comment, Rachel. Best of luck with the indie published project!

  • Stacy Chambers says:

    I have SO many thoughts about this. I totally agree with you, Chip, that there’s no good vs. evil story here. I also agree with Laura that the publishing industry was ripe for a shakeup. (And many in the industry spent far too long with their heads in the sand.) I’m not published (yet!) so I can only come at this from a customer’s point of view.

    When things run smoothly (i.e. when everyone does what Amazon wants), Amazon is great. But when people don’t, I’ve noticed Amazon tends to go all medieval. It turns off customers’ accounts with no explanation, leaving those customers in the wind for their Kindle purchases. It booted small businesspeople in states where it was fighting a sales tax (I got booted in Illinois, so I couldn’t sell anything on Marketplace for a long time). It lowered royalty rates on audiobooks once it dominated the marketplace. It’s fighting with publishers. The money it pays to screenwriters is bad–plus, its contract leaves no room for negotiation.

    This latest spat with Hachette has been a real turnoff to me as a customer. I know Amazon is not evil, per se, but it seems to handle its business negotiations the same way an abusive boyfriend handles negotiating with his girlfriend: You do what I say, or else. The only real way to deal effectively with someone like that is to disengage.

    I haven’t bothered to renew my Prime membership and I’ve canceled any subscriptions for groceries. When I bought Stephen King’s latest release, I went through Bookshout. And I plan to use that app for Hachette authors. It’s not that I’m especially angry–it’s more that there’s enough evidence for me that Amazon is willing to basically abuse everyone with whom it does business. That’s not something I want to support with my money.

    I’ll buy from Amazon if I have to, but I no longer want to. I’ll be getting a Costco membership and ordering my ebooks from other retailers.

    Thanks for posting about this, Chip.

    • chipmacgregor says:

      I think a lot of people are having that response, Stacy. Maybe it’s easy to criticize Amazon because they’re big, but really, in this case, they’ve taken steps that have turned off a lot of consumers. An odd mis-step for a company that has done so much good. Appreciate your comment.

  • chipmacgregor says:

    Sorry, Laura, I failed to see your last line, about pre-orders. You’re using faulty logic. “We won’t take preorders on books we may not be selling… because we’re trying to get you to agree to sell your books here”??? Again, this is a multi-million dollar fight, made by two billion dollar companies, and the people really getting screwed are the authors who aren’t getting their books sold. If I were Stephen Colbert, and someone was trying to keep me from selling a bunch of books, I’d do the same thing. I think it’s funny that the criticism Colbert has received from the indie crowd is basically, “The guy is making a fortune, selling tens of thousands of books, and he shouldn’t be complaining!” What stupid logic. ALL of those indie writers would be thrilled to be selling like Colbert. AND all of those indie authors would be pissed if, after selling a bunch of books, the biggest retailer suddenly decided to try and screw up their sales. Again, if a few folks weren’t so completely enraptured with Amazon, if they could step back and see that what Amazon is doing is bad for authors in this particular case, they’d side with Colbert. But they can’t because the True Church of Indie has determined that anything Amazon does is good, and anything a Big Six publisher does is bad. My view? There’s good with both. There’s bad with both. And having the choice of both is better than not having any choice. I do business with both Amazon and Hachette. I like them both. But this is a fight, and it’s getting nasty, and I think it’s fair to comment on what’s happening on each side.

    • Laura Scott says:

      Faulty logic? I don’t think you made the case there.

      “If I were Stephen Colbert, and someone was trying to keep me from selling a bunch of books…” is an interesting expression, when that “someone” is Amazon, who’s been making so much money for the Big Five and, to a lesser extent, their authors. Because of that success, sales via Amazon is now deemed an entitlement?

      As a business owner, would you like it if people were insisting that you MUST sell product X, even if you don’t like the deal for you? “My sheet-metal screws are worth $X and should be sold for $Y, and Amazon must take that deal, because reasons! Or else government intervention!” Isn’t that what people are claiming for Amazon?

      I applaud Colbert for saying, “Buy it from me” or someone else, because of course there are alternatives! Every Hatchette book is available online from numerous other retailers, including former whipping-boy B&N. Is the problem that Amazon is just too damn good at selling to be allowed to not sell anything? Isn’t it at least a tad ludicrous to say that Amazon is obligated to sell Hatchette’s product, whatever the deal? Since when is “I want to sell my stuff through Amazon” an entitlement? Is there now a writ of mandamus for Amazon? Amazon must sell anything on any terms the seller wants?

      Look, I and other indies are not blind to Amazon’s games. Amazon may shift on indies, like it already has for audiobooks. That would be painful to many. But it would also provide opportunities for competitors. (See the Howey post I linked above, where he presents a scenario as to what would happen if Amazon truly started squeezing everyone. Maybe it’s pollyanna, or maybe there’s some sense to it. The mere fact that Amazon offers a different deal for traditional publishers than for indies is alone a cause for re-examination.)

      I have to say, though, that what you call “the True Church of Indie” is, for independent publishers, a not a cathedral but a bazaar — the emerging market of independent publishing. Indies aren’t “enraptured with Amazon”. This is business, not religion. Entrepreneurs don’t want to be liked, they want to be paid. Otherwise they’d just post their books on free websites and be done with it. Right now, Amazon’s deal is, for many indie publishers, far more appealing than what Amazon’s competitors offer. And for many authors, going indie offers many advantages over traditional publishing’s contract terms, low royalties, rights grabs and low advances. And when Amazon’s advantages fade, watch its competitors rise. After all, these are disruptive times. There are no secure positions.

    • chipmacgregor says:

      An entitlement? Well… I suppose we could argue, but surely you see that what Amazon is doing (slowing down orders, not listing books, etc) is a problem for the authors in question. And Amazon is not being told they have to sell the books, whatever the deal… the two sides are trying to work out the deal. That’s what this is about. But for the record, I love Amazon, and think they do a great job of selling books. I just don’t like the tactics they’re using in this fight. (And, if this matters, I have railed against some things Hachette has done in the past as well. I love them, and do business with them, but their insistence on clinging to a 25% ebook royalty rate is unfair — and they seem to be balancing the books with that. Maybe THAT’s how they pay the light bill!)

      Oh, and my “Church of Indie” analogy is just for fun, of course. You sound like a reasonable person, but I can tell you from firsthand experience that not all the True Indie Believers are as polite, as well spoken, or as reasonable as you. Again, I love and support indie publishing (you can check my blog or talk to my authors to test that statement). And I love your analogy of it being a bazaar — a great image. I’m just stating that, for some, it’s more than that. They believe to the core, and there’s no argument allowed. Maybe I’m just tired of people on that side dominating the discussion. In fact, I think authors having choices is the best scenario.

  • Laura Scott says:

    I’m scratching my head on this one. First, Amazon is not a “monopoly”. It may be the largest retailer with a plurality of the market, but that’s not a monopoly. They aren’t even a monopoly of online booksales. Saying “monopoly” doesn’t make it true.

    To me, Amazon is a big disruptor in an industry ripe for disruption—an industry that has been consolidating into an oligopoly for decades now. That doesn’t mean I feel Amazon can do no wrong. But right now Amazon has been the leader in opening up publishing to indie voices by allowing them to bypass the lockdown on books distribution. It’s only natural that when indie authors, some of whom are able to make a living for the first time from their writing, see multi-millionaire authors like Patterson and Colbert cry foul, with the full backing of traditional news outlets like the NY Times, they feel that they themselves are being attacked. You may consider independent publishing a “religion,” but for thousands of people it’s business that’s paying the bills and putting kids through school.

    As for pre-orders, isn’t it a natural development for Amazon not to take pre-orders for books that they may not be selling?

    • chipmacgregor says:

      Hey, I love Amazon. And I didn’t call them a monopoly — I warned that they’re trying to become one. And I think any reasonable view of today’s book retailing situation makes that clear. Indie stores sell 3% of all books in America. Costco & Sam’s/WalMart sell another 3%. Christian stores sell 3%. Used bookstores and supermarkets each sell about 2%. Ecommerce? They sell 41% of all books, and growing. And Amazon is the 800-lb gorilla. They’ve done a fabulous job of opening up opportunities for authors, Laura, and we sell more books today (and make more money) because Amazon is in business.

      But they’re trying to drive others out of business. Including publishers. And I don’t think that’s in the best interests of authors. Think about it: If Amazon drives the Big Six out of business, who benefits? If major media conglomerates like Hachette can’t stand up to them, what chance do you think an independent author has?

      As for some indie authors treating that like a religion… um, take a look at Konrath & his minions. They have core truths: Amazon is sacred; the Big Six are evil. They have a couple leaders who know “the truth.” They’ve set up an “us against them” mentality. They attack or belittle anyone who comes onto a blog and veers from the party line. So yeah, I think my comment is correct. But listen, I’m been VERY supportive, both publicly and privately, of authors going indie. And I’m not taking Hachette’s side in this (I’ve already said I rolled my eyes at Patterson’s comment about publishers not being able to pay the light bill). My point is that authors aren’t being taken care of in this fight.

    • Laura Scott says:

      “But they’re trying to drive others out of business. Including publishers.” Where is your evidence of that? Why would Amazon try to drive their suppliers out of business?

      You seem to have an emotional antagonism to Konrath. I’m not going to defend him, he can do that for himself, but he has said several times he’s not treating Amazon as an angel, and is cautious, but I do agree with the Passive Guy that Amazon Derangement Syndrome seems to run rampant.

      I don’t have any personal experience with the Big Five. But I’ve been around a while, and have watched the massive arbitrage and consolidations happening in publishing well before Amazon ever became a significant player. And I have to say, Hatchette’s crocodile tears over the plight of the authors, when they’ve been making great profits while giving the authors a pittance, to the point that even traditional publishing’s defenders are crying how their authors are having trouble making ends meet.

      Disruption happens. In the ’80s and ’90s, the disruptors were the multinationals who ran the family-owned operations out of business, or bought them out. Now it’s the internet age, where artificial scarcity via restricted distribution has been bypassed altogether. A few years ago, people bemoaned B&N’s superstores. Remember Waldenbooks & B. Dalton? They went away long before Borders. Now Amazon is the big retailer now — some 55% of ebook sales and a third of overall book sales in the US, from what I’m reading. (Maybe it’s more, because the traditional sources don’t even count the indies, who are probably earning 70-80% through Amazon.) But who’s to say they will be dominant in a few years? It wasn’t that long ago that Yahoo was the all-powerful search engine and Microsoft was unstoppable in hardware. Twitter is driving a lot of online traffic but didn’t exist ten years ago. Pinboard now drives more traffic, and wasn’t around five years ago. My point is that we aren’t in end times because Amazon has a third of the book retail business.

      The companies that will need to adjust in these market conditions are the publishers, by offering better deals for their authors, cutting overhead (maybe owning/leasing buildings in some of the most expensive zipcodes in the world isn’t the best approach right now), and embracing the new markets. After all, they have all the advantages: Reputations, the backing of the mainstream media, huge backlists, and the capital to invest in new distribution methods.

      Frankly, the company that should be most nervous is B&N. They have an opportunity, but a lot of overhead as well. From what I’m reading, the indie bookstores are actually rebounding. Just the other day I was reading about a woman who was about to open her fourth independent bookstore in New York City, hardly a soft retail area.

      So I guess I have more faith that things will settle out, not because of market dogma, but because it’s what we’ve been watching for years and years. It’s classic “Innovator’s Dilemma” stuff.

      My apologies for reading “monopoly” into your post. I stand corrected. Right now, I don’t see Amazon even close as becoming a monopoly, but who knows? Then again, iOS 8 will have iBooks pre-installed, Nook is partnering with Samsung, and others aren’t sitting still. Where will we be a year from now? What if the Big Five took their products elsewhere? They aren’t supposed to act any more as a cartel, but what if individually they did? After all, this is a disruptive business, and disruptors are not immune to disruption. (Hugh Howey, who yes can be a bit of a cheerleader, posited some rather compelling logic in a post a few days ago .)

    • chipmacgregor says:

      Wow — great stuff here, Laura! You and I agree on about 90% of this. The problems with the legacy publishers, the changes to the system, the nervousness attendant to B&N, etc. (The stuff with Konrath? I’m just tired of his constant barrage about how every legacy publisher is trying to screw him, and every agent is evil. Geez. You’ve sold your books. Move on, man.) And I think if the Legacies all act in concert, there will be a MAJOR problem. The DOJ will be all over them. So… you may not see it, but we’re largely believing the same thing. Love your analysis, by the way.

    • Laura Scott says:

      I agree that we agree about 90%. And I agree with you here and your comment below that Joe can get strident at times, and others can be just as ornery. (We’re not all mad geniuses, after all.) But it’s the whining of the millionaires that gets all the attention.

    • chipmacgregor says:

      Ha! No argument, Laura. As a matter of fact, “The Whining of the Millionaires” would be a great book title if you wanted to write this story. :o)

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