Amazon vs. Hachette: The Battle Is Over, the War Isn’t
The Great Publishing Battle of 2014 is over. Retailing behemoth Amazon and publishing giant Hachette Book Group on Thursday announced they had reached a new multiyear deal covering print and e-book sales, ending a long and public dispute.
In any other context, this would have been a clash of titans. After all, Hachette is one of publishing’s Big Five (the others are Penguin Random House, Macmillan, HarperCollins and Simon & Schuster) whose market clout still has the power to make or break an author’s career. But this is Amazon.com, the Everything Store, that Hachette took on in what turned into a nasty fight over how prices on e-books would be set for customers using Amazon’s Kindle devices.
Who won? Well, we don’t really know, though if Amazon was looking to gain control over Hachette’s e-book prices, it appears to have fallen short of that goal. Neither side is disclosing details of the settlement (just as both managed to keep the precise terms of what they were wrangling about secret for nearly six months). Both say they are happy. Hachette’s CEO says it’s a great day for authors; that the new agreement will benefit them “for years to come.” Amazon execs took to the airwaves, proclaiming that it includes incentives for Hachette to lower prices on e-books, a win for consumers.
The news arrived only a week after The New Republic published a scathing cover story attacking the web retailer, entitled “Amazon Must Be Stopped.” In the piece, Franklin Foer, editor of The New Republic, focuses on the company’s allegedly pernicious “record of shredding young businesses… just as they begin to pose a competitive challenge” and its tendency to use “its riches to undercut opponents on price.”
The dispute with Hachette — which resulted in Amazon deliberately delaying shipments of the publisher’s titles to customers — serves as a case study in The New Republic’s attack, and has galvanized opposition to Amazon on a number of fronts. “There seems to be no limits to Amazon’s demands,” and the Hachette negotiations proved this, the magazine argued.
Related: Amazon Faces Growing Backlash in Showdown with Hachette
Other authors lined up in two camps. On one side was a hastily organized group, Authors United, spearheaded by Hachette-published Douglas Preston, who organized protests that included publishing a full-page ad in The New York Times criticizing Amazon’s business practices and its demands. Self-published authors, a group that includes best-selling writers like Hugh Howey, rallied to defend Amazon, which has helped them to create new online markets for their work and reach readers. “Rather than innovate and serve their customers, publishers have been resisting technology,” they said scornfully, in a Change.org petition that attracted 8,665 signatures and suggested that “all the complaints about Amazon should be directed at Hachette” instead.
It was clear in recent weeks that the publishers and Amazon were inching closer toward a settlement. The level of vitriol was unsustainably high; Amazon might be able to do without income from Hachette, but the controversy was getting harder to manage. Meanwhile, Hachette and its authors were suffering: Recent research shows that Amazon controls 41 percent of all new books, including 64 percent of all new books purchased online and a 67 percent share of all e-books. Amazon removed the preorder button, making it impossible for customers to shop in advance for books by favorite authors — and making it much, much harder for that book to make it onto a bestseller list, and having a knock-on effect on sales.
It was a kind of death spiral that took a toll on both authors and even consumers, even though Amazon claimed to be fighting the battle in their name. Anyone who wanted specific books delivered in a timely manner ended up having to take their business elsewhere. Almost the only group for whom this bitter dispute was a boon were independent booksellers, a crowd that is long overdue for a break.
Hachette couldn’t live without that market, and neither could its authors. Hachette-published novelist Luis Urrea tweeted Thursday in response to the news that the dispute had been settled: “I only lost ½ of my book income during that fight. Didn’t hurt, he gasped.”
Indeed, authors quickly went to Amazon’s website to see whether the “shipping delays” had been altered (“usually ships in one to four weeks” was a common sight for any new book published by a Hachette imprint, as well as popular backlist titles). Thriller author Jeff Abbott was disappointed. “My books still say 1-4 weeks to ship,” he tweeted. “We’ll see how quickly that changes.”
What some authors don’t expect to change is the bad blood that the dispute has brought to the surface and aggravated between the publishing industry and Amazon. “If anyone thinks this is over, they are deluding themselves,” Douglas Preston told The New York Times. “Amazon covets market share the way Napoleon coveted territory.”
If Amazon compromised on what it wanted this time, the balance of power is clearly in its favor — too many of us have become too Amazon dependent — and the conflict between Amazon and publishers, or anyone else that might get in its way, is likely to be a long, complicated and very messy one.
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Meanwhile, Amazon is finding that there may be more than one route to victory. Even as it does battle with traditional publishers, it has been building up its own in-house publishing arm, with divisions dedicated to all kinds of genre fiction, heavy promotional activity, lots of treats for authors (flowers and chocolates on publication day) and big, big sales for the most successful authors under its umbrella. (CEO Jeff Bezos’s own wife, MacKenzie, opted for a Penguin Random House imprint for her own novel, but writers with less powerful connections are big, big fans.) Consumers, meanwhile, love the low prices, which often max out at $4.99 or lower, and can be free via the Kindle Unlimited program.
So, Hachette authors may be grateful that their pain is over; consumers may be glad to have instant gratification once more. But anyone who is worried about shifting balance of power in the book industry shouldn’t relax any time soon.
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