Amazon issued a statement on Tuesday explaining the tactics the company is using to get better ebook terms from publisher Hachette Group, and defending those tactics as normal business practices. Amazon also said that customers who need Hachette titles on a timely basis should order from one of its competitors.
Amazon, the Big Five Publishers (and Apple)
The move of issuing a statement such as this is unusual for the retailing giant. Similar to Apple, Amazon has long employed a strategy of seldom commenting on much of anything. To go so far as to both explain itself and defend its actions is even more rare, and it might be a reaction to the intense criticism for the company about its war with Hachette.
In addition to some mainstream coverage—most notably at The New York Times—Authors at both Hachette and other publishers have cried foul, in part because many have seen their sales plummet. You don't have to be Nostradamus to see that your books will be in the cross hairs next if Amazon gets what it wants from Hachette.
The New York Times first broke the story that Amazon was encouraging customers to buy books by other authors when viewing Hachette-published titles on Amazon. The retailer had also lowered the discounts it offered on Hachette books and was telling customers that books labeled as in-stock would take weeks to deliver. More recently, Amazon stopped taking pre-orders on many Hachette-published books, and removed some ordering options, as well.
All of has happened because Amazon's distribution deal with Hachette was up for renewal, and Amazon wanted better terms on Kindle ebooks. The tactics have been described as bully tactics—including by me—because Amazon owns a massive share of the book market. That share was recently ensured by the U.S. Department of Justice's witch hunt against Apple for shifting the ebook market to an agency model.
For its part, Amazon owned up to many of the charges leveled by The New York Times and complained about by authors. The company said that it was ordering less "safety stock" of Hachette titles and that it had stopped taking preorders for new titles.
The company said that, "Negotiating for acceptable terms is an essential business practice that is critical to keeping service and value high for customers in the medium and long term." The statement did not address charges that it was actively encouraging customers to buy other books or that it was artificially making Hachette titles appear more expensive by discounting them less.
On a positive, note, Amazon claimed that it offered to fund 50 percent of an "author pool - to be allocated by Hachette - to mitigate the impact of this dispute on author royalties." The company said it would do so if Hachette funded the other 50 percent, and said that it had done so with Macmillan when Amazon removed the buy button for that company's titles in a similar negotiation.
Next: The One about the Small Publisher Who Defended Amazon and Amazon's Statement