Amazon Doubles Down on Intimidation Campaign Against Hachette

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Amazon has doubled down on its campaign of intimidation with book publisher Hachette, actively pulling high profile Hachette books from preorder. As noted by The New York Times, J.K. Rowling's The Silkworm (A Cormoran Strike Novel) (under pen name Robert Galbraith) is now listed as "Currently Unavailable," rather than preorder, and the same is true for the paperback version of The Everything Store: Jeff Bezos and the Age of Amazon, a biography by Brad Stone.

The Silkworm

Currently and Artificially Unavailable

Both books are highly anticipated titles that are available now from Apple's iBooks and from Barnes and Noble. A variety of independent book stores will also happily take your money.

For instance, The Silkworm is available as a $12.99 preorder from iBooks, or as a $21 hardcover and $14.99 Nook ebook from Barnes and Noble.

The Everything Store has been out for some time in hard back. You can buy it in hardback from Amazon for $15.82, a competitive price, or as a Kindle ebook for $14.99. The paperback, which will be released in October, is listed as unavailable for preorder.

Apple's iBooks offers The Everything Store for $10.99, while Barnes and Noble has the hardback ($16.13), Nook ebook ($14.99), and paperback preorder ($13.50).

Amazon has been accused of using a variety of artificial tactics to force Hachette to give the retailer better terms, including smaller discounts for Hachette books, multi-week delivery times for books that are in stock, and aggressive recommendations for other publishers' titles.

Not allowing preorders on highly anticipated books is yet another such tactic. The Girls of August by Anne Rivers Siddons is scheduled for release in July. Amazon has pages for hardback and paperback, but no preorders are allowed. A $62.99 audio book—note the high price—is available, but the Kindle version is missing entirely.

iBooks has the title for preorder at $12.99, while Barnes and Noble has the hardback ($17.55) and Nook ($12.99) for preorder.

Amazon's campaign against Hachette has been going on for months, and it's Hachette's authors who are paying at least as big a price as Hachette. Of course, most authors aren't large corporations with deep pockets, and many people have speculated that Amazon's intent is to cause those authors to rise up and force Hachette to give Amazon whatever terms it wants.

So far that hasn't been the case, and that could be because few authors are idiots. They know that giving Amazon better terms is merely another step in Amazon's perpetual race to the bottom, and that in the long run it will result in less money for them, too.

Jay Kristoff, one of my favorite new authors, wrote a beautiful (expletive-filled) rant on the subject. His first book, Stormdancer, which was published by MacMillan, is available on Amazon in hardback, paperback, Kindle, and audio versions from $8.95 to $21.95.

Children's author Nina Laden, who has books distributed by Hachette, posted a protest on Facebook heavily criticizing the retailer. N.K. Jemisin tweeted this:

In fact, every author I've seen commenting on the issue has slammed Amazon for the corporate bully it is. That said, I have still seen a bizarre lack of commentary (other than mine) on how this whole move shows that the DOJ went after the wrong target when it sued Apple for conspiring to raise ebook prices.

In a healthy market, Amazon's bully tactics would have only limited effect. Amazon has distorted that market by dumping books below cost, snapping up share that gives it an incredible amount of power in the book market. When the company uses these intimidation tactics, authors and their publisher both feel it.

What's the most interesting thing to me is that Amazon has escalated its bully tactics even in the face of increased author criticism and markedly increased media attention on the matter. Clearly Amazon's leadership feels like the DOJ won't touch them, and they're probably right to do so.

After the farce that was Judge Denise Cote's trial against Apple, it's very clear that the DOJ was dancing to Amazon's tune. That trial and the DOJ's campaign against Apple only served to concentrate power in Amazon's hands, and Amazon is obviously ready to flex that power.

One last note: Amazon is using similar tactics in the German market, "using its dominant position in the market to blackmail the publishers,” according to Alexander Skipis, president of the German Publishers and Booksellers Association. Europe has a different attitude about the excesses of capitalism than the U.S., and I'll be shocked if Germany's regulators are as willing to aid and abet Amazon's march to monopoly.

Comments

daemon

Bryan, what are you smoking, crack cocaine?

Amazon doesn’t do anything that every single other retailer in the US does. Walmart does it, so does Target, and so does brick and mortar book stores.

Bryan Chaffin

Hi daemon, you might not have read to the end, where I discussed why this is an issue. The differences between Amazon in the book market and these other retailers should be obvious.

I also challenge you to find one example of Wal-mart, Target, or another retailer having product in stock and telling customers it will take weeks to ship, pulling Buy buttons, or selectively and artificially removing preorder options for products that would otherwise be offered for pre-order.

Barnes and Noble tried to punish Simon & Schuster by carrying fewer of its titles, but that strategy failed in part because B&N lost its market power to Amazon.

Lastly, I’m curious why you launched an ad hominem attack against me. You may disagree with it, but my piece is well reasoned and backed by lots of external information. It bears few hallmarks of being fueled by drugs.

furbies

daemon, you’re right. Every retailer does what they can to lower margins, and make more profit.

The difference this time is how the DOJ went after Apple & the Publishing Houses, and didn’t go after Amazon.

It does make me wonder if, in this time of money politics, if Amazon didn’t grease the political wheels in Washington, and get the DOJ to ignore Amazon’s own bad behaviour, while going after Apple et al ?

And from now on, I refuse to buy books from Amazon.
(Until they change their behaviour)

KurtG

Excellent article, Bryan.  Keep smoking what you’re smoking!

Hagen

However, Bryan, you might want to check on your listed prices. Every number I see in your article shows under $1.

Bryan Chaffin

Thanks for the note, Hagen. Our CMS was munging everything with a price. It should be fixed now.

daemon

Bryan,

I did not mean you to take “what are you smoking, crack cocaine?” as an ad hominem attack. I was using it as a cultural idiom to express my pure dismay at your line of reasoning.

Bryan Chaffin

No worries, daemon, and I’ve written worse things about pundits and the like.

In any event, I do think that the unique circumstances of Amazon’s market position take this outside of acceptable business practices. Even if it’s legal—and in my piece I made it clear that I think the DOJ should be investigating Amazon’s practices—I think Amazon needs to be called out.

This sort of thing is very bad for anyone who loves books and wants to read well-writen and well-edited material.

The Famous Writer

Yeah, I didn’t think it was an ad hominem attack (though I had to Google it to find out what it was).  He was just expressing amazement at what you’d said. I have seen a lot of people accused of using ad hominem attacks recently, though this was the first time I’d bothered to find out what it meant.  grin  Here’s the thing - what is so bad about an ad hominem attack?  If an idiot attacks you (and that’s NOT what happened here, obviously) then what’s wrong with just calling the guy an idiot and having done with it, rather than getting bogged down in an argument with someone who probably isn’t worth arguing with. An ad hominem attack is often just cutting to the chase! grin  I have to say that I wouldn’t have the balls to say ‘ad hominem’ in the first place!  grin

Bryan Chaffin

Context is king, Famous Writer. daemon and I go way back. He’s a curmudgeon, is both smart and knowledgeable, brings a different perspective to most conversations, and I love him for keeping me on my toes. I do the same when I can.

vpndev

It obvious that Apple put Hachette up to this. And that means that antitrust monitor Michael Bromwich really has been blocked from executing his assigned duty.

I expect that Apple will face increased sanctions as a result.

/sarcasm

Ref Librarian

This is why I pay the small amount more and buy my ebooks at Apple, Barnes & Noble or elsewhere if at all possible. Plus I don’t want Barnes & Noble or my local independent bookseller to go out of business so I spend money at those two places too.

ibuck

Is Amazon in trouble?

Warehouse workers have complained (businessinsider.com) about “The Pretty Miserable Working Conditions At An Amazon Warehouse.  The workers are temporary and have no medical benefits; they are forced to meet stressful quotas that require walking 7-10 miles per day on hard concrete floors, and they are not paid while waiting up to 25 minutes/day for security to search them before leaving for the day. In the Seattle Times, warehouse workers allege:
- that warehouses get so hot in summer that “Amazon had ambulances parked outside to take workers to the hospital”
- there was pressure to manage injuries so they would not have to be reported to OSHA, such as attributing workplace injuries to pre-existing conditions or treating wounds in a way that did not trigger federal reports.
- in-house medical staff were asked to treat wounds, when possible, with bandages rather than refer workers to a doctor for stitches that could trigger federal reports.

Publishers complain that Amazon has no sense of collegiality [shared responsibility]. “They behave like pigs,” said another. A decade ago the average wholesale discount for a book was in the region of 40 percent. Today it’s more like 50 percent, and for many of the large outlets it can be 60 percent or more.  As their revenues fall, forcing many publishers to make cutbacks and concentrate more on lead titles, the blockbusters are the most profitable component of their business. Fewer staff and falling promotion budgets mean that books by less established authors—the “mid-list”—receive ever shorter shrift. The mid-list is the place where new talent has traditionally been nurtured, where publishers can take chances on less predictable titles.  Also, a clause in many publishers’ contracts reduces royalties paid to authors if sales are made to booksellers at a high discount, in some cases reducing the royalty by half. In this respect publisher, bookstore and customer appear to benefit from the lower price at the expense of the author. But lower advances and royalties make for less-well-researched books and an author pool increasingly populated by hobbyists rather than those whose primary qualification is the ability to write.

Customers complain that its difficult or impossible to contact Amazon with problems, that emails are rejected. Meanwhile Amazon raised the free shipping minimum to $35 in Oct 2013 and raised Prime membership to $99/yr in March 2014.

Slate says Amazon sucks as a generator of income and earnings. Most quarters it earns very low profits, with margins so thin that happenstance can force quarterly losses up to $275 million.  Amazon’s stock, which was apparently 87% owned by institutional investors and insiders, has tumbled 25% in 2014. It’s Price-Earnings ratio, once over 1300, is now 487 per Yahoo (compared to ratios of 12 to 22 for stocks on the Dow, Nasdaq 100, and S&P 500).

As Bezos’ personal wealth soars, are these symptoms of an over-reaching company approaching collapse? IMO, these are numerous reasons not to question doing any business with Amazon.

ibuck

Oops, I neglected to remove not in that last sentence. It should read:

IMO, these are numerous reasons to question doing any business with Amazon.

Lee Dronick

See yesterday’s Joy of Tech comic

http://www.geekculture.com/joyoftech/joyarchives/2004.html

aardman

Amazon is a predatory monopolist. 
They are only behaving like any predatory monopolist behaves.
That the DoJ never seemed to have thought about, predicted, cared about this when they went after Apple is just totally appalling.

People claiming “what’s the big deal, Amazon is just behaving like any other fierce competitor” are way off base.  When you have market power, under US laws, you operate under a different set of rules.

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