Amazon feud with publisher Hachette escalates

e-Commerce site Amazon and publisher Hachette Book Group are bickering over pricing.

Meryl Gordon spent three years labouring over her latest book, The Phantom of Fifth Avenue, a tale of a wealthy heiress who became a recluse in her vast apartment overlooking New York City's Central Park. It received good reviews in Publishers' Weekly and Kirkus and was doing well with pre-publication orders on Amazon.com.

Until Thursday.

That day, Amazon stopped taking advance orders and posted a notice saying "Currently Unavailable," even though the publisher, Grand Central Publishing, said books are ready and available for shipping. Amazon said it would email customers when the book becomes available.

Amazon this week put the same notice on other new releases published by the Hachette Book Group, marking another step in the continuing spat over contract terms between the online retailing behemoth and the French-based publishing house, which owns Grand Central Publishing, Hyperion Books and Little, Brown & Co. Among the books affected are J.K. Rowling's novel, The Silkworm, due out June 19.

The two sides are widely believed to be bickering over e-book pricing and whether Amazon can get bigger discounts for Hachette books.

Hachette alleges that Amazon has raised prices of its books, stretched out their delivery times to as long as five weeks, and tried to steer customers to books published by other companies in an effort to pressure Hachette into accepting Amazon's terms. Some Hachette books with modest sales volumes have been dropped altogether.

"Please know that we are doing everything in our power to find a solution to this difficult situation, one that best serves our authors and their work, and that preserves our ability to survive and thrive as a strong and author-centric publishing company," Hachette chief executive Michael Pietsch said in a letter to authors this week.

Amazon, whose chief executive Jeff Bezos owns The Washington Post, did not respond to requests for comment.

Amazon chief executive Jeff Bezos. Photo / Wikipedia - Steve Jurvetson

On the list of bestselling books on Amazon, Gordon's book had ranked in the 2,000 range on Thursday and fell to 4,025 by midday Friday. By Friday evening, its ranking sank to 6,945.

"I spent three years on this book, and I'm very happy and excited by it," Gordon said. "But it's devastating as an author to see the market power they have. It just comes as a bit of a sucker punch when you are trying to reach an audience."

"I'm not inclined to make moral judgements. Private enterprises act in their own interests, and that's what they should be expected to do," said Mike Shatzkin, founder of the Idea Logical Company and author of a publishing blog called The Shatzkin Files.

Companies in other industries often pressure suppliers for better prices. Cable companies bargain with channels over television content, Walmart pressures suppliers in its quest for low consumer prices and physical bookstores seek payments from publishers for better shelf display.

But Shatzkin questioned whether Amazon's tactics this time were in the company's best interests. He said Amazon might argue that pressuring Hachette over better contract terms would help bring consumers lower prices in the long term. But for now, Shatzkin added, customers are suffering from higher prices and less choice.

Read: Amazon starts collecting Florida sales tax

The dispute has broken out now because of consent decrees signed in 2012. When publishers plotted together earlier about how to resist Amazon's negotiating demands, the Justice Department said they were guilty of collusion and e-book price fixing under antitrust laws. It allowed retailers, including Amazon, to discount publishers' lists by 30 per cent for two years.

Hachette is one of five major publishing houses that agreed to terms under consent decrees. Negotiations between Amazon and the biggest publishing houses, Random House and Harper Collins, still lie ahead. Amazon is trying to set a precedent with the Hachette deal, publishing industry experts say.

"They're going to drive out both distributors and the people who create the product. Plus writing is not a consumer product like tissue paper," Roxana Robinson, president of the Authors' Guild, said. "It's not a commodity. It's part of our culture and can't be controlled in this fashion."

Independent booksellers have been trying to take advantage of the Amazon dispute with Hachette. In the District of Columbia, the Politics and Prose bookstore has set up a table featuring Hachette books, including David and Goliath by Malcolm Gladwell; Brad Stone's The Everything Store (about Amazon); Stephen Colbert's America Again; and James Patterson's Gone.

Bradley Graham, co-owner of Politics and Prose (and a former Washington Post staff writer), said the display had given some of the titles a boost in sales, but he deplored the impact of Amazon's feud with Hachette.

J.K. Rowling's new novel, The Silkworm, written under her pseudonym Robert Galbraith, is one of the titles affected by the dispute.

"If the Justice Department is not looking into this and remains reluctant to go after Amazon for their abusive behaviour, then I think that should be a real concern to the American reading public," Graham said.

One of the authors caught in the middle is Daniel Schulman, who wrote Sons of Witchita, about the Koch brothers. The publication date was on Tuesday, and the Amazon page for it says shipping will take three to five weeks. There is only a modest 10 per cent discount from the $30 list price.

"Hachette authors are kind of caught in the crossfire of this business dispute, and it's us that are really getting hurt here," Schulman said. "This is how we make our livelihood. And if you can't sell books, it directly affects your ability to sell another book if your book is not seen as a success. It's disheartening after pouring your soul into the subject."

Schulman has been talking about his book at every opportunity, including public radio's "Fresh Air" and MSNBC. A New York Times review will appear this weekend, he said.

"I kind of have the wind at my back," he said. "I just want people to be able to go where they want to go to buy it. I'm just trying to keep a level head. I think this situation is going to resolve itself in a few days. But I know other authors are just beside themselves."

- Washington Post