Amazon said to be 'increasingly ruthless' in negotiations with UK publishers

Posted:
in General Discussion edited July 2014
Hachette is not the only imprint to find itself under Amazon's thumb as the online retailing giant has begun turning the heat up on smaller publishers in the U.K., demanding terms that one publishing executive likened to a "form of assisted suicide for the industry."


An Amazon warehouse, via The Dallas Morning News.


Among the concessions sought by Amazon are the right to print its own versions of popular books if the publisher cannot keep pace with demand as well as a new "most favored nation" clause that would prevent publishers from offering other distribution channels terms -- including new e-book agreements -- that would be unavailable to Amazon itself, according to the BBC.

Publishers are worried that Amazon's digitally-printed volumes, which many believe are of lesser quality than those printed by traditional offset means, would cause confusion for consumers and harm the publishers' reputation. Granting the retailer "most favored nation" status, combined with Amazon's famous willingness to subsidize shipping costs, could essentially remove any incentive for consumers to purchase books from independent booksellers or the publishers themselves.

Seattle, Wash.-based Amazon is seen as both a blessing and a curse by publishers, according to Philip Jones, editor of trade rag The Bookseller.

"The worst thing that could happen [to book publishers] would be for Amazon to go away," he told the BBC. "The second worst thing would be for it to become more dominant."

Perhaps emboldened by its victory by proxy over rival Apple in the U.S., Amazon has been "bullying" U.K. publishers to accept its terms, a representative from one shop told the British broadcaster. At least one other publisher has said that its response would be a "simple and monosyllabic no," though it is unclear to what extent that resolve pervades the industry.

Smaller publishers are likely keeping a close eye on Amazon's negotiations with massive worldwide imprint Hachette, which is locked in an ongoing dispute with Amazon that has seen books from authors including J.K. Rowling and James Patterson pulled from Amazon's virtual shelves. Amazon insists that negotiations over pricing for Hachette's e-books are for the benefit of consumers, but many industry watchers instead believe Amazon is leveraging Apple's loss for a more profitable sales agreement.
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Comments

  • Reply 1 of 80
    copelandcopeland Posts: 298member
    If it wasn't that sad the verdict against Apple would start looking comical.
  • Reply 2 of 80
    Good thing the consumer is being protected from Apple.
  • Reply 3 of 80
    theothergeofftheothergeoff Posts: 2,075member

    Yeah, that Agency Pricing model was pure market evil compared to allowing Amazon to maintain Status Quo, wasn't it?

  • Reply 4 of 80
    solipsismxsolipsismx Posts: 19,566member
    But Amazon operates with such a small profit margin that they are allowed to be unethical and have government ordained monopolies¡
  • Reply 5 of 80
    SpamSandwichSpamSandwich Posts: 30,424member
    Apropos of nothing, I recall seeing a run-of-the-mill hardbound novel in a bookstore, perhaps five or six years ago, which had a nearly thirty dollar sale price.

    It was at that point I decided to never buy a physical book again!
  • Reply 6 of 80
    SpamSandwichSpamSandwich Posts: 30,424member
    solipsismx wrote: »
    But Amazon operates with such a small profit margin that they are allowed to be unethical and have government ordained monopolies¡

    Government is good... Repeat after me... Government is good...
  • Reply 7 of 80

    I dislike Amazon more and more every day.

  • Reply 8 of 80
    Quote:

    Originally Posted by SpamSandwich View Post



    Apropos of nothing, I recall seeing a run-of-the-mill hardbound novel in a bookstore, perhaps five or six years ago, which had a nearly thirty dollar sale price.



    It was at that point I decided to never buy a physical book again!



    If the NYT Bestseller List is to be believed, even new release books are selling 5,000 copies in a week. That's a pittance. (honestly, I don't know how it's that low). But it makes it hard to lower the prices through mass production.

  • Reply 9 of 80
    mstonemstone Posts: 11,510member
    Quote:

    Originally Posted by TheWhiteFalcon View Post

     
    If the NYT Bestseller List is to be believed, even new release books are selling 5,000 copies in a week. That's a pittance. (honestly, I don't know how it's that low). But it makes it hard to lower the prices through mass production.


    People don't read anymore.

  • Reply 10 of 80
    dickprinterdickprinter Posts: 1,060member
    Quote:

    Originally Posted by SolipsismX View Post



    But Amazon operates with such a small profit margin that they are allowed to be unethical and have government ordained monopolies¡

    Amazon, especially with the introduction of the Fire phone, is slowly but surely killing small business across the country. Consumers will walk into a local store to see, touch & feel the object they are shopping for and then will use their Firefly app to order online.

     

    Perfect example is a shoe store.

     

    1) Walk in.

    2) Get perfectly fitted by a professional

    3) Ask to try on "one last pair"

    4) Salesman walks into the stock room to retrieve "one last pair" thinking he made a great sale

    5) Meanwhile, consumer scans UPC with Firefly, finds much better deals

    6) When salesman returns, fake an "emergency" and walk out, only to order on Amazon.

     

    It happens multiple times daily in the shoe store across from my shop and it's putting him out of business.

  • Reply 11 of 80
    justbobfjustbobf Posts: 261member
    For the most part, yes, government is good. Government paves out streets, maintains our National Parks, mandates labels warning us of he dangers of smoking and seat belts and air bags in cars.

    Somethimes it gets things wrong, but also, Apple sort of started this by colluding with all the publishers. That's not legal. That's what anti-trust laws are about. Trouble here is that Apple wasn't the leader and the one to fear, here.

    Amazon was paying authors 30%. Apple reversed that to 70%.

    But let's not make this an anti-government rant, please.
  • Reply 12 of 80
    solipsismxsolipsismx Posts: 19,566member
    Amazon, especially with the introduction of the Fire phone, is slowly but surely killing small business across the country. Consumers will walk into a local store to see, touch & feel the object they are shopping for and then will use their Firefly app to order online.

    Between Amazon and Walmart it's definitely getting more difficult for small businesses to stay in business.

    Academic question: Is this sort of change a bad thing? Should we stop progress? Remember when there ere general stores or corner stores where you could buy pretty much anything or when Sears would deliver anything, including pre-fab homes, via the mail that you picked out of a catalog? (Maybe [@]Dick Applebaum[/@] remembers the latter :))

    Perfect example is a shoe store.

    1) Walk in.
    2) Get perfectly fitted by a professional
    3) Ask to try on "one last pair"
    <span style="line-height:1.4em;">4) Salesman walks into the stock room to retrieve "one last pair" thinking he made a great sale</span>

    5) Meanwhile, consumer scans UPC with Firefly, finds much better deals
    6) When salesman returns, fake an "emergency" and walk out, only to order on Amazon.

    It happens multiple times daily in the shoe store across from my shop and it's putting him out of business.

    On the one-hand that's a clever use of the technology. I had only conceived of it for creating a grocery shopping list at home with ease. On the other hand that shoe store is not a charity so it's unethical to take up the employee's time under the guise of being a customer when you have no intention of doing so.

    Maybe he should get a cell jammer so they can't check Amazon's prices. :D
  • Reply 13 of 80
    Quote:

    Originally Posted by justbobf View Post



    For the most part, yes, government is good. , mandates labels warning us of he dangers of smoking and seat belts and air bags in cars.

    You really need labels to know that?

  • Reply 14 of 80
    anantksundaramanantksundaram Posts: 18,822member
    LOL. They should call it the Cote-Bromwich Reading Tax.

    Bloody fools.
  • Reply 15 of 80
    rob53rob53 Posts: 1,950member
    Quote:

    Originally Posted by SpamSandwich View Post



    Apropos of nothing, I recall seeing a run-of-the-mill hardbound novel in a bookstore, perhaps five or six years ago, which had a nearly thirty dollar sale price.



    It was at that point I decided to never buy a physical book again!

    You probably don't own any physical artwork either or anything else that has value, instead getting digital copies of everything. Your statement about physical books is sad and a sign of a declining society.

  • Reply 16 of 80
    jungmarkjungmark Posts: 6,591member
    Shhh. It's Amazon. They're doing it for the benefit of customers. Honest.

    I say the publishers consult with their authors and pull books from Amazon and start selling them elsewhere. It will hurt in the short term but benefit in the long term.
  • Reply 17 of 80
    rob53rob53 Posts: 1,950member

    I thought Apple was convicted of anti-competitive behavior (pending appeal) because of the most favored nation clause. Isn't this what sealed their fate? Now Amazon is demanding the same thing. What else do they need to do before the DOJ gets off their a** and starts investigating them. Amazon is providing them with so much ammunition I can't believe nothing has happened. They are worse than Microsoft was.

  • Reply 18 of 80
    solipsismxsolipsismx Posts: 19,566member
    Government is good... Repeat after me... Government is good...

    As an idea, it's not only great but necessary for a complex society, but there are issues… and I don't see how there won't always be issues.

    mstone wrote: »
    People don't read anymore.

    That wasn't true when Steve Jobs and it's not true now. I'd argue that people, especially kids and especially throughout the world, read more now than in any other time in human history. The ability to type on a keyboard is also much more advanced than I was at a given age. I had to take a typewriter course in school. They were electric typewriters but you still had to have those little White Out sheets to fix a mistake. Those were the leading invention at the time since you didn't have to roll the paper up, apply liquid White Out, wait for it to dry and then get it back in the right position without getting the line ever so slightly off, all while trying to remember your thought, which oft meant writing it out by hand with pen and paper first. It was a nightmare!

    Now, do they spend as much time reading novels as opposed other forms of casual reading, like this forum? Likely not even close, but they are reading, and I think that's important. I'd also argue that the ability to exchange ideas and interact with others is better training for the brain than simply reading the ideas of someone else in a one-way dialogue.
  • Reply 19 of 80
    paxmanpaxman Posts: 4,589member

    I find it amazing that Amazon is at such odds with the Book Publishing world and also the creators of the books they sell. I see nothing in Amazon that reveals a positive view of the future of the industries that it lives off, nor of the world as a sustainable place for creators, workers and consumers alike. Amazon has turned ecommerce into something very ugly. I like convenience and low prices as much as the next guy but what Amazon is practicing is more akin to a scorched earth policy for its own benefit. It is a horrible company.

     

    http://www.theguardian.com/books/2014/jun/25/new-amazon-terms-book-industry-report-concessions

  • Reply 20 of 80
    zoetmbzoetmb Posts: 2,378member
    Quote:

    Originally Posted by SpamSandwich View Post



    Apropos of nothing, I recall seeing a run-of-the-mill hardbound novel in a bookstore, perhaps five or six years ago, which had a nearly thirty dollar sale price.



    It was at that point I decided to never buy a physical book again!

    OK and if it wasn't from a big hit author, it probably sold somewhere between 5000 and 7500 copies, but let's say it sold 10,000 copies    That's $300,000 gross.   The publisher gets about $150,000.    The author (again assuming it wasn't a famous author) got about $40,000 in royalties and advances.   Let's say it cost $3 per copy to buy the paper, binding and have it printed.     For the remaining $80,000, the publisher had the overhead costs of finding the author/book, supplying an editor and copy editing services, tracking royalties, having a cover designed and marketing and distribution costs.    

     

    Trade publishing is not a very profitable business, except when you have a really big hit.   And there aren't that many really big hits per year.   Most trade publishers earn less than 10%.  And only 10% of the cost is in the paper and manufacturing, so most of the costs are still there for e-books, which sell for substantially less.

     

    The big money is in classic children's works which sell year after year to generation after generation.

     

    That's not to say that I'm willing to pay $30 for a novel either.   I'll usually wait for the trade or mass-market paperback.   But don't think the publishers are making a killing.   And even though there's been consolidation among the big publishers over the years, there are more books from more publishers being published than ever before.     Back in the mid-90's, there was about 1.6 million books that the publishers considered "in-print", but only about 700,000 were really available from either the publisher or the large distributors, like Ingram or Baker & Taylor.   Today, over a million books are published each year in the U.S.

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