Saturday, August 9, 2014

Amazon Vs Hachette

Anyone interested in books has been watching the situation between Amazon and Hachette with great interest.  While the true facts are hard to determine since both sides are accusing, the general situation has been: Amazon wants to discount ebooks from Hachette, and Hachette will not allow it.  A lot of insults have flown back and forth.  Hachette says they are defending authors and cheaper prices will only hurt them.

Amazon says they are looking out for the reader's best interest AND the author by selling more books the royalty check will actually higher.

Who is right?  I am not sure.  I see both sides of the situation very clearly.  And today Amazon sent out a email (which you can read here ) describing the history of the mass-market paperback is akin to their situation, saying that the paperback was a revolution and now the ebook is doing the same thing.  Publishing didn't die then by lower prices, and it won't now.

With the situation of prices and ebooks, I have to agree.  Story telling has been on going since the beginning of time.  That won't stop, the method of distribution may change but stories and the industry will go on.

Amazon says they have given Hachette several offers.  We don't know for certain if said offers were as quoted, but I suspect Hachette also gave offers we don't know about that Amazon rejected.  It will be interesting to see Hachette's response.

Lower prices will likely help in the long run.  I have to agree with Amazon that 14.99 for a ebook is too high considering there are none of the costs that print books have.  But it is Hachette's right to sell them for that and I don't think it was proper of Amazon to pull books or otherwise try to give leverage to its position.  In the end most people will not purchase books at those prices, and Hachette will have to lower them.  Or they will go out of the ebook business, which would be financially unwise.

I also think that having any company too large is bad for consumers in the long run.  Nothing against Amazon, but they are certainly not perfect, and history shows that sooner or later greed comes into the equation harming the consumer.  It may not even happen for many decades, but it will happen at some point.  It is just the way of the world, market competition is the only thing that will keep a company honest in the long term.  And the price of not doing so will harm their business.

Here is a classic example, there is one utility (gas, electric, phone, etc) provider in a certain area.  A customer has a issue, it is filed but the company doesn't really work hard or quickly fixing the issue.  They don't care.  The company isn't evil, they are not trying to cause problems, but they just don't have the motivation to deal with situations quickly.  They figure "we will get to it, and where else are they going to go?"  This is the problem of monopolies.  Then there is the other end of the spectrum where the company does this (and far more) on purpose.  Or raising prices just because they can and "where else are you going to go?"

I am not seeing Amazon as a saviour in this situation, while they are trying to get better deals for their readers, it is not out of their good hearts, it is for their bottom line.  And while it is not bad, one does need to keep this in mind.  They are doing this is to improve their business, not just for the readers or authors.

Hachette is doing the same, but while their reasons are also for their bottom line, charging the same for a product that does not have any of the costs of the traditional format never sits well.  This can only end badly for them if they don't relent soon.

What is the best way out of this situation?  It is simple: Hachette agrees to lower prices, but not just for Amazon ebooks.  If they lowered them across the board then it gives readers what they want: lower prices.  But it does not give Amazon what they (really) want: a deal just for them.  Both companies won't get what they want, however it will end the stalemate.  It will also raise the image of both companies, which to be honest, is suffering greatly.  And sometimes we don't get what we want, but what will work and pull our bacon out of the fire.

I and everyone else will continue to watch the situation unfold, hoping sanity will prevail.

Don DeBon is the author of Italian Fever, Red Warp, and Soulmates.  Currently available on  Nook, iBook, Kindle, Smashwords, Oyster, Scribd, and Kobo.

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