Amazon-Hachette Spat Hurts Writers

By David Streitfeld, The New York Times | Updated: 10 May 2014 13:51 IST

The world's biggest bookstore is a bit smaller these days.

Amazon's secret campaign to discourage customers from buying books by Hachette, one of the big New York publishers, burst into the open Friday.

The uneasy relationship between the retailer and the writing community that needs Amazon but fears its power immediately soured as authors took to Twitter to denounce what they saw as bullying.

Among Amazon's tactics against Hachette, some of which it has been employing for months, are charging more for its books and suggesting that readers might enjoy instead a book from another author. If customers for some reason persist and buy a Hachette book anyway, Amazon is saying it will take weeks to deliver it.

The scorched earth tactics arose out of failed contract negotiations. Amazon was seeking better terms, Hachette was balking, so Amazon began cutting it off. Writers from Malcolm Gladwell to J.D. Salinger were affected, although some Hachette authors were unscathed.

On both sides, the stakes are high. Amazon controls about a third of the book business, which means big publishers cannot live without it. But Amazon risks alienating readers as well as authors and undermining its carefully wrought image as the consumer's friend.

"What we are seeing is a classic case of muscle-flexing," said Andrew Rhomberg, founder of Jellybooks, an e-book discovery site. "Kind of like Vladimir Putin mobilizing his troops along the Ukrainian border."

As accusations flew, the two antagonists kept a low profile. Hachette stressed it was shipping orders promptly and yet Amazon was still showing the books as being unavailable. Amazon, as usual, declined to say anything at all.

The retailer appeared to be using three main tactics in its efforts against Hachette, which owns Grand Central Publishing, Orbit and Little, Brown as well as many other imprints.

One is simply warning that books would take a long time to show up. Amazon has been relentlessly expanding its delivery ambitions and just this week announced Sunday deliveries in 15 more cities, including Austin, Texas, and New Orleans. Its two-day free shipping program has more than 20 million members.

But if a reader wants a Malcolm Gladwell book from Amazon, "Outliers," "The Tipping Point," "Blink" and "What the Dog Saw" were all listed as taking two to three weeks. A Spanish edition from another publisher was available immediately.

Then there is the question of price. "Outliers" was selling Friday for $15.29, a mere 10 percent discount. On Barnes & Noble, the book was $12.74.

With some Hachette authors, Amazon seemed to be discouraging buyers in other ways. On the top of the page for Jeffery Deaver's forthcoming novel "The Skin Collector," Amazon suggested that the prospective customer buy other novels entirely.

"Similar items at a lower price," it said, were novels by Lee Child and John Sandford.

Hachette authors were fuming.

"Like all repressive regimes, Amazon wants to completely control your access to books," tweeted Sherman Alexie.

"Given AMZN's near-monopoly position I think it's an antitrust violation, but the U.S. antitrust regulators are broken," tweeted Charlie Stross.

With the demise of the Borders chain, the struggles of Barnes & Noble, and the ever-precarious position of the few remaining independent stores, authors of all types have grown to depend on Amazon. Hachette author Marla Heller, who wrote "The Dash Diet Weight Loss Solution," said Amazon's actions "dramatically impacted" her sales.

On March 19, she said, Amazon raised the price of her book by $8. Then it ran a banner recommending other less expensive diet books.

"Then they let my book go out of stock," she wrote in an email. "When this problem started, my book was ranked in the top 300 on Amazon. It has since dropped to as low as the top 3,000. While this may be a dispute between an Internet giant and a major publisher, it is the authors who will pay the price." She included a chart of her sales, which were flatlining.

An Amazon spokesman did not respond to a message about Heller's complaints. Her book is listed as available with a two- to three-week delay. The discount is 10 percent. There is no banner at the moment promoting other books, however.

The Authors Guild said it had received about 15 complaints Friday from Hachette authors involving more than 150 titles.

"If you're a monopolist, you get to be a bully," said Richard Russo, a Pulitzer-winning novelist and Authors Guild vice president. "Maybe you feel immune." Still, he added that he was surprised that Amazon "would want one more bad story about its practices."

Michael J. Sullivan is not sure whom to blame. When the science fiction writer saw in March that his books were suddenly unavailable, he called Amazon, which said Hachette was not shipping the books. Hachette told Sullivan it was. He does not know whom to believe but knows this: "It's the little guys who pay the price."

Amazon stopped discounting his novels entirely two months ago. "To me, this is even worse than the slow shipping aspect," Sullivan said.

When Amazon was founded in the mid-1990s, publishers celebrated it as a counterweight to the chain stores. As it expanded to other forms of retail, those suppliers also found much to like.

"One of the main reasons for doing deals with Amazon in the beginning was because its terms were favorable," said Sucharita Mulpuru, an analyst with Forrester. "They didn't demand all the concessions that their traditional retail partners asked for. But almost all of those companies, as their relationship with Amazon matured, started to get requests for better terms."

For at least a decade, Amazon has been very aggressive toward publishers. One publisher, who declined to be identified because of fear of Amazon, said negotiations with the company resembled a chef deboning a chicken - by the end, everything of value had been sliced off.

Brad Stone's book on Amazon, "The Everything Store," said the company's negotiations with publishers were so hostile that a veteran of its book group had post-traumatic stress disorder after leaving the company. (The price and availability of Stone's book, published by Hachette last fall, appeared unaffected by the current conflict.)

One reason for Amazon to pursue Hachette and other suppliers is that the mood on Wall Street is changing. For years, Amazon's program of investing all its profits in new businesses was applauded. Revenue soared, and so did the stock.

But shares are down sharply this year, and analysts are cutting earnings forecasts. The pending stock exchange debut of Alibaba, the highly profitable Chinese e-commerce company, has underlined the notion that Internet retail does not have to be a break-even game.

If Amazon needs to improve its bottom line, it is a dangerous game to make things harder for its customers. Mulpuru said Amazon was usually cleverer than that.

"This could seem like they're being spiteful and petty," she said. "That's typically not Amazon's playbook."

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