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Internet vs book publishers

September 2014

There’s a fairly juicy row brewing at the moment that rather neatly encapsulates the disruptive effect that the internet can have on long established businesses.  It is between Amazon, the behemoth online shop that was founded on selling printed books, and Hachette, the giant French publishing house, whose authors include hundreds of well-known writers.

There’s always been a fairly uncertain relationship between writers, publishers and booksellers; they can’t live without each other, and generally co-exist uneasily, but get along.  At least, that used to be the case, before cyberspace upset the apple cart.  First, Amazon made it possible to buy almost any book, new or second hand, more cheaply than elsewhere; second, enterprising authors discovered that it is possible (just) to self-publish a book, and third, electronic books (eBooks) were invented, which can be delivered in a flash.

The overall effect has been to place a squeeze on the profits bookshops and publishers; this, in turn has meant that there is less money in the publishing industry to support and market those authors who don’t want to sell their own books (which is most of them, I’d guess).

Consequently, the relationship between publishers and Amazon has become one of continuous commercial arm wrestling; if a big publisher (like Hachette) wants to sell thousands of books through Amazon, a fierce negotiation over terms takes place.  Recently a hostile dispute has broken out over the way in which Amazon will sell and promote Hachette’s eBooks in particular. 

The stakes are high, as sales of eBooks are surging ahead, up by about 10% every few months, according to the UK Publishers Association.  Whilst neither side has gone public, it is reported that Amazon wants to increase its share of the sale price from 30% to 50%, as well demanding exclusive selling rights and charging extra for the books to appear in the “Customers Who Bought This Item Also Bought” section and for any other form of marketing within the Amazon site.  This promotion is central to selling big numbers through Amazon, and both sides know it.

Whilst this battle of two giants goes on, anecdotal evidence is that Amazon has slowed down delivery of real books from Hachette.  It’s all getting rather tense.

I am anxious about this fight, in the short term, at least.  Whilst I would normally be on the side of the consumer, wanting the likes of Amazon to drive down prices and make books of all kinds both readily available and cheaper, we do need to be a bit careful what we wish for.

The truth is that Amazon is not an open market place, and has no real competition.  This is not Amazon’s fault, but it’s not healthy.  Amazon is too big; if it also becomes the only place anyone uses to buy an eBook, then it alone will determine what we see is for sale and how much we pay for it.

In a real marketplace there are competing forces and we have a bit of choice; if Amazon gets its way there will be no real choice at all.  So I think I’m on the side of the publishers and I wish them well in their battle to keep some control of their market.

Of course, the internet is perfectly capable of throwing up surprises to them all.  What would happen, for example, if Facebook or Google decided that Amazon has had it too easy and waded into the battle?  Now that Amazon has shown that good profits can be made from selling words online, don’t be surprised if someone else wants a slice of the action.

I hope so, anyway; it would liven things up immensely, and anything that makes it easier to sell the written word gets my vote.