Friday, June 13, 2008

What do horses and Amazon have in common?

The Hachette Livre versus Amazon debate continues apace, with it featured on the Radio Four programme Today earlier on, from what I have been told. I did not hear the progamme myself, since I only listen to local radio, but I will try and find the link later on on the BBC website, since it is bound to still be there.

The author and agent community appears to be backing Hachette's stance, no doubt to the chagrin of Amazon, with leading agents leading the backlash against the online retailer.

It was reported earlier this week that Hachette CEO Tim Hely Hutchinson had sent a letter to authors affected by the dispute, whose books have been removed from Amazon's site, asking for their patience and understanding. According to The Bookseller online, the response has been overwhelmingly positive. In his letter, Hely Hutchinson said that he would stand firm against conceding any additional trading terms, adding that Amazon's sanctions were creating a breach of trust between the online retailer and its customers, which could prove to be a catalyst for them starting to lose their popularity with book buyers.

Despite advantageous terms, far better than most chain stores get (when buying direct from publishers anyway), Amazon seems to go from one publisher to the next year on year, making increasingly high demands in order to get rich at everyone else's expense.

Of course the cynic in me says that all retailers do this, and this is not confined to the publishing industry. Amazon though are by far the worst example of this that I have come across, and from what I have seen and heard in recent months, will stop at nothing to gain almost total control of the marketplace until they are the dominant book retailer and traditional book stores are driven out of business. This is then the thin end of a very long wedge, and is exactly why the publishing industry needs to make a stand. If we are not careful then given its current rate of growth, Amazon could become the largest bookseller in Britain within the next three years, and if they are not stopped now, then they will be able to dictate any terms that they like.

Curtis Brown MD Jonathan Lloyd commented that the entire industry is 100 percent behind what Hachette are doing, and that someone somewhere has to draw the line as using authors as what he terms 'a financial football' is disgraceful.

Clare Alexander of Aitken Alexander added that 'this is a disturbing glimpse of the iron in Amazon’s soul. I think its ruthlessness in bargaining is extremely disturbing'.

The MD of a unnamed rival publication said that removing buy buttons is akin to walking into a High Street bookstore and asking to buy a book, only to be told no. The irony of course is that until quite recently, this is exactly what did happen with some POD books, since inexperienced booksellers were unaware of how the system works. When they saw that the POD book was not in stock at the wholesaler from where they obtained their stock, they assumed that it was not available at all, unaware that there was such a thing as special orders. This though is changing, as the publishing industry wises up to what POD is about and how it works.

An spokesperson for Amazon said that they continue to be committed to offering the broadest range of titles possible, through both their own retail offering and re-sellers (Amazon Marketplace - where Hachette titles are still available). is also committed to ensuring we offer our customers the lowest possible prices.

What they fail to understand is that by making this move, and alienating the largest book publishing group in the UK, they are failing to honour those principals and cutting off their nose to spite their face, as they are not offering the broadest range possible at all. All that will happen is that readers wishing to buy these books will go elsewhere to bricks and mortar stores, or to other online retailers such as, Book Depository or Bookrabbit.

The online community upon which Amazon's business is built will turn against them, and ultimately prove to be their undoing. This is I think, the beginning of the end, and one never knows, the backlash against discounting and ever increasing terms may also be applied to traditional book stores as well, with firm sale, on back list titles at least, becoming the norm. How this would affect the indepedent and print on demand author is very much open to debate.

In the meantime, if we are not careful, then in the US at least, Amazon may soon be invading the High Street as well. Associated Press reports that Pershing Capital Management's William Ackerman, a major stakeholder in Borders Group in the US, said that the troubled book chain should consider approaching Amazon about a possible acquisition.

Borders, which was put up for sale in March has around 500 stores throughout the US. One possible incentive to Amazon to buy the Borders stores may be the some 18 states are considering the introduction of sales tax to online businesses. Once Amazon lose this tax advantage, then they may be keen to move into bricks and mortar book selling.

In an interview with the Wallstreet Journal earlier this week, Amazon founder Jeff Bezos compared books to horses, stating that the industry faced the challenge of improving something which like the horse, had been around for many years and was difficult if not impossible to improve. From my perspective, there is one more thing that Amazon and horses have in common - their ability to produce s*** in copious quantities !

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