The battle between Amazon.com Inc and French publisher Hachette is not simply a spat about the price of books. Their row over ebook prices, which led to the online retailer refusing to take pre-orders for Hachette books and has provoked angry words from such authors as Donna Tartt and Philip Pullman, could write the next chapter for the publishing industry.
On one side is “The everything store” that sold US$75 billion of goods online last year, from toothbrushes to tents — including an estimated 90 percent of ebooks in the UK. On the other is one of the world’s biggest publishers, whose parent company, French conglomerate Lagardere, earned 7.2 billion euros (US$9.5 billion) last year from its print and broadcasting empire.
However, Hachette’s starring role is more than anything a quirk of timing, as all the big publishers face fresh negotiations with Amazon over the coming months. This latest dispute, which strikes at the heart of their business model, comes as traditional publishers face changes sweeping through the industry. Independent bookshops continue to close, while mobile games and screen-based entertainment compete for readers’ scarce attention as never before.
Even before this dispute, publishers were thinking about how to reinvent themselves, from developing their own digital content to hosting author events and using social media.
Penguin Random House, the world’s biggest publisher, recently launched a social network Web site for readers, allowing people to showcase their favorite books and buy them from independent stores.
HarperCollins has unveiled a revamped version of its US Web site, making it easier for fans of Agatha Christie, Chimamanda Ngozi Adichie and David Walliams to buy their titles direct from the publisher. A new version of its UK Web site is to be unveiled in the fall. The timing of the launch prompted headlines that the initiative was a device to bypass Amazon, but HarperCollins chief digital officer Chantal Restivo-Alessi says she never had any intention of competing with the Internet company.
“Do you think I am mad?” she said. “I don’t think that’s realistic, and why would we want to? They are one of our biggest retail partners. We want to create different channels and opportunities for our authors.”
The HarperCollins Web site encourages consumers to shop around, providing links to almost two dozen retailers, including Amazon and Apple Inc, which are often selling a book cheaper. For example, the official One Direction autobiography was available to pre-order on the HarperCollins Web site for US$21.99 in hardback, but a US$14.84 version was a click away on Amazon. While HarperCollins sells the book, Amazon is also urging shoppers to buy the group’s albums, wall calendars and posters, to post reviews and create wishlists.
HarperCollins is not revealing the percentage of sales it is seeking to generate, but Restivo-Alessi says that is not the whole point.
“Even if we get a small percentage of sales, that small percentage will give us a better insight into the author’s consumer, which will make us a better publisher and provide a better service to our authors,” she said.
Some smaller publishers have already moved into direct sales. When Colin Robinson cofounded OR Books in 2009, he decided to bypass Amazon and sell to readers directly, printing books on demand.
He says Amazon would have taken a 60 percent cut on the list price, money that can instead be spent on promotion.
OR Books is “hand-selling” its books, he says, “like the person who works in the bookstore [and] knows you.”
It is a model that suits the New York-based publisher, which Robinson says publishes books that are “written, edited, reviewed, bought and read by people with sympathy for ideas that are politically and culturally off-piste.”
Recent publications include an account of the rise of the Islamic State, formerly known as the Islamic State of Iraq and the Levant, by a veteran Middle East reporter, and a collection of short stories by Cuban authors.
“The future of the business, especially for small to medium-sized publishers — who have got quite targeted audiences for their books — the future is to sell direct,” Robinson says.
However, industry watchers doubt that this model would be easy to replicate for a big conglomerate, such as HarperCollins, which sells 40,000 books online, from “hot and steamy” US$1.99 novels on to self-improvement and cookbooks.
Douglas McCabe, from Enders Analysis, thinks large publishers continue to need the middleman, pointing out that readers do not set out to buy HarperCollins or Penguin books, any more than they choose to watch a film because it is made at Pinewood studios.
For now, publishers have no choice but to deal with Amazon — the publisher’s “frenemy” in the words of Restivo-Alessi.
“When it comes to negotiation, you are enemies because obviously you are both trying to maximize returns for your business — and in our case our authors ... and at other times you are friends, because you are both trying to increase the amount of the product,” she said.
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