Finally. Hachette has put an end to their nightmare of a standoff and has agreed to terms with Amazon. This is great news for book buyers and Hachette authors and the industry in general. It comes right on the heels of Simon & Schuster signing a multi-year deal with Amazon for both print and ebooks, and the wording of that announcement was practically identical to the wording of the Hachette announcement today. What does that tell us?
It suggests to me that Amazon offered Hachette and Simon & Schuster the same deal. But what took Hachette most of 2014 to agree to took S&S a single offer / counteroffer. It must be said, though, that Hachette was at a serious disadvantage by being forced to negotiate first. The settlement with the Department of Justice forced the major publishers to negotiate with Amazon in 6-month windows. This was to prevent them from colluding with one another the way they did in 2009.
I don’t know how the order was picked, but Hachette drew the short straw. This meant two things: They had to negotiate with Amazon without knowing if their fellow publishers would fall in line and help pressure the retailer as they did in 2009, and it also meant that Hachette had six months less sales data to go on to judge the fairness of what Amazon was offering.
A year ago, jacking up ebook prices to protect print seemed like standard operating procedure. Over the course of this year, publishers have watched operating margins go up due to the rise in ebook sales, and many titles have moved a lot of units by employing sane pricing. In a way, Amazon was offering a deal based on what they saw coming, while Hachette was rejecting that deal based on what they saw in their rearview mirror. Simon & Schuster had six months extra of road to study. I hope this helps portray Hachette in a less harsh light. Again, they had a lot of disadvantages.
That doesn’t mean they weren’t wrong in this dispute, however. I believe they were. The wording of Amazon’s announcement today reinforces what I’ve assumed this offer was about since June, and that’s an incentivized form of agency pricing similar to what self-published authors receive. David Naggar, a VP at Amazon, said it thusly:
“We are pleased with this new agreement as it includes specific financial incentives for Hachette to deliver lower prices, which we believe will be a great win for readers and authors alike.”
This is exactly what many of us have been saying from the beginning. Now, this isn’t about who was right and who was wrong—this is about learning from history to understand the present and gauge the future. Twice now, Hachette and major publishers have waged wars with Amazon over the price of ebooks. They waged these wars with big box discounters like Barnes & Noble. Conflating our love of books with the virtuousness of those who package them is a very bad idea. Publishers belong to multi-national, multi-billion dollar corporations. They need to make profits. They do this by pushing prices up on readers and pushing wages down on writers. I don’t blame them for that (though I do try to pressure them to be more fair to both parties).
The people I blame are those who should do their homework, understand this business better, and get on the right side of these debates. The real damage has been done by those who refuse to fight for the little guys; the real damage has been done by the parties who seem to think that publishers can do no wrong and that Amazon can do no right.
This includes the New York Times and many other traditional media outlets. It includes The Authors Guild and Authors United. By waging a PR campaign without understanding the issues (often stating things that were patently untrue), these parties caused severe damage and helped to prolong this negotiation. They aligned themselves with a party that has broken the law to raise prices and refuses to pay authors a decent digital royalty. I don’t think this damage is done intentionally or with malice but by simple ignorance. As stated above, they conflate their love of books with a love of who puts stories in wrappers.
We need to do better in the future. Coverage of this industry should shift to coverage on what’s being done for readers and what’s being done for writers. These are the only two parties that matter. If publishers disappeared tomorrow, writers would continue to write great works of fiction and non-fiction. If Amazon disappeared tomorrow, readers would still seek these works out. The middlemen are not necessary. They are not crucial. They exist to serve readers and writers only.
So in the future, when middlemen squabble, perhaps we can be a little more balanced in our consternation. Perhaps we can start putting just a modicum of pressure on publishers to behave better, and maybe the vitriol spewed toward Amazon can be toned down a bit. Because in the case of Hachette / Amazon, the vast majority of the rhetoric got it all wrong. I’m usually an optimistic guy, but I have a feeling the people who were wrong won’t be able to see it, won’t be able to admit it, and will continue to fight on the incorrect side of history. But hey, maybe I’m wrong about this. I’d love to be able to admit it one day.