Amazon, Hachette Spat Said to Show Author Divide on Self-, Traditional Publishing

Author Doug Preston is continuing to collect signatures for a draft letter (WID July 7 p12) by an informal group of authors criticizing Amazon’s negotiating tactics in its quarrel with Hachette. The letter has been signed by Malcolm Gladwell and Stephen King, among more than 800 other authors, he said. Meanwhile, a petition (http://chn.ge/1zpvYr3) criticizing Hachette’s stance has collected nearly 7,000 signatures on change.org. Author Hugh Howey spearheaded the petition, with contributions from more than a dozen authors, he said. Howey self-published his best-seller Wool through Amazon’s Kindle Direct program and other platforms, he said. Preston and Howey spoke on the phone Sunday to hash out their differences, said Howey.

Howey said he and Preston agree that “authors are being harmed” by the protracted negotiations, but where Preston “sees Amazon hurting authors, I see Hachette forcing Amazon to hurt authors.” “Hachette is not being hurt” by the negotiations and “there’s no way to cause [Hachette] pain without hurting authors,” said Howey. “Amazon is exercising its very great power in a way that is unfortunate and unfair,” said Preston, who described Amazon’s control over the e-book industry as “monopolistic.” Amazon is using authors as a “human shield” by delaying the sale of Hachette books and making those books “unavailable,” he said. Amazon shouldn’t use authors as “leverage,” he said: The companies must “bridge the gap.”

Howey attributed some of Hachette’s perceived public support as a result of the endorsement of “high-profile names like Stephen Colbert and James Patterson,” but also the “traditional” media’s relationship with “traditional publishing.” CBS owns Simon & Schuster (http://bit.ly/1ncCooe), News Corp owns HarperCollins (http://bit.ly/1suWqLo) and the Parisian media conglomerate Lagardère Group owns Hachette (http://bit.ly/1mecjFo), he said. “It’s not a conspiracy, it’s just that these guys work for the same parent [media] companies.” The Apple e-books case is evidence that “we got that wrong last time,” he said. Hachette was one of five publishers the Justice Department and state attorneys general had accused of colluding with Apple to force Amazon to accept an “agency model” of e-book pricing in the lead-up to the introduction of the iPad, allegedly causing consumers to pay higher prices (WID Aug 31/12 p1). Hachette and two other publishers agreed to a $69 million settlement, plus $7.6 million of the states’ legal fees, with attorneys general in 54 states and U.S. territories.

Monopoly

Amazon is a “monopoly and monopsony” and “should be broken up,” said Amanda Foreman, historian and supporter of Preston’s group. Foreman publishes with Penguin Random House. “A diverse literary marketplace is one of the fundamental pillars of democracy,” and “it’s utterly unhealthy to have one mode of distribution” for the dissemination of ideas, she said. “If you have one entity that becomes the single acquirer of ideas, then you have reached the tipping point.” One should “take their hats off” to Amazon for having DOJ “wrapped around its little finger,” while “authors are being held hostage,” said Foreman. What Amazon is doing isn’t “technically illegal, but it can’t be the only game in town,” she said.

"Amazon broke the oligopoly the Big Five Publishers had on the industry,” which “functioned as a cartel,” controlled “book prices, decided which authors were published and which books readers were allowed to read,” emailed J.A. Konrath, author and a “pioneer in independent publishing,” according to his website (http://bit.ly/1tlHOlr). Howey said Konrath contributed to the change.org petition. “Amazon is the first real competition” the publishing industry has faced and has given “all authors an even playing field and equal opportunity,” said Konrath. “DOJ hates monopolies because they raise prices -- which is what the Big 5 have a history of doing,” he said. “Amazon has a history of lowering prices.” Amazon also has competitors, such as iBooks and Kobo, he said. “Amazon is not a monopoly by any definition.” Konrath said he has sold more than 1 million e-books and has seen his income rise “tenfold” since leaving Hachette.

"There’s never been anything less democratic than the traditional publishing model,” said Howey. Foreman’s “argument is like saying the Internet is a threat to democracy,” but “it’s the exact opposite: Amazon allows anyone to publish,” he said. “It’s Hachette that’s hurting the authors, not Amazon,” he said.

Both are “large companies” looking after their own interests, but “it’s not Hachette that is hurting the authors, it’s Amazon,” said Preston. “Commercial disputes happen all the time” and the companies should be left to “fight it out,” but “please don’t hurt the authors,” he said. Authors have a “long history with Amazon and a good history,” he said. “We helped Amazon build one of the largest corporations in the world. They used the book business as a way to gain traction into selling everything else.” Amazon is kicking the same authors in the “nuts,” he said. Preston’s group isn’t “against Amazon,” he said. “You can be against the war and still be a patriotic American."

Amazon has a “huge, disproportionately large share of the market and is using predatory tactics to drive” Hachette “into a state of financial instability,” said Roxana Robinson, Authors Guild president, who signed Preston’s letter. The guild has not taken an official position, she said. Amazon’s “market pressure is not natural,” she said. “It’s incoherent to describe Amazon as a monopoly when there are so many other venues selling books,” said author Barry Eisler. Howey said Eisler contributed to the change.org petition. The “monopsony” charge is “at least a coherent argument,” but “is it supported by the evidence?” he asked.

Amazon and Hachette are both “seeking a bottom line,” and one “shouldn’t ascribe too much moral agency to either” party, said Michael Wolfe, University of California-Berkeley School of Law copyright research fellow and Authors Alliance member. Wolfe wasn’t speaking on behalf of the alliance, but “with the interest of that organization in mind.” Amazon and Hachette aren’t “working to make sure authors are read,” he said. Determining whether Amazon is a monopoly is “difficult,” he said. “The onus is on the accusers.”

Response to Amazon Letter

"We invite Amazon to withdraw the sanctions they have unilaterally imposed, and we will continue to negotiate in good faith and with the hope of a swift conclusion,” said Hachette in response to Amazon’s proposal. “We look forward to resolving this dispute soon and to the benefit of the writers who have trusted their books to us."

Amazon’s proposal doesn’t “seem to be a sincere attempt to help authors or bridge the gap between Amazon and Hachette,” but a way to “drive a wedge between authors and their publishers,” said Preston by email. It’s “unfair and lopsided: it would be financially devastating to Hachette while hardly hurting Amazon at all,” he said.

"Easy for him to say,” said an Amazon spokeswoman in response to Preston. “He’s rich and already successful,” she said. “He can opt out of the offer for himself if he wants, but he shouldn’t stand in the way of debut and midlist authors benefiting from the offer,” she said. “Hachette is part of a $10 billion global conglomerate,” and “Kindle books are only 1% of Lagardère Group’s sales,” she said in a separate statement.

"The ‘offer’ itself seems rather cynical,” because “it would be much more costly to Hachette than Amazon,” said John Mutter, co-founder of the Shelf Awareness, which publishes a book industry newsletter, and supporter of Preston’s letter. “It’s like a mugger wanting praise for donating stolen goods to a charity,” he said. Amazon’s letter is a “shrewd move” and a “win-win,” said author Laura Resnick. Resnick described the move as an attempt by Amazon to “reframe the story.”

It appears “Amazon is attempting to call Hachette’s bluff,” because the letter “undermines Hachette’s position that Amazon’s demands are stalling negotiations,” said author David Gaughran, who supports Howey’s petition. “It appears that Hachette hasn’t been properly engaging in negotiations,” said Gaughran. Said Berkeley’s Wolfe: “If neither side is getting paid, they're going to be forced into an agreement soon.”