, , , , , , ,

Stack of booksWho knew that the cultured world of literary publishing could start to look so much like a soap opera, filled with accusations of betrayal, threats of divorce, and anguished sighs by innocent bystanders? And just like some long-running soaps, it gets hard to keep the list of characters—not to mention who is allying with whom and who is stabbing a former partner in the back—straight without paying close attention.

The role of the big, bad villain is mainly being played by Amazon these days. The retailing giant for years has been working to lower the prices on both hardbound and electronic versions of books for customers. That seems like a good thing, but according to its supply chain partners and competitors—namely, book publishers and independent booksellers—it’s actually harmful for the reading public. By undercutting prices and demanding price concessions by the publishers, Amazon leaves impossibly small margins for writers to earn profits on their intellectual labor, especially if they have not yet joined the ranks of bestselling authors. The publishers also argue that these slim margins make it impossible for them to provide intangible but ultimately valuable development services, such as finding new authors and voices, providing editorial services to them, and making sure niche genres have plenty of texts available.

One publisher recently stood firm against the pressure: Hachette proclaimed that it would not grant Amazon the greater split of the profits earned on e-books that the retailer was demanding. In response, Amazon allegedly started holding small, insufficient stocks of Hachette titles, so that customers faced “out of stock” responses on many of the books they ordered. It also halted all preorders on popular titles that were about to be released, such as the latest book by Robert Galbraith, the well-known pseudonym of J.K. Rowling.

In the meantime, Hachette and several other companies also ruled out the possibility of a new channel for book sales, through introductory subscription services. Similar to Netflix and GameFly, services such as Oyster and Scribd charge a monthly fee, in return for which subscribers may download as many books as they can read. Only a few publishers have signed on with these services, including Simon & Schuster most recently, but already the two providers claim they have hundreds of thousands of titles available. All of the books are those that were published more than a year ago, which represents an effort to avoid cannibalizing existing sales of new titles any further.

Across all these developments though, the character most commonly being threatened appears to be consumers. On one side, they face the threat of unavailable or more expensive books if Hachette and other publishers won’t come to terms with Amazon. But on the other side, there sits the possibility that the quantity or quality of available titles will suffer if Amazon has its way. Be sure to stay tuned for more. You won’t want to miss tomorrow’s exciting episode!

Source: Jeffrey A. Trachtenberg, “Simon & Schuster, E-Book Services Strike Deal,” The Wall Street Journal, May 20, 2014, http://online.wsj.com; Jeffrey A. Trachtenberg, “Amazon-Hachette Dispute Heats Up,” The Wall Street Journal, May 23, 2014, http://online.wsj.com