With Hachette, has Amazon gone one step too far?

For some time now, there’s been a whole lotta grumbling about the market dominance of Amazon in the world of books.  Authors and publishers alike have both complained about the online retailer, and up to this point much of the complaining has been a combination of both sour grapes and legitimate questioning about whether one company should hold so much market power.

But with recent moves to strong-arm Hachette in its negotiations for better pricing, the company may have taken things a step too far.  According to the New York Times, the company has delayed shipments, raised prices and encouraged buyers to consider books other than those published by Hachette. They’ve also removed the ability for consumers to prepurchase Hachette books, which is a big deal since the pre-purchase window is an important one in helping books get out of the gate quickly.

The company move to remove the buy button for MacMillan books in 2010 may have been equally brazen, but at the time e-books weren’t such a big part of the overall sales mix for the publishing industry. The company holds much more market power now, and while Amazon would no doubt argue that they have the right to negotiate pricing for books, I have to wonder now if the Justice Department will be as willing to give the company a pass.

And the company is not only playing with fire in terms of potentially welcoming a new look by the government, but I also think they’re increasingly being seen by authors as a bad actor. Many authors have been willing to play along to this point given how important a channel Amazon is for their books, but as Nina Laden, a children’s book author wrote:

You are punishing me- the author- because you want a deeper discount from Hachette- this is deplorable. You want authors and illustrators to suffer being used as pawns and we have nothing to do with this.

Of course, it’s hard for any author to do much about Amazon’s aggressive behavior, nor is it really possible for many to survive without selling through Amazon given the company’s market share in digital books. But this recent move has served as a wake-up call and, maybe more importantly, a call to action for many, and it will be interesting to watch the fall out over time as authors become increasingly distrustful of Amazon and redouble efforts to look for alternative ways to sell their books.

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Wolf

Michael Wolf

Chief Analyst NextMarket Insights

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