Amazon Throws Another Elbow at a Major British Publisher

In April we reported that Bloomsbury, a division of PenguinUK, feared retaliation for daring to price some titles competitively with online behemoth Amazon.com

Yesterday a major American author received an email from Tim Hely Hutchinson, Group Chief Executive of Hachette in London, informing him that Amazon was “removing the ‘buy button’ from some of our books and also removing some of our titles from promotional positions such as ‘Perfect Partner’, in order to apply pressure on us to give Amazon even better commercial terms than it presently receives.”

Hutchinson’s letter details Amazon’s tactics as an effort to bully publishers into giving Amazon such favorable discounts that bookstores and bookstore chains would be unable to compete, thus accelerating the demise of the traditional book retailing business.

Some highlights of his letter are reproduced below.

Larger British book retailers already receive the most generous terms in the English-language world from publishers including ourselves. Of the “cake” represented by the recommended retail price of a general book, major retailers including Amazon already receive on average well over 50%. Despite these advantageous terms, Amazon seems each year to go from one publisher to another making increasing demands in order to achieve richer terms at our expense and sometimes at yours… If this continued, it would not be long before Amazon got virtually all of the revenue that is presently shared between author, publisher, retailer, printer and other parties… We are politely but firmly saying that these encroachments need to stop now.

Amazon has grown very rapidly since it launched and it now makes some 16% of all book sales in Britain. We respect the creativity, the value and range offered and the standards of service that have made Amazon so successful. At its present rate of growth, which was 30% last year, Amazon would become the largest bookseller in Britain in about three years. You will be aware that the retail market for book is not increasing and therefore much of this growth would inevitably come at the expense of “bricks and mortar” booksellers. This is of course not a criticism of Amazon, and no publisher can or should tell the public where to shop. However, we are concerned that more and more traditional booksellers are having to close their doors, with skilled individual booksellers losing their jobs, and this is due in part to Amazon’s aggressively low pricing on prominent titles. Therefore, despite our limited role in respect of these changes in the retail landscape, we are determined not to provide Amazon with further ammunition with which it could damage booksellers who offer a personal service, browsing facilities and other valuable benefits to the reading public…

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