Amazon Feud Seems to Be Costing Hachette Money

Taking on the retail giant Amazon comes with some pretty obvious risks, especially for book publishers, and it seems that Hachette is getting a taste of those repercussions. As the feud between Amazon and Hachette stretches into its third month, Hachette reports that their ebook sales are down, though they say this is due to other factors beyond the dispute. Still, it seems unlikely that the feud with Amazon, the world's most well-known ebook retailer, wouldn't have some effect on sales.

Most striking however, isn't the fact that U.S. ebook sales are down, but that they haven't dropped too drastically. In the U.S., ebook sales made up 29 percent of Hachette's adult book sales, as opposed to 34 percent this time last year (and 36 percent in countries where Amazon is not interfering with Hachette orders). But Hachette's overall book sales in the U.S. are reportedly up by 5.6 percent, which is surprising given that Amazon has also been interfering with hard copy Hachette books sold on the site. The increase probably has something to do with their bestsellers like Donna Tartt's The Goldfinch following its Pulitzer Prize win and J.K. Rowling's The Silkworm. Meanwhile, the company maintains that they are only seeing "a limited impact from Amazon's punitive measures."

Of course, there's no way to know how high Hachette's sales might have been if Amazon hadn't started increasing shipping times and removing pre-order buttons on Hachette books, but it certainly appears that Amazon's hardball tactics aren't squeezing Hachette's bottom line as much as they were meant to. In fact, if consumers continue taking their book-buying business elsewhere as a result of the feud, Amazon might be the one in trouble, though that day is still a long way off.

Amazon, for their part, have been trying to gain ground in the fight for public opinion by releasing more details on their demands. Apparently, they are asking Hachette to price all ebooks at $9.99 or less, except for a "small number of specialized titles" that might cost more. Amazon says they are only interested in taking 30 percent of the price, a fairly standard figure, and that they estimate lower prices would correspond to a large increase in sales.

As Amazon points out, ebooks really should be cheaper than they currently are. "With an ebook," the Amazon Book Team explains, "there's no printing, no over-printing, no need to forecast, no returns, no lost sales due to out-of-stock, no warehousing costs, no transportation costs, and there is no secondary market — e-books cannot be resold as used books." And it's hard to argue with that, though lots of Amazon's other demands do seem rather unreasonable.

The question, of course, is whether or not Amazon will be able to get Hachette to agree to lower prices when it seems that their best strong arm tactics aren't having a crushing impact. One thing is for sure though, the longer this drags on, the worse things get for both companies.