AAR Joins the Fray in the Amazon-Hachette Contract Dispute

Hachette and 2844902161_f66b8f9bdf_b[1]Amazon's brutal months-long contract renegotiation picked up a  peanut gallery commentator today.The AAR (Association of Authors Representatives) has sent an open letter today to Amazon, calling Amazon out for delaying new orders of Hachette titles and reducing the number of copies they stock in their warehouses.

Amazon is reportedly negotiating new contracts with Hachette, and Amazon is using the stock situation to pressure Hachette into signing a deal. This is much the same as what B&N did last year, only the Amazon-Hachette negotiation should matter more to the average consumer than last year's fight.

According to PW the negotiations cover both paper books and ebooks, but most importantly the ebook negotiations could decide whether Amazon will retain the ability to discount ebook prices. Hachette was one of the first to settle the ebook antitrust lawsuit in 2012, and the 2 year period where they were required to relinquish price controls is about up.

Amazon's negotiation with Hachette is going to set the tone for all of the subsequent ebook contract negotiations. If Amazon loses this round, Agency pricing could make a comeback, resulting in financial harm to ebook buyers.

Here is the letter:

Dear Amazon Team,

I am writing as the President of the AAR, the Association of Authors Representatives, the largest organization of literary and dramatic agents in North America. The AAR has more than 400 member agents, who in turn represent tens of thousands of authors, dramatists, and other rights owners.

The AAR has heard from many of its members reporting that Amazon has delayed delivery and/or otherwise impeded the sale of many of their clients’ books that were published by Hachette. Apparently, those actions are a part of Amazon’s current business dispute with Hachette. Without knowledge of the issues underlying that dispute, and without taking a position on that dispute, we want to advise you in the strongest possible terms that the AAR deplores any attempt by any party that would seek to injure and punish innocent authors--and their innocent readers-- in order to pursue its position in a business dispute. We believe that such actions are analogous to hostage-taking to extort concessions, and are just as indefensible.

The AAR supports the maximum possible sale and dissemination of all published works, which benefits not only the authors and readers of those works but all of society. On a purely commercial basis, we believe that such unrestricted dissemination of published works leads to repeat readers and buyers, which serves the economic interests of not only their authors and publishers but their sellers and distributors, including quite prominently Amazon. Each of us has a role to play in this ecosystem, and surely Amazon does not need to--and should not in any event--hold the works of selected individual authors hostage as a weapon in a negotiation with a publisher. This is a brutal and manipulative tactic, ironically from a company that proclaims its goal to fully satisfy the reading needs and desires of its customers and to be a champion of authors.

Sincerely,
Gail Hochman, President,
and the Board of Directors of the Association of Authors’ Representatives

PW

image by mararie

About Nate Hoffelder (11591 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

16 Comments on AAR Joins the Fray in the Amazon-Hachette Contract Dispute

  1. “Agency pricing could make a comeback”

    Agency pricing never left. There’s nothing stopping publishers from using Agency model sales (and a number of them, including Hachette, still are), they’re only barred from including Most Favored Nation clauses in the contracts for 2 years. Again, the trial had nothing whatsoever to do with the method of selling, but merely the illegal collusion between competitors to implement the system.

    And while you keep trying to tie this to the BN/SS spat, I think you’re reaching a bit. While yes, both are examples of retailers and suppliers playing hardball in contract negotiations, BN never actively prevented their paying customers from receiving their merchandise in a timely manner like Amazon is doing, rather just reducing orders and promotional displays. Bezos is going way further than BN ever did and directly using his own customers as a pawn in his schemes. It’s hypocritical for company that’s supposedly “customer centric” to do so.

  2. Al the Great and Powerful // 14 May, 2014 at 9:40 pm // Reply

    Really, FT? Got proof they are holding PURCHASES? Not asking if they are slow in restocking, I’m asking if you have actual proof that amazon is holding books they sold instead of sending them.

    • You mean aside from Hachette’s own PR people confirming that they are currently on-time with all retailer deliveries?

      If this was just a few titles maybe you could make the argument that it’s a supply issue. If this was a small publisher who couldn’t physically meet demand (like what’s happening with Harvard University Press and Capital in the Twenty-First Century right now) you could make the argument that it’s a supply issue.

      But it’s not. Hachette is one of the largest publishers in the world. The books that are on backorder are ones with huge print runs – Robin Robert’s latest is north of a quarter million, and Malcom Gladwell’s are more than treble that. The books aren’t having any supply issues at any other retailer, and from my sources the wholesalers have plenty of stock should Hachette run out.

      So maybe it is all a little conjecture, but if it looks like a duck…

  3. Al the Great and Powerful // 14 May, 2014 at 10:34 pm // Reply

    So Amazon isn’t restocking as fast as Hachette wants them to.

    But how does that equate to “Amazon is taking Hachette books that people *paid for* and delaying the shipment 2-3 weeks…”

    Do you have proof Amazon is taking shoppers’ money while delaying restocking? Because so far, you have presented no duck.

    I’m asking if you have actual proof that amazon is holding books they sold instead of sending them.

    • Because if the book is easily obtainable (which, by all metrics, it is) and Amazon is happily taking your money when you click the “buy” button, yet shipping the book out 2-3 weeks later, they are delaying your shipment. The 2-3 week gap between when you order the book and when Amazon actually sends it to you is not caused by any supply shortfall, it’s caused by Amazon deciding that squeezing better terms from their suppliers is worth more than their customers.

      But it doesn’t matter. I could video tape Jeff Bezos stating flat out that they’re doing this and it wouldn’t be enough “proof” for you.

  4. Everything I’ve ordered from Amazon with a delayed ship date, whether a pre-order on an upcoming title or something that’s temporarily out-of-stock, has been charged when the item is processed for shipping.

  5. Al the Great and Powerful // 15 May, 2014 at 2:57 am // Reply

    You are not reading my original question.
    What shows that they are taking peoples money and not delivering books THAT THEY HAVE?”

    Screw it, I’m going on vacation. For a month. Overseas. With plenty of ebooks, and damned little internet. Do what you want, bitch all you want and blame me for not accepting your claims, I’m not gonna be listening.

    I think you over-egged the pudding, and then wouldn’t cop to it, except for that weak sauce throwaway, “So maybe it is all a little conjecture, but if it looks like a duck…” but it really doesn’t matter. I’m off.

  6. Last I heard, Amazon doesn’t do pbook returns: when they order books, they pay for them and keep them until they sell. That still true?
    Because if it is, then the delays and affiliate sales are simply because Amazon isn’t buying from Hachette until they reach a deal. No deal, no orders. Of course, if Amazon doesn’t buy, their next quarterly financial is going to take a hit. Which explain why the Hachette negotiators are trying to negotiate in public. Which is stupid in dozens of ways.

    What most annoys the BPHs and their apologists is that they need Amazon way more than Amazon needs them. In fact, this teapot tempest proves it. Amazon doesn’t need their payola (prior to the conspiracy, they offered terms that included zero coop payments, which only annoyed the conspirators more–documented publicly by the feds) and Amazon doesn’t even need to stock their books. Nor are they required to. And, remember, pbook sales volumes are declining so it’s not all that important to Amazon but they are critical to the BPHs keeping their authors in line. Again, documented by the DOJ: the BPHs are worried that the less important pbooks and B&M sales become, the less valuable they are to authors… who might just start demanding meaningful royalties.

    Oh, and according to the conspiracy settlement terms, the DOJ gets to monitor contracts and negotiations for five years-plus. Even if Hachette can force Amazon to stop discounting ebooks, there is no guarantee the terms will pass DOJ muster. It might even land them back in court. Just one of the many reasons public negotiations are stupid: where there is smoke, there’s fire and that tends to bring out the firefighters.

    The AAR might just find their emails subpoenaed in a few weeks so they better start scrubbing their systems.

    • Last I heard, Amazon doesn’t do pbook returns: when they order books, they pay for them and keep them until they sell. That still true?

      Our warehouse wishes! Amazon routinely returns pbooks, sometimes by the truckload.

    • “Oh, and according to the conspiracy settlement terms, the DOJ gets to monitor contracts and negotiations for five years-plus. Even if Hachette can force Amazon to stop discounting ebooks, there is no guarantee the terms will pass DOJ muster. It might even land them back in court. Just one of the many reasons public negotiations are stupid: where there is smoke, there’s fire and that tends to bring out the firefighters.”

      Again (and again and again) the *ONLY* thing the court is monitoring for is collusion, because MFN Agency model sales ARE COMPLETELY LEGAL. Once the two years are up, the publishers are more than free to return to that pricing scheme, something that was explicitly stated in the final settlement agreements. So long as Hachette isn’t chumming up with any other publisher, there’s pretty much nothing the Amazon-bought court monitor can do about the situation.

  7. I hope they sent a similar letter to Hachette, encouraging them to make their terms with Amazon more favorable to the retailer and readers. I’d say to authors, too, but I don’t remember the last time AAR advocated for them.

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