Guess who is Hachette’s Leading Source of Book Market Forecasts?

amazon frownEveryone knows that Amazon is one of the main booksellers in the US, but they're not just a source of revenue for the major publishers.

Amazon is hitting Hachette in the pocketbook by not discounting and not adequately stocking Hachette titles, but as Lilith SaintCrow explained over on Ragged Feathers, Amazon is also Hachette's default source of market forecasts.

When Amazon pulled the pre-order buttons yesterday Hachette lost also lost their best source of forecast data:

Preorders are largely how publishers forecast how well a certain book will do. Those forecasts create numbers that are used when, for example, Devi makes the case to buy another series from me while I’m finishing up writing the current one. It’s not fair, but it’s the only metric the publishers have in some cases, for all sorts of reasons–frex, it can take over six months for the contracts department to get all situated. (Contracts people are by their nature picky and detail-oriented, and that’s fine, it’s just frustrating sometimes.)

All of this is backstory (hello, exposition!) to what I am about to tell you.

The full, nasty effect of Amazon removing buy buttons and removing the ability to preorder a publisher’s upcoming books doesn’t hit the publisher. ...

You really have to wonder about whether the Hachette management knows what they are doing. It's one thing to become financially dependent on a retailer which needs Hachette not one bit, but to also let a key business function atrophy in favor of relying on that same retailer? And then to let a contract dispute carry on for 7 months while lying to authors and agents?

I am finally beginning to understand why everyone is springing to Hachette's defense and blaiming Amazon for being so evil.

It's like you are defending a special needs child against a bully. Here I thought that Hachette was part of a multi-billion dollar multi-national, when in reality they cannot be relied upon to run their own affairs.

Shame on you, Amazon, for beating up on an innocent publisher. Shame.

30 thoughts on “Guess who is Hachette’s Leading Source of Book Market Forecasts?

  1. Well, yanno, us indies have to work in the dark as far as trying to figure out what series to concentrate on (if we have more than one going and many of us do). Pre-order numbers are nice and become more available to us, but it is possible to run a business without them. Now, I’m not choosing sides; both of these companies could have handled things better. But when you run a business and one side becomes very powerful…it’s time to change the model.

    I do think that Amazon is pushing the publishers into creating their own sites and selling direct. They will still need big-box places for “one stop shopping” and those who are habitual buyers at a given store, but you know every time this happens, the idea springs anew..

    1. Amazon knows what we all know: the publishers couldn’t build a working site to sell their books. A) they would spend too much doing so. B) they would suck, big time. C) the prices would be high, and the shipping even more so. D) there would be difficult discoverability. And the big one E) they are not equipped to run warehouses for shipping individual books to individuals.

      As an instance, the big publisher’s sites that I’ve seen have been difficult to use and annoying. And that is just to see what books specific authors have.

        1. Hachette could have a bookstore up and running in a few weeks or months, if they wanted to; unless they have signed contracts with retail stores not to compete directly in retail sales.

          All they would have to do is buy Books-on-Board or the Diesel bookstore or the Sony bookstore. Change a few logos to re-brand the software as “The Hachette Bookstore”, get a new Hachette Bookstore web site address, delete non Hachette books from the catalogue, and add any Hachette books that were not listed when these stores closed. Presto: the instant Hachette direct sale eBook store.

          The big problem with doing this is that many (most?) Kindle customers want to buy their books from Amazon because they want a very simple process, without having to download or cross-load books from the Hachette store onto their readers. Coming up with a Kindle compatible DRM system might also be a big problem. (Of course, they could abandon DRM if they wanted to, but they don`t.)

  2. Like the record labels before them, most publishers long ago forgot who their REAL customers are, namely you and me. Hachette is merely more open about it, namely, they’re arguing with their customer over terms, and paying absolutely zip in the way of attention to collateral damage to their real customer base.

    The last time this happened, it was a disaster. For the publishers. It included public proof industry-wide price fixing (which did not endear them to readers), withdrawal of pre-ordered books (with snide remarks about how, by paying 50% above the pre-order price you could still get the book from Amazon), and the eventual demolition of both Books on Board and Fictionwise, thereby destroying the only companies who were actually doing better at marketing eBooks than Amazon.

    I’m just wondering how many holes Hachette is going to blow in its own feet while shooting their gun at Amazon’s feet trying to make it dance.

  3. It’s not just sales forecasting that the BPHs have effectively outsourced to the distributors (Amazon, B&N, and BAM these days, plus Borders once upon a time) it is also most marketting and promotional efforts where except for placement payola and a few token ads they do nothing to promote the majority of their titles.
    Even worse is market research. As in, they don’t do any nor give it a thought.

    As Shatzkin and Michael Sullivan have recently pointed out, the publishers have been living in a system where authors create the product but only get 15% of revenue, retailers market and promote and (in B&N and Amazon’s case, distribute the product nationally) for 25-30% and the publishers get 55-60% and copyright control for a century and they do what? Finance the pbook? Small wonder both authors and retailers want more and many authors are going straight to the retailers.

    1. Actually I believe the authors have to share the 15% with their agent because you can’t deal with the publishers without an agent.

  4. You know, I really don’t give a D***.

    I do not own any shares in Amazon, or in Hachette, or in any other book seller or publisher, so I have no financial interest in this stupid war.

    All I want to do is to read the latest books by my favourite authors.

    If Hachette goes down and/or if Amazon goes down it will not really affect my ability to get the books I want to read. The authors will still write the books, and the authors will try to sell them, one way or another.

    All I need is the internet, a search engine, and a credit card to find and buy what I’m looking for.

  5. What a bunch of Amazon shills. Predatory pricing to eliminate competitors and than time to jack up the prices and bully suppliers – classic evil monopolist behaviour. You all condemn Apple for trying to fight back. Losers!

    1. I think you mean “loss leading.” Predatory pricing, legally speaking, requires the majority of products in a line be priced below wholesale, not just a few. And Amazon was never pricing more than a few out of the thousands upon thousands of e-books it carries below wholesale. The Department of Justice investigated and confirmed that Amazon’s pricing is perfectly legal. And there’s no way the publishers couldn’t have known that all along; they could look at the prices Amazon is charging for any book in their catalog the same as anyone else could.

      If the publishers really thought Amazon was engaging in predatory pricing, they could have taken legal action. Instead of, y’know, illegal action.

      1. “If the publishers really thought Amazon was engaging in predatory pricing, they could have taken legal action. Instead of, y’know, illegal action.”

        LOL I’m going to save that to my list of pithy rebuttals.

  6. LOL Obama’s justice department is a blend of hypocrisy and contradiction. But the bottom-line is Amazon is a monopolist and they got their not because it is a profitable company but the opposite and with the help of Obama’s justice department. And now that they’ve arrived they are attempting to boost their profits not with good business practices but with intimidation and mafia like behaviour.

    1. The odd thing is, if the Justice Department were really out to get Apple, they wouldn’t have interceded on Apple’s behalf multiple times to quash the injunctions Samsung was awarded against the import and sale of Apple products in its patent lawsuit.

  7. Well after reading the linked blog post and comments where she is 100% convinced that Amazon is in the wrong and Hachette is an innocent little victim, I have to conclude either:
    1) she is omniscient and able to visit the board rooms of each company and read their minds.
    or
    2) she is well connected enough to be personally attending the negotiations and has first person accounts.
    or
    3) she is just another blogger who is long on opinion and short on facts, and what facts she has are from other opinion pieces.

    Personally I’m leaning towards the later.

  8. I don’t get it.

    Amazon is both the largest single vendor of paper books and has historically had a near-monopoly on ebooks, but Hachette is somehow in the wrong for heavily weighing their preorder numbers?

    Seems like you’re reaching for anything that absolves buddy Bezos here.

      1. ..and since they have so little leverage with amazon, doubly stupid to go public with the dispute. They get friendly headlines now, but what happens when the current contract expires and Amazon doesn’t yield?
        They’re trying to bell the cat with no bell and no collar.

      2. As Nate said–this control issues has been a long time in the making and now they are backed into an ugly corner. While the publishers may have tried to create their own sales channel, they either did so badly or didn’t put enough resources into it. They have largely left marketing up to authors and authors can become an Amazon associate and get money for sending people to Amazon. (We can also do that with Kobo and now B&N to some extent, but for a long time B&N didn’t pay associate fees on ebooks making it pointless to send anyone to their site).

        They don’t have enough leverage and that makes it very difficult to negotiate. In order to create a better position they are going to have to change the way they do business SOMEHOW.

      3. But again, if Amazon is over a third of the printed book market and over two thirds of the ebook market, statistically they have to be heavily weighed. Ignoring them would be far stupider.

        Again, this is a non-story. It would be like saying “politicians trust polling from survey with largest number of statistically valid responses”. Duh.

  9. Last week, this was big news:
    http://www.digitalbookworld.com/2014/penguin-random-house-creates-company-wide-consumer-marketing-department/?et_mid=674281&rid=240988274

    In the year 2014, the largest publisher in the business, good for 50,000 books a year, decided it *might* be a good idea to have an actual marketting group to promote those 50,000 new titles to consumers. They are, apparently, the first of the BPHs to give this wild and wacky idea a try.

    1. They’ll underfund it. And then kill it because it can’t prove that it was effective. And then blame Amazon for all of this…

  10. Wow I had no idea Amazon is so powerful that they could force B&N to stop selling Hatches books. I mean that’s what a monopoly is right, they are the only game in town?

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