Hachette’s parent company, the French media conglomerate Lagardère, released their mid-year financial report today. They did not release specific details on Lagardère Publishing’s performance in US, UK, France, and other markets, but we do know that revenues for the publishing division including US Hachette Book Group were down 14 million euros, to 903 million euros.
US ebook sales dropped to 29% of US trade revenues in the first half of 2014, down from 34% in the first half of last year. In comparison, UK ebook sales reached 36% of net sales in adult trade vs. 31% last year. As a whole ebooks accounted for 11.3% of Lagardère Publishing’s total net sales, the same as in the first half of 2013.
The drop in US ebook sales may be due to the ongoing contract dispute between Amazon and Hachette, but Lagardère was not willing to come out and say so. According to Lagardère co-director Dominique D’Hinnin the decline in US ebook sales was “maybe” the result of the contract dispute. The Bookseller reports that he added that it was “hard to tell – probably a little bit, but very hard to assess”.
D’Hinnin reportedtly went on to add that negotiations with Amazon remain ongoing and there is “no deadline”.
Amazon has been in the middle of a very public and very messy contract dispute with Hachette Book Group, Lagardère’s US sub, since May 2014. According to what Amazon has said, the situation came about as a result of Hachette allowing the contract to lapse before beginning to negotiate a new one. Amazon has reduced their stockpile of Hachette titles, allowing many to go out of stock before ordering new copies. Amazon has also removed some services which they would say they are not obligated to provide under a contract which they don’t have, including pre-order buttons and price discounts.
I cannot confirm that the contract dispute has caused a drop in revenues at Hachette; Lagardère says revenues were actually up 5.6% thanks to “the Hyperion acquisition and the takeover of Disney’s distribution activity”.
But without that acquisition, Lagardère would probably be reporting a loss due to the contract dispute. And yet, they don’t see a reason to resolve the dispute.
As outsiders we don’t know why this negotiation drags on but as the months turn to quarters it’s time to ask whether one side or the other is deliberately delaying talks, and why.
image by Ben+Sam