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Lagardère Reports Hachette eBook Sales Down in the US, Says There’s "No Deadline" to Resolve Contract Dispute with Amazon

3272821791_1557117acc_z[1]Hachette revealed today that their US ebook sales declined in the first 6 months of 2014.

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.

On a related note, I have no details on Lagardère’s ebook sales in France or other markets; they’re not in the press release and The Bookseller didn’t get them.

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.

The Bookseller

image by Ben+Sam

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Syn July 31, 2014 um 4:30 pm

I think we are just in stall mode until they can flat out say what they really want. To pressure Amazon back into Agency model again.

Anne July 31, 2014 um 6:30 pm

…it’s time to ask whether one side or the other is deliberately delaying talks, and why.

Outsider here but what we have is a lot of unattributed leaks (?) from Hachette and three (?) very specific statements/letters from Amazon. I think the whole point of the July 8 letter from Amazon was to let the world know that they’re working without a contract and that Hachette is not negotiating. If true, I think it’s reasonable to conclude that Hachette is stonewalling until they can go for non-discounted agency and that Amazon’s latest statement was to outline under what kind of conditions they would consider agreeing to agency.

Felipe Adan Lerma August 2, 2014 um 10:44 am

Same here (the wondering) :

I’m starting to dig a little more into where both entities are heading, which is tie-ins and distribution of multi-media, or contracts ties to same.

Is this regard, I believe, both Hachette and Amazon are on fairly equal grounds.

The former has formidable IP control of popular movies or titles that will/could lead to movies (and their included music), and the latter has a powerful and growing multi-media presence.

That would explain the stalement to me better than price points on ebooks.

Especially since both Amazon and Hachette are doing more and more via the subscription models.

Price points to subscription readers are irrelevant.

Felipe Adan Lerma August 2, 2014 um 10:50 am

Nate, in one of a line of terribly skewed article titles from supporters of both the Amazon and Hachette camps, HBG Sales Rise 5.6% Despite Amazon’s 'Punitive' Actions, – there’s this excerpt :

"Lagardère blamed the overall sales decline of 1% over the first half on “a tough comparison” to the first half of 2013, particularly in France, where Fifty Shades of Gray (volumes 2 and 3) and Dan Brown’s Inferno generated strong sales."

Followed by this excerpt further down :

"In the U.S. digital sales dropped from 34% to 29% of total trade sales in the first half of the year, reflecting a year with 'fewer movie-ties compared to 2013, and Amazon’s punitive action.’”

The latter part of the quote is a needless jab. But the part about "fewer movie-ties" is where the real money, and eventual distribution/terms dispute, I believe, really is.

I asked for clarification in the comments as to whom the "Amazon’s punitive action" could be attributed, but no response.

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