Amazon offers 100% of e-book revenue to Hachette authors

In an escalating fight between retailer Amazon and publisher Hachette, Amazon has proposed giving Hachette authors 100 per cent of revenue from their e-books.

Amazon has been delaying orders of books from Hachette in an effort to get the publisher to agree to more favourable terms for e-book publishing.

In return, some Hachette authors have withdrawn their books from the online retailer.

Amazon’s offer to the authors is an effort to woo them to Amazon’s side in the dispute and step up the pressure to resolve the dispute. Hachette represents authors such as J.K. Rowling, whose The Silkworm was released in June under her pen name Robert Galbraith and comedian Stephen Colbert, author of America Again.

Hachette called the offer of 100 per cent returns to authors “suicidal” to publishing, quickly rejecting it outright. Amazon accounted for 60 per cent of the publisher’s e-book sales in the U.S. last year.

 “Amazon has just sent us a brief proposal. We invite Amazon to withdraw the sanctions they have unilaterally imposed, and we will continue to negotiate in good faith and with the hope of a swift conclusion,” Hachette said in a statement Tuesday.

Amazon makes accusations of stalling

Amazon then shot back in distinctly unprofessional language.  “We call baloney. Hachette is part of a $10-billion global conglomerate. It wouldn’t be ‘suicide.’ They can afford it. What they’re really making clear is that they absolutely want their authors caught in the middle of this negotiation because they believe it increases their leverage. All the while, they are stalling and refusing to negotiate, despite the pain caused to their authors. Our offer is sincere. They should take us up on it.”

It is rare for a dispute between two companies to erupt so publicly and with such ugly tactics. Amazon and Hachette have been locked in a dispute for more than six months over the price of e-books, a fight many believe will define the future of publishing.

Amazon, which has grabbed a growing share of book sales by offering deep discounts on e-books, wants deeper discounts over the price of a hardcover book so it can afford to offer low e-book prices.

Hachette had proposed offering a 30 per cent discount, too little for Amazon to afford a discount. In a presentation to investors June 13, parent company Lagardère said control of e-book pricing is a primary goal going forward.

The authors, many of whom have spoken out against Amazon’s tactics of delaying books, are caught in the middle.

Amazon’s offer, made directly to some of Hachette’s most prominent authors, would allow them to sit out the dispute until their publisher agrees to terms.

Roxana Robinson, president of the Authors Guild, said the offer is unlikely to go over well with authors.

Authors in the middle

“If Amazon wants to have a constructive conversation about this, we’re ready to have one at any time,” she told the New York Times. “But this seems like a short-term solution that encourages authors to take sides against their publishers. It doesn’t get authors out of the middle of this — we’re still in the middle.”

Robinson said most authors want a solution that returns a fair share of e-book revenue to writers.

Hundreds of writers, including Stephen King and John Grisham, have signed a petition, calling for Amazon to stop holding books hostage and for the dispute to end.

For Amazon, which sells everything from electronics to groceries, handing over 100 per cent of e-book revenues for a stable of authors is not going to hurt substantially.

It also agreed to stop its delaying tactics on Hachette books by returning to “normal levels of on-hand print inventory, return[ing] to normal pricing in all formats, and for books that haven’t gone on sale yet, reinstate preorders.”

Amazon claims Hachette refused to negotiate for months, while the publisher said Amazon has rejected offers it made in April and May.

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