Amazon has turned up the heat in its ongoing dispute with book giant Hachette, having approached several of the publisher's authors and their agents with a proposal that sounds too good to pass up.
For the last few months, Amazon has been playing hardball with Hachette over pricing of the publisher's e-books. Among other pressure tactics, the e-commerce kingpin has stopped taking preorders of Hachette titles, reduced its inventory, and slashed the discounts it offers – all of which has resulted in a dramatic decrease in sales for Hachette authors.
But in a letter obtained by GigaOm on Tuesday, Amazon has extended an olive branch to authors caught in the middle of the dispute by suggesting that it might offer to pay them the full retail price of each Hachette book it sells. In other words, if the customer pays $9.99, the author gets $9.99 and Amazon gets nothing.
The catch? Hachette would get nothing, either.
"If Hachette agrees, for as long as this dispute lasts, Hachette authors would get 100 per cent of the sales price of every Hachette e-book we sell," Amazon's letter explains. "Both Amazon and Hachette would forego all revenue and profit from the sale of every e-book until an agreement is reached."
If the publisher assents, Amazon says it can begin channeling proceeds from Hachette titles directly to authors "in 72 hours." But this isn't the first time Amazon has floated a compensation scheme for authors whose sales have suffered from its own actions, and Hachette has been unmoved by such proposals in the past.
Previously, the e-tailer offered to fund an "author pool" that Hachette could use to offset the damage to its authors from lost sales, provided Hachette agreed to contribute 50 per cent of the funds.
'Compensating authors for damage done'
In a statement obtained by Digital Book World in May, Hachette made clear it would "spare no effort" to resume normal business relations with Amazon, but that it would only accept a deal on terms that "appropriately value" the contributions that authors and publishers make to the book-selling business.
"Once we have reached such an agreement, we will be happy to discuss with Amazon its ideas about compensating authors for the damage its demand for improved terms may have done them, and to pass along any payments it considers appropriate," Hachette's statement said.
Note, too, that Amazon is not fully committed to its 100 per cent royalty idea. Rather, the letter merely describes the plan as something the e-tailer is "thinking of proposing" to Hachette.
Hachette, a division of French publishing giant Hachette Livre, is considered one of the "Big Five" US publishing companies and is composed of Grand Central Publishing (formerly Warner Books); Hachette Books (formerly Hyperion Books); Hachette Nashville; Little, Brown, and Company; Little, Brown Books for Young Readers; and Orbit books, along with their various imprints.
Bestselling authors whose books Hachette publishes include David Baldacci, Stephen Colbert, Douglas Preston, James Patterson, JK Rowling, and JD Salinger, among others.
In June, Preston penned an open letter [PDF] calling on Amazon to resolve its dispute with Hachette, and urging readers to write Amazon CEO Jeff Bezos and tell him what they think of his company's current tactics.
"It is not right for Amazon to single out a group of authors, who are not involved in the dispute, for selective retaliation," the letter, which has since been signed by over 300 authors, reads. "Moreover, by inconveniencing and misleading its own customers with unfair pricing and delayed delivery, Amazon is contradicting its own written promise to be 'Earth's most customer-centric company'."
But for now, at least, Amazon doesn't seem swayed by such arguments. In the letter it circulated to authors on Tuesday it claimed, "Hachette's unresponsiveness and unwillingness to talk until we took action put us in this position, and unless Hachette dramatically changes their negotiating tempo, this is going to take a really long time." ®