What Is Going On Between Amazon and Hachette

There has been a lot of rumblings in book world of late about the contentious negotiations between Hachette Book Group and Amazon.com.  The publisher and the online giant are in the midst of renegotiating their terms, which happens from time to time between large sellers and the publishers they do business with.  Well things have become contentious, with Hachette attempting to protect their bottom line, and Amazon attempting to increase theirs.  This is not exactly an uncommon occurrence when terms are negotiated.  Both parties are trying to get the best deal for their side.  That would be expected.  But here is where this negotiation is different.

Amazon has started to throw their weight around.  They have decided to show Hachette what they can do to them, if they don't play nice and give them what they want.  By neglecting to list Hachette titles for pre-order, suggesting alternate titles at the top of the pages of Hachette author's books, or offering no discounts or smaller discounts on Hachette author's titles.  It seems as if Hachette is negotiating for terms with a mobster who is showing them exactly what kind of accident they could have if they neglect to pay up.  They are a company who can decide what they will or will not sell, but they are big enough and powerful enough to put publishers out of business if they decide that's the direction they want to go in.  And if they decide they just want to show them how it behooves Hachette to give Amazon what it wants during negotiations, they can do that too.  But that doesn't make it right.  It's estimated that Amazon controls 33% of the book market.  They have grown very large thanks to generous discounts and inexpensive shipping.  That's where the problem lies; generous discounts.

When a bookstore buys from a distributor of publisher, they they typically receive discounts between 40-55%.  A long time ago Amazon decided they were going to give most of these discounts away to their customers by steeply discounting their titles.  They were going to make their money by selling in a large volume on this new thing called the internet.  Now anyone who has ever been in business can tell you, that is an extraordinarily difficult way to make money.  Margin is everything in business.  Consequently it took Amazon many, many years before they were able to make a profit conducting business this way.  Their investors where not deterred and kept giving them money even though they had yet to succeed.  Now obviously most businesses would not be able to operate at a loss for years and still be allowed to continue on, so in this way they were blessed.  Their competitors were not however, and they went out of business in droves.   And now Amazon has decided they want to recapture some of that margin, by taking it from their suppliers.  You can see why the book world is up in arms about this.  That's not how the game should be played.  You were given a large piece for yourself, and decided to give it away, and now you want my piece?  That's not really how business should work.

Now one of Hachette's best-selling authors is James Patterson.  Patterson has been a champion of independent bookstores, and even though I haven't read much of his work, I respect him a great deal.  He has much to say about this situation, and I think when people this intelligent and in the know speak, the world should listen.  Here is something he said at Book Expo America, which is currently going on in New York:

Hi, I'm Jeff Bezos. I can't do his hysterical laugh.... Amazon seems out to control shopping in this country. This ultimately will have an effect on every grocery and department store chain and every big box store and ultimately put thousands of mom and pop stores out of business. It sounds like a monopoly to me. Amazon also wants to control bookselling, the book business and book publishing. That's a national tragedy. If this is the new American way, it has to be changed by law if necessary.

Perhaps it is time that Amazon thinks about Google's Mission Statement, one which would be best followed by all companies both large and small.  "Don't Be Evil."  It has a nice ring to it, don't you think?  I really would love to know what you think.  Please let me know your thoughts in the comments.

So Last Week Amazon Bought Goodreads

Last week Amazon bought Goodreads.  While I am excited for the monetary reward the creators of Goodreads received as a result of all of their hard work, I am also disappointed and angry.  I am angry because there is only one reason Amazon would have any interest in purchasing Goodreads, and that is data mining.  They want to know what we read.  They will use this information to market specifically to people so they can sell more stuff.  This tactic isn't really a problem.  That is what businesses do.  When I sign up for your site, I am giving you permission to use my data.  I fully expect you will do everything in your power to monetize my data, particularly by directly marketing products and services to me.  That is the way of the world.  However, knowing all of this, when you later tell me you are going to sell my data to a company that was heretofore not associated with your company, that is when I get a bit twitchy.

The same thing happened when Barnes & Noble purchased Borders Rewards information.  When you sign up for a rewards card, you can rest assured that the company is using that information to try to make more money.  If you would assume that your purchasing history would die with the company, you would clearly be wrong.  One of the assets Borders liquidated was my buying history.  They sold their rewards information to Barnes & Noble.  This includes purchasing history and God knows what else.  We were given the option to opt out of our histories being sold to Barnes & Noble, which I immediately did.  That is not what I signed up for.

Now the main issue I have with opting out of Goodreads is I really enjoy the site.  I love the shelf system, and to see what all of my friends are reading, and to be able to track and rate what I read in a year.  There are several other sites I have encountered as a result of my attempts to leave Goodreads, and take my data with me, thank you very much.  I think the one I enjoy the most in Booklikes.  It has most of the same functionality as Goodreads (although the inability to place the same book on multiple shelves is a bit of a downer) and also includes a blogging function which is nice.  If I can manage to get my entire Goodreads history to upload it's probably a no-brainer.  And magic of magics, it allows you to rate half stars.  I can rate something 3 and a half stars instead of having to decide between 3 and 4.  And they respond in live time to help requests.  That is amazing.  And there is the part where the site actually looks better than Goodreads.  It is more modern in appearance.

So Goodreads account deleted.  On to the next chapter.

Now to prevent Amazon from buying anything else I love.  There's the rub.

Do you have a Goodreads account?  Will Amazon's purchase of Goodreads make you delete it or otherwise change your social book tracking habits?