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The latest news on Audiobooks, eBooks and eReaders

Hachette CEO Fires Back at Amazon for Readers United Website

August 12, 2014 By Michael Kozlowski 2 Comments

amazon

Over the weekend Amazon launched a new propaganda website that dumbs down the contract dispute between Hachette and Amazon. It targets the readers and proclaims that Amazon just wants to keep book prices around the $9.99 mark and doesn’t think its fair that users pay beyond that. Amazon encouraged its readers to directly email  Hachette CEO Michael Pietsch to end the dispute for good, here is what he said.

“Thank you for writing to me in response to Amazon’s email. I appreciate that you care enough about books to take the time to write. We usually don’t comment publicly while negotiating,but I’ve received a lot of requests for Hachette’s response to the issues raised by Amazon, and want to reply with a few facts.

Hachette sets prices for our books entirely on our own, not in collusion with anyone.

We set our ebook prices far below corresponding print book prices, reflecting savings in manufacturing and shipping.

More than 80% of the ebooks we publish are priced at $9.99 or lower.

Those few priced higher—most at $11.99 and $12.99—are less than half the price of their print versions.

Those higher priced ebooks will have lower prices soon, when the paperback version is published.

The invention of mass-market paperbacks was great for all because it was not intended to replace hardbacks but to create a new format available later, at a lower price.

As a publisher, we work to bring a variety of great books to readers, in a variety of formats and prices. We know by experience that there is not one appropriate price for all ebooks, and that all ebooks do not belong in the same $9.99 box. Unlike retailers, publishers invest heavily in individual books, often for years, before we see any revenue. We invest in advances against royalties, editing, design, production, marketing, warehousing, shipping, piracy protection, and more. We recoup these costs from sales of all the versions of the book that we publish — hardcover, paperback, large print, audio, and ebook. While ebooks do not have the $2-$3 costs of manufacturing, warehousing, and shipping that print books have, their selling price carries share of all our investments in the book.

This dispute started because Amazon is seeking a lot more profit and even more market share, at the expense of authors, bricks and mortar bookstores, and ourselves. Both Hachette and Amazon are big businesses and neither should claim a monopoly on enlightenment, but we do believe in a book industry where talent is respected and choice continues to be offered to the reading public.

Once again, we call on Amazon to withdraw the sanctions against Hachette’s authors that they have unilaterally imposed, and restore their books to normal levels of availability. We are negotiating in good faith. These punitive actions are not necessary, nor what we would expect from a trusted business partner.

Thank you again and best wishes,

Michael Pietsch

Michael Kozlowski

Michael Kozlowski is the Editor in Chief of Good e-Reader. He has been writing about audiobooks and e-readers for the past ten years. His articles have been picked up by major and local news sources and websites such as the CNET, Engadget, Huffington Post and Verge.

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Filed Under: E-Book News



  • Nirmala Erway

    The statement that 80% of the ebooks they publish are priced
    at $9.99 or lower is misleading on Pietsch’s part: what matters is the list
    price of actual ebooks sold. It is possible that only 20% of the ebooks they
    have published have a list price above $9.99, but that nonetheless some other
    percentage (maybe even a large percentage like 80 or 90%) of their ebooks that
    actually sell each day are listed for over $9.99. This could easily be so if
    their bestselling ebooks, which undoubtedly make up most of their sales, are
    all listed for over $9.99.

    To exaggerate a bit to make the point clearer: if Hachette only published
    100 ebooks and had 99 ebooks priced $9.99 or less and 1 ebook priced at $14.99,
    then Mr Pietsch could accurately claim that 99% of the ebooks Hachette
    publishes are available for $9.99 or less. But let’s say that all of those
    lower priced ebooks sell on average a total of 1 book a day for a total of 99
    books a day, and that the one book at $14.99 sells 10000 copies a day. Well
    guess what, in that scenario over 99% of the ebooks that Hachette sells are
    priced $14.99 (even though it is still true to say that 99% of the books they
    publish are priced at 9.99 or less)

    The difference is probably not even close to being that extreme, but since
    Hachette did not tell us, we have no idea what percentage of actual sales (not
    the percentage of books published) are at a price of $9.99 or less. It is
    reasonable to assume that they price their best selling ebooks higher, so it is
    reasonable to assume that a much higher percentage than just 20% of sales are
    at a price point above $9.99. As always, there are lies, damn lies and then
    there are statistics.

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