Amazon and Hachette are locked in a contract battle that may decide the future of the publishing industry. Amazon wants lower prices on print and digital titles so it can increase its profit margins, Hachette is obviously resistant to the entire concept. Amazon has disabled pre-orders of all Hachette titles and has implemented a five week shipping delay on a huge catalog of print books. A recently leaked investor slideshow sheds light on how reliant Hachette is on Amazon for their worldwide eBook sales.
Amazon currently represents 60% of all Hachette eBook sales in the US, followed by B&N (18%) and Apple (12%). In the United Kingdom 78% of all digital sales derive from Amazon, followed by Apple (12%) and Kobo (5%).
Worldwide Hachette is currently the 3rd largest publisher in terms of eBook sales. 50% of their revenue in the US stems from trade and 25% from their education unit and another 25% from the profits of distribution. In the UK they derive 87% of their income from fiction and nonfiction sales. In 2013 over 16,452 books were published and 84 eBooks were showcased on the New York Times Bestseller List.
Hachette acknowledges a slowdown in their growth in the US and stabilization in the critical UK market. This is primary due to authors self-publishing via Amazon Kindle Direct Publishing, Barnes and Noble Nook Press, and Archway Publishing. Authors simply aren’t relying on major publishers like they used to, and this factor is making Hachette hit the glass ceiling.
When it comes to the future of digital book sales, Hachette is quite bullish. Ebooks share of total sales in the USA should continue to increase but at a lower pace to stabilize between 25-35% by 2017. UK market will follow the US market trend with ebook share reaching 35% of 2017 total
market. In France, despite a protracted take-off, ebooks will account for 10-15% of Trade market with Hachette Livre leading the charge.
All of these statistics from the leaked investors document showcase how reliant Hachette is on their digital sales in the US and UK by Amazon. This is prompting them to establish new relationships with Books A Million and other digital book stores, to offset the losses.