Amazon has fired its latest shot in what has become a protracted battle with book publisher Hachette. The retailer has published an open letter to readers admonishing Hachette for refusing to agree to a new contract. The letter, titled "Readers United," paints the publisher as a big business that's set in its old-fashioned ways, likening Hachette to the publishers of old that fought to suppress cheap paperback books in the ‘30s.
The online retailer is seeking new contract terms with Hachette that would see most ebooks sell for $9.99 or less. It also wants a 30 percent cut, an amount that the company says Hachette itself originally proposed in 2010. Amazon echoes an earlier letter, saying that $14.99 to $19.99, the current price of many ebooks being released by the publisher, "is unjustifiably high for an ebook." It notes that ebooks are less expensive to produce and don't have the same stocking or resale concerns as physical copies. "Ebooks can and should be less expensive," Amazon's books team writes.
"We want lower ebook prices. Hachette does not."
Amazon says it is defending readers and "book culture" in the dispute, writing that "we will never give up our fight for reasonable ebook prices." It also argues that cheaper prices are "good for all parties involved," citing its own analysis that shows customers buy far more books at $9.99 or less — easily making up for the lost revenue per book.
The public relations push comes just as a group of nearly 900 authors — going by the name "Authors United" — are set to publish a letter opposing Amazon in a full-page New York Times ad this weekend, according to The Wall Street Journal. The authors, which include Stephen King and John Grisham, object to Amazon's "thuggish behavior," writing that "what we object to is harming authors who have nothing to do with this dispute to gain leverage."
Amazon has been widely criticized for using its dominant market position to coerce Hachette into signing a deal. The company has attempted to steer readers away from Hachette books by raising prices, removing the option to pre-order new books, and delaying shipping times — all side effects of its decision to reduce its warehouse inventory and call in books from the publisher only when orders are placed online. The retailer, for its part, says that it has made three separate offers to Hachette in hopes of ensuring author's royalties aren't victim to the dispute between the two companies. Hachette wasn't interested, according to Amazon:
We recognize that writers reasonably want to be left out of a dispute between large companies. Some have suggested that we "just talk." We tried that. Hachette spent three months stonewalling and only grudgingly began to even acknowledge our concerns when we took action to reduce sales of their titles in our store. Since then Amazon has made three separate offers to Hachette to take authors out of the middle ... But Hachette, and their parent company Lagardere, have quickly and repeatedly dismissed these offers even though ebooks represent 1 percent of their revenues and they could easily agree to do so. They believe they get leverage from keeping their authors in the middle.
It's clear Amazon's trying to get readers and authors on its side, but unfortunately for both it looks like the two companies are still not near striking a deal. Amazon is encouraging readers to write Hachette — it published CEO Michael Pietsch's email address publicly — and voice their preference for low-cost ebooks. The request mimics the closing lines of the "Authors United" letter set to be published in The New York Times. The jointly-signed letter includes CEO Jeff Bezos' email address, and asks authors "to email ... and tell him what you think. He says he genuinely welcomes hearing from his customers and claims to read all emails at that account."
Update, August 9th, 5:00PM ET: Updated on Amazon's request to note that "Authors United" published Jeff Bezos' email address in its own public letter.