Hatchette Fun and Games

Still following the Hatchette / Amazon dispute?


Some clues about what's really happening here, for those interested:

(ganked from here )


If you want to understand what a party is doing in a negotiation, a good place to start is with their public statements. In this case, we know exactly what Hachette was planning to do in this negotiation because they published their strategy. In a letter to the federal court in the ebook antitrust case, believe it or not. When the proposed final judgment for Apple was announced, it included a provision that prohibited Apple from entering into agreements that would limit its ability to offer retail discounts. The Big 5 legacy publishers got together an wrote a whiny letter to the court objecting that this violated the terms of their settlement (the court rejected this argument because, well, it was stupid). Here's what the Big 5 said:


"Each Settling Defendant entered into a carefully negotiated consent decree with Plaintiffs. For the original three Settling Defendants, the negotiations with Plaintiffs lasted nearly one year. Although the DOJ initially sought to include a five-year prohibition against the agency model—identical to Section Ill.C in the Proposed Order—the final consent decrees permit the use of the agency model while also expressly allowing for retailer discounting for a period of two years. Once that "cooling off' period has run, each Settling Defendant may negotiate unilaterally with e-book retailers to enter into any distribution arrangement, including an agency model."


Let me translate that from legalese to English. The Big 5 are saying that as soon as the two year "cooling off" period is over, they want to get rid of retail discounting. Literally their only objection to the Apple settlement is that it will leave one ebook retailer who must maintain the ability to discount. The Big 5 have been waiting for two years for a chance to get rid of retail discounting. And take special note of that word "unilaterally". That means that the Big 5 each have to negotiate independently with their retailers. Those "original three Settling Defendants" are reaching the end of their "cooling off" period in September. They are negotiating new contracts with retailers right now. Unilaterally. Which means only one of them (at a time) can try to impose their preferred "no discounting" policy on retailers. One of them has to go first.


I have a clue as to which of one of the three is doing it. The only time a single one of the Big 5 tried to negotiate a no-discounting agency agreement with Amazon, Amazon removed the "buy" buttons from their books (that was MacMillan in January 2010). So, I think it is pretty safe to assume that Hachette is the one trying it now.


But maybe that's not enough evidence for you. Let me suggest that you find a few Hachette ebooks which are not available for pre-order on Amazon and then go over and look at the prices on Barnes & Noble's web site. Carefully note the paper list price and the ebook price. When I did this, every single title I checked fell within the non-discountable price bands in Apple's illegal proposal from January 2010. And if you check the ebook prices for the same books in the iBookstore, you will discover that Apple is offering most of them for less. Because Apple needs to keep its nose clean during its appeal. Hachette has pretty clearly already got B&N to sign on to the non-discountable agency prices (because B&N would love not to have to compete on price with Amazon).


I really don't understand why this is such a big mystery to people. Hachette is doing what they said they were going to do. Amazon is reacting exactly the way we would expect them to.

Source: http://sinfulfolk.com