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Barnes & Noble and the battle between Amazon and Hachette

May 13, 2014

At first, they don’t seem related–the prediction that Barnes & Noble won’t be around much after the first of the year and the brawl ongoing between Amazon and Hachette. But their relationship points to the reason you need to understand the industry as it continued to change.

The bad news about Barnes & Noble

If you missed it, a published author and self-proclaimed book lover named Michael Levin opined in the Contra Costa Times that if you have Barnes & Noble gift cards, you might want to use them by the end of the year because this could be their last year in existence. To be fair, Mr. Levin doesn’t point to any new information in his article.

Barnes & Noble is not a healthy company these days. It is slowly closing bookstores and will continue to do so. And it’s Nook division is basically on life support. And last Christmas season wasn’t kind to B&N and this year isn’t likely to be a lot better.

I can’t say that his experience with B&N’s customer service is accurate because I haven’t spent much time there. For one thing, I don’t like Starbucks coffee. For another, if I want to browse books, I download samples in my e-reader apps, which I can do at home.

As much as Mr. Levin says B&N’s closure, if it comes, will hurt readers, it’s those same readers who have been getting books from discount stores or online from Amazon. In short, a lot of the people who read this blog will miss Barnes & Noble a lot of it goes away. But if that experience were truly shared, it wouldn’t be in trouble.

Which brings us to Amazon

This picture of Don Vito Corleone and his cat is entirely coincidental to the content of this post.

One of the things you can do when you control the distribution channel is that you can go back to your providers and suggest that they might want to change contractual terms because, after all, if you drop them, they’re screwed.

Depending on who you listen to, Amazon has done this to publishers. The new part of that news is that Hachette is pushing back and refusing to redo their terms. And now, either Amazon is retaliating or a series of unfortunate coincidences is affecting how a bunch of books, coincidentally published by Hachette, are appearing on Amazon’s results pages.

According to this story from The New York Times, the following things are happening:

  • Hachette says its books are shipping on time, yet Amazon shows them being unavailable, or requiring two to three weeks for delivery.
  • Deeper discounts are showing up on other books, and then Amazon is pointing users to those books when they search for Hachette books.
  • Amazon is allowing some titles to go out of stock.

Writers are understandably angry. The article illustrates with the story of Marla Heller, whose book The Dash Diet Weight Loss Solution fell from the top 300 to the top 3000 after Amazon raised its price $8, promoted less expensive competing books, and increased wait times.

For the record, Amazon isn’t commenting.

No doubt this battle will eventually work out, but until it does, authors’ profits are held hostage. In a war of attrition, the authors may very well side with Amazon, wanting the books back in their original promotional configuration so the mortgage gets paid.

The Times analysis says Amazon has risk, as well, as it might not be seen as the readers’ friend. On the contrary, Amazon appears to be looking out for readers by suggesting lower-priced alternatives. And unless you’re a hardcore fan of a specific author, why wait two to three weeks to pay more for a book when something functionally equivalent is available now for less?

What it means taken together

It mean Amazon is in a strong and very influential position in this industry and Barnes and Nobles’ health and rumors of its demise only strengthen that position.

  1. May 15, 2014 11:33 pm

    Could Amazon be shunning Hachette? Possibly. But I doubt it. As an indie book publisher, my experience with Amazon suggest they only care about profits (though you might not get that impression from reading their balance sheet). I suspect there is something else behind this – a technical explanation. Not defending Amazon. Just saying with all the data feeds coming into their online store it’s easy for one to go off the rails.

  2. May 16, 2014 1:18 am

    My career before my current ( writing in retirement career) was in Retail/Wholesale businesses. Barnes and Noble stores have been too large for years, they think readers want that huge selection in their faces . They never realized that there marketing never told the readers where to go and encourage them to buy . Why buy a book if you are only passing time with coffee, can easily open the book and read till you are bored, then leave without spending money on the book. Small stores, gently sealed books, and the ability to read only one expert on an electronic device, might have saved them a few years ago, but it probably will not work now.

  3. May 17, 2014 10:53 pm

    I wonder if all those who automatically go to Amazon for their online book purchases will be happy when Amazon is all there is. I like B& because my yearly membership gives me prices that often beat Amazon and, frankly, I feel better not giving all my business to a prospective monopoly.

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