Amazon makes an offer to Hachette authors


Jeff Bezos, chief executive officer of Amazon.com Inc., is embroiled in a battle with book publisher Hachette over e-book pricing. (Mike Kane/Bloomberg)

Amazon.com has an offer for authors at the book publisher Hachette, which is embroiled in a fight with the Internet retailer over e-book prices: Amazon will restore the authors' books to its Web site and give writers all of the revenue from digital sales of their books.

"If Hachette agrees, for as long as this dispute lasts, Hachette authors would get 100 percent of the sales price of every Hachette e-book we sell," Amazon said in a letter sent to authors and literary agents. "Both Amazon and Hachette would forego all revenue and profit from the sale of every e-book until an agreement is reached."

Hachette confirmed in a statement that Amazon has sent it a brief proposal to this effect, but says the best solution would be to resolve the dispute as quickly as possible. The publisher and Amazon have been fighting over the pricing of e-books and what share each of the firms will get from digital sales. The publisher alleges that the Web retailer is purposefully not delivering Hachette books promptly, even though the titles are in stock and available.

"We invite Amazon to withdraw the sanctions they have unilaterally imposed, and we will continue to negotiate in good faith and with the hope of a swift conclusion," the publisher said.

But Amazon, whose chief executive Jeffrey P. Bezos owns The Washington Post, has made clear that it's ready to play hardball. In a statement Tuesday, the firm referred to earlier comments from the publisher that accepting Amazon's offer would be suicidal. Amazon countered that Hachette would be more than able to afford the sort of deal the retailer proposes.

"We call baloney," the Amazon statement said. "Hachette is part of a $10 billion global conglomerate. It wouldn't be 'suicide.'  They can afford it. What they're really making clear is that they absolutely want their authors caught in the middle of this negotiation because they believe it increases their leverage."

According to Hachette's Web site, the publisher makes approximately 33 percent of its sales from e-books; the New York Times reported that around 60 percent of that business comes through Amazon. A New Yorker report in February estimated that 7 percent of Amazon's revenues come from books.

Authors should not have their books held hostage as a bargaining chip, said Robert Gottlieb, chairman of Trident Media Group, a literary agency.

"I feel from an author's standpoint that what matters to them is that their books are available," said Gottlieb. And retailers, he said, have the right to conduct business as they see fit.

Meanwhile, authors are still weighing the pros and cons of accepting such a deal. Some authors feel that Amazon's proposal is unfair and asks writers to burn bridges with their publishing company.

"They're asking us authors to load Amazon's guns for them," said Doug Preston, a best-selling author who had penned a letter asking Amazon to resolve its dispute with Hachette. That letter, which he circulated to other writers, has thus far gathered at least 400 signatures from notable authors such as Stephen King, James Patterson and Robert A. Caro. David Maraniss, an associate editor at The Washington Post, has also signed the letter.

Preston, who spoke with Amazon senior vice president of Kindle content Russ Grandinetti over the weekend, said that he wouldn't feel right taking Amazon's proposed deal -- even though he estimates doing so would make him millions of dollars.

"That would be like blood money,"  he said. "I would never turn around and do something like that to them."

Best-selling Hachette author Scott Turow called Amazon's offer "little more than a publicity stunt."

Turow, a lawyer and former president of the Authors’ Guild, said accepting the offer "would be very shortsighted on the part of authors. If they succeeded by this tactic in making Hachette cave, one of the losers would end up being the authors. Amazon is not offering 100 percent in perpetuity.”

Turow said that “to some extent the publishers have brought this on themselves by not sharing appropriately with authors. There are much fatter profits on ebooks than on physical ones and that has drawn Amazon like bees to the honey.” But he added that “giving more to Amazon is not the solution.”

He said only best-selling authors have the bargaining power to get better royalties from publishers. “If Amazon really wanted to split authors from the publishers, it would wrap its arms around us and demand higher royalties for authors while not increasing its share of revenues,” Turow said.

Update, July 9: In response to Preston’s comments, Amazon said in a statement, “Easy for him to say. He's rich and already successful. He can opt out of the offer for himself if he wants, but he shouldn't stand in the way of debut and midlist authors benefiting from the offer."

Staff writer Steven Mufson contributed to this report.

Hayley Tsukayama covers consumer technology for The Washington Post.
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