The Great Amazon-Hachette Debate: Why Should Readers Care?


Debate? What debate?

If you’re a reader, you probably asked that question as you opened this post. Most likely, you’re not even aware that as you read this, Amazon and Hachette are locked in a rather nasty battle with each other on how high (or low) e-books ought to be priced. To give a two-sentence summary of the situation, Amazon thinks they should be priced low. Hachette thinks they should be priced high. And they’re throwing everything they have to ensure they get their way.

How does this concern you, the reader? Why should you care?

I will tell you why. Because the issue underlying this fight on e-book pricing is not really e-book pricing.

Change is coming.

A change that the publishing industry worldwide is being pushed to undergo but is resisting: the shift from print to digital.

A short while back, I wrote a post on how the reading habit is migrating from paper to the screen. This migration is already in full swing in Western nations such as the US and the UK, and it shouldn’t take longer than perhaps ten years for India to fall into the same path. As we old fogies who grew up on paper books give way to a younger generation that is being brought up with electronic devices, and as devices themselves become more user friendly and convenient, more and more people will jump.

That’s not a dire prediction. It’s just the most likely future scenario. It has happened in other industries. Where is the tape player? Where is the video casette? Where is the newspaper? Our lives are increasingly becoming digital in all aspects. Mechanical and analog machines are making way for microprocessors.

Why should the book industry be any different? Why, indeed.

What does this mean for publishers?

It may not seem that way until you sit down to think about it, but as readers, the kind of books we read has traditionally been controlled by what the publishing houses think we should read. That places an enormous amount of power in the hands of the ‘big five’ publishing houses (Hachette, HarperCollins, Penguin Random House, Pan Macmillan, Simon & Schuster), because by the choices they make in what they accept and reject, they shape the way the reading world thinks.

With platforms such as Amazon and e-book publishing, authors can, for the first time in history, reach their readers directly through their books. This represents a certain loss of control for publishers, and understandably they’re miffed.

But let’s put abstract concepts such as power to one side. Let’s look at the finances of the book business.

The average book is priced at around 200 rupees. Of this, the author is generally paid 7.5 – 10% on each sale. Where does the remaining 90% go? It goes into feeding the ‘machinery’ of publishing. Editors, proofreaders, cover designers, warehousing, printing, distributors, booksellers, book launches, events, marketing, rent – and of course, profits.

Who pays for all of that?

We, the consumers. The readers. And we, the producers. The authors.

In an e-book business, an author generally pays a freelance editor to edit his book. He employs a designer to create a cover. He doesn’t need a distributor because his books will be available online, and online space is much vaster than physical shelf space in bookstores. There are no warehousing costs. There is no risk of books being returned. Authors will directly talk to bookstore owners and negotiate deals for their books to be sold on their shelves. If an author is big enough, he may even employ a freelance distributor.

Because the machinery in this form is much lighter, the average price of an e-book could be around 50 rupees for a book of similar quality. The author makes 70% of each sale, paying 30% to an online bookseller like Amazon. The author makes more. The reader spends less. For both the producer and for the consumer, this is win-win. It’s a free market, too; so while there will be a lot of dross published this way, quality works – as determined by readership – will rise to the top.

The other, bigger, more important point is that with lower prices on books, they will begin to compete more aggressively with other forms of entertainment – like television, games, videos, and social media.

Who loses out? As always, the middle man: the publisher. Hence this tussle.

Now isn’t it possible for publishers to reinvent themselves to fit the new paradigm? Of course it is. But unfortunately, Amazon has beat them to it. So they’re trying their best to hold on to the old model instead of learning a game that Amazon (and a few other players) has already mastered.

Where do I stand?

As an author published by one of the Big Five (HarperCollins India), it would be easy for me to take the insider’s view and say all self-published books ought to be controlled. But I do see the logic in the argument above. When it comes down to it, a publishing company is nothing more than a middle man who takes a rather big cut out of earnings for the act of transporting a product from producer to consumer.

So I can’t help but think that this new model will be good for authors, if for nothing else, to even out the balance of power a little bit. An author can today shrug off a rejection and say, ‘No biggie, I will self-publish it.’ Indeed, many self-published authors today are turning down big advances from traditional publishers.

What should you do as a reader?

First, you should form an opinion. Your opinion matters. In fact, yours is the opinion that matters the most. This whole industry exists because of your love for words and stories.

So listen to both sides of the debate. Weigh in with your own personal choices. Here are a couple of links that will start you off:

  1. Readers United – A Message from the Amazon Books Team
  2. The Author’s Guild Post about the issue
  3. A Petition to encourage fair pricing

And after you’ve made up your minds, tell us what you think. Better still, vote with your wallets.

A note of caution

In all this, it’s important to note that I’m not so naive as to ascribe noble intentions to Amazon. It is not out of a wish to save the world that Amazon is fighting for low prices. It is because its business model is based on serving readers directly. And it is also currently in a mad rush to capture market share. Who knows what will happen in the future, after it becomes the only online bookstore in the world?

Monopoly has to be feared. I know. Amazon has an agenda. I know.

Everyone has an agenda. But it seems to me that the only way to move forward is to pick the side whose agenda aligns with yours. Whether you’r a reader or a writer. And right now, it’s not hard to tell who that is.

What is your opinion? I’m extremely eager to listen to what readers have to say on the subject. Are you happy with how books are priced at the moment? Would you like lower, fairer prices on books? And do you support the shift from physical to digital?

Image Courtesy: Ala


  1. Bhagirathi Kumar says:

    Yes Sharath, though I am a digital ignoramus, I fully support the shift from physical to digital. Who wants gatekeepers to decide what is good or not? Let the readers decide.


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