Books written by Ray Sullivan

Monday, 18 August 2014

Hachettte CEO Responds to Amazon Spam Request

Just over a week ago Amazon astounded the self publishing world by emailing all of their KDP authors with a bizarre call to arms against Hachette, specifically the CEO of the publishing company.  They wanted all of the authors publishing through Amazon to email the Hachette CEO to complain about Hachette's position in its ongoing dispute with Amazon over pricing of ebooks.

Now most Amazon KDP authors are not published by Hachette.  The few who are will know that Amazon are suppressing their books, limiting their sales.  Potentially, if they believe the Amazon stance to be better for them, they could carry out Amazon's request and spam the CEO of the company that has invested in their books.  Edgy tactics for those who have probably striven for years to get that elusive publishing contract.  Pointless for the vast majority who don't have contracts with Hachette and who will probably never get one, may not even want one but for those that do they would probably not want to get the attention of the CEO in such a negative way.

My view, which many readers supported through tweets, is that CEOs shouldn't be inciting customers to spam other CEOs.  Unlike the craze of CEOs challenging other CEOs to pour iced water over their heads for charity this wasn't a one-on-one attack.  It was an attempt to bully the CEO of Hachette using a mob that had no business, in the main, getting involved.

So I wrote to the CEO of Amazon, Jeff Bezos instead.  In part I wrote to ask him to desist from invoking me to do Amazon's dirty work and to be fair, for the last week they haven't.  But the main reason for writing to Mr Bezos instead of Michael Pietsch, CEO of Hachette, was to point out that the competing pricing methods at the heart of the Amazon/Hachette isn't the issue, Amazon's attempt at dominating the ebook industry through KDP Select and Kindle Unlimited is.  I also pointed out that both of those services would benefit greatly by the dropping of the exclusivity clause Amazon insists on.  If you haven't seen my email, which I CC'd to Mr Pietsch out of courtesy, you can read it here.

Unsurprisingly Mr Bezos hasn't replied to my email, however Mr Pietsch did take the time to write me.  To be fair to Mr Pietsch I didn't write specifically supporting his side of the debate, I wrote to point out that Amazon were out of line with their attempt to recruit the KDP authors to do their bidding.  Mr Pietsch attached a letter that he put out after the Amazon email which explains Hachette's side in this saga but added a few words showing that he had taken the time to read my email.  Below is the full email from Mr Pietsch including his reply to all KDP authors, which has already been circulated on the web quite extensively.  It is well argued and worth reading, even for those of us not directly affected by the dispute.  As most of us are consumers as well as authors the outcome of the dispute is important - Hachette's approach may or may not price books higher than Amazon would like, but it gives consumers a choice. Amazon's approach, to gain absolute market dominance, is likely to cost consumers in the long run.

Here's the email:

  Your letter in response to Amazon's "Important Kindle Request"

Thank you for sending me your thoughts about Amazon’s letter to KDP authors.  Below is a note of clarification that I’ve sent to those who passed along Amazon’s complaints, which I thought you might want to see as well.


It’s heartening to hear your thoughtful comments.  Thanks again for writing.




Michael Pietsch

CEO, Hachette Book Group


Thank you for writing to me in response to Amazon’s email.  I appreciate that you care enough about books to take the time to write.  We usually don’t comment publicly while negotiating, but I’ve received a lot of requests for Hachette’s response to the issues raised by Amazon, and want to reply with a few facts.

·        Hachette sets prices for our books entirely on our own, not in collusion with anyone.

·        We set our ebook prices far below corresponding print book prices, reflecting savings in manufacturing and shipping.

·        More than 80% of the ebooks we publish are priced at $9.99 or lower.

·        Those few priced higher—most at $11.99 and $12.99—are less than half the price of their print versions.

·        Those higher priced ebooks will have lower prices soon, when the paperback version is published.

·        The invention of mass-market paperbacks was great for all because it was not intended to replace hardbacks but to create a new format available later, at a lower price.

As a publisher, we work to bring a variety of great books to readers, in a variety of formats and prices.  We know by experience that there is not one appropriate price for all ebooks, and that all ebooks do not belong in the same $9.99 box.  Unlike retailers, publishers invest heavily in individual books, often for years, before we see any revenue.  We invest in advances against royalties, editing, design, production, marketing, warehousing, shipping, piracy protection, and more.  We recoup these costs from sales of all the versions of the book that we publish—hardcover, paperback, large print, audio, and ebook.  While ebooks do not have the $2-$3 costs of manufacturing, warehousing, and shipping that print books have, their selling price carries a share of all our investments in the book. 


This dispute started because Amazon is seeking a lot more profit and even more market share, at the expense of authors, bricks and mortar bookstores, and ourselves.  Both Hachette and Amazon are big businesses and neither should claim a monopoly on enlightenment, but we do believe in a book industry where talent is respected and choice continues to be offered to the reading public.

Once again, we call on Amazon to withdraw the sanctions against Hachette’s authors that they have unilaterally imposed, and restore their books to normal levels of availability.  We are negotiating in good faith.  These punitive actions are not necessary, nor what we would expect from a trusted business partner.

Thank you again and best wishes,

Michael Pietsch


Michael Pietsch | Chief Executive Officer

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