Hatchette Cannot Compete In A Free Market

The financial Times does not want their articles extracted for others to argue with so they play with the text to make it unusable. The important parts are my comments which are layed out normally, so give this a patient read.

* F T H o m e

E - b o o k s c o u l d s p e l l t h e e n d f o r h a r d b a c k s , w a r n s H a c h e t t e c h i e f

B y B e n H a l l i n P a r i s

P u b l i s h e d : A u g u s t 3 0 2 0 0 9 2 3 : 3 1 | L a s t u p d a t e d : A u g u s t 3 0 2 0 0 9 2 3 : 3 1

H a r d b a c k b o o k s c o u l d b e k i l l e d o f f i f A m a z o n s e - b o o k s a n d G o o g l e s d i g i t a l l i b r a r y f o r c e p u b l i s h e r s t o s l a s h p r i c e s , A r n a u d N o u r r y , c h i e f e x e c u t i v e o f F r e n c h p u b l i s h i n g g r o u p H a c h e t t e , h a s w a r n e d .

***Amazon cannot force anyone to do anything. Some business managers may feel compelled to take some act, out of ignorance or greed, but no one is forced to do anything in business.***

E b o o k s M r N o u r r y s a i d u n i l a t e r a l p r i c i n g b y G o o g l e , A m a z o n a n d o t h e r e - b o o k r e t a i l e r s s u c h a s B a r n e s & N o b l e c o u l d d e s t r o y p u b l i s h e r s p r o f i t s .

***These companies control Hatchette’s profits? Hatchette is reactive onjly, it has no proactive capabilities?***

H e s a i d p u b l i s h e r s w e r e v e r y h o s t i l e t o A m a z o n s p r i c i n g s t r a t e g y o v e r w h i c h t h e o n l i n e r e t a i l e r f a i l e d t o c o n s u l t p u b l i s h e r s t o c h a r g e $ 9 . 9 9 f o r a l l i t s e - b o o k s i n t h e U S . H e a l s o p o i n t e d t o p l a n s b y G o o g l e t o p u t m i l l i o n s o f o u t - o f - c o p y r i g h t b o o k s o n l i n e f o r p u b l i c u s e .

***Not all publsihers are hostile. Seattle Teachers College Press has been consistently please, if soometimes pleasantly surprised, by Amazon’s pricing strategies.***

O n t h e o n e h a n d , y o u h a v e m i l l i o n s o f b o o k s f o r f r e e w h e r e t h e r e i s n o l o n g e r a n a u t h o r t o p a y a n d , o n t h e o t h e r h a n d , t h e r e a r e v e r y r e c e n t b o o k s , b e s t s e l l e r s a t $ 9 . 9 9 , w h i c h m e a n s t h a t a l l t h e r e s t w i l l h a v e t o b e s o l d a t b e t w e e n z e r o a n d $ 9 . 9 9 , M r N o u r r y s a i d .

***Mr. Nourry does not keep up with the publishing industry in which Hatchette is presently a leader. When he says “free” he means free of royalty payments to authors, which is true of most books ever written.. They still bneed to be produced and distributed, at a profit, something that Mr. Noury seems not to understand.***

T h e r e w a s a r e a l a n d m u s c u l a r d e b a t e i n t h e i n d u s t r y i n t h e U S , h e a d d e d . R e t a i l e r s w e r e p a y i n g p u b l i s h e r s m o r e t h a n $ 9 . 9 9 f o r e a c h e - b o o k , s o w e r e s e l l i n g t h e m a t a l o s s : T h a t c a n n o t l a s t . . .

***So why didn’t publishers get into this business? Why were they paying too much? It sounds as though business sense has atrophied at Hatchette.***

A m a z o n i s n o t i n t h e b u s i n e s s o f l o s i n g m o n e y . S o , o n e d a y , t h e y a r e g o i n g t o c o m e t o t h e p u b l i s h e r s a n d s a y : b y t h e w a y , w e a r e c u t t i n g t h e p r i c e w e p a y . I f t h a t h a p p e n s , a f t e r p a y i n g t h e a u t h o r s , t h e r e w i l l b e n o t h i n g l e f t f o r t h e p u b l i s h e r s .

***For publishers like Hatchette, that have lost the ability to compete, due to having something of a monopoly on publishing and distribution.***

S o m e r i v a l p u b l i s h e r s h a v e e x p r e s s e d c o n c e r n i n p r i v a t e a t A m a z o n s f i x e d $ 9 . 9 9 p e r t i t l e p r i c i n g o n i t s K i n d l e e l e c t r o n i c r e a d e r . O t h e r s n o t e t h e m i n i m a l c o s t s o f d i s t r i b u t i n g b o o k s e l e c t r o n i c a l l y m e a n t h e y c a n m a k e h i g h e r p r o f i t m a r g i n s e v e n w i t h l o w e r p r i c e s t h a n i n p r i n t .

***VEry good... so now respond.***

R e s i s t a n c e t o t h e G o o g l e b o o k s p r o j e c t f r o m E u r o p e a n l i b r a r i e s a p p e a r s t o b e e a s i n g , w i t h t h e N a t i o n a l L i b r a r y o f F r a n c e c o n f i r m i n g t h i s m o n t h t h a t i t w a s w o r k i n g w i t h t h e U S i n t e r n e t g i a n t . B u t E u r o p e a n p u b l i s h e r s s a y t h e y a r e d e t e r m i n e d t o d e f e n d t h e i r r i g h t s .

***They are figuring out change is good.***

M r N o u r r y s a i d H a c h e t t e t h e w o r l d s s e c o n d l a r g e s t p u b l i s h e r o f b o o k s b y s a l e s w a n t e d t o w o r k w i t h G o o g l e b e c a u s e o f i t s f o r m i d a b l e o n l i n e p r e s e n c e . B u t h e c a l l e d o n t h e g r o u p t o b e m o r e r e a s o n a b l e i n i t s d e a l i n g w i t h F r e n c h p u b l i s h i n g h o u s e s .

***Or, far less expensive to the consumer, Hatchette can be more entrepreneurial.***

C o p y r i g h t T h e F i n a n c i a l T i m e s L i m i t e d 2 0 0 9 . Y o u m a y s h a r e u s i n g o u r a r t i c l e t o o l s . P l e a s e d o n ' t c u t a r t i c l e s f r o m F T . c o m a n d r e d i s t r i b u t e b y e m a i l o r p o s t t o t h e w e b .

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