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Hysterical Amazon exec calls 911, says accelerator is stuck and he can’t keep from running over publishers

18 March 2010

With the launch of the Apple iPad — and its iBookstore — just two weeks away, “strong initial pre-orders for the iPad (along with its sexy television advertisement) make it possible that Apple could meet or exceed the number of Kindles in the marketplace in short order,” observes Michael Cader in this report (subscription required) for Publishers Marketplace. And as you can guess, that’s bringing out the best in Amazon.com.

Yep, you guessed it: Amazon is once again issuing threats to remove buy buttons from publishers who don’t play ball. According to Cader:

At least one independent publisher of scale was told categorically by Amazon in a recent phone call initiated by the etailer that Amazon would not negotiate agency selling terms with any other publishers outside of the five initial Apple partners. This publisher was told that if they switched to an agency model for ebooks, Amazon would stop selling their entire list, in print and digital form. In conversation, Amazon is said to have reiterated that as matter of policy they are declining to negotiate an agency model with any publisher outside of the five who have already announced agreements with Apple’s iBookstore.

In a stirring development, however, it seems independent publishers may try to stand against Amazon the way most of the Big Six publishers did:

In other conversations, executives who did not want to speak for attribution indicated an inclination to move forward with Apple and stand firm on any resistance from other customers–along with a hope that they wouldn’t be standing alone in taking such a position. Though publishers traditionally do not discuss such matters with each other out of legal concerns, the publisher receiving the direct threat cited above is exploring with counsel the extent to which they might be able to consult with other independent publishers facing a similar choice.

Of course, Amazon didn’t like the fact that most of big publishing stood up against them, and in a surprising note Cader reports that …

… ongoing negotiations between Amazon and the outstanding Agency Four (Hachette, Harper, Penguin and Simon & Schuster) remain unresolved for now. If you thought the discussion over the resetting of terms was over and done with after Amazon admitted that “ultimately” they would “have to capitulate and accept Macmillan’s terms,” then think again.

At the time, Amazon told customers “Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books.” But now, according to those who have been briefed on the negotiations, Amazon continues to use the threat of removing buy buttons from publishers’ physical and digital books.

The indications are that if the Agency Four have not finalized new digital sales agreements with Amazon prior to the launch of Apple’s iPad, they could face delisting from direct sale at Amazon, as Macmillan did.

And as if Apple wasn’t making Amazon feel cornered/crazed enough, there’s also this to consider, says Cader: “Google is on the horizon and continues to take a flexible position in discussing an agency model for the forthcoming Google Editions, publishers say.”

Posted by Dennis Johnson in Amazon, Apple |

5 Comments »

  1. Great title!

    Comment by stevie — March 19, 2010 @ 7:34 am
  2. Isn’t Amazon just pushing everyone to make a deal with Apple?

    Comment by John — March 19, 2010 @ 12:33 pm
  3. Amazon’s threat to remove the list of both print and e-books from its store of any publisher that insist on agency-pricing is, if true, I think, a patent violation of U.S. antitrust law. The claims that come to mind are illegal tying, restraint of trade, an illegal attempt to monopolize, and refusal to deal. That is just a start and just for the affected publishers. Apple, Inc. may also have standing to sue under antitrust law, because Amazon is clearly attempting to stop publishers, at least small publishers, from accepting Apple’s agency model and thereby hinder Apple’s ability to compete with Amazon in the market for e-books. That is a clear attempt by Amazon to restraint competition in the market for retailing e-books.

    My advice to any group of publishers facing such threats from Amazon is to retain skilled antitrust counsel and head straight to the U.S. Department of Justice and the FTC. Consider filing their own private antitrust action in conjunction with anything that the DOJ and the FTC may do. And immediately confer with Apple computer on possible antitrust remedies to coordinate any antitrust action taken against Amazon.

    Comment by Chanson de Roland — March 19, 2010 @ 3:17 pm
  4. Why would Amazon alienate the rest of the Big 6 and at the same time annoy all of their existing customer base? Imagine a world in which all the “buy” buttons are disabled for Random House, Hachette, HarperCollins, Penguin, Macmillan, and Simon & Schuster — what is Amazon going to sell? Who is going to login when there’s nothing to buy? I can’t imagine Amazon would actually pull the trigger on such a short-sighted strategy.

    Can I imagine them posturing? Sure. Going through with it? No.

    Comment by Robert Scott Lawrence — March 19, 2010 @ 4:14 pm
  5. Amazon is self-destructing. Without publishers it has little to offer.

    Comment by Cathy Macleod — March 20, 2010 @ 4:57 am

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