Amazon offers to pay Hachette authors 100% of ebook profits

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Image Credit: David Cheskin/AFP/Getty Images

In the latest development of the ongoing negotiations between Amazon and Hachette, Amazon may be trying to sidestep the publisher altogether and work directly with the authors. David Naggar, VP of Kindle content and independent publishing, contacted several Hachette authors, book agents, and The Authors Guild offering a temporary truce until negotiations are over: “For as long as this dispute lasts, Hachette authors would get 100% of the sales price of every Hachette ebook we sell,” he wrote in a letter. “Both Amazon and Hachette would forego all revenue and profit from the sale of every ebook until an agreement is reached.”

For months, Hachette and Amazon have been negotiating what percentage of revenue from ebook sales should go to each company. Presumably, the revenue lost by giving all book-sale profits directly to authors would “motivate both Hachette and Amazon to work faster to resolve the situation,” as Amazon said in their letter. It isn’t clear which authors Amazon contacted, but Hachette is one of the biggest book publishers in the world, and publishes books by J.K. Rowling, Stephen King, and James Patterson, among others.

Roxana Robinson, president of The Authors Guild, publicly declined the offer. “This seems like a short-term solution that encourages authors to take sides against their publishers,” she told The New York Times. “It doesn’t get authors out of the middle of this—we’re still in the middle.”

For the proposal to work, Hachette would need to agree to it. It appears as though Amazon meant to make this deal a kind of meta-negotiation to speed up the process of the more important negotiations. However, Amazon addressed the letter to authors and members of the publishing industry to solicit feedback. They didn’t initially bring the proposal up with Hachette, saying that they were unresponsive to negotiations.

In the original letter, Amazon wrote:

We heard nothing from them for three full months. We extended the contract into April under existing terms. Still nothing. In fact we got no conversation at all from Hachette until we started reducing our on-hand print inventory and reducing the discounts we offer customers off their list prices. Even since then, weeks have gone by while we waited for them to get back to us.

Hachette responded. “We believe that the best outcome for the writers we publish is a contract with Amazon that brings genuine marketing benefits and whose terms allow Hachette to continue to invest in writers, marketing, and innovation,” the company published in a letter. Hachette also denied Amazon’s accusations that they’ve been unresponsive to the ongoing negotiations. A representative of the company told The Wall Street Journal that it “made an offer in April that was the largest we ever made to any retailer, and in May made another that was higher still. Both offers were rejected.”

Amazon, however, said that turning down the offer to give authors a higher percentage of ebook revenue is bad for authors. “We call baloney,” they said in a statement. “Hachette is part of a $10 billion global conglomerate … 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.”

In 2013, Amazon accounted for 60 percent of Hachette’s ebook sales.


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