January 10, 2012

Amazon ups co-op and discount pressure on publishers to “astronomical” levels


Are Amazon's outrages beginning to engender resistance in the industry?

While Amazon.com raised an across-the-board furor before the holiday with its offer of a $15 bribe to people to conduct surveillance on brick-and-mortar retailers (see our earlier reports here and here), another story about publisher outrage at Amazon went little commented-upon. The story, by Rachel Deahl and Jim Milliot for Publishers Weekly, reported that “what has publishers riled, behind the scenes, is aggressive moves the retailer is making in its demands on co-op and discounts. A number of sources in the industry, all of whom spoke to PW on the condition of anonymity, said the retailer is, in certain cases, threatening to stop selling titles from companies who won’t pay up.”

So what, exactly, is Amazon doing? According to Deahl and Milliot, “Amazon has, as some sources explained, long been pressuring publishers to provide ancillary content on the pages where their books are sold, from videos and q&a’s to links to similar books. That content has always been something publishers have had to both pay for and provide. In the latest negotiations with Amazon, sources told PW, the price of providing that content has jumped to what sources say are astronomical percentages (but those sources would not provide specific numbers).”

Note: One reason those publishers aren’t giving out figures is that Amazon demands a non-disclosure on its yearly contract. Which makes talking to the press at all about their largest account a dangerous thing for publishers, and the fact that it seems multiple publishers have done so is significant.

With no one else reporting on the subject since, it’s impossible to know whether any publishers are yet taking a stand, by force if not be volition. But as PW notes, most publishers are describing their annual Amazon contract negotiations “as less of a dialogue than a dictation of terms.”

But what happens when no one can afford to take that dictation? Stay tuned.

Meanwhile, bravo to PW for some great investigative reporting.


Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.