michaelpietsch
Hachette CEO Michael Pietsch

Amazon this weekend took the unusual step of asking authors and readers to send a message to Hachette Book Group CEO Michael Pietsch, appealing to the publisher to support Amazon’s push for lower e-book prices. The company even published Pietsch’s email address, with suggested talking points.

As it turns out, Pietsch isn’t just filing the messages away or hitting delete. He’s taking the opportunity to make Hachette’s case, replying to each message by emailing a letter that disputes Amazon’s claims about e-book pricing, and calls on Amazon to end its ‘punitive actions’ against Hachette authors.

“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,” he writes, in part. “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.”

Pietsch adds in his letter, “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.”

His response comes after more than 900 authors appealed to Amazon in a New York Times ad to stop preventing customers from pre-ordering Hachette books, among other tactics. The authors had similarly published Amazon CEO Jeff Bezos’ email address.

A Hachette spokeswoman on Sunday provided Pietsch’s letter, below, in response to an inquiry from GeekWire. She said Pietsch is sending the letter to everyone who emails him. In a hint that the volume of emails hasn’t been insignificant, she said expects to be able to respond to everyone over the next couple of days.

Here’s the full text of the letter.

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

Previously: In epic letter, Amazon asks authors and readers to join its struggle against Hachette for lower e-book prices

Comments

  • fivecard

    I think the ReadersUnited.com website is a joke. Amazon’s flywheel is stuck in the mud, and now they need their customers to dislodge it for them?

  • http://john-the-artist.deviantart.com JohnTheArtist

    Why don’t they just partner with B&N and the Nook and revolt against Amazon together? If all of those authors siding with Hachette took their books out of Amazon and shifted the industry as a whole toward another eReader, then Amazon might actually get the point.

    • Fal Phil

      Is this a serious question?

      When your business model revolves around gatekeeping, you don’t take on partners. Otherwise, they would go with the 800 pound gorilla and partner with Amazon. But never fear. There are still buggy whips in the 21st century and the Big Five publishing model is one of the more prominent ones.

  • Kary

    Nice letter, except that Amazon is seeking a lot more profit for themselves, the publisher and the authors, while offering consumers lower prices. It’s a win-win-win-win, and easily understood if you’re not a dinosaur.

  • Nirmala Erway

    The statement that 80% of the ebooks they publish are priced at $9.99 or lower is misleading on Pietsch’s part: what matters is the list price of actual ebooks sold. It is possible that only 20% of the ebooks they have published have a list price above $9.99, but that nonetheless some other percentage (maybe even a large percentage like 80 or 90%) of their ebooks that actually sell each day are listed for over $9.99. This could easily be so if their bestselling ebooks, which undoubtedly make up most of their sales, are all listed for over $9.99.

    His statement makes it sound like most of the ebooks they sell are priced at $9.99 or lower, but in fact the ebooks they sell each day for more than $9.99 probably make up a much higher percentage of actual sales than just 20%. As always, there are lies, damn lies and then statistics.

    • Sci-fi reader

      Read that again. He states that 80% of the books Hachette publishes are available at or under the $9.99 cost. Please be careful to make sure you fully comprehend a statement before you condemn it.

      • jaminjj1053

        Pot, meet kettle. Nirmala was saying that while 80% of their available library may be $9.99 the VOLUME of their sales may be something entirely different.

        For instance, both Apple & Google app stores claim very large libraries of apps available but only a small few are worth actually downloading. Similarly, Hachette has a large library of books available at $9.99 but most of them aren’t worth buying.

      • Nirmala Erway

        To exaggerate a bit to make the point clearer: if Hachette only had 99 ebooks priced $9.99 or less and 1 ebook priced at $14.99, then Mr Pietsch could accurately claim that 99% of the ebooks Hachette publishes are available for $9.99 or less. But let’s say that all of those 99 ebooks put together sell on average a total of 1 book a day (remember I am exaggerating here on purpose), and that the one book at $14.99 sells 99 copies a day. Well guess what, in that scenario 99% of the ebooks that Hachette sells are priced $14.99 (even though it is still true to say that 99% of the books they publish are priced at 9.99 or less)

        The difference is probably not even close to being that extreme, but since Hachette did not tell us, we have no idea what percentage of actual sales are at a price of $9.99 or less. It is reasonable to assume that they price their best selling ebooks higher, so it is reasonable to assume that a much higher percentage than 20% of sales are at a price point above $9.99.

  • Michael Dunfee

    Until Amazon gets their heads out of their greedy butts I won’t be buying anymore kindle books. I’ll just get my books for work thru B&N

  • Fal Phil

    Pietsch is lying on several levels. But then, I would expect nothing less from a man running a dinosaur business model. The facts are (1) ebooks have a highly elastic sales model, (2) Amazon pays authors it publishes or self-published authors a much higher percentage on sales while selling at a lower price; earning authors much more money since Amazon understand pricing elasticity, and (3) Hachette and the rest of the Big Five have, for decades, prevented many authors from publishing, robbing the public of some really good entertainment.

    So, the choice is to pay less while more authors earn more money, or pay more while a few authors earn less money.

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