Tuesday, June 3, 2014

Public Relations Standoff: Amazon v. Hachette

Image from Slate.com

Amazon and Hachette Publishing Group have gotten in a very public dispute over the last couple weeks. The companies are disputing e-book pricing, and the larger publishing world--mostly Amazon's role in it. So why does this matter? Essentially because of this dispute all of Hachette's books on Amazon are showing in fewer searches, not being sold entirely, have slower shipping speeds and pre-orders are being cancelled. Hachette is losing money because Amazon wants more control over the publisher to determine pricing and publication. This is a huge loss for Hachette if they cannot reach an agreement because Amazon sells 41 percent of all new books in the United States, both print and electronic.

Hachette publishes big name authors like James Patterson and J.K. Rowling. None of Hachette's authors have commented to major news outlets, and the two companies have not commented either. Instead, Amazon is encouraging people to go to competitors while the dispute is being handled. In the end Amazon wants a bigger cut of the profits, but the seller can suffer a small sales loss because of their other products offered. Hachette on the other hand is losing an important supplier if disputes continue. According to an article in Forbes, "Amazon wants a bigger piece of its suppliers’ profit margins to purportedly pass on to its customers in the form of lower prices."
Image from Amazon.com
The two companies are negotiating terms, but the effects of their dispute are very public. Customers are not happy, and this could effect how Amazon interacts with other publishers and suppliers. Although over the past couple days Amazon has released some of Hachette's titles, they are still losing profits while other mega-companies are profiting. The Huffington Post reported that, "Other retailers, including Walmart, Target and Barnes & Noble, have seized the standoff as an opportunity to one-up Amazon."

For now the dispute continues, but readers across America are hoping an agreement is reached soon so that they can receive their books at the price they are willing to pay. Amazon and Hachette have not done the best job of staying transparent, and their communication skills can be improved. Speculation is not a good reaction to negotiations, so Amazon and Hachette would be wise to release statements so that the press is not in the dark. 

How do you think Amazon and Hachette should have handled this problem?

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