Hatchette and Amazon inked a new distribution deal on November 13th. Both sides said they're happy with the deal and got what they wanted. However, there are three problems that still exist:
1) Hatchette let short-term profits override it's long-term interests.
Amazon and Hatchette signed their deal on November 13th, two weeks before the American Thanksgiving holiday, which also happens to be the start of the winter holiday retail season. Americans call the Friday after Thanksgiving "Black Friday" because for many retailers, this is the turning point in the profitability of their store for the year.
Amazon has diversified enough that it isn't dependent on selling books in December. Hatchette is dependent on books alone. Without the U.S. largest book retailer, Hatchette Book Group USA would be in a world of hurt at the end of the year. They didn't have a choice but to sign a deal with Amazon at least two weeks before Black Friday in order to get their stock in Amazon warehouses in time.
The real question is will the holiday shopping season make up for the 18% loss in sales Hatchette saw in the last quarter, a loss they blamed on the conflict with Amazon.
2) The multi-year deals between Amazon and the Big 5.
Publishers have been signing writers for eons to contracts for the length of copyright, i.e. life of the author plus 70 years. Such a term makes it next to impossible for the writer to capitalize on their work. Writers are hobbled by the very contract they desired.
With the rapid changes in the publishing industry, Amazon has just done something similar to Hatchette with their four-year deal. Four years ago, I was still submitting to agents. Three and a half years ago, I self-published my first book. Two years ago, I quit my day job. Yes, things have changed that rapidly as far as fiction publishing and distribution go. If changes keep up this pace over the next four years, Hatchette may have crippled itself.
3) Hatchette's Author Mouthpieces Won't Shut Up
James Patterson and Doug Preston are still railing against Amazon. The usual suspects are mentioned: literature, culture, children, puppies. But if you read between the lines, not once does either author mention other writers. Their entire concern is for publishers, aka the entities that made them both very rich men. How many writers pull in $90 million a year?
It's those millions per year that the star authors are seeing slip through their fingers. And guess where it's going? Yep, into indie writers' pockets.
That's the real reason the Big 5 and folks like Patterson and Preston hate Amazon. Bezos and his people opened publishing's doors to the unwashed masses. Even worse, those same unvetted, uncensored books are being bought by readers. Lots of readers. To the point that the unwashed masses can pay their electric bills, their mortgages, and their children's college tuition. How much more will the mega-stars like Patterson and Preston lose?
Adding onto Hatchette's PR problems is Roxana Robinson, president of the Authors Guild. She's making noises about how Hatchette should be rewarding loyal authors who stood by the publisher during the dispute. Hatchette has every legal right to adhere to the contracts signed by their loyal followers, but how many of them will stick around if they feel they've been dissed and dismissed by Hatchette?
Hatchette needs to take a good long look at the mess Harlequin has become to see their future.
So, ladies and gentlemen, what are your bets on Hatchette surviving the next four years?