Amazon accused of 'bullying' publishers while Barnes & Noble spins off e-reader business

By Peter Gothard
30 Jun 2014 View Comments
Amazon Kindle

Amazon has been accused of "bullying" small and mid-sized publishing firms for failing to keep up with demand for books, while Barnes & Noble has admitted defeat on the e-reader front by spinning off its Nook e-reader arm.

A mid-sized publishing firm accused Amazon of "bullying" smaller companies, while another said it has become "increasingly ruthless" in its negotiating style. Both firms made their comments to the BBC, in reaction to changes in Amazon's contract clauses with UK independent publishing houses that include one that gives Amazon the right to publish its own copies of books via its print on demand facility.

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The publishers are worried that, while print on demand can produce books faster, the quality is not as good as their own books and that this could damage their reputations.

But perhaps even more worryingly, Amazon's new terms are also asking - via industry-standard "most favoured nation" (MFN) conventions - that it be included in all promotions and offers that publishers may want to carry out on their own or with other suppliers, as well as come to Amazon first with such potential deals.

This could effectively give Amazon carte blanche over every business decision a publisher intends to make in the future.

The Bookseller editor Philip Jones told the BBC that publisher agreement to such terms would be "a form of assisted suicide for the industry".

The Amazon squeeze also appears to be affecting Barnes & Noble, which has finally had to admit a form of defeat and spin off its unprofitable Nook e-reader business from its bricks and mortar stores.

Nook, which competes with Amazon's Kindle e-reader, as well as other products such as Indigo Books' Kobo product and various services by Apple and Google on their devices, has experienced a 35.2 per cent reduction in revenue in the past year. It has lost $700m for Barnes & Noble over the past two fiscal years.

Microsoft has also ploughed $350m into keeping Nook afloat, as part of a five-year deal that lasts until 2017.

Commenting on earlier plans to split the company in 2012, Barnes & Noble CEO Michael Huseby said: "We're in a better position to do this today. Separating the businesses will enable us to capitalize them more efficiently and unlock shareholder value."

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