Amazon.com Inc is raising the pressure on Hachette Book Group, one of the biggest US book publishers, as it seeks a larger profit cut of e-book prices. Hachette said on Friday that the retailer has blocked pre-orders for some of its upcoming book releases, making it harder for them to hit the best-seller lists.
The pre-order denial comes as the two counterparties are negotiating new terms under which Amazon will sell Hachette e-books. The dispute is likely to hurt the publishers sales of new titles due to Amazons dominating presence on the market and the fact that sales during the first days of their release are crucial for propelling a book into the best seller lists, which in terms attracts more readers.
Mike Shatzkin, chief executive of Idea Logical Co., said, cited by the Wall Street Journal: “By concentrating the orders of several weeks or months into a single day when the book hits, preorders propel books onto the best seller lists. Publishers want to maximize their sales during the first few days, and preorders at Amazon are a very big part of that.”
In the first three months of 2014, e-books accounted for 34% of Hachettes U.S. sales. Amazon argued that e-books generate much higher margins for publishers than print books, which carry costs of materials, printing, storing, shipping, as well as returns. Despite the swiftly rising revenue, Amazon has suffered razor thin margins which it seeks to improve as the companys shares have declined by nearly 25% this year, despite achieving satisfying profit in the first three months.
Michael Pietsch, CEO of Hachette Book Group, said in a letter addressed to authors and agents, which was cited by Bloomberg: “Please know that we are doing everything in our power to find a solution to this difficult situation, one that best serves our authors and their work, and that preserves our ability to survive and thrive as a strong and author-centric publishing company.”
One of the forthcoming books affected by Amazons measures is J.K. Rowlings “The Silkworm”, written under the pseudonym Robert Galbraith. It, along with Michael Korytas book “Those Who Wish Me Dead” are currently marked as “unavailable” to pre-order on Amazon.
Amazon.com Inc rose by 2.40% to 312.24 per share on Friday in New York, marking a one-year change of +19.29%. The retailer is valued at $136.56 billion. According to CNN Money, the 38 analysts offering 12-month price forecasts for Amazon.com Inc have a median target of $425.00, with a high estimate of $500.00 and a low estimate of $330.00. The median estimate represents a +36.11% increase from the last price of $312.24.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
