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Ebook Sales down at Hachette

31 July 2015

From a Lagardère press release discussing 2015 first half results:

In the United States, the decline in activity, which had been expected (-7.8%), can be explained by the high level of activity in the first half of 2014 (including The Silkworm by Robert Galbraith and The Goldfinch by Donna Tartt) as well as a decline in e-book sales.

. . . .

Digital: in the 1st half of 2015, the weighting of e-books in Lagardère Publishing total sales declined to 10.7%, compared to 11.3% at the end of June 2014. This transition remains limited to English-speaking countries and to the General Literature segment:
– in the United States, in a declining digital market (slowdown seen since the beginning of 2014), sales of e-books have dropped (24% of sales for Trade vs. 29% at the end of June 2014), given a less successful slate of new releases and the implementation of the agreement with Amazon;
– in the United Kingdom, the market is stabilising and has been impacted by the January 1, 2015 VAT increase. E-books represented 33% of sales in Adult Trade(8) vs. 36% at the end of June 2014.

Link to the rest at Lagardère press release

“Implementation of the agreement with Amazon”

PG suspects this means Hachette’s agency pricing agreement with Amazon which allowed Hachette to increase its ebook prices. Is it possible that Amazon knows more about the optimal pricing of ebooks than Hachette?

Big Publishing

42 Comments to “Ebook Sales down at Hachette”

  1. Prices went up. Sales went down. I don’t understand what happened. — Hachette execs, probably.

  2. “Is it possible that Amazon knows more about the optimal pricing of ebooks than Hachette?” — PG

    Awww, you’re so cynical PG — I LOVE it!

    • Hachette doesn’t give a damn on the Ebook optimal price. At best, they want to penalize customers who choose to bypass the REAL paperbook experience(tm).

  3. Gommer Pile voice: “Surprise surprise surprise …”

    • At $14.99 for a new ebook (concurrent with the hardcover edition, I suppose) who can afford to buy Hachette ebooks?

      I can get that same hardcover at Costco for a buck more.

      • Yeah, this is end-game tactics. They know they’re doing it wrong and don’t dare admit it, but if they can keep it up one more quarter or one more year they’ll get their bonuses and can walk away from the mess they made.

        • My sources have informed me that publishers realize they have been complete idiots and that prices are set to go down swiftly and soonly.

          • Unless it’s into the indie range it won’t do them any good — but it will do badly for their authors with contracts that don’t pay out on ‘bargain sales’ …

          • This is sarcasm, right?

            • Felix J. Torres

              The giveaway is “swiftly”.
              BPHs execs can’t even get out of a burning building swiftly.
              (It takes time to set up a transatlantic conference call to get their marching orders.)

          • Oh no! Hugh’s deep sarcasm has trapped him in the fantasy land inside one of his books!

            Save him, please.

            Think the “The NeverEnding Story.”

  4. I can’t wait for the next author earnings report. There’s nothing like one line trending downward and another trending upward to support an argument.

    We’ll see.

  5. One would have to have access to more information to determine whether this pricing move made sense in the short run, for Hachette. They may well have made more profit at the higher price point, even at the expense of sales.

    In the longer run, BPH prices will have to come down, though, due to competition from other sources.

  6. Follow the money (and the executives skipping from company to company): the ONLY THING THAT MATTERS is the QUARTERLY BOTTOM LINE.

    That’s what keeps stockholders happy, stock prices up, and executive bonuses coming.

    Nothing else.

    So they are master manipulators of that bottom line. Similar behavior killed long-term research in companies – because it cost the QBL to have outgo for research and no results at the end of three months.

    I wish someone would figure out how to counter this, but as long as it exists as a way to decide executive bonuses, it will drive every decision ‘companies’ make.

  7. I think Hachette and all the other Big-pubs are in a catch 22 dilemma. They like the profits from eBooks, but eBooks will erode and eventually collapse their paper book cartel. If they price the eBooks competitively they have no edge against Indie eBooks, who can always under-price them. But paper books are expensive, and they have competition from inexpensive Indie eBooks, and the Trad-Pubs sales will decline further. No matter what they do, they’re screwed. All they can do is slow down the eBooks and pray they’ll be around in the next decade.

    • Agreed that big publishers are acting like they’ve decided they can’t afford to be competitive in Amazon’s ebookstore, Mit.

    • No matter what they do, they’re screwed.

      Agree. That’s why I look at their actions as an orderly retreat from fiction. It fits much better than presuming they are competing and intend to remain in the fiction market.

    • Yep. I’ve been saying this for a while now. They may have acted foolishly (and said a lot of dumb things about Amazon publicly through their mouthpiece authors), but they’re not completely dumb. They obviously have their reasons. They’re in a tight spot and unable to find a way to get out of it. Long term they’re unlikely to succeed at this business unless they come up with some kind of miracle plan to grow.

  8. Dear Hachette,

    I firmly believe you should make prices even higher. Keep working that strategy. I’m behind you, cheering you on. And so are my indie author friends. We do not doubt you should add a couple bucks to every single ebook title you have out there. In fact, be bold: price all ebooks at 16.99. You deserve it.

    Best of luck.

    Me

  9. Mir, naughty-delicious.

  10. Let’s not forget either that they probably pay for having the ability to choose the selling price with higher rates going for Amazon on each overpriced ebook sale…

  11. “Lagardère Publishing: Recurring EBIT of €36 million, down -€14 million, related to the decline in activity, particularly in the US.”

  12. Smart Debut Author

    I’d love for once to see an honest press release from Hachette:

    “In the United States, the decline in Hachette’s sales and future prospects, which had been expected by indie authors everywhere, can be explained by the incompetence of Lagardere executive leadership as well as the diminishing fortunes of Hachette’s authors who were badly damaged by the decisions those executives made.”

    • Douglas Preston once railed at his readers for being “entitled” and having a “Walmart mentality” for not paying $14.99 for his new ebooks.

      Last year, he waged what appears to have been a successful campaign to keep his idiotic publisher in charge of ebook pricing, rather than let Amazon continue to discount down to the bone and move units, all while he made a full royalty on every sale.

      Preston got just what he wanted. Too bad he couldn’t understand the implications, because a lot of authors got hurt by his foolishness.

    • @ SDA

      “I’d love for once to see an honest press release from Hachette”

      Honest press release? Oxymoron… 🙂

      • Smart Debut Author

        If the press release quotes a Hachette executive, you can leave out the “oxy” part…

  13. A comment on the way it all works. The root of the problem is not short-sighted Lagardère executives. They report to their stockholders and stockholders will not stand for anything less than rising stock prices or dividends every quarter. For the most part, stockholders care very little about the companies they invest in as long as the investment pays off. Some of these villains are fat cats, but not all. Almost half the households in the US have money directly or indirectly in the stock market.

  14. Is anyone surprised?

  15. Seems 2015 sales are down because 2014 was a successful year. What does that make 2015?

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