Amazon has a 78% market share of Hachette Livre e-book titles in the UK and a 60% share in the US, an Investor Day presentation by Hachette Livre has revealed.
The presentation, made public on the company's website and first reported by Publishers Marketplace, has shed fresh light into how hard the publisher must be being hit by its current row over terms with Amazon in the US, which has seen pre-ordering removed from selected Hachette Book Group titles. The presentation has also discussed a necessary "rebalancing" between the company's US and UK operations.
The report said that 60% of digital sales of Hachette titles are through Amazon in the US, followed by Barnes & Noble with a 19% share and Apple iBooks with a 13% share, while "others" including Kobo and Google share 8% of the pie.
The figures suggest that if the Hachette dispute carried over into the UK as some industry commentators fear, the publisher would be even worse hit, as Amazon takes a 78% share of Hachette’s e-books in the UK, followed by Apple which has a 12% share, Kobo which has a 5% share and "others" including Google, Nook and OverDrive which share 5% between them.
The report stated: “Publishers are now dealing with giant technology players who enjoy considerable bargaining power” which was “a different economic rationale from traditional retailers.”
Hachette said trade book e-book penetration was “about” to stabilize in the US at 25-35% and at 35% in the UK by 2017. In France, e-books account for around 10-15% of the trade market, where Hachette was leading, according to the publisher.
The report said that since 2007, Hachette had strove to foster greater competition between e-retail partners to avoid a “dominant position in the value chain”, by developing a large network of clients composed of international and local companies.
Consolidation will be inevitable for the publisher, the report said, following the merger of Penguin and Random House last year, creating a big player in the US and the UK markets, and also following the acquisition of Harlequin for HarperCollins earlier this year. “Publishers need size and muscle in order to keep control over relations with authors over pricing and distribution,” Hachette said.
One of the “strategic priorities” Hachette is pursuing to consolidate its market position is to “rebalance” its US and UK operations. The publisher said it was actively looking for international bestsellers with worldwide rights and would focus more on the US market to “identify, acquire and develop top authors, titles, licenses to maintain its leading position in all markets”, because the “these talents are mainly sourced in the US,” giving Donna Tartt’s Pulitzer-winning title Goldfinch as an example.
Hachette said the US book market was bigger than the UK’s in terms of readership and the number of new titles published and that it was “necessary to be a bigger player in the USA than in the UK in order to secure enough primary rights”.
The historical establishment of Hachette in the UK first meant the portfolio of activities between the USA and UK was “skewed” and that British publishers of the group were “insufficiently provided with US titles” by the Hachette Book Group, according to the report. The bestselling authors of Hachette UK were not published by the rest of the group but instead by competitors in the USA, such as Stephen King and Harlan Coben, therefore the publisher intended to “rebalance the weight of the US vs the UK subsidiary,” it said.
Hachette said it was confident that traditional publishers would remain more attractive to authors than alternatives because of the “exclusive services” they can offer such as advances, editorial expertise, marketing and sales clout, and also that most successful self-published authors seek a traditional publisher to increase their sales reach.