(Adds Hachette's response on the record)
By Deepa Seetharaman
SAN FRANCISCO, July 8 Amazon.com Inc
ratcheted up the pressure on Hachette Book Group by proposing
the publisher's authors get all the revenue from ebooks sold by
the ecommerce company, as both sides try to resolve their bitter
months-long contract dispute.
Hachette rejected the offer on Tuesday. The fourth-largest
U.S. book publisher, owned by France's Lagardere,
instead asked Amazon to immediately withdraw "sanctions" on its
books. Amazon's reply to Hachette's response: "We call baloney."
At the center of the highly charged dispute is the price
Amazon can charge for e-books. Earlier this year, Amazon delayed
delivery of some Hachette titles, including sought-after print
versions and, at one point, it removed a pre-order option for
"The Silkworm," by Harry Potter author J.K. Rowling writing as
Amazon, in a letter to authors and agents seen by Reuters on
Tuesday, portrayed its proposal as a windfall for writers.
Amazon also said it tried to re-negotiate terms with
Hachette in January, but heard nothing back until it began
cutting back print inventory and reducing discounts on its
"Unless Hachette dramatically changes their negotiating
tempo, this is going to take a really long time," Amazon said in
the letter. It reiterated key points in a separate statement
later on Tuesday.
"Hachette is part of a $10 billion global conglomerate," it
said. "It wouldn't be 'suicide.' They can afford it."
What's clear is "they absolutely want their authors caught
in the middle of this negotiation because they believe it
increases their leverage," Amazon said. "Our offer is sincere.
They should take us up on it."
Amazon's actions have alienated authors including
top-sellers James Patterson and Malcolm Gladwell, who mocked the
situation in a spoof video posted on Slate.com this week.
Both companies have remained quiet on details of the talks.
During a July 1 panel discussion at the New York Public Library,
one literary agent likened the situation to waiting for surgeons
to finish operating on a loved one.
When the Amazon letter was written to authors, the
e-commerce giant had not yet broached the revenue proposal with
Hachette. Typically, Amazon, Hachette and authors would share
digital book sales in agreed-upon proportions.
Lagardere has said Amazon.com accounts for some 60 percent
of Hachette's digital sales.
"Hachette authors would get 100 percent of the sales price
of every Hachette e-book we sell. Both Amazon and Hachette would
forego all revenue and profit ... of every e-book until an
agreement is reached," the letter said.
Amazon's proposal needs Hachette's consent. Should the
publisher agree, Amazon said it would return to normal levels of
on-hand print inventory, normal pricing in all formats, and
pre-order options for books that have not yet gone on sale would
The Journal and the New York Times first reported on
Amazon's proposal on Tuesday.
(Reporting by San Francisco newsroom; Editing by Andrew Hay and