Monday, August 31, 2009

French open war against Google, Amazon

The CEO of French publisher Hachette Livre has declared war on both Amazon and Google’s efforts to commoditize (and perhaps disintermediate) book publishing, according to a front page story in Monday’s FT (quoted by Teleread, Barron’s, GigaOM etc. etc.). (Even the commentary en Français quotes the FT original).

Arnaud Nourry has two objections to the price-cutting American cultural imperialists. First, Amazon is selling best-selling books in the Kindle edition at $10 — less than the wholesale price. Since this Kindle pump-priming strategy is obviously not sustainable, Nourry is willing to say in public what American publishers (who perhaps fear Amazon) will not:

So, one day, they are going to come to the publishers and say: ‘by the way, we are cutting the price we pay.’ If that happens, after paying the authors, there will be nothing left for the publishers.
I remember back to 1998 when teaching the Amazon case — and writing my own case — we debated whether book publishers would disintermediate retailers or whether retailers would disintermediate publishers. I think this would be a good Five Forces question for MBA students: why is Amazon threatening to disintermediate publishers while the converse threat never got off the ground?

French publishers (including Hachette) are also hoping that a French court will toss out Google’s 10-month old settlement for giving away out-of-copyright books. The goal would be to force Google to negotiate more favorable terms with French (and perhaps other) publishers.

So in both cases, the French publishers don’t like commoditization of information distribution. Since such commoditization is inevitable, I guess they’re hoping to secure for themselves a tollkeeper role rather than being disintermediated by the big bad Americans.

My European history isn’t very good, but I don’t recall the French winning any wars against the Americans — only alongside the Americans (including their final victory over the English.) Still, fighting on home turf, under Napoleonic law, with Gaullist-inflamed passions against American cultural imperialism, I would bet $20 (not $500) that they’ll get the outcome they seek and extract additional payments from Google. The only wildcard is whether the Obama administration will intervene on behalf of the organization whose employees represented its 5th largest group of 2008 campaign contributors.

No comments: