The dispute between Amazon and Hatchette seems like it's intractable. On the one side we have a retailer that wants a larger share of e-book revenues on the grounds that it bears more of the costs for sales and distribution, and on the other we have a publisher that wants to retain the larger share of the income for the intellectual property that it owns. Both sides seem to want to cut out the other, even though doing so would harm themselves. Amazon won't have a product to sell without the publishers, and Hatchette won't have access to as much of the market without Amazon.
Meanwhile, the customers and the authors are stuck in the middle. The customers see a monopolistic system with overpriced products, and the authors feel like they're getting the crumbs after the publishers and retailers are done feasting. Something is going to change, but it's not clear how or who will end up benefiting.
Of course, I have a solution.
It occurred to me while talking about this issue with some other authors at the Origins Game Fair this past spring. I got some confused looks, which usually tells me that either I'm way off in Loopy-land or that I'm not expressing myself clearly. In the hopes that it was the latter, I'll try and detail what I was thinking. If it's the former then hopefully my insane natterings will provide amusement for someone.
The Customer is the Problem
The core issue here is that people are, to some degree, inherently lazy and don't want to spend lots of time shopping for books. If there's a chance that they might save a huge amount on the price of a new book then they might check two or three online retailers to find the best deal. What they're not going to do is search through dozens of websites for the best deal when all of them have pretty much the same price. This is the core reason why Amazon has done so well. They essentially have ALL THE BOOKS, and do a reasonably good job with customer service. Most people don't bother with other online bookstores anymore - if it's not on Amazon then it must not be available.
So what we need is an online retailer that provides access to ALL THE BOOKS, can compete with Amazon, and can allow publishers (and authors) access to the customers in a way that lets them get a bigger share of the revenue. I think there's a way to do this.
Now Here's My Plan ...
For convenience I'll refer to our hypothetical online retailer as Fnordbooks. The first thing Fnordbooks needs is access to ALL THE BOOKS, because without that it will fail. The full listing of all of the books in print can be obtained by buying a subscription to a product logically called Books In Print. Bookstores, publishers, and the like buy access to this database, which tells them what books are out there, who publishes them, when they're coming out, etc.
That gets Fnordbooks all the details about the books. Add in a gaggle of geek programmers and now when a user goes to Fnordbooks.com they can enter a book title or author or keywords into a search and get back the full information about the book. So far, so good ... but they can't buy it yet.
For the next part we'll start by helping the publishers. Each publisher can list which books they want to sell, and at what price. Any publisher, big or small, could sign up. Even a self-publishing author could do it.
The trick is that they've got to do the actual shipping. Fnordbooks would act more as an intermediary, kind of like eBay or Amazon Marketplace. Fnordbooks takes the order, keeps track of the customer preferences and such, and processes the payments (taking a small cut). Fnordbooks would also keep track of customer's ratings of the publishers to encourage the publishers to ship in a timely fashion.
If a publisher doesn't want to handle the shipping themselves then they can make a deal with a third-party fulfillment service to handle that part. Maybe they'd get together with some other publishers to set up some kind of co-op. That would be up to them - Fnordbooks wouldn't really care who's actually shipping the book to the customer as long as it gets there.
Now that I think about it, e-books could be an exception in that Fnordbooks could handle the delivery as well. There isn't much more overhead in shipping e-books than there is in running the website and payment processing. Again, Fnordbooks would take a small cut of the price for this - not nearly the 30% that the big retailers are asking.
Here's the Trick
We need to remember that a customer isn't going to bother with a retailer that doesn't have ALL THE BOOKS. If Fnordbooks doesn't give the customer access to the book then they're going to go somewhere else, and stay there. So for all the books that Fnordbooks doesn't have a direct source to the publisher, it offers up a link to where the book can be bought through Amazon (and/or other big book retailers). Amazon has an "Associates" program where referral links provide a small cut of the price back to the associate who set up the link, so this fallback option would still provide a bit of income to Fnordbooks while allowing the customer to get what they want.
And Another Thing
Amazon doesn't carry every book. If Fnordbooks doesn't have a publisher supplying the books directly and Amazon doesn't carry the book, then Fnordbooks needs to go one step further. For those titles Fnordbooks would provide a link to WorldCat's listings of where the book can be found in a Library, and even where the books can be found online for free, such as Project Gutenberg. In this way Fnordbooks can provide access to more titles than Amazon - truly ALL THE BOOKS.
Lastly, I'd have Fnordbooks set up as a non-profit organization. It's not necessary, but it'd be nice to have a competitor to the big retailers that doesn't have profit as a main motive.
The way I see things, someone is going to do this sooner or later. Heck, Google Books is already partway there - see their listing for A Dwarven Cookbook for an example. It's only a matter of time before someone puts all the pieces together.