From Publisher's Weekly:
Publishers, for the most part, believe it is necessary to hold the line with Amazon--and refuse being too generous on discount terms and co-op--in order to ensure that various retailers can remain viable. In other words, publishers see caving into Amazon's demands on terms as a direct blow to smaller retailer players, and independent bookstores.
While Amazon helped to expand the market for books when it grew its online bookstore and jump-started the e-book market with its introduction of the Kindle, many feel Amazon is now focused on driving its competitors out of business. As the head of a major house put it: “Every nickel more we give Amazon will help them accelerate their efforts to put another independent out of business.”
Like a lot of authors, Amazon.com has done a lot for me. It's made it easier for readers to get my backlist, and it's allowed me to publish books that have gone out of print. As a reader, it's been even better - I can now get practically any book I'm interested in whenever I want. There have been several times - working on American Gun, for example - when that was critically important.
But at the same time, Amazon has hurt authors as well. The target in the dispute with Hatchette may be the publishing house, but the people who will really suffer are the writers who will lose royalties because they lose sales. That diminishes all writers, lowering their pay - which for most of us isn't all that much to begin with. It also makes it difficult if not impossible for other stores, on-line and off, to compete fairly. If you can only get a book from one place in the world . . . well, the implications are scary.