Playing The Role Of The Devil: Amazon.com

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good-vs-evil

The Amazon vs. Hachette dispute continues to grab headlines. But as it does, it appears to be less about a simple contract renegotiation over pricing, and more about The Big 5 publishers holding onto their highly profitable roles as gatekeepers to the industry. Corporate publishing, however, doesn’t want to give up their long-held power and money tree (who ever does?), and has launched a full frontal assault, casting Amazon as the Darth Vader of publishing. Their campaign amounts to an emotional appeal full of disinformation, which in some circles, has been surprisingly effective.

I knew somebody once that sold life insurance. He had been trained to use something called, “Power Phrases.”  Power phrases were brief sentences that, on the surface, just seemed to make so much sense that a potential life insurance buyer would accept it at face value. Here are just a few of the most often repeated power phrases I’ve heard about Amazon:

James Patterson: “The quality of American literature will suffer” (ostensibly because of Amazon)…

This argument positions The Big 5 as some sort of superhero, protecting the reading public from sub-standard quality books. And clearly, it’s easy to find self-published books with poor covers, inadequate editing, and other problems. Amazon is in fact giving authors a platform through which they can publish what many would consider low-quality work.

I just finished reading Patterson’s Kill Me If You Can. It came up on a Google search as one of his best. My take? A run of the mill thriller, with an irrelevant sub-plot of graphic incest. I wouldn’t recommend Kill Me, and it would never come to mind as a shining example of American Literature. That said, a number of people on Amazon gave it 5-star reviews. To each his own. Which is exactly the point.

Remember the scene in Footloose where the town council was burning books from the school library? Reverend Shaw Moore (John Lithgow) stops them, saying (essentially), “Who appointed you guardians?” and, “What happens when you’re done with these?” Perhaps someone on that fictional town council would have burned Patterson’s Kill Me If You Can, even though there was clearly a market for it. Where do you draw the line?

Why do we need mega-corporations, taking ever-increasing cuts from authors, while steadily raising book prices for readers, acting as gate-keepers, deciding what the rest of us get to read? The quality of American Literature will be enhanced by letting as many authors as possible throw ideas into the pool, and counting on the best rise. Removal of gatekeepers will result in discovery of more good ideas, not less.

But Amazon has a monopoly. That’s bad, right?

According to Forbes, Amazon only has about 30% of the book retailing market. Can you have a monopoly with only 30% share? Regardless of the actual number, the courts have held that simply having a large market share is not illegal. Using market share to raise consumer prices is illegal. Amazon is the single driving force in the industry driving prices lower, not higher.

According to one estimate (chart: 2012), the Big 5 publish about two-thirds of all books in the US. And they are the ones that have been forcing prices higher. In fact, a federal court held last summer that the Big 5 colluded with Apple to drive eBook prices higher. Just who is it that has the power of a monopoly? Clearly, corporate publishing has been restricting writer’s access to the system, limiting payouts to those that do gain access, and increasing book prices for readers.

But Amazon is putting bookstores out of business, aren’t they?

Significant numbers of indie bookstore have closed. We’ve also seen Borders close, and Barnes and Noble seems shaky. However, it appears that most of the indie closures were brought on by the mega-book retailers (Borders and B&N). If anything, it appears Amazon may be taking share from the mega-stores, and the indies are experiencing a resurgence. It makes sense that they would. There are some things that physical book stores can do that Amazon cannot. Indie’s path to success lies in emphasizing these things.

Okay, but if Amazon continues to grow, the might be in position to do bad things some day!  

The Amazon vs. Hachette dispute continues to grab headlines. But as it does, it appears to be less about a simple contract renegotiation over pricing, and more about The Big 5 publishers holding onto their highly profitable roles as gatekeepers to the industry. Corporate publishing, however, doesn’t want to give up their long-held power and money tree (who ever does?), and has launched a full frontal assault, casting Amazon as the Darth Vader of publishing. Their campaign amounts to an emotional appeal full of disinformation, which in some circles, has been surprisingly effective.

I knew somebody once that sold life insurance. He had been trained to use something called, “Power Phrases.”  Power phrases were brief sentences that, on the surface, just seemed to make so much sense that a potential life insurance buyer would accept it at face value. Here are just a few of the most often repeated power phrases I’ve heard about Amazon:

James Patterson: “The quality of American literature will suffer” (ostensibly because of Amazon)…

This argument positions The Big 5 as some sort of superhero, protecting the reading public from sub-standard quality books. And clearly, it’s easy to find self-published books with poor covers, inadequate editing, and other problems. Amazon is in fact giving authors a platform through which they can publish what many would consider low-quality work.

I just finished reading Patterson’s Kill Me If You Can. It came up on a Google search as one of his best. My take? A run of the mill thriller, with an irrelevant sub-plot of graphic incest. I wouldn’t recommend Kill Me, and it would never come to mind as a shining example of American Literature. That said, a number of people on Amazon gave it 5-star reviews. To each his own. Which is exactly the point.

Remember the scene in Footloose where the town council was burning books from the school library? Reverend Shaw Moore (John Lithgow) stops them, saying (essentially), “Who appointed you guardians?” and, “What happens when you’re done with these?” Perhaps someone on that fictional town council would have burned Patterson’s Kill Me If You Can, even though there was clearly a market for it. Where do you draw the line?

Why do we need mega-corporations, taking ever-increasing cuts from authors, while steadily raising book prices for readers, acting as gate-keepers, deciding what the rest of us get to read? The quality of American Literature will be enhanced by letting as many authors as possible throw ideas into the pool, and counting on the best rise. Removal of gatekeepers will result in discovery of more good ideas, not less.

But Amazon has a monopoly. That’s bad, right?

According to Forbes, Amazon only has about 30% of the book retailing market. Can you have a monopoly with only 30% share? Regardless of the actual number, the courts have held that simply having a large market share is not illegal. Using market share to raise consumer prices is illegal. Amazon is the single driving force in the industry driving prices lower, not higher.

According to one estimate (chart: 2012), the Big 5 publish about two-thirds of all books in the US. And they are the ones that have been forcing prices higher. In fact, a federal court held last summer that the Big 5 colluded with Apple to drive eBook prices higher. Just who is it that has the power of a monopoly? Clearly, corporate publishing has been restricting writer’s access to the system, limiting payouts to those that do gain access, and increasing book prices for readers.

But Amazon is putting bookstores out of business, aren’t they?

Significant numbers of indie bookstore have closed. We’ve also seen Borders close, and Barnes and Noble seems shaky. However, it appears that most of the indie closures were brought on by the mega-book retailers (Borders and B&N). If anything, it appears Amazon may be taking share from the mega-stores, and the indies are experiencing a resurgence. It makes sense that they would. There are some things that physical book stores can do that Amazon cannot. Indie’s path to success lies in emphasizing these things.

Okay, but if Amazon continues to grow, the might be in position to do bad things some day!

The three biggest threats, as proposed by the establishment, would be Amazon cutting payouts to authors, restricting access to books, and increasing prices of books for consumers. But consider:

1. Royalty rates for authors at Amazon can be as high as 70%. Royalties for traditionally published authors typically top out at 17.5%, and are often much lower.
2. Amazon has stopped discounting prices of some Hachette books, and discontinued the ability to pre-order others that will be published in the future. It seems reasonable, given they don’t know if they’ll even be able to deliver those books, and on what terms, as long as negotiations are underway. On the other hand, indie bookstores almost always refuse to carry any book published through Amazon or subsidiaries. They are doing that now, and are unapologetic about it. Where’s the outcry?
3. Again, the Big 5 have worked consistently to increase book prices. They’re doing it right now. And we’re supposed to disregard what they’re doing now, for what Amazon might do someday?
As a relative newcomer on the scene, I’m stunned to see Amazon cast as the bad guy by many of the people who stand to benefit from Amazon’s impact in the marketplace. There is an entire sub-industry selling books and seminars to authors, to show them how to get a contract with an agent, and how to get a publisher to actually agree to publish their book. There are seemingly infinite stories of writers that work for years, and never see their work published. There are stories about declining advances, contracts slanted increasingly in the publisher’s favor, and authors stuck in contracts, and unable to do anything about it (think about many of the similar stories you’ve heard about rock bands stuck in contracts over the years). And yet, many seem to prefer the mess they’re in now to embracing change that may become less than perfect at some point in the future.

Authors should be free to choose whatever service providers work best for their given situation. If an author feels the Big 5 present the best overall package of services, have at it. But authors should be just as free to act as their own general contractor, and sub-contract out services like editing and formatting. Outside mega-selling authors like Patterson or King, I fail to see the case for incurring the enormous costs of choosing the corporate publishing route.

Any business model is viable only as long as it provides value to its customers. For the Big 5, and for Amazon, their customers include writers and readers. Amazon understands this, and is growing precisely because they provide value to both. Rather than expending enormous effort needed to try to convince us that the status quo is “good enough”, the Big 5 should divert their energies to discovering new and creative ways to provide value. It’s the only sure way for them to survive.

In the end, Amazon is neither angel nor devil. They’re simply a creative provider of needed services. As a new writer, I can spend my time perfecting my craft, rather than learning how to write agent query letters. I’ll always need a way to get my books into the hands of readers. Right now, Amazon gives me the best way to do that. Perhaps someday, one of the Big 5 (or someone else) will come up with a better way. I’d love to see it.

(OP 6/3/2014)

 

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