Amazon is bad for writers and book lovers

 Amazon’s tactics against the book publisher Hachette are not just bad for publishers.  They are bad for writers.   And, in the long run, they are bad for lovers of books.

What’s going on is part of a familiar pattern.   A powerful company uses its power to squeeze the profit margins of weaker companies.   This means the weaker companies can’t afford decent pay for the people who produce the work.   But the producers can’t get at the powerful company because it is buffered by the intermediaries.

That is how it works with fast-food franchisers such as McConald’s, their franchisees and low-wage fast-food workers.   That is how it works with electronics companies such as Apple and Sony, their sub-contractors in Asia, and the low-paid sweatshop workers.  That is how it works with Walmart, its suppliers and their low-paid employees (aside from what Walmart pays its own employees)

And this is how, apparently, it is going to work with Amazon, book publishers and authors.

Jeff Bezos of Amazon refuses to provide good service to buyers of Hachette books unless the publisher submits to his terms for distributing their books.  In an earlier dispute with the publisher Macmillian, he simply deleted the “buy” button from all Macmillan books listed on Amazon.

One of my favorite authors, Charles Stross, who is published by Hachette, explained what is at stake.

Amazon’s strategy … is to squat on the distribution channel, artificially subsidize the price of e-books “dumping” or predatory pricing to get consumers hooked, rely on DRM on the walled garden of the Kindle store to lock consumers onto their platform, and then to use their monopsony buying power to grab the publishers’ share of the profits.  If you’re a consumer, in the short term this is good news: it means you get cheap books.

But if you’re a reader, you probably like to read new books.  By driving down the unit revenue, Amazon makes it really hard for publishers—who are a proxy for authors—to turn a profit.  Eventually they go out of business, leaving just Amazon as a monopoly distribution channel retailing the output of an atomized cloud of highly vulnerable self-employed piece-workers like myself.

At which point the screws can be tightened indefinitely.  And after a while, there will be no more Charlie Stross novels because I will be unable to earn a living and will have to go find a paying job.

via Charlie’s Diary.

There is an old tradeoff:  Speed.  Price.  Quality.  Pick any two.  The business model being pushed by Jeff Bezos would pressure publishers into signing up authors who are prolific and cheap.  That literature has a value in and of itself doesn’t enter into his thinking.  As Stross said:

It’s hard to argue against low prices, but consider this: texts are a cultural medium, and the production of new texts is not something amenable to automation or mass production. I can’t go out and hire twenty people off the street and install them in a cubicle farm extruding Charlie Stross branded fiction product.  I can’t even hire twenty SF novelists and train them to do that.

Our product is bespoke and highly idiosyncratic.  It used to be the case that cultural activities like writing fiction benefited from some barriers against marketization, but a corollary of the global free trade regime we live in these days is that no field is exempt.

via Charlie’s Diary.

The free market is intended to be an arena in which individuals and companies compete to provide better services at lower prices.   This is not what is going on between Amazon and Hachette.   What is going on is a test of power, which Amazon, because of its position, will probably win.

The governmental solution to Amazon’s practices is to enforce the Robinson-Patman Act of 1936 and other anti-trust laws.   The individual solution is to bypass Amazon in buying books.   I have done this for a long time because of Amazon’s abominable treatment of warehouse employees.

LINKS

Amazon: malignant monopoly or just plain evil? by Charles Stross.

A footnote about the publishing industry by Charles Stross.

Here’s Why Amazon Is More Ruthless Than Walmart by Jeffrey Pfeffer for Time.

Market power and the media baron by Ryan Chittum for Columbia Journalism Review.

A Quick Remedy for the Amazon-Hachette Fight? by Lina Khan for CNN.

What Amazon’s e-book strategy means by Charles Stross in 2012.

The Everything Store, Brad Stone’s book about Jeff Bezos and Amazon, probably is good.  I’ve read reviews, but not the book itself.

Tags: Amazon, Amazon.com, Charles Stross, Jeff Bezos