The Amazon Effect

Posted on Jun 2, 2012

Photo by (CC-BY)

By Steve Wasserman

(Page 5)

James Marcus, now an editor at Harper’s Magazine, sees a particular irony in Amazon’s entry into book publishing. “When I first worked at Amazon in the mid 1990s,” he recalls, “we were advised to think of publishers as our partners. I believe this directive was in earnest. But even then, a creeping contempt for the publishing industry was sometimes discernible. Weren’t they stodgy traditionalists, who relied on rotary phones and a Depression-era business model? Well, the company is now a bona-fide trade publisher. There’s no predicting how these books will fare, especially with many retailers refusing to sell them (an embargo that won’t, of course, affect e-book sales, where Amazon still rules the roost). But Bezos may now discover that cutting out the middleman isn’t all it’s cracked up to be—that it’s surprisingly easy to fail in the neo-Victorian enterprise of publishing, especially when it comes to finding readers for worthy books. Perhaps it’s time for him to acquire a rotary phone, available in five retro colors and eligible for two-day Prime shipping on his very own site.”

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Amazon’s entry into publishing’s traditional casino is a sideshow. More worrisome, at least over the long term, is the success of Amazon’s Kindle Single program, an effort to encourage writers to make an end run around publishers, not only of books but of magazines as well. That program offers writers a chance to publish original e-book essays of no more than 30,000 words (authors agree to a bargain-basement price of no more than $2.99 in exchange for a 70 percent royalty and no advance). It has attracted Nelson DeMille, Jon Krakauer, William Vollmann, Walter Mosley, Ann Patchett, Amy Tan and the late Christopher Hitchens as well as a slew of lesser-known scribblers, some of whom have enjoyed paydays rivaling or exceeding what they might have gotten were magazines like Vanity Fair or The New Yorker to have commissioned their work. Royalties are direct-deposited monthly, and authors can check their sales anytime—a level of efficiency and transparency almost unknown at traditional publishers and magazines.

The boundaries are blurring all over publishing, as various actors have belatedly roused themselves to the necessities and blandishments of the online world. The literary agency William Morris Endeavor, for example, has launched 212 Books, an e-publishing program designed to showcase its clients, such as the estimable David Frum, a former speechwriter for President George W. Bush, whose first novel is wittingly called Patriots (first-serial rights have been placed with the Huffington Post). Endeavor is also bringing out as a direct e-book the hapless James Frey’s The Final Testament of the Holy Bible. J.K. Rowling, an empire unto herself, is releasing the Harry Potter series on her own terms and making it available through her own website, Amazon, Apple and every other conceivable digital “platform” in the known universe. Sourcebooks Inc., a medium-sized independent publisher based in Naperville, Illinois, is starting an online bookstore to sell its romance novels directly to readers for a monthly fee. Other creative online inducements for writers are being hatched at a number of publishers, including Little, Brown.

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Such efforts have scant chance of preventing Amazon from bulldozing any real or perceived obstacles to its single-minded pursuit of maximum clout. It is big enough to impose increasingly harsh terms on both its competitors and its clients. As reported by the Seattle Times, it has even begun to compel tiny indie publishers to abandon their traditional short discounts and embrace punitive larger trade discounts. When Karen Christensen of Berkshire Publishing Group refused, Amazon “stopped placing orders, affecting 10 percent of her business.”

The Independent Publishers Group, a principal distributor of about 500 small publishers, recently angered Amazon by refusing to accept the company’s peremptory demand for deeper discounts. Amazon promptly yanked nearly 5,000 digital titles. Small-press publishers were beside themselves. Bryce Milligan of Wings Press, based in Texas, spoke for most when, in a blistering broadside, he lambasted Amazon, complaining that its actions caused his sales to drop by 40 percent. “Amazon,” he wrote, “seemingly wants to kill off the distributors, then kill off the independent publishers and bookstores, and become the only link between the reader and the author…. E-book sales have been a highly addictive drug to many smaller publishers. For one thing, there are no ‘returns.’… E-book sales allowed smaller presses to get a taste of the kind of money that online impulse buying can produce.  Already e-book sales were underwriting the publication of paper books-and-ink at Wings Press…. For Amazon to rip e-book sales away is a classic bait-and-switch tactic guaranteed to kill small presses by the hundreds…. There was a time not so long ago when ‘competition’ was a healthy thing, not a synonym for corporate ‘murder.’ Amazon could have been a bright and shining star, lighting the way to increased literacy and improved access to alternative literatures. Alas, it looks more likely to be a large and deadly asteroid. We, the literary dinosaurs, are watching to see if this is a near miss or the beginning of extinction.”

But Amazon isn’t the only player willing to play hardball. Random House, for example, quietly began in March to charge public libraries three times the retail price for e-books, causing Nova Scotia’s South Shore Public Libraries to call for a boycott and accuse the German-owned conglomerate of unfair e-book pricing. It gets worse: according to the New York Times, “five of the six major publishers either refuse to make new e-books available to libraries or have pulled back significantly over the last year on how easily or how often those books can be circulated.”

Jacob Stevens, the managing director of Verso, the distinguished independent press spawned by the London-based New Left Review, says of Amazon: “Having our backlist instantly and immediately available has so far outweighed the problems. For me, the problems become worse as Amazon moves from ‘just’ being a big player in selling books to vertical control of entire sections of the industry. It all gets a bit Big Brother. It’s easy to imagine Amazon muscling existing publishers out of the picture altogether and inviting authors and agents to deal directly with them. What would that do for the richness and diversity of our culture?”

And yet Amazon gives $1 million a year, in grants of about $25,000 apiece, to a wide range of independent literary journals and nonprofit organizations, including the Kenyon Review, the newly launched online Los Angeles Review of Books and even One Story, the nonprofit literary magazine devoted to the short story, which recently celebrated its tenth anniversary by honoring Ann Patchett, an outspoken critic of Bezos’ business practices and a co-owner of an independent bookstore in Nashville. Amazon’s contributions outstrip by a large factor any advertising dollars sent my way by traditional publishers during the nearly nine years I ran the Los Angeles Times Book Review. Of course, such largesse—less than a pittance of its $5 billion cash reserve—may be meant to ensnare its most articulate critics in a web of dependency. If so, Amazon will likely be surprised, as the editors of such journals have well-deserved reputations for biting the hand that feeds, and they prize their contrarian sensibilities.

Another bookselling veteran made uneasy by Amazon’s colossal success is Andy Ross, who—having succeeded the venerable Fred Cody as the owner of Cody’s Books in Berkeley until online competition forced its flagship location to close in 2006, after fifty years in business—now works in Oakland as a literary agent. “Monopolies are always problematic in a free society, and they are more so when we are dealing with the dissemination of ideas, which is what book publishing is about,” he told me. “In the realm of electronic publishing, Amazon until recently controlled about 90 percent of the market, a monopoly by almost anyone’s definition. Most people bought their e-books in the proprietary Kindle file format that could only be purchased from Amazon and only read on the Kindle reader that was manufactured by Amazon. Other makers of e-book readers designed them to accept the open-source e-pub format that allowed customers to have a wider choice of retailers to supply them with e-books. Since then, Amazon’s market share has been declining, but 60 percent of all e-books in America continue to be sold by Amazon in the Kindle file format. Amazon simply has too much power in the marketplace. And when their business interest conflicts with the public interest, the public interest suffers.”

It’s a fair point—one that also plagues Peter Mayer of Overlook Press: “All sides of this argument need to think deeply—not just about their businesses, but also about their world. I grew up in a world in which many parts together formed a community adversarial in a microcosmic way but communal in a larger sense: authors, editors, agents, publishers, wholesalers, retailers and readers. I hope, worried as I am about the current trajectory [of publishing], that we do not look back one day, sitting on a stump as the boy does in Shel Silverstein’s The Giving Tree, and only see what has become a largely denuded wasteland.”
 

Steve Wasserman was the book editor of the Los Angeles Times and Truthdig. He also served as editorial director of Times Books and publisher of Hill & Wang, an imprint of Farrar, Straus & Giroux. He is a past partner of the Kneerim & Williams Literary Agency and is currently editor at large for Yale University Press.

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