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The Pirahna-Filled South American River

Recently I completed an online course at Humber College called “Ebook QA: Digital Literacy for Editors,” with instructor Laura Brady. One our assignments (due October 9, 2014) was to “reflect on the behemoth that is Amazon.” This is what I wrote:

As a former bookseller, I see Amazon as a predator in the marketplace. I recognize that it cannot be ignored, but nor can any schoolyard bully with the means to buy any shiny bauble he covets. Having worked in book publishing for a little over ten years, I can view the industry as both an insider and a consumer. Convenience and competitive pricing often makes purchase decisions simple: Oh, that item is so cheap and it’s just a click away. I don’t even need to put pants on! Just pull out my credit card, give my info…

While Amazon doesn’t have a monopoly in online book retail, it is perceived as the first place to go when you want a book and the Kindle the only reader you need. Its influence is so pervasive that many forget the many devices that came before, such as the iLiad (see Robert Sawyer’s blog post with photos). In fact, early on in his book Burning the Page Jason Merkoski Amazon employee and ebook “evangelist” makes no mention of the iLiad, the Sony reader, or the rest; indeed, his scripture extols his boss, Jeff Bezos, as the Genesis of ebooks. Strange: In the 1968 book and film 2001: A Space Odyssey Arthur C. Clarke and Stanley Kubrick depict an astronaut reading from a digital device. Bezos was nowhere to be seen. An obvious oversight.

Bezos sees himself as an innovator not unlike Steve Jobs. In an interview with Michael Enright on CBC’s Sunday Edition , journalist and author Richard Brandt (One Click: Jeff Bezos and the Rise of Amazon) disputes this, comparing Bezos to Walmart founder Sam Walton. A difference I would make between Amazon and Walmart is that while Walmart wants to sell lots of stuff in exchange for money, Amazon wants to sell lots of stuff in exchange for information. The company got into the book business because books are easy to ship. In his New Yorker article, “Cheap Words,” George Packer writes, “Bezos said that Amazon intended to sell books as a way of gathering data on affluent, educated shoppers. The books would be priced close to cost, in order to increase sales volume. After collecting data on millions of customers, Amazon could figure out how to sell everything else dirt cheap on the Internet. (Amazon says that its original business plan ‘contemplated only books.’).” And they did. As Packer states, “Bezos had realized that the greatest value of an online company lay in the consumer data it collected.”

Amazon has gone on from selling books to publishing them. There is no “gatekeeper” rummaging through her inbox or slush pile looking for the “voice of a generation,” “an epic saga,” or a “gripping, unputdownable page-turner.” No, there is simply an upload button. Okay, it’s not quite that simple, but it’s not as hard as having a manuscript acquired by a traditional publishing house. Indeed, you don’t even have to edit the thing! That’s a lot of books. Wait, scratch that. That’s a lot of content. All of which can be yours for a low, low price. And so easily, too. Just 1-ClickTM away on millions Kindles around the world.

That is, of course, if the content is in MOBI format. Otherwise, you’re cut off. No libraries, no PDF manuals, no borrowing an ebook from your mum who uses a Kobo, or your American cousin who scored a Nook on Black Friday. Amazon’s proprietary software has not only changed reading, it has changed book culture. It sought to change that when it bought Goodreads. (Full disclosure: I’m on Goodreads. I joined before it was bought out because it has great mobile interface.) There is another similar site called LibraryThing. In May 2006, AbeBooks (specializing in used and hard-to-find books) bought 40 per cent of the company. In December 2008, AbeBooks was swallowed up by Amazon.

Publishers have to play nice with Amazon, too. If not, Amazon will take its bat, ball, and buy button and go home. Hachette’s just the latest victim of this tactic.* When Macmillan dared to question pricing in 2010, its buy button disappeared. With Melville House, a small publisher in Brooklyn, things got sinister:

In 2004, when Melville House was just getting started, [co-owner, Dennis] Johnson’s distributor called him and described his negotiations with Amazon as being “like dinner with the Godfather.” Amazon wanted a payment without having to reveal how many Melville House books were sold on the site. (Amazon rarely makes its sales figures public, using bar graphs without numbers in presentations.) “‘Fuck you’ was my attitude,” Johnson said. “‘They’re bluffing—I’m going to call their bluff.’ I’m a working-class kid. I come at this from ‘This is my company, you don’t come in here.’” Johnson, who remains one of the few people in publishing willing to criticize Amazon on the record, contacted reporters, and Publishers Weekly ran a story. By the next day, the BUY buttons had disappeared from Melville House’s titles on Amazon.com. Not long afterward, the Book Expo was held at the Javits Center, in Manhattan. Two young men in suits approached Melville House’s booth and pointed fingers at Johnson. “When are you going to get with the program?” they asked. The men were wearing Amazon nametags.

Before the impasse, Amazon had represented eight per cent of Melville House’s sales, more than Johnson could afford to lose. So he capitulated. “I paid that bribe”—he wouldn’t disclose the amount—“and the books reappeared.”

As I mentioned, I am a former bookseller. For nearly ten years, I worked part-time at Book City in the Beaches. It had its ups and downs, but sales numbers always sent a chill. I lost count of how many times customers (not regulars) would compare our prices with Amazon’s or would ask to pay the US price. One particularly galling Christmas, some customers would come in and scan the books to compare with the Amazon app, then buy it online right there in front of the staff! The logic being if Amazon could sell books so cheap, then it must be a scam and the fat-cat publishers were making millions on the poor readers’ backs. Low-ball ebook pricing simply contributes to this myth. (Meanwhile, I had just been laid off from Key Porter Books, which went bankrupt.) In March 2014, eighteen of us were laid off from Book City—eighteen of thousands of “elitist” minimum-wage bookshop clerks

Now I’m a freelance editor (I can’t lay myself off, right?) who’s trying to write a novel. I’m also trying to write short stories destined for ebooks. My normally clear-eyed view of things is jaded by Amazon. Yes, many if not most readers have a Kindle. It’s almost the only way to get an ebook out there; Kobo simply doesn’t have the same market share. I want to play ball, but unless a bunch of open-source code monkeys break in, the only kid in the schoolyard is the bully and he owns all the gear.

*Hachette and Amazon have since come to an agreement.

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About Muse Ink

Toronto-based freelance editor | feminist nerd | hobbyist photographer | former bookseller

3 responses »

  1. Good column. You’re mostly right. I do compare Amazon to Walmart, but Walmart itself has become a predator. There are many stories about how it has screwed competitors and even potential partners, driving them out of business. That’s Amazon.

    My main point is that Jeff Bezos is no Steve Jobs. He does not have Jobs’s talent and imagination to produce great products.

    He is a brilliant and ruthless businessman, and every move is calculated to further Amazon’s success and turn it into the most powerful entity on the Internet. He does not worry about who might be harmed in the process, with one exception — his customers.

    This seems enigmatic, but is not. His business sense tells him that success ultimately comes from keeping his customers happy. And they are. One of the things that keeps them happy is very low prices. He does that in large part by selling products at very thin margins.

    He also does one other thing brilliantly: he doesn’t care about his shareholders. Almost every public company manages quarter-to-quarter to keep shareholders happy, and that is not always in the customers’ best interests. It means raising prices (especially if you’re a monopoly, which Amazon is), failing to invest in updating products, failing to invest in the future.

    Bezos cannot be voted out by shareholders, so he ignores them. He makes the investments in Amazon’s future and takes risks. He is willing to run the company at a loss in order to develop this online selling model and succeed long-term.

    He also screws his suppliers, hence the war with Hachette and others. By the way, I think he started the Hachette war because he thinks the right price point for ebooks is lower than the publishers want, and he’s probably right. Lower the price and you more than make up for it in volume–until you hit the point of diminishing returns. Bezos is willing to experiment with that, traditional publishers are not. And a lot of my books are sold electronically. His authors may just benefit from that. Having a lot of great authors benefits customers and Amazon.

    Also, he does collect information about customers. The good side to that is he can find things his customers really want and offer them, sometimes in special sales. Every online retailer does this. There is no evidence that he sells our information to anyone outside Amazon. That’s bad for customers and he would be sharing a valuable asset. It’s not soething I worry about.

    I would not want to work for Bezos, compete with him, or be a supplier. Those people all get screwed. But I do not mind him selling my books, and I like buying from him. He’s less dangerous to customers than most public companies today.

    Reply
  2. I would like to add one more thing. I hate what Amazon is doing to bookstores. But the big box retailers are the ones most easily hurt, because they have always competed mainly on prices, and you can’t beat Amazon at that game. But local retailers are making a comeback by offering something Amazon cannot: personalized, person-to-person service. I shop as often as I can at Bookshop Santa Cruz, which is doing well, even though I pay higher prices. It provides a valuable service to the community. The one thing I cannot get the store to do, however, is carry my books on its shelves!

    Reply
    • Thank you for such thoughtful and thorough comments! And I agree that perhaps in a ultimately free market, he’s brilliant. But as you know, free comes at a price that customers will have to pay one way or another. It’s an idea I need to work through in order to articulate properly, but it’s connected to your remarks about local bookshops (and retailers in general). As for the shop carrying your books, it might be worth your while to ask the manager/book buyer directly. Have they carried your books in the past?

      Reply

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