Is Amazon Evil, or Is It Just Business?

With all the upheaval in bookselling, there seems to be a growing distrust and backlash towards Amazon. Borders imploded, B&N is struggling with their physical stores, independent bookstores are disappearing, and Amazon is waiting with open arms for any lost consumers. The anti-Amazon discussions boil down to two main arguments; the idea that as convenient as Amazon is, buying “local” is worth the higher costs, and the idea that Amazon is just plain evil. I understand the “buy local” argument, but the “Amazon as an evil entity sent to suck the life from the competition” argument is, to put it bluntly, completely insane.

Sadly, it’s not one that comes from the outskirts, but straight from the Author’s Guild themselves!

Here is the opening of what the Guild had to say about Amazon last week (found via Teleread):

Our article from two weeks ago, Publishing’s Ecosystem on the Brink: The Backstory, and similar articles spur frequent comments online that Amazon is simply reaping the rewards of its innovation, that its growing dominance of book publishing is merely a demonstration that the free market is functioning as it should. This isn’t really what’s been happening.

Useful innovation should of course be rewarded, but we’ve long had laws in place (limits on the duration and scope of patent protections, antitrust laws, stricter regulation of industries considered natural monopolies) that aim to prevent innovators and others from capturing a market or an industry. There’s good reason for this: those who capture a market tend to be a bit rough on other participants in the market. They also tend to stop innovating.

Amazon’s first Kindle, released in November 2007, was certainly innovative, but its key breakthrough wasn’t any particular piece of technology. Sony had already commercialized e-ink display screens for handheld e-books in September 2006.  (E Ink, a Cambridge company co-founded by MIT Media Lab professor Joseph Jacobson developed the displays used by both companies.) Amazon’s leap was to marry e-ink displays to another existing technology, wireless connectivity, to bring e-book shopping and downloading right to the handheld device.

Amazon’s innovation, in other words, was to untether the Sony device and put a virtual store inside it. This is no small achievement, and Jeff Bezos’s particular genius seems to be his ability to grasp the transformative potential of this sort of thing long before others do, just as he saw the potential of databases and the Internet to facilitate shopping for books and the potential for one-click shopping to ramp up online sales before most others had caught on.

Amazon’s reward for developing the wireless e-reader should have been that it would become a significant vendor of e-books and earn a profit commensurate with the value it added to the publishing ecosystem. Whether it would then continue to be a significant e-book vendor should have depended on whether it continued to innovate and provide good service to its customers. Amazon’s reward should not have included being able to combine its wireless e-reader, deep pockets, and an existing dominant position in a related, but separate, market — the online market for physical books — to prevent other vendors from entering the e-book market. Amazon’s reward as an innovator, in other words, shouldn’t be getting to wall itself off from competition.

 The entire article is worth reading, though I recommend having a table handy to rest your jaw, lest it drop all the way to the floor in horror as the Author’s Guild argument unfolds. Summed up, the Guild believes that Amazon is anti-competitive, and they mainly cite the MacMillan showdown over ebooks and Amazon’s low pricing as the reasons. I’ll get to pricing in a moment, but it boggles my mind that the Guild has the nerve to call out Amazon for their anti-competitive practice of pulling MacMillan titles but doesn’t address the Agency Model or the wave of anti-competitive ebook pricing that came with it. As a refresher, Amazon refused to sell MacMillan titles in protest of the unified agency-style pricing being proposed by Apple and five major publishers (of which MacMillan was one). Essentially, every time you notice an ebook is priced higher than the paper book, it’s likely because of Agency pricing. Did Amazon behave badly by pulling the titles briefly? Probably. But you cannot discuss that showdown without pointing out that the consumer was hurt worst of all, and that a hurt consumer doesn’t buy books, whether Amazon sells them or the Guild’s beloved Barnes and Noble. Amazon has never pretended they are anything other than a for-profit company. The Author’s Guild claims to be an advocate for writers, but it’s hard to see how they can address one of the biggest controversies in book pricing and not acknowledge that it may have harmed the writers they represent.
Apparently writers also feel that way. I thought this comment from an author to the Guild’s article was very, very enlightening:

Re: Amazon. A lot has been written about Amazon, other publishers, independent bookstores, but not much about the product producers..the authors. I sympathize with everyone, but this is my experience as an Amazon author.A funny thing happened on the way to 2012.The day after Christmas—December 26, 2011—my book, “How to Succeed at Aging Without Really Dying.” rose to #79 on Amazon’s list of 100 top sellers, all genres. If you’ve never heard of it or me, I’m not surprised.
This slim book of humorous essays satirizing the perils and pleasures of seniordom arrived with little fanfare in April 2010 . It was one of the first books published by  the nascent Amazon/Encore Publishing Group. A  PR campaign resulted in some radio interviews where I was repeatedly asked to what I attributed my overly long life. I felt sad answering, “a sense of humor,” because if longevity was tied in with humor, these folks’ days were numbered. There were also book talks and signings at local (CT) luncheons, libraries and community meetings. The galley edition was sent to all media that covered the AARP crowd (it was a first book by an 82 year old author.) A few reviews were written on and offline.Independent bookstores made no secret of how they felt about carrying a book published by their arch enemy, Amazon, and with the exception of an occasional Barnes and Noble brick and mortar, where it could be found on the black crepe “”Aging” shelves, “How to Succeed—“ could be ordered but not picked up at your neighborhood bookstore, if one remained.In the year and a half, following publication, sales of the book were less than spectacular. It had been included in a few Amazon promotions, as a gift book for Mother’s Day; at other times bundled with another humor book or a manual on the rites of death in the Belgian Congo. Whatever. The mention would produce a spike in sales that month, but the highest rank for the hardcover prior to December ’11 was in the high 800’s.The Kindle edition, released at the same time as the hardcover, to my surprise, fared somewhat better. Remember, the Kindle had only been introduced a few years before, and I didn’t think the older crowd would accept no less embrace the new technology. Wrong. The e-book ranked either 1,2 or 3 in the essay category and/or humor, and/or aging and, following promotions in both January and May 2011,  more than 200 e-books were sold.The hard cover was a different story. Despite being offered more than once at a bargain price, and some excellent 5 star reviews on the Amazon site, sales of this version, could only be described as sluggish. Some weeks 1 or 2 copies sold; some weeks, 12. It was hard to find a month where even 25 copies had been sold either wholesale or through Amazon.Then it happened. In October, 2011, following a Kindle promotion of selected e-books, and inclusion as one of “20 Memoirs About Transformation” in a MORE Magazine online article, 1550 Kindle copies were sold. And in December, Amazon sent out a mailing: Year End Deals with the cover of, “How to Succeed—“ representing the category of Unusual & Eclectic. Bingo. The week before Christmas, the hardcover edition of “How to Succeed—“ sold out. Amazon shipped more than 440, and more than 100 people were waitlisted. Courtesy of POD, over 250 copies were sold and shipped in the second week of January.

My book was an ”overnight success.” Not because it was prominently displayed on a table in a bookstore, or because it won critical acclaim from esteemed journals or because it was touted by established book distributors. Aside from a few hundred books I signed at readings and appearances, “How to Succeed at Aging Without Really Dying” was pictured, described, promoted and sold purely and simply online.

I’m sorry for the plight of the independent bookseller, and I hope they will have a continuing role in the sale of books. But for me and thousands of other authors whose sole purpose is to have our work published and read by as many people as possible, this new technology has created a greater market for books than the publishing world has ever known. And I think it’s time we stopped apologizing for it.

This sums it up better than I ever could. There’s a reason authors publish through Amazon, there’s a reason Amazon is successful. They know how to sell books. The fact that they know how to sell books better than their primary competition isn’t evil, especially to writers who benefit from those skills. Book sales are in a tailspin, and the answer isn’t to castigate the company SELLING BOOKS. This tends to be counterproductive to supporting the authors who write the books.

And while the commenter only touches upon this, I’ll say it outright: Amazon is doing less damage to authors than the games Amazon’s competitors are playing. Essentially the Guild, B&N, and various independent bookstores want authors to sacrifice the immediate sales boost of working with Amazon because there’s a long-term benefit to other stores if Amazon is weakened. The problem here is that they’re acting as though the authors’ best interests (selling books and building an audience) aren’t important here. Sure, authors are necessary to write books and produce things to be sold, but why should they act in their self-interest and desire to make money from their writing? It’s almost insulting, because the arguments the Author’s Guild gives for why Amazon is evil are extremely poor, and only serve to ask authors to sacrifice, and ask consumers to accept the party line about price fixed ebooks, without consideration for how anything else has ever harmed consumers and authors in the short history of ebooks.

As I said above, we’re going to talk pricing. This one admittedly is less cut and dry. I read a great article at Forbes a few weeks ago, and spent a great deal of time thinking about it while I was on vacation. In a nutshell, the author of the Forbes piece explains he feels guilty for shopping with Amazon sometimes, since even though it saves him money it takes money away from his local area. This I understand, and it’s something I wonder about often as well. I’ve been known to consciously not purchase items locally to save money at Amazon, and yes, Sarah and I are young and trying to save, but we do want to see our local community stores remain strong.

It’s tough, because this is a two-way street. A local business can’t demand that I shop with them out of loyalty due to geography, and I can’t expect that a local business cut their margins to compete with a website that doesn’t have the same overhead expenses. In the end, for me, it comes down to service. Amazon can recommend a book based on my prior shopping history, but a good bookseller can sell me a book I would never have considered based on the description. I can order sneakers online, but the local running store will take the time to fit my feet and spend a half hour while I try on every shoe in the store. So when I am trying to make buying decisions, I see it as more than just a price factor, it’s also the service. If a local place will cost more but gives me amazing service, it’s worth paying more. But they need to make an effort. There’s a florist in my town that consistently has snarky messages about shopping locally, how they only sell flowers (and not lawnmowers or groceries), etc. They’re funny messages, and that’s good. What’s bad is their hours: 8am to 5pm during the week. Know when I shop for flowers for Sarah? On my way home from work, usually around 5:30 to 6. So I have lived in this town for 3 years, and never set foot in the local florist’s shop. It’s not because I love buying plants from A&P and Shop Rite, it’s because they’re open when I am heading home from work, and the florist is not. No amount of funny, eye-catching signage is going to  change the fact that even my bank has more convenient hours than this florist. So while yes, sometimes I feel guilty for not supporting a local business, I can’t rearrange my life to support a business that doesn’t try very hard to accommodate their customers. As I said, it’s a two-way street.

I bring up the local shopping and pricing issue because in the end it’s intertwined with the Author’s Guild issues. They’re attacking Amazon for being dominant and successful, and Amazon’s success is tied to the fact that they have trained customers to look for lower prices and convenience online over local stores. The Guild is resisting change, and lashing out at the biggest player instigating those changes. However, and I can’t say this enough times, it’s insane and hypocritical to call Amazon out for anti-competitive practices while not criticizing MacMillan and the other publishers raising and fixing ebook prices by 30%. And while the author whose comment I quoted above didn’t get into it too deeply, the Guild should be equally angry with Barnes and Noble for refusing to sell books published through Amazon/exclusive to Kindle, if they’re going complain about anti-competitive practices. Again, the people who are being hurt here are authors and consumers, not by Amazon marketing or publishing a book, but by someone else refusing to sell that book. Refusing to sell those books isn’t going to change Amazon’s market position, that requires working hard to win over consumers. Amazon isn’t holding a gun to my head, or anyone else’s head, demanding we all order from for all our shopping needs. It’s not a conspiracy, it’s capitalism. Amazon is better at selling than Borders was. Someday someone will be better at selling books than Amazon is. Something tells me the Author’s Guild needs to read less Philip K Dick and more Adam Smith.

So that’s my take on the Author’s Guild and other attacks on Amazon (and feel free to replace Amazon with Apple, Google, Best Buy, or any other company that’s ever successfully become top in its field). What’s your position on Amazon, competition, and buying locally? Sound off in the comments!

Categories: eBooks, Editorials, Rants and Raves

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3 replies

  1. I kind of look at this whole thing about the same I look at Walmart.  Walmart is aggressive at getting everyday low pricing.  They want to provide a better service than the mom and pops could and they generally do.  However, Walmart only carries what the masses will buy.  That local store can carry the same stuff as Walmart, but 9 times out of 10 Walmart will beat them on price for the same identical item and that is because of the volume  of sales that Walmart does.

    Does that mean that Walmart is evil and local can’t compete?  Not in the slightest.  Local CAN compete by not just bringing the SAME product….but by bringing something even better.  For example, Walmart would never carry ice cream made by one of our local companies, Jeni’s Splendid Ice Creams.  Jeni, on the other hand, is VERY successful even though there’s about 10-15 Walmarts here in Columbus because she focuses on something that the other companies can’t: unique flavors made from ONLY the best ingredients.  Jeni makes the effort to get only the best ingredients and every ingredient she uses is either Fair Trade or Locally grown ingredients.  Jeni’s ice cream is more expensive, but she has been so successful that she’s been able to open other stores with 9 locations in Columbus and 2 in Tennessee!  Jeni provides a product that is superior to almost ANY ice cream that Walmart carries and it is worth every dollar you pay…at least in my opinion! :-)

    Book sellers need to start thinking like Jeni.  They need to provide a superior service to Amazon.  They also need to look at hyper local things.  For example, how about a bookstore that focuses on books written ONLY by local authors?  Put this kind of bookstore in an Airport or Tourist type setting and it could do very well.  If not that, then how about providing a second to none experience?  Sell books, but bring in some local artisans or a local coffee shoppe.  Maybe provide a service that Amazon can’t.  Make it worth the trip to the bookstore by providing an experience.  Don’t just sell and do what Amazon does and then complain you can’t compete.

    Amazon isn’t evil either.  Amazon’s system allows authors that would never get a book deal from a publisher be published and get exposure.  I do not know a single writer that wouldn’t be happy to get MORE to ALL of the profit and not have to give it to a publisher who just puts it on paper.  Amazon’s system has leveled the playing field….just as the web did for almost every other type of content….but for books.  What’s wrong with that?

  2. It’s funny that people who have exclusive rights to their work of art – to its distribution and pricing – are calling a Amazon anti-competitive. For example, these very authors should have the right to refuse Amazon selling Kindle versions of their books. They are just the pot calling the kettle a pan.

    • What’s funnier is that it’s not even the authors, it’s the organization purporting to represent the authors. Very few authors are vocal about Amazon in a negative way (unless they are railing against ebooks as a whole). Most people who want to sell books recognize pragmatically that if you want to sell books, Amazon is a good friend.
      Why the Authors Guild hates them so much to the point of vitriol is beyond me.