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Amazon’s Assault on Intellectual Freedom

15 March 2012

From writer and Wings Press owner Bryce Milligan via TeleRead:

There is an undeclared war going on in the United States that threatens the linchpins of American intellectual freedom. In a statement worthy of Cassandra, Noah Davis wrote in a Business Insider post last October, “Amazon is coming for the book publishing industry. And not just the e-book world, either.” When titans battle, it is tempting to think that there will be no local impact. In this case, that’s dead wrong. Amazon’s recent actions have already cut the sales of the small press I run by 40 percent. Jeff Bezos could not care less.

One recent battle in Amazon’s larger war has pitted it against a diverse group of writers, small publishers, university presses, and independent distributors. It is a classic David-and-Goliath encounter. As in that story, however, this is more than just pitting the powerful against the powerless. In this case, the underdogs have the ideas, and ideas are always where the ultimate power lies.

Wings Press (San Antonio, Texas) is one of the several hundred independent publishers and university presses distributed by the Independent Publishers Group (IPG), the second largest book distributor in the country, but still only a medium-sized dolphin in a sea of killer whales. In late February, IPG’s contract with Amazon.com was due to be renegotiated. Terms that had been generally accepted across the industry were suddenly not good enough for Amazon, which demanded discounts and practices that IPG—and all of its client publishers—could only have accepted at a loss. Yes, that does mean what it sounds like: To do business with Amazon would mean reducing the profit margin to the point of often losing money on every book or ebook sold.

. . . .

Ebook sales have been a highly addictive drug to many smaller publishers. For one thing, there are no “returns.” Traditionally, profit margins for publishers are so low because books that remain on shelves too long can be returned for credit—too often in unsalable condition. No one returns an ebook. Further, ebook sales allowed smaller presses to get a taste of the kind of money that online impulse buying can produce. Already ebook sales were underwriting the publication of paper-and-ink books at Wings Press.

. . . .

Having created numerous (seven or more) imprints of its own, Amazon has begun courting authors directly by offering exorbitant royalties if the authors will publish directly with Amazon. Among the financial upper echelon of authors, Amazon is paying huge advances. Among rank-and-file authors, not so. Here they are offering what amounts to glorified self-publication. The effect is to lure authors away from the editors who would have helped them perfect their work, away from the publishers and designers and publicists and booksellers who have dedicated their lives to building the careers of authors, while themselves making a living from the books they love. Even the lowly book reviewer has been replaced by semi-anonymous reader-reviewers. All these are the people who sustain literary culture.

. . . .

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 closely to see if this is a near miss or the beginning of extinction.

Link to the rest at TeleRead

Change can be hard. Stories and storytellers never go away, but the infrastructure for connecting storytellers with those who want stories is transient.

20th century publishing was essentially an industrial-age construct focused on mass-production and mass-distribution of physical goods in a complex system awash with middlemen. Internet-age publishing operates differently. Publishing “factories” are obsolete. Middlemen are falling like flies.

PG is never happy seeing anyone lose a livelihood, but capitalism is about creative destruction. There are other economic systems, but most of them seem to end up like Greece or Zimbabwe.

If you want to sell ebooks, you need lots of consumers with ereaders. Absent ereaders and a sophisticated online bookstore that makes it simple for customers to get the ebooks they purchase to their reader, the publishing business is back to the seemingly irreversible decline it was experiencing prior to widespread adoption of Kindles and Nooks. Remember that bookstores were closing and publishers were disappearing before Kindle ebooks.

PG doesn’t understand the small press business but wonders why any small publisher would use a distributor to deal with Amazon. If IPG mandates that publishers allow it to distribute ebooks if they want IPG to distribute printed books, it would seem that IPG’s contract terms are more the source of the problem than Amazon is.

It appears IPG imposes an extra cost for publishers to access Amazon’s ebook sales channel without providing any real value in that channel. Small publishers dealing directly with Amazon for ebooks seem to be generally pleased with the experience. For one thing they can get their books on the e-shelves of Amazon more easily than they can get them on the physical shelves of Barnes & Noble.

Amazon, Disruptive Innovation, Ebooks

41 Comments to “Amazon’s Assault on Intellectual Freedom”

  1. “The effect is to lure authors away from the editors who would have helped them perfect their work, away from the publishers and designers and publicists and booksellers who have dedicated their lives to building the careers of authors, while themselves making a living from the books they love. Even the lowly book reviewer has been replaced by semi-anonymous reader-reviewers.”

    And then Amazon is coming for your wives and daughters, and they have herpes and they’ll curdle your milk and make your eyeballs cross! Run away, everybody! Run away!

    Shees.

    • Hahaha! I know it’s ridiculous isn’t it?

    • Well, lots of people have herpes — that’s what cold sores are, after all. Don’t see what HSV has to do with morality, seeing’s how lots of people get it as kids from relatives who didn’t get the memo, or daycare smooches from fellow toddlers. :p

  2. This is the most laughable thing I have ever read. What over-emotional, nonsensical drivel.

  3. How dare Amazon offer authors an opportunity to make more money! The nerve! Yet another pathetic screed from the old guard, either adapt or die, it’s that simple IMO.

  4. brendan stallard

    “there are no “returns.”

    P.G.

    Lie, repeated later in the piece.

    “Amazon has begun courting authors directly by offering exorbitant royalties if the authors will publish directly with Amazon.”

    Big statement, no evidence.

    “glorified self-publication.”

    Oh, when if they did it with you, it would be MORE glorified and cost $14,000 a pop, where self pub on Amazon cost what $100/300?

    “The effect is to lure authors away from the editors who would have helped them perfect their work”

    Snicker.

    “All these are the people who sustain literary culture.”

    Sustain literary agents and IPG.

    Spinning and spinning and spinning around, painting the town, never going down!

    brendan

  5. You’ve got to wonder what publishing world they thought they were still living in. This kind of thing exasperates me to the point where I want to shout at my PC. For the past ten years or more, the vast majority of publishers have been only after the ‘stunning debut novel’ and haven’t cared tuppence about ‘building the careers of authors’. The key to their crocodile tears, of course, is in that phrase ‘making a living.’ I know dozens of writers, but I only know a scant handful of my fellow novelists who have ever ‘made a living’ from their work by conventional publishing.

    • Gordon Fridenberg

      I would be curious to know the ratio of writers who make a living in traditional publishing vs middle men who make a living in traditional publishing. I would be VERY curious to know the ratio of take home income of writers vs non-writers in traditional publishing.

  6. I believe the phrase ‘exorbitant royalties’ has a lovely ring and I fantasize about the day I might read such a headline.

    “Amazon showers R.E. McDermott with exorbitant royalties.”

  7. Maybe if you weren’t paying for an unnecessary distributor for your ebooks, Amazon’s terms might not be at a loss for you. It seems a bit hypocritical to point at Amazon as the bad guy but ignore the fact that IPG is taking a cut for distributing ebooks where they really bring very little or no value. What’s worse, IPG’s bread and butter is physical book distribution, so they have an inherent conflict in distributing ebooks anyway because their primary interests are in protecting the print model, which may well explain why publishers under IPG’s umbrella are moving ebooks at less than half the rate of the industry at large.

    I can understand the frustration at the serious changes in the industry, and the negative impact that’s having in some quarters, but this guy really lost me when he descended into the argument that Amazon is damaging literacy and culture by “prying” authors away from the editors, publishers, etc that he claims want nothing more than to nurture those same authors. For one thing, many, many writers don’t seem to need much prying to get away from the traditional culture he seems to revere, often using terms that equate to being freed from bondage and servitude in the process. Secondly, if your role truly does bring real value to the process, there will be a place for you, although maybe not the one you are accustomed to. If there’s not a place for you, then perhaps you weren’t quite as valuable as you thought you were.

  8. If you can’t say the word niggardly in public without fear of repercussions, that’s a bigger assault on intellectual freedom than Jeff Bezos selling some books which they don’t read, don’t edit and don’t care 2 hoots and a holler about until a reader complains that they think you misspelled “objets” which is a niggardly mindset anyway.

  9. If traditional publishing actually did as he claimed (“perfect their work”, “dedicated their lives to building the careers of authors”) then authors wouldn’t be fleeing publishing like rats from a sinking ship. If publishing actually provided the value they claim to and treated authors like valuable partners then no force in the verse would be able to pry authors away.

  10. I think part of the problem here is terminology, and I wish Amazon would change theirs.

    Amazon is not a “publisher”. (The fact that there are sub-elements of Amazon that are publishers doesn’t change that.) Amazon, as a whole, is a retailer — and, moreover, one that collapses the retailer and distributor functions into a single entities. The payments I get for sales of my ebook aren’t “royalties”, they are payments for goods delivered and resold. If I deliver rutabagas to the local supermarket, the supermarket will sell them to people who want rutabagas, keep some of the money, and pay me the rest. It’s no different on Amazon.

    On the other end, the Amazon process allows me and others to collapse “author”, “printer”, and “publisher” into a single entity. If there are “royalties” in the system, they are internal to that entity — I put on my “author” hat and write something; I then put on my “printer” hat and format it for uploading; then I put on my “publisher” hat and send it to the distributor-retailer. Wearing my author hat, I give myself (wearing my publisher hat) the right to publish my work; as publisher, I return royalties to myself as author. In that view, the royalty rate is 100% of net after costs of getting the book to market.

    Amazon provides the services of a retailer: stocking, advertising, collecting money from retail purchasers, &ct. For this they charge 30% of list price, which is a pretty small retail markup. That’s justifiable because Amazon’s costs for doing retail business are low on a per-item basis.

    I guess it’s just a matter of there not being a single, simple term for payments by a retailer to a supplier (other than “profit”, which is what it is, but the word seems to horrify a lot of people), so they picked “royalty” as the best approximation. I wish they’d use some other term. As it stands it’s misleading.

    Looking at it that way, it’s clear that what’s happening is people getting indignant at having their rice bowls kicked over. They really shouldn’t be taken all that seriously.

    Regards,
    Ric

    • Milligan is complaining in part about the Amazon imprints (which are publishers)–47North, Montelake, etc. I think the royalty that Milligan is complaining about is the advances and rates the Amazon imprints are offering authors.

      Milligan is also complaining about the Amazon retail too for squeezing his distributor.

      From his point of view, he is getting squeezed from both ends–Amazon retail is squeezing his profits and Amazon imprints are stealing his authors. He feels under siege.

      • Middlemen are universally needed. They are also universally hated. NOBODY is going to complain when the middlemen lose some of their power. The agent/publisher/distributor/retailer combination has been the middleman between authors and readers for a long time, and a snooty one at that. Its behavior was tolerated because there was no other real choice.
        But few people are going to mourn the middleman, especially when there is a shorter connection between readers and authors, shorter and a lot cheaper.
        I note there are still Walmarts out there.

    • Great dose of good sense. I’m getting a kick out of thinking of myself not as a writer/publisher, but as a greengrocer selling non-fiction yams.

  11. As a former academic and a constant consumer of academic writing (mostly for work) my first reaction to the idea of the death of the academic press was, “Oh no! You mean we’ll have to find another way to pay someone a ton of money for publishing papers that were researched, written and edited by writers who don’t get a single penny in royalties?”

    Academic presses are not as bad as the journals, but they could still do with being shaken up a bit. A new business model would do them a lot of good.

  12. This last paragraph really boggles my mind.

    “Amazon could have been a bright and shining star, lighting the way to increased literacy and improved access to alternative literatures.”

    Could have been? COULD have been? Seriously?

    “Alas, it looks more likely to be a large and deadly asteroid. We, the literary dinosaurs, are watching closely to see if this is a near miss or the beginning of extinction.”

    Sorry, sir, the asteroid is here. But the asteroid isn’t Amazon. It’s ebook technology, which Amazon didn’t invent. They just made it efficient and attractive. There’s no avoiding the movement from paper to ebooks. However, the dinosaurs of traditional publishing have it better than the real dinosaurs. Publishing still has a choice. They can either evolve or die. Unfortunately, this misguided fool seems to have chosen the latter.

    • The fact that he is “watching closely to see if this is a near miss or the beginning of extinction” tells you just how clueless this guy is. The writing has been on the wall for a while now.

      It’s interesting to see how people choose to ignore things. I remember this kind of denial happening back in 2005 and 2006 when I told people the housing market was going to crash. They laughed at me when I said it. Needless to say, they’re not laughing now.

  13. Writing is a business like any other and how the writer sells/distributes their work boils down to value proposition. Why is it that the Big 6 (and the writer of this article about small presses) never provide a value proposition to writers with hard numbers? They always justify their existence with phrases like “helping you with your career,” or being “curators of taste.” What a load of hogwash. If a publisher can’t provide a good value proposition to the writer compared to Amazon, etc. then that’s unfortunate, but that’s also what business competition is about. I recommend publishers try competing with Amazon and actually attempt to convince writers as to why they can offer a better value proposition.

  14. I’d say it’s a sign of a weak argument that a business disagreement is being characterized as an assault on intellectual freedom. Nobody is denying IPG the ability to sell these books – they could sell them, even to Kindle owners, without Amazon, if they’d give up DRM. Sure, it would probably cost them more than the “draconian” terms Amazon is asking (though we don’t know, because no one has actually mentioned any terms), but this isn’t about intellectual freedom.

  15. All of these rails against the Evil Empire are getting very, very tiresome.

    In the meantime, they do nothing to prevent the Empire from eating traditional publishing’s lunch, because traditional publishers are too lazy and inept to stop them.

    They have only themselves to blame.

  16. I flashed on Monty Python’s Nobody Expects the Spanish Inquisition.

    Authors, Amazon will now make you sit in the comfy chair and poke you with the soft pillows until you repent your heresy.

  17. Oh, the melodrama of it all. It sounds a bit like a slave owner at the end of the Civil War. “But, but, the slaves NEED us. They can’t just go out and get paid for their work! We’re the only ones who can guide them and lead them. They’ll be glorified self-workers. Darn that federal government for making them think they can go out on their own!”

    The only draconian terms I’ve seen in all of this mess is from the publishers. The only illegal behavior I’ve seen in all this is from the publishers (and Apple). The only people preventing thousands of authors from making an actual full-time living is the publishers.

    So I’m sorry Wings Press and IPG don’t like Amazon’s terms. I’m sorry if they have to take a loss. Maybe those publishers who just can’t afford to compete will disband and then I can hire them to freelance on my next book so that I can make sure to get it “perfect.”

    Bottom line – adapt or die. I bet the dinosaurs weren’t fans of the mammals, either.

    P.S. – Did anyone else see an Amazon Kindle ad on the page? I thought that was hilarious.

  18. I rather wish that IPG would give actual numbers on this contract they turned down. It would be interesting to see what they consider “taking a loss” would be.

    In the meantime, maybe they should approach Baen and see if they can get their ebooks sold through them? The SF ones, anyway, if they have any.

  19. Guys, guys, maybe we’re too hard on this guy. I mean, without the literary culture the big publishers curate and nurture, where in the world would we get our Snookie memoirs, Twilight fanfic erotica, and James Patterson books of the week?

    • Good point, Jaye. I don’t know how I live without those things. Oh, wait, yes I do. With art and literature abounding in my life. Much of it indie published.

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