Home » Amazon, Big Publishing, Joe Konrath » Zombie Publishing Memes #1 – Amazon is a Monopoly

Zombie Publishing Memes #1 – Amazon is a Monopoly

20 August 2015

From Joe Konrath:

This is the first in an ongoing series that Barry Eisler and I are writing. When we talk about zombie memes, we’re referring to arguments that just won’t die no matter how many times they’re massacred by logic and evidence. Because we’ve been shooting down so many of these memes for so long, and because they just keep reanimating (often repeatedly from the same people), we thought it would be useful to create an online source for easy (and time-saving) reference.

We’ll be tackling these memes one at a time over the course of the next few weeks and then publishing a downloadable compendium, so if you’ve encountered a zombie meme that you’d like to see addressed, please mention it in the comments. And if you’re aware of articles out there on this topic, please refer us to them so we can include links.

We’d also like to ask for your help in spreading this cure. When you see the meme “Amazon is a Monopoly” anywhere on the Internet, please link to this post. When fighting the walking dead, a group is always helpful.

Amazon is a Monopoly.

This meme is incoherent, mistaken, and perverse.

Incoherent, because the “evidence” of Amazon’s monopoly power is always that Amazon is hard on its suppliers, not on its customers (no one can argue with a remotely straight face that Amazon is anything other than exceptionally customer-centric). If the evidence is that a company is squeezing suppliers, it might be evidence of something called monopsony, not of monopoly.

Mistaken, because Amazon has numerous competitors, including Apple, Google, Walmart, Barnes & Noble, Books A Million, Kobo, Smashwords, Scribd, Oyster, and more than 2000 independent bookstores (with new indies opening all the time).

It’s important to remember that US antitrust laws were adopted to protect not competitors but competition. Monopolies (and monopsonies) are not themselves illegal — what is illegal is abuse or unfair acquisition of monopoly power. Ultimately, antitrust laws are intended to protect the consumer, and it’s difficult to argue that low prices, innovation, and an ever-expanding variety of products are bad for consumers (though valiant efforts are constantly made).

. . . .

Perverse, because it fails to point out there actually is a monopoly in publishing — or call it a quasi-monopoly, or oligopoly, or cartel. This is the New York Big Five (the cartel is right there in the name). The Big Five actually was prosecuted by the Justice Department for price-fixing under the Sherman Act. The Big Five settled; Apple fought and then lost. For any lawyers out there, note that price fixing is per se illegal under the Sherman Act. Meaning it is the very definition of abuse of monopoly power.

Of course, even if we didn’t know about the per se price collusion, we might surmise by its singular lack of innovation that the Big Five is functionally a single entity. Until Amazon pioneered online bookselling, digital books, and self-publishing, the Big Five was content to subsist on monopoly rents, developing nothing new or disruptive in generations.

In describing the Big Five as a cartel, by the way, we don’t mean to be insulting. We doubt even OPEC looks in the mirror and sees a cartel. Most likely, OPEC perceives itself as a humble organization beneficently managing prices for the good of society overall. This is just human nature, and there’s no reason to believe the Big Five views itself less attractively than does any other cartel.

Moreover, the Big Five has always itself functioned as a monopsony, abusing its author suppliers. How else to explain the forever-term contracts, the twice-yearly annual royalty payments, the lockstep low digital royalties, the outlandish rights grabs and draconian non-compete provisions? Could practices like these persist except by the abuse of vastly asymmetrical take-it-or-leave-it power exercised by a Big-Five controlled system against authors?

. . . .

The tendency of some writers to draw support for the validity of a zombie meme by citing previous manifestations of the same meme might offer some insight into the resilience of zombie memes generally. Zombie memes are based on emotion, not on evidence or logic (in fact, they are contravened by evidence and logic). It may be that finding other people who share your fears and prejudices has the effect of validating and reinforcing those fears and prejudices. After all, it’s easier to ignore evidence and logic when you can point to other people who seem to be feeling the same things you are.

. . . .

Ultimately, the “Amazon is a monopoly” meme is attractive to some because it seems to paint a veneer of objectivity and reason over what is fundamentally a subjective emotional reaction.

Link to the rest at Joe Konrath

Here’s a link to Joe Konrath’s books and Barry Eisler’s books. If you like an author’s post, you can show your appreciation by checking out their books.

Amazon, Big Publishing, Joe Konrath

33 Comments to “Zombie Publishing Memes #1 – Amazon is a Monopoly”

  1. And, if Amazon becomes a monopoly, it will be because the competition don’t want to compete. I was looking for something on one of their Canadian competitors’ web sites yesterday, and it was just hopeless.

  2. The problem with Joe, at least in this piece, is that he takes way to much space to make a point that would be better received and remembered in fewer words.

    • Can’t get much shorter than, “Amazon isn’t a monopoly,” and people still don’t get that. Joe might as well spread his wings a bit.

    • Hey, I told Barry it could be trimmed!

      But, seriously, in order to deal with the “Amazon is a monopoly” zombie meme, there are a lot of points to consider, so this post is longer than the 20+ more posts we’ll be releasing soon.

  3. Amazon is not a monopoly, and will probably never become a true monopoly for ebooks or any other form of “books,” but they have consolidated a great deal of control over their authors and are seeking to increase it. Here is what I find disturbing:

    The exclusivity requirement for their KU subscriptions service. This is a blatant grab for market power.

    The convoluted and ever-changing payment scheme for KU, which is zero-sum at best, and completely non-transparent at worst. If Amazon has a target borrow rate, why not fix their payments around that? Why not tell their authors how much they’ll be paid before their books are sold? In any other supplier relationship, this would be insane.

    Lack of transparency and data sharing, making it much more difficult for authors to decide whether it’s best to opt out of KU or stay into it. Again, it’s all about control: information shortages make it difficult for authors to control their own business.

    Rankings and algorithms that disproportionately boost KU books (in KU1, “ghost borrows” counted as full sales even before the 10% threshold was crossed) and punish authors that are not enrolled in KU.

    Certainly Amazon has a right to run their business as best they see fit. But when it comes to stuff like this, it’s no longer about a mutually beneficial business partnership: it’s about control, pure and simple. As much as Amazon has done to make self-publishing a viable career path, this type of behavior is clearly meant to limit our independence and empower Amazon at readers’ and writers’ expense.

    • “The exclusivity requirement for their KU subscriptions service. This is a blatant grab for market power.”

      Which each writer has a choice not to join — or quit after I think it’s 90 days?

      Vs signing a contract from a trad-pub with their life+70 and no complete clauses? Now that’s a real ‘blatant grab for market power’ as you say.

      If KU is that ‘evil’, don’t use it. Oh, wait, it ‘might’ make your ebooks more visible and make you money? Gee, isn’t that the same reason the trad-pubs cry about the ‘Amazon monopoly’ but won’t pull their books from it?

      • Actually, I have. Not a single one of my books is in KU, which I consider to be a bad deal for readers and writers.

        Also, you’re grossly oversimplifying my argument with the “if Amazon is evil” jab. That’s almost as much of a simplification as saying that Amazon is a monopoly, and perhaps just as much a straw man.

        • “Actually, I have. Not a single one of my books is in KU, which I consider to be a bad deal for readers and writers.”

          Congrats on that, good for you for standing up for your beliefs. Strangely enough, it seems not a few readers find KU useful enough to use it — and if they’re to be believed — some writers are doing quite well with it, even better a couple claim since KU2.

          “Also, you’re grossly oversimplifying my argument with the “if Amazon is evil” jab. That’s almost as much of a simplification as saying that Amazon is a monopoly, and perhaps just as much a straw man.”

          Do I? Oversimplifying your argument? You complain of the lack of transparency and data sharing from Amazon’s KU but don’t compare it to a company that is giving the writers the transparency and data sharing you seem to expect from Amazon. Could that be because Amazon actually gives out more data than any trad-pub ever thought to (or would dare to).

          And you complain that Amazon has too much control and ‘information shortages’ keeping writers from knowing what to do. Once again, please give us an example of a company that gives out what you seem to want/need/expect of Amazon. Please, I’d like to know of this place.

          You say you don’t like ‘straw men’ but then you hold up KU as all that’s wrong in every way because you see it as ‘punishing authors that are not enrolled’ …

          .

          (found my old Lazarus Long notebook and this fits just too well for this thread …)

          Certainly the game is rigged
          Don’t let that stop you; if you don’t bet you can’t win.

          • I would love to make my books available on KU, even with all the warts of the program, but exclusivity is too onerous and impinges too much on my independence. If the exclusivity requirement were lifted, most of my objections about KU as a power grab would go away.

            Just because Amazon is more transparent than other publishers/retailers doesn’t mean that they are as transparent as they should be. Good is not merely the absence of evil.

            • Just because Amazon is more transparent than other publishers/retailers doesn’t mean that they are as transparent as they should be.

              How transparent should Amazon be, and by what standard do we determine if it is sufficiently transparent?

            • Retailers make exclusive deals all the time. Amazon doesn’t impinge on anyone’s independence. You have a choice. You either go exclusive with them or you don’t. You’ve chosen not to. I believe that was an independent choice. And you can still sell your books on Amazon.

              If you’re interested in making your books available to subscribers I believe there are other companies out there. Again, your choice.

    • The exclusivity requirement for their KU subscriptions service. This is a blatant grab for market power.

      Of course it is. That is what firms do in a capitalist system. They strive for market share. That’s competition. Independent authors are doing the same thing. We can now see market share flowing from traditional authors to independent authors. That’s market power. Lose the market power game, and you go do something else.

      The convoluted and ever-changing payment scheme for KU, which is zero-sum at best, and completely non-transparent at worst.

      Ever changing? How many times has it changed?

      Show of hands. Who has ever paid money into KU? If not, then it isn’t zero-sum.

      Lack of transparency and data sharing, making it much more difficult for authors to decide whether it’s best to opt out of KU or stay into it. Again, it’s all about control: information shortages make it difficult for authors to control their own business

      So what? Authors have to make the same kinds of decisions zillions of people make in business everyday. They manage risk, and do it with imperfect information.

      What’s so special about authors that they should be coddled? Things are difficult for authors? So what? Things are difficult for everyone in business.

      And transparency? The fact that a supplier wants to know stuff not covered by contract imposes no obligation on anyone to provide that information.

      But when it comes to stuff like this, it’s no longer about a mutually beneficial business partnership: it’s about control, pure and simple.

      It’s not a partnership. It never was. That’s one of those Zombie Memes. Amazon is a retailer. Authors are suppliers. Just like with widgets.

      • So business in general is not about making partnerships, and competition in the marketplace is really just everyone striving to become as monopolistic as possible? What a strange world you live in.

        • Agree. Business in general is not about making partnerships unless that is the specific model chosen by the parties.

          Competition in the market place is about securing as much market share as possible. That does not mean securing a monopoly. Monopolies are incredibly difficult to secure, and even more difficult to maintain. Monopolies have to control supply, limit access to other players, and limit production.

          This is not a strange world. It’s the economy we operate in everyday. It’s very familiar. We can observe it.

          • Competition in a free market is about producers and consumers finding the intersection between supply and demand, and altering those curves by making better products more efficiently. Market power is about breaking that system, thus moving away from the free market equilibrium.

            • A free market is about producers and consumers finding a way to trade goods for money.

              Which Amazon seems to be doing quite well …

              Competition is two or more trying to get a bigger share of that trading.

              Which Amazon seems to be doing quite well …

              Market power is how much control/say one says in how things are traded/sold.

              Which Amazon seems to be doing quite well …

              You too can have Amazon help you buy/sell things, but it’s their ball/bat/playing field, so we have to play by their rules.

              Don’t like the rules? Plenty of other playing fields out there. Though you may not like their rules either (I hear Amazon’s KU exclusive rules are nothing compared to what most trad-pub will do to you!)

              ((But there sure seem to be a lot of spectators watching those Amazon fields and buying things from those selling out there!))

            • Uh, market power is the result of competing effectively.
              It is the second most important goal of every well-run business, right after rewarding your investors/owners.

              You might have little market power if you’re a startup or also-ran or wield lots of it if you create a new market but only dead companies have zero power.

            • Competition among producers or vendors is an effort to win the consumer’s dollar, and ensure a competitor does not. That effort is a contributing factor to supply curves. Supply curves then intersect with demand curves to deliver prevailing prices and units sold.

              So, supply curves reflect competitive efforts, and are a partial function of competitive efforts, but it is incorrect to say supply and demand curve intersection defines competition.

              Market power is about breaking that system, thus moving away from the free market equilibrium.

              Equilibrium is always changing as market conditions change. It indicates a healthy, competitive market.

            • Competition in a free market is about producers and consumers finding the intersection between supply and demand, and altering those curves by making better products more efficiently.

              Competition among producers or vendors is an effort to win the consumer’s dollar, and ensure a competitor does not. Aggregate those winnings and we get market share.

              That effort is one contributing factor to supply/demand curves. Supply curves then intersect with demand curves to deliver prevailing prices and units sold.

              So, supply and demand curves reflect competitive efforts, and are a partial function of competitive efforts, but it is incorrect to say supply and demand curve intersection defines competition.

              Note that altering those curves changes the equilibrium point,

              Market power is about breaking that system, thus moving away from the free market equilibrium.

              Equilibrium is always changing as market conditions change. It indicates a healthy, competitive market.

  4. It must be nice to have so many sales you don’t have to worry about money, allowing you to write this drivel day in and day out.

    If you see an Amazon business article online, it’s a good sign it’s time to open up your current work in progress and get back to work.

    Don’t waste your time on this.

    • Get to dah choppah!

    • Get to da choppah!

    • So, you’re a writer, but you don’t waste your time on what is happening in the publishing industry?

      If you were a farmer instead, would you check the weather forecast? Or ignore the weather and just keep planting stuff?

      • Joe, meet Greg. Greg likes to pop in here and tell everyone that they should be writing, then he disappears back into his cave where he never, ever looks up the definition of “irony.”

      • Allow me to translate, Joe:
        “Mommy, make the mean man go away!”

        Me, I’m looking forward to the full set of zombie memes and collecting all the trading cards 😉 For extra fun, someone with graphic skill should come up with cute little icons (making fun of whatever meme it is) that can be posted to rebut the zombies. For the monopoly one, I would suggest a riff on the “I am Spartacus!” scene, only with “I am a Monopoly!” text instead.

      • You’re a high-class writer, Joe, I’m not. I can’t afford to waste my time like you can. You don’t need to worry about the rent, I do. You can follow this stuff and spout off on it and it won’t cost you anything. If I did that for a month or so and neglected my work, like you have admitted to doing – you said on August 15 that you “haven’t released anything new in over a year” – then I’d be out of business.

        You’re a high-class writer, Joe, I’m not.

    • It must be nice to have so many sales you don’t have to worry about money, allowing you to write this drivel day in and day out.

      I have so many sales I can sit on my porch and shoot wind chimes with my pellet gun. I play the Hallelijah Chrus for Christmas pageants.

  5. I completely agree the idea that Amazon is a monopoly is completely entrenched.

    I adored the concept of the zombie meme. This:

    “When we talk about zombie memes, we’re referring to arguments that just won’t die no matter how many times they’re massacred by logic and evidence.”

    Awesome! That’s hilarious, and wonderful.

    I hope that gets coined as a phrase into popular culture. It deserves it. 🙂

  6. Well, today was a no-writing day for me. Grocery shopping and then dropping my mother at the doctor’s office took most of the day. I’m hot, tired and ready for a nap, but I wanted to check in on the latest news from da man, PG. 😀

  7. Walmart is a monopoly. Walmart treats their employees terribly. Walmart is killing off smaller businesses. See an ad hominem pattern here?

    Sidenote: Did you hear about the nursery store upset that Walmart sold their bark mulch cheaper?

    Sidenote 2: Did you hear about hear the mulch company upset that the nursery store was selling it’s bark mulch cheaper?

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