Amazon is a global superstore, like Walmart. It’s also a hardware manufacturer, like Apple, and a utility, like Con Edison, and a video distributor, like Netflix, and a book publisher, like Random House, and a production studio, like Paramount, and a literary magazine, like The Paris Review, and a grocery deliverer, like FreshDirect, and someday it might be a package service, like U.P.S. Its founder and chief executive, Jeff Bezos, also owns a major newspaper, the Washington Post. All these streams and tributaries make Amazon something radically new in the history of American business. Sam Walton wanted merely to be the world’s biggest retailer. After Apple launched the iPod, Steve Jobs didn’t sign up pop stars for recording contracts. A.T. & T. doesn’t build transmission towers and rent them to smaller phone companies, the way Amazon Web Services provides server infrastructure for startups (not to mention the C.I.A.). Amazon’s identity and goals are never clear and always fluid, which makes the company destabilizing and intimidating.
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It wasn’t a love of books that led him to start an online bookstore. “It was totally based on the property of books as a product,” Shel Kaphan, Bezos’s former deputy, says. Books are easy to ship and hard to break, and there was a major distribution warehouse in Oregon. Crucially, there are far too many books, in and out of print, to sell even a fraction of them at a physical store. The vast selection made possible by the Internet gave Amazon its initial advantage, and a wedge into selling everything else. For Bezos to have seen a bookstore as a means to world domination at the beginning of the Internet age, when there was already a crisis of confidence in the publishing world, in a country not known for its book-crazy public, was a stroke of business genius.
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Before Google, and long before Facebook, Bezos had realized that the greatest value of an online company lay in the consumer data it collected. Two decades later, Amazon sells a bewildering array of products: lawnmowers, iPods, art work, toys, diapers, dildos, shoes, bike racks, gun safes, 3-D printers. Amazon’s code of corporate secrecy is extreme—it won’t confirm how many Seattle employees it has, or how many Kindle e-readers have been sold—so it’s impossible to know for sure, but, according to one publisher’s estimate, book sales in the U.S. now make up no more than seven per cent of the company’s roughly seventy-five billion dollars in annual revenue.
Origins, though, leave lasting marks, and Amazon remains intimately tangled up in books. Few notice if Amazon prices an electronics store out of business (except its staff); but, in the influential, self-conscious world of people who care about reading, Amazon’s unparalleled power generates endless discussion, along with paranoia, resentment, confusion, and yearning. For its part, Amazon continues to expend considerable effort both to dominate this small, fragile market and to win the hearts and minds of readers. To many book professionals, Amazon is a ruthless predator. The company claims to want a more literate world—and it came along when the book world was in distress, offering a vital new source of sales. But then it started asking a lot of personal questions, and it created dependency and harshly exploited its leverage; eventually, the book world realized that Amazon had its house keys and its bank-account number, and wondered if that had been the intention all along.
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Amazon’s revenue multiplied every year. In the late nineties, an Amazon vice-president named Mary Morouse e-mailed her colleagues after a trip to visit publishers in New York. “We are certainly popular with them,” she wrote. “They rave about Amazon.com—both as a store/service and a great way to market books. There were several examples cited where Amazon.com ‘made’ titles. And they love our sales numbers.”
Publishers weren’t troubled that Amazon sold their books at dramatic discounts. They all wanted to collaborate with the Seattle upstart, and they used Amazon as an information resource; it was a vast improvement over the old green-bound copies of “Books in Print.” A New York marketing executive told me, “When Amazon came into the picture, metadata”—code numbers, Library of Congress categories, search keywords—“became an integral part of books.” A few farsighted publishers wondered if Amazon would eventually control so much of the market that it would stop selling books at cost and raise prices to become more profitable.
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Book publishers’ dependence on Amazon, however unwilling, keeps growing. Amazon constitutes a third of one major house’s retail sales on a given week, with the growth chart pointing toward fifty per cent. By contrast, independents represent under ten per cent, and one New York editor said that only a third of the three thousand brick-and-mortar bookstores still in existence would remain financially healthy if publishers didn’t waive certain terms of payment. Jane Friedman, the former Random House and HarperCollins executive, who now runs a digital publisher called Open Road Integrated Media, told me, “If there wasn’t an Amazon today, there probably wouldn’t be a book business.” The senior editor who met Grandinetti said, “They’re our biggest customer, we want them to succeed. As I recover from being punched in the face by Amazon, I also worry: What if they are a bubble? What if the stock market suddenly says, ‘We want a profit’? You don’t want your father who abuses you physically to lose his job.”
Publishers are less like abused minors and more like financially insecure adults who rely on the support of a bullying uncle. Their dependence breeds bad faith. “Privately, we berate Amazon,” the marketing executive said. “Yet we’re always trying to figure out how to work with them.”
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Penguin Random House and Barnes & Noble are hardly Davids to Amazon’s Goliath. “It’s like you turn into your enemy,” the head of one New York house said. “Publishers are in a bad position to be representing themselves as speaking for the artists.”
Lately, digital titles have levelled off at about thirty per cent of book sales. Whatever the temporary fluctuations in publishers’ profits, the long-term outlook is discouraging. This is partly because Americans don’t read as many books as they used to—they are too busy doing other things with their devices—but also because of the relentless downward pressure on prices that Amazon enforces. The digital market is awash with millions of barely edited titles, most of it dreck, while readers are being conditioned to think that books are worth as little as a sandwich. “Amazon has successfully fostered the idea that a book is a thing of minimal value,” Johnson said. “It’s a widget.”
There are two ways to think about this. Amazon believes that its approach encourages ever more people to tell their stories to ever more people, and turns writers into entrepreneurs; the price per unit might be cheap, but the higher number of units sold, and the accompanying royalties, will make authors wealthier. Jane Friedman, of Open Road, is unfazed by the prospect that Amazon might destroy the old model of publishing. “They are practicing the American Dream—competition is good!” she told me. Publishers, meanwhile, “have been banks for authors. Advances have been very high.” In Friedman’s view, selling digital books at low prices will democratize reading: “What do you want as an author—to sell books to as few people as possible for as much as possible, or for as little as possible to as many readers as possible?”
The answer seems self-evident, but there is a more skeptical view. Several editors, agents, and authors told me that the money for serious fiction and nonfiction has eroded dramatically in recent years; advances on mid-list titles—books that are expected to sell modestly but whose quality gives them a strong chance of enduring—have declined by a quarter. These are the kinds of book that particularly benefit from the attention of editors and marketers, and that attract gifted people to publishing, despite the pitiful salaries. Without sufficient advances, many writers will not be able to undertake long, difficult, risky projects. Those who do so anyway will have to expend a lot of effort mastering the art of blowing their own horn. “Writing is being outsourced, because the only people who can afford to write books make money elsewhere—academics, rich people, celebrities,” Colin Robinson, a veteran publisher, said. “The real talent, the people who are writers because they happen to be really good at writing—they aren’t going to be able to afford to do it.”
Passive Guy says “world of people who care about reading” is much, much larger than the literati of Manhattan or the readership of The New Yorker. Amazon and Kindle Direct Publishing have democratized the elitist and insular world of publishers and their pet authors.
PG also says that if, vis–à–vis Amazon, “publishers are less like abused minors and more like financially insecure adults who rely on the support of a bullying uncle,” they’re only experiencing treatment that authors have received from publishers approximately forever.
Books that are priced like sandwiches are godsends to most people who care about reading (as opposed to publishing or Barnes & Noble). The real problem with sandwich prices is that such prices don’t support all the New York publishing hangers-on in the manner to which they have become accustomed.
However, for the ever-increasing number of indie authors, sandwiches taste better than crumbs.