Amazon, a Friendly Giant as Long as It’s Fed
From The New York Times
Vincent Zandri hails from the future. He is a novelist from the day after tomorrow, when Amazon has remade the worlds of writing, printing, selling and reading books so thoroughly that there is hardly anything left besides Amazon.
Mr. Zandri, an author of mystery and suspense tales, is published by Thomas & Mercer, one of Amazon Publishing’s many book imprints. He is edited by Amazon editors and promoted by Amazon publicists to Amazon customers, nearly all of whom read his books in electronic form on Amazon’s e-readers, Amazon’s tablets and, soon, Amazon’s phones, an author of mystery and suspense tales, is published by Thomas & Mercer, one of Amazon Publishing’s many book imprints. He is edited by Amazon editors and promoted by Amazon publicists to Amazon customers, nearly all of whom read his books in electronic form on Amazon’s e-readers, Amazon’s tablets and, soon, Amazon’s phones.
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A few years ago he was reduced to returning bottles and cans for grocery money. Now his Amazon earnings pay for lengthy stays in Italy and Paris, as well as expeditions to the real Amazon. “I go wherever I want, do whatever I want and live however I want,” he said recently at a bar in Mill Valley, Calif., a San Francisco suburb where he was relaxing after a jaunt to Nepal.
While Mr. Zandri celebrates Amazon as the best thing to happen to storytellers since the invention of movable type, many other writers are denouncing what they see as its bullying tendencies and an inclination toward monopoly.
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At first, those in the publishing business considered Amazon a cute toy (you could see a book’s exact sales ranking!) and a useful counterweight to Barnes & Noble and Borders, chains willing to throw their weight around. Now Borders is dead, Barnes & Noble is weak and Amazon owns the publishing platform of the digital era.
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All of this angst and arguing is pushing forward a question: Is the resistance to Amazon a last-ditch bid to keep the future of American literary culture out of the hands of a rapacious corporation that calls books “demand-weighted units,” or an effort by a bunch of dead-enders and snobs to forestall a future that will be much better for most readers and writers?
Mr. Zandri, who 15 years ago had a $235,000 contract with a big New York house that went sour, has an answer.
“Everything Amazon has promised me, it has fulfilled — and more,” he said. “They ask: ‘Are you happy, Vince? We just want to see you writing books.’ That’s the major difference between corporate-driven Big Five publishers, where the writer is not the most important ingredient in the soup, and Amazon Publishing, which places its writers on a pedestal.”
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Amazon believes that publishers take too much of the money in producing a book and add too little value. In traditional publishing, the highest royalty a writer could get was 15 percent of the book’s price. With e-books, the royalty is 25 percent of net revenue, but Amazon feels that is still not enough. Mr. Zandri gets 35 percent, and self-published writers who use Amazon’s platform get more.
“Amazon believes the value exchange between publishers and authors is fundamentally broken,” said Scott Jacobson, who worked on the Kindle team at Amazon and is now at the Madrona Venture Group. “In a world where authors can hire their own editors, market their books through the web and social media, and get production and distribution through Amazon or other services, publishers will play a lesser role and their share of the economics will be diminished.”
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“If you charge high e-book prices, ultimately what you’re doing is making a slow, painful slide to irrelevancy,” said Russell Grandinetti, Amazon’s senior vice president for Kindle. “You have to draw the box big. Books don’t just compete against books. Books compete against Candy Crush, Twitter, Facebook, streaming movies, newspapers you can read for free. It’s a new world. It’s so important not to simply build a moat around the industry the way it is now.”
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“For most books, $9.99 creates more total revenue than $14.99,” Mr. Grandinetti said. “That means $9.99 creates more total dollars to share with authors.”
Amazon also argues that publishers like Hachette are ungrateful. They are generally doing well now, thanks to the fact that e-book income is bolstering their bottom line. And who made that e-book income possible?
“The truth is, Hachette is making dramatically larger profits on digital sales in large part thanks to Kindle, which has led the book business to a very healthy transition to digital, perhaps uniquely among media,” Mr. Grandinetti said.
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A decade ago, when all books were physical, Amazon would run the numbers on its suppliers and would notice that one publisher was out of line — perhaps not paying the same amount to Amazon to promote its titles as some of its peers.
So Amazon would talk with the publisher, try to make it see reason. Sometimes it did not. Publishers were arrogant back then, said Randy Miller, who worked at Amazon from 1999 to 2006.
“A lot of people had been in business for 30 years,” he said. “They said: This is what we’re going to publish, this is the price, you have no leverage, we control the content.”
They had no clue that the world was changing. If a publisher did not give Amazon what it wanted, some of its books might disappear from the site. The writers would go wild.
“There were particular authors — we’d meet with them, have dinner with them — and they’d say, ‘I always check Amazon to see where my book is,’ ” Mr. Miller said. “They’d do it over their morning coffee. So you knew.”
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Another antitrust suit, this time supporting the publishers rather than going after them, might fill the bill nicely.
“I can see the emotional argument against Amazon, but I have a hard time seeing it prevail in court,” said Geoffrey A. Manne, executive director of the International Center for Law and Economics in Portland, Ore. “The argument that there is an appropriate number of competitors, and one is not it, almost never flies in the United States.”
Link to the rest at The New York Times and thanks to Buffy for the tip.