From The Literary Hub:
Amazon founder Jeff Bezos came up with the slogan “Get Big Fast” because he knew size was crucial to exacting ever lower prices from suppliers. Publishers have tried to respond to Amazon’s power by doing the exact same thing, accelerating their decades-long campaign of mergers and acquisitions to consolidate into an ever smaller number of bigger firms all trying to publish ever bigger books (like the memoirs of Barack and Michelle Obama, for which Penguin Random House advanced an astonishing $65 million).
The push towards “big” explains Penguin Random House’s play to absorb Simon & Schuster. Matt Stoller describes the merger as “defensive, an attempt to gain bargaining power against a monopolist bookseller.” This kind of producer integration is an understandable response to overly powerful buyers, especially since antitrust law prevents separate companies from banding together to create countervailing power.
But it causes knock-on problems for suppliers and workers downstream. As Stoller puts it, “it’s not fair that authors must sell on the terms laid down by increasingly powerful publishers, but this dynamic is driven by the far more unfair situation whereby publishers are dealing with the utterly ruthless trillion dollar powerhouse Amazon.”
An increasing “bestseller” mentality contributes to the vulnerability of independent presses to being absorbed. Mass-market retailers only stock the titles they predict will be hits, and online marketplaces amplify the books that are shifting fastest. This results in “a cycle so self-fulfilling it’s nearly tautological: Best sellers sell the best because they are best sellers.” As a result, according to book analyst Mike Shatzkin, “the medium-sized publishers can’t sustain themselves anymore. They can’t compete for the really big titles, so they get bought.”
Even the very biggest publishers are merging with one another. Incredibly, Penguin and Random House (the world’s two biggest trade publishers) were permitted to merge in 2013, creating a behemoth of unimaginable scale, now fully owned by private German conglomerate Bertelsmann. That giant is now persuading regulators to let it gulp down Simon & Schuster, one of the world’s biggest remaining publishers.
As publishers go around gobbling up others and being gobbled up themselves, they have sought to recover losses to Amazon with gains exacted from writers and libraries. Writers have found themselves with less power to negotiate the terms of their contracts than perhaps ever before, regularly being obliged to sign away their worldwide English-language rights, audio rights, even graphic novel rights all in one go. Libraries, meanwhile, have seen mounting costs and onerous conditions for the electronic materials they buy from major publishers, even as electronic materials account for an ever larger share of their collections.
Amazon long refused to license the titles it publishes to libraries on any terms at all. In 2020, however, as the COVID-19 pandemic spotlighted the crucial importance of remote access to books, some US states passed legislation to require publishers to license titles to libraries on reasonable terms, and Amazon was finally forced to bend. Some publishers, like Hachette, make their books available to North American libraries but refuse to license them to libraries throughout the UK, Australia, and New Zealand on any terms at all. In other words, as more and more value gets siphoned further up the food chain, there’s less and less for everyone else.
While Amazon started with books, that was never its main game. Right from the beginning it planned to use books we searched for and bought to gather data on us in order to sell us more stuff and, ideally, take over the world. Ebooks were a perfect fit for Amazon’s extractive mindset, because they cost us more in terms of privacy than physical titles ever could. Amazon knows what we search for, what we read, and what we listen to—when and for how long. This “actionable market intelligence” allows it to poach authors, market its own titles to readers, and cross-sell non-book items to readers. The combination of surveillance and vertical integration means that Amazon vastly out-powers both publishers and other retailers, cementing its dominance, and giving it more opportunities to spy on readers.
This is the true heart of “surveillance capitalism”—not the idea that Big Tech uses data-mining and machine learning to create mind-control systems that bypass our critical faculties and trick us into buying whatever they want to sell us. Rather, Big Tech abuses monopoly power to deprive us of choice by limiting what we can buy, redirecting our searches to hide rivals’ products, and locking us into its ecosystem with technologies we can’t alter without risking a lengthy prison sentence.
Amazon tracks the phrases we highlight, the words we look up, who else is reading from the same address. All this allows it to deduce the most intimate information about our lives: whether we’re struggling with our gender identity or sexual orientation, if we think our partner is cheating or that we might be depressed, if we’re having money problems or struggling to get pregnant or considering leaving our jobs. Public libraries have some of this same information, and they guard it fiercely. But Amazon feeds it into an insatiable machine designed to extract maximum profit. If you, as a reader, feel uncomfortable with this, that’s too bad: DRM makes it illegal for you to read or listen to the books you’ve purchased on surveillance-free platforms.
But our individual exposure and commoditization is just the beginning of the harm that was wrought. Amazon used books to extract data on consumers and used that data to slowly subsume all else. The data that came out of physical books and later ebooks and audiobooks all fed into that flywheel that gave it ever more information, which enabled it to attract ever more customers and ever more products, and which has ultimately ended up giving it the power to squeeze its suppliers and workers to near asphyxiation.
There’s no reason to believe this flywheel will slow down without intervention. The money Amazon squeezes out all along the supply chain funds its famous “kill zone.” Anyone who enters Amazon’s territory (or that of Facebook, Google, and other giants) knows they’ll be bought or destroyed. Amazon threw away $200 million in a single month when it went after the company behind diapers.com, first weakening it by bribing away its customers with impossibly low prices, then acquiring it for a fraction of its previous value. At that point Amazon shut down its new acquisition and put its own prices back up.
Link to the rest at The Literary Hub