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A local book publisher laments Amazon's impact

The founder of Sasquatch Books in Seattle recounts how publishing has been squeezed by the big chains and the tight-fisted practices of Amazon. Worse, book publishers have been willing partners in their own demise.

The old Elliott Bay Book Co. interior.

The old Elliott Bay Book Co. interior. Flickr

We have all been waiting for decisive action by the U.S. Department of Justice, mostly in redressing the catastrophic wrongs of Wall Street that precipitated our current economic morass. So there was mild surprise when the DOJ turned its attention instead to a largely defenseless and almost moribund book publishing industry, filing a recent lawsuit for price fixing by five large publishers. The lawsuit also included defendant Apple, an almost insignificant player in the universe of bookselling. Conspicuously missing from the DOJ lawsuit was our own Seattle-based Amazon, which has been sitting silently on the sidelines while the U.S. government in effect does its dirty work.

Ironically, it was the iconoclastic Steve Jobs who allegedly set this monopolistic ploy in motion when he urged a group of book publishers to move to an "agency" model of bookselling, which protects the right of publishers to set the retail price of their ebooks while the distributor takes a flat 30 percent in the transaction. This was created to do an end-run around Amazon, who was dictating a mandatory $9.99 selling price for ebooks without exception. Publishers and booksellers were overwrought about Amazon’s pricing scheme, but their protests went unheard.

Technically the five publishers are probably guilty of the charges (three have already admitted as much), inasmuch as they met and discussed what action to take. And while the DOJ may have hit a target that qualifies as restraint of trade, it missed the real elephant in the publishing room, Amazon, which has been turning publishing practices upside down, ultimately threatening the art and vitality that readers value most in books.

With the advent of digital books and their $9.99 pricing, Amazon had quickly commandeered 80 percent of the ebook business. It was exercising its first-mover business practice, a willingness to lose money in support of steering readers to its new ebook reading device, the Kindle cum Fire cum Conflagration.

Amazon had learned and practiced this tactic when it first started its online business, selling deeply discounted books in the 1990s. Jeff Bezos’ rule of thumb was that he who was first to market would ultimately own the market and recoup the initial years of lost profits. For the book publishing industry, a co-conspirator since Amazon’s inception, the new ebook tactics were déjà vu all over again. It’s reminiscent of the old joke about the farmer who lays eggs. When his wife is asked if she doesn’t want to do something about this problem, she answers meekly, “Well, frankly, we need the eggs.”

And for Amazon, who better than hapless book publishers to exploit for their necessary content to build the online empire before quietly strangling the meager profits out of an industry that had become the weaker co-dependent in the relationship? Publishers were caught gasping for air as they watched the underpinnings of their business get sideswiped by technology and a ruthlessness not seen since the rise of the book chains, Barnes & Noble and Borders.

Book publishing, which I practiced for many years as head of Sasquatch Books in Seattle, is a marriage of art and commerce. Publishers are akin to midwives, who bring an author's creation to full artistic flower and then commercially breathe success into the printed words through good editing, public relations, wide distribution, and royalty payments back to the author. Publishing was regarded as a "gentleman's" business with deals consummated over tete-a-tete lunch meetings. Ironically, the DOJ complaint accuses the five publishers involved with fixing prices for the agency model at a swank New York bistro. They are probably still wondering how else they were expected to conduct business.

And as for the prerogative of publishers to set the retail price of the books they publish, well, this has always been the industry practice, as it is for almost all manufacturers. Just not in collusion with each other, thank you very much. Not until Amazon demanded the $9.99 set price for ebooks had publishers ever been dictated the value of their goods. Amazon knew it could withstand the losses. The publishers could not.


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Comments:

Posted Fri, Apr 20, 6:56 a.m. Inappropriate

I have heard and read versions of this hand-wringing, old-ways-are-best argument for decades. Yes, the industry has transformed in ways that would have been unimaginable when I took my first job at Scribner's Bookstore in 1979. I worked in publishing for 20 years listening to the the endless lamentations echoed here by Mr. Haight: "When book publishers suffer financially it is art that suffers first."

When book publishers suffer financially it is because their business model is failing. How we buy, read, publish, and distribute our books is changing. Get over it. Moral qualms about Amazon's market strategies may be worth airing but that conversation has nothing to do with art. There will always be readers and writers. And there will always be art.

ptb

Posted Fri, Apr 20, 8:18 a.m. Inappropriate

"Better World Books" offers an alternative for purchasing paper books online and they actually appear to be doing with some heart.

ruffner

Posted Fri, Apr 20, 8:25 a.m. Inappropriate

I agree with ptb. In addition, the clubby arrangements between author-agent-publisher--long a barrier to entry for many promising writers--is breaking down as well. Today an author can easily self-publish with Amazon's help. Sure this yields a significant amount of dross, but the user reviews go a long way to weeding that out. Plus, at $.99 to 2.99 per ebook, the reader's risk is much lower.

It was amusing at first to hear the from those who lament the passing of the beloved book and its sentimental associations (the smell and feel of the paper! The solid heft of the tome in the hand!). Then it got annoying. Now it's just boring. It is what it is. Live with it.

Posted Fri, Apr 20, 10:16 a.m. Inappropriate

The article's actually raising more nuanced points than just bewailing the change of the basic business model from paper to electronic media. It's criticizing Amazon's specific ways of doing an e-business, not the fact that it's electronically based.

I would much rather give my money to Elliott Bay Books--they'll order anything you ask for--and Powells.com. Consumer dollars are votes, and I vote for a world of passion and intelligent engagement, not a world of endless amounts of really cheap undifferentiated crap. If Amazon wants my money they'll have to show some kind of commitment to values I respect. I'm not talking about ideological litmus tests--I don't need them to agree with every one of my opinions, but I do want to have a general sense that whoever I buy my books from is trying to take care of the larger resource of books and the community of writers and readers.

Posted Fri, Apr 20, 10:21 a.m. Inappropriate

The most recent estimate that I could find in a cursory online search says that more than 30 million trees a year are cut down to support the publishing industry. Personally, I'd rather read an e-book where the creator of the work gets a higher royalty payment and where not a single tree was cut down to make it.

The negative environmental impact of book publishing is one of the major reasons that I am a strong supporter of ebooks over physical media. I'd rather a tree was out there converting carbon dioxide to oxygen and providing habitat than being used to convey stories about sparkling vampires.

talisker

Posted Fri, Apr 20, 10:27 a.m. Inappropriate

"Get over it" and "live with it" don't particularly advance the conversation, although I suppose ptb and theintegrator say that because they feel the same way about Haight's piece.

It's true: the business model is failing, and things aren't going to go back the way they were 20 years ago*, let alone 40, 60, 80**, or 100. Would we even want them to? And if we did, would giving all our business to a local indie accomplish it? I think not... there are far too many people out there who want what they want at the lowest price possible, not thinking about everything it takes to make the product they want. (See Walmart.)

I do give most (though not all) of my new-book business to the University Book Store. But that's because I love the place and want to see them survive for as long as possible. I have no illusions that I am doing anything more than sticking a finger in a dike with many more holes than there are in Blackburn, Lancashire.

All that having been said, I hope against hope the baby doesn't go out with the bathwater. I do hope there will always be readers. There certainly will always be writers. And art. What the conditions will be like under which they make that art, though, is the question. The world doesn't owe anyone a living just because. But it does owe people a living if it wants a quality product. The amount of dross is very significant indeed.

Two last thoughts: A lot of e-books cost a lot more than $2.99. And you know what? I do have sentimental associations with the physical book. So do many others. That shouldn't be overlooked. (And this is entirely separate from other things that separate e-books from p-books: that you are buying a license, not a personal copy; that you can't sell it on the used market; etc.)

* Speaking of which, an excellent read is André Schiffrin's The Business of Books: How the International Conglomerates Took Over Publishing and Changed the Way We Read, published in 2000, detailing how by 1990 things at Pantheon had become intolerable for him — and, if I remember correctly, it had been a long decline.

** Penguin Special: The Story of Allen Lane, the Founder of Penguin Books and the Man Who Changed Publishing Forever is another excellent read. Many of the same charges being leveled against purveyors of e-books today were being made against Lane in the mid '30s. Plus ça change..

Posted Fri, Apr 20, 10:42 a.m. Inappropriate

Traditional publishers and traditional bookstores are shooting themselves in the collective foot, if not head, and they don't seem to know it. The digital innovations that Amazon (and others) have brought to the world of publishing are not going away, and failure to adapt merely forestalls inevitable doom. There is no way around this simple fact. And while traditional publishers and bookstores try to push back on Amazon's admittedly unfriendly but decidedly competitive behavior, they are wasting their time and resources not adapting to the new world of readership.

Publishers in many ways have only themselves to blame: for decades they have churned out waste-paper pabulum of the worst sort: just look at the tables of joke books for sale every year at Christmastime. The vast, vast majority of books published end up as returns, meaning they are simply dumped coverless into recycling bins. The publishing model to date is environmentally unfriendly and produces mainly low quality.

Publishers have also been creating little added value in the last couple of decades. In their heyday, editors really shepherded and mentored impressive new writers into notariety. Nowadays, publishers mainly consider only manuscripts put in front of their noses by literary agents who used to be editors, and manuscripts typically have already been through developmental editing and copy editing stages even before a publisher reads them. Given this, it should have surprised no one that authors would start leverages self-publishing and digital publishing to eventually bypass the publisher. Amazon has capitalized on this shift that few other publishers yet have.

Publishers have also been pretty naughty. Look at the scam that is textbook publishing in the US. Look at the refusal to pay appropriate royalties to authors and translators. Look at their failure to market. Look at their environmentally abusive consumption of paper.

Meanwhile, what Amazon and similar innovators do is offer artists ("content creators") real opportunities, opportunities that the traditional publishing world has reliably passed on for twenty years or more.

So as we lament the decline and failure of traditional publishers and bookstores, look who is _benefitting_ from the new literary economy: authors and translators!

Yes! Imgagine a world where authors have more control and earn more money per copy sold and have more opportunities to get their writing into the hands of readers! Imagine a world where a translator is not treated like garbage and enjoys a financial stake in the success of the title! Imagine a world where Americans are reading more translated literature because it is more accessible than it ever was under the traditional-publisher model.

I will not defend every competitive instinct that Amazon has; they could likely be doing just as well while playing a much softer version of hardball than they do. But this does not really change the fact that traditional booksellers and traditional publishers have been sitting on their asses doing nothing for years and only now, at the end, in panic mode, are they up in arms. I have little compassion.

What I will predict is this: in a decade or two, the only books physically published will be special edition volumes of important works, hand-bound on fancy linen gold-edged paper. Book publishing will return to its glory days, when a book was an art form. Everything else, including all those stupid fluff books wasting trees for their paper on sale every Christmas, will become digital downloads, read only by their small target audiences, and promptly forgotten.

smacgry

Posted Fri, Apr 20, 11:07 a.m. Inappropriate

Talisker, it may be true that not a single tree has to be cut down to make an e-book, but your reader is full of electronic components which have to be manufactured (and cannot be pulped), and server farms don't run on solar power.

Posted Fri, Apr 20, 11:14 a.m. Inappropriate

This interesting conversation reminds me of the continuing saga of print newspapers versus online -- the sea change of how we access media. As an old AP guy, I love newspapers and subscribe to several, but I get the lion's share of my eyeball time online. On books, I haven't quite made the shift from printed to e. I own a Kindle Fire, but haven't fired it up. I have vast stacks of unread print books & keep ordering more or going to book sales!

Ammons

Posted Fri, Apr 20, 11:38 a.m. Inappropriate

". It would now like authors to skip the traditional book publishers and sign directly with the new sugar daddy in town."

Yep, that's the model that Amazon is pursuing, self publication. Amazon offers, not just e-books, but print on demand. Which lowers the barrier to entry for an author. The next is for authors to have access to a pool of contract editors. From the perspective an author, publishers are a giant barrier to publication. Their are countless stories of authors sending multiple copies of transcripts to literary agents and those agents sending them to publishers and being rejected over and over. Some of course with good reason but from the authors perspective it is like try to beat your way out of a paper bag. with the new model, your write it, you contract out to an editor, and then an index'er if necessary, and then straight to distribution. Your up front costs are the cost of the time you spend writing, and the editing. You set the price as a third party seller on Amazon and the market tells you what the demand is.

GaryP

Posted Fri, Apr 20, 12:18 p.m. Inappropriate

One thing that is really strange about how epublishing is going is you still have to buy an entire book. Often there are just a few chapters that matter in many books, for example certain technical books or travel books.

There is definitely a lot of room for improvement with how this whole system works, and that improvement is going to be disruptive to a lot of people who have done the best they could in the old system, and done so with very noble intentions.

sjenner

Posted Fri, Apr 20, 12:20 p.m. Inappropriate

And note the ads below: "how to publish your book", "how to publish a book" and "ebook publishing services". Friesen Press and xlibris and ebookpublishing are at least trying to get some new customers.

sjenner

Posted Fri, Apr 20, 4:17 p.m. Inappropriate

I would also like to mention that a number of graphic artist/book writers are using this self publish model to stay in business. They run a pre-sale until they get enough orders to justify a printing then print them at a bulk rate, mail them out themselves to their fan base. Authors are totally scr*wed by the guaranteed return policy of publishers, those extra copies are taken out of the profit side of their payments at full price.

GaryP

Posted Fri, Apr 20, 7:53 p.m. Inappropriate

Ammons is right this is a very interesting conversation!

I first must confess to being an ungrateful winner of a Crosscut drawing some time ago that supplied us with an early Kindle used exactly twice. Once to download a sample free book from Amazon and once to order a ebook from the library only to discover upon its "arrival"" that:it was a "checkout " of limited duration exactly the same as the hard copy.

The best bookstore in Seattle remains the Unversity Bookstore with free shipping, liberal returns (keep it clean and unmarred), an "alumni" discount to all who apply— alunmi or not, plus ah extensive collection. Dedicated to keeping the UBS in business, I always check it first and what they don't have I buy used from one of the many small booksellerss nationwide who pay Amazon to be their collection agent, which I think is about as New Age as it gets in terms of truly recycling valuable resources. That said, If I ever come across anyone else who provides the same thing for a similar array of small book sellers I will switch in a heartbeat. I imagine those small book sellers willing to deal having the same feelings about Amazon—the art of deal probably will never change.

afreeman

Posted Fri, Apr 20, 8:23 p.m. Inappropriate

"When mega-retailers have all the power in the industry, consumers benefit from low prices, but the effect on the future of literature—on what books can be published successfully—is far more in doubt." Mega-retailers of books like the titanic Amazon have driven major publishers to be less venturesome in their choices and marketing of books, and small publishers get bullied, according to Onnesha Roychoudhuri in the Boston Review: "Books After Amazon." In Roychoudhuri's article, see especially the part about what happened to Ten Speed Books: http://www.bostonreview.net/BR35.6/roychoudhuri.php .

Posted Fri, Apr 20, 10:53 p.m. Inappropriate

"Yes! Imgagine (sic) a world where authors have more control and earn more money per copy sold and have more opportunities to get their writing into the hands of readers!"

smacgry, why do you believe that Amazon won't eventually do to authors what they are doing to publishers and bookstores? Once they become the only game in town (their avowed business model), do you think they will hesitate to put the screws to you, too? "You want us to publish/list/sell your book? Fine, we'll take 95% of the profit. Don't like it? Too bad!"

Authors who sing the praises of Amazon as publisher sound like Hansel and Gretel: "Ooh, look at this yummy gingerbread house!" while failing to notice that the evil witch is fattening them up for the kill.

kws

Posted Sat, Apr 21, 9:28 a.m. Inappropriate

I cannot see the book vanishing.

But many books are best as ebooks- science fiction, or romance, or the summer novel. And the ebook model will dominate those categories, and it will inevitably go down in price- data, no matter what copyright lawyers think, has a way of sneaking off the reservation and being available for free, somewhere.

Where I see publishers shooting themselves in the foot, however, is in their odd reluctance to embrace publishing on demand.

It is no longer financially feasible, in most cases, to print ten thousand copies of many books, and then just warehouse them for years and wait for them to sell. Nobody makes money that way, and far too many books are out of print or never published in the first place because they cant sell enough copies to justify the expense and logistics of printing runs.

Instead, I ought to be able to walk into Village Books in Fairhaven, and have printed while I wait, ANY book. Any book that is currently considered "in print" by publishers, and ANY book that is now out of print, or out of copyright. If its currently in copyright, the publisher automatically gets a electronic payment. Not a huge one, but they dont have to work much for it either- just scan the galleys.
If its out of print or out of copyright, the bookstore makes the money, after the physical expense of printing.

The Espresso machine (the brand name of the most common print and bind to order machine) technology is pretty advanced right now, and if publishers signed on, it would get better quicker.

Of course, there is no reason the Music Industry doesnt adopt this technology either, and allow individual stores to burn CD's to order, print a cover, insert in a jewel box, and carry no inventory except raw materials. But those dinosaurs are still suing housewives in Ohio for the Lady GaGa song their kid downloaded.

Point of sale printing of books is here already, and, as oil and transport costs go up, its going to be more and more the way books are sold. You could, for instance, buy from Amazon, but pick up the actual physical book at your local 7/11 or Fed Ex store, where they had a printer in the corner.

Ries

Posted Tue, Apr 24, 11:18 p.m. Inappropriate

Don't understand the resistance to selling many books at less profit than fewer books at a greater profit. Six of one to me.

chbeba

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