Book buyers like to shop Amazon.Com. You could even go so far as to say they love it. Consumers don’t know much about Amazon’s top man, Jeff Bezos, but they do know that Amazon is the world’s largest bookstore. Best of all, you can buy a book with a few clocks of your computer mouse. And if you don’t want to buy it at full price, you can see right there beside it some second hand copies for sale at a lower price. (That might be hard on the writer but, hey, we’re poor readers, not starving writers.)
Furthermore, the book will arrive at your home the very next day, or in a few days if you’re not in a rush. And if you’re in a big hurry and want something right now you can download a book to your Amazon Kindle reader. But maybe you don’t want a book. Maybe you’d like a movie. Amazon has lots of those. And lots of music, too. As Amazon says: “20 million movies, TV shows, songs, magazines, and books.” And dresses. And shoes. And crockpots and shovels and tomato sauce and banjos. Amazon is amazing!
So it’s interesting that writers and publishers loath Amazon, the world’s largest bookstore. How can that be? (OK, we’ve already given you a hint. But please keep reading anyway.) Publishers don’t sell books to directly readers, they sell them to booksellers who then sell them to readers. Now online shoppers in the United States will spend $327 billion in 2016, up 45% from $226 billion this year and 62% from $202 billion in 2011, according to a projection by Forrester Research, Inc. And Amazon dominates the online book selling world.
Here’s what you do when you dominate the market, if you’re Jeff Bezos. A couple of years ago Amazon decided to sell MacMillan’s e-books, and e-book of every publisher, for $9.99 or less. (Great for customers, right?) That meant Amazon would lose money on every sale, but Jeff Bezos has money to burn and selling at a loss would knock out other e-book sellers, such as Barnes & Noble, whereupon Jeff and Amazon could monopolize the market.
But MacMillan objected to Amazon’s pricing and said that only MacMillan had the right to determine pricing for MacMillan’s books. So Amazon simply turned off the little buttons that permit you to buy MacMillan books at Amazon, thereby shutting the publisher out of the biggest online market.
Amazon was used to pushing small publishers around and had been doing it for years. But MacMillan was a big old publishing company and didn’t give in. There was an uproar in the book industry and this time Amazon backed down. But it didn’t quit. Instead it went out and hired a big editor from one of the Big Six publishers — Hachette, HarperCollins, MacMillan, Penguin, Random House, Simon & Schuster — and set up its own publishing company to compete directly against other publishers.
Amazon has about three-quarters of the online market for print books and more than half the e-book market. Keep that in mind as you read this interesting quote from the Authors Guild. In the late 1970s, when a single book retailer first captured a 10 percent share of the U.S. market, Congress and the regulatory agencies were swift to react. As the head of the Federal Trade Commission put it: “The First Amendment protects us from the chilling shadow of government interference with the media. But are there comparable dangers if other powerful economic or political institutions assume control…?”
But wait, there’s more! The US Department of Justice has launched an anti-trust suit against the Big Six publishers over e-book pricing. According to the Justice Department, when the Big Six decided not to cave in under Amazon’s pricing policy, they were colluding to fix prices or at least to keep them high. Currently, the Department of Justice is in negotiations with the Bit Six plus Apple — Apple is in the mix because the late Steve Jobs had agreed with the Big Six and said Apple would go along with their pricing plans.
Critical Pages has never been in love with the Big Six, but we do love writers and small independent presses, and this is a case where virtually all publishers, big and small, are lining up against the Goliath who wants to take over the world. The Authors Guild, which has not been a warm friend to Barnes & Noble in the past, is lining up with that company and the Big Six against Amazon. What writers and publishers want is to have more than a monopolistic online bookstore through which to sell books. Scott Turow, President of the Authors Guild, summed it up this way: “The irony bites hard: our government may be on the verge of killing real competition in order to save the appearance of competition.”
We like short posts and we recognize that this is a long one. Unfortunately, it still leaves a lot unsaid about a complicated issue. If you’re interested in pursuing this further, a good place to start may be the open letter written by Scott Turow at the Authors Guild blog. As we said, we’re not in love with the Big Six and, indeed, have written a critical post about them. We find this whole business depressing. In fact, if it’s a good day, we suggest you go out and enjoy it.