Monday, September 17, 2012

Opinion — Amazon, Apple, Authors And Traditional Publishers

Leaving the high moral ground issues and marketing matters aside for a moment, the book battle between Amazon and several major publishers is initially about the use of different business models, especially as it relates to the burgeoning e-book phenomenon.  Amazon embraces what we have come to know as a wholesale model.  That is, the bookseller pays so much for each book and they may sell it for whatever they want — even use it as a loss leader if they choose.  Most major publishing houses wanted what’s called the agency model — that is they set the cost to the bookseller and also set the price for the purchase.  In other words if the publisher wants the book sold at $12.99, booksellers must do that.  Of course, in both cases, the publishers and booksellers would make a profit, but in the agency model, there wouldn’t be any pricing flexibility for the retailers. No special sales or discounts, unless the publisher approves it.

Legally, the publishing houses might very well have won the day when the dispute went to the court because, while it may not afford the public or in some cases the writer the best possible deal, agency pricing is not illegal. Many companies in many businesses that have strong brand recognition and customer loyalty can and do demand that of their retailers.  But there was something else that the judge didn’t like about the situation.  The publishers, it is alleged, got together with each other and with Apple to set prices and policies.  If it's true, it is collusion and that is illegal.

As of today, three of the world’s largest publishers have settled with the U.S. District Judge, agreeing to end their current agency agreements — for the time being.  MacMillan and Penguin plan to fight the suit with the continued support of the highly respected Authors Guild, an association of published writers, and the American Booksellers Association, whose noble cause it is to support independent bookstores.   They have a counter accusation. They believe that Amazon is guilty of predatory pricing.  And certainly a case may be made for that. Nonetheless most folks, whether they liked the judge’s decision or not, seem to think Amazon won this round big time.

This is generally regarded as a win for readers who will likely benefit from lower prices on reading material.  But there is an argument that it will hurt the quality of the work in the long run because publishers won’t nurture and support their writers if they can’t ask for higher prices on e-books.  And there is also an argument that if Amazon (and perhaps Barnes & Noble) has this advantage, the result will further damage independent bookstores because of these lower prices.

As a writer, surviving as such by the skin of his teeth, I have divided loyalties.  As an older human, a veteran of the print media in many of its forms, a devoted library fan and a more than frequent visitor to bookstores, where I buy books on paper, I want very much to see the sacredness of the book in its traditional form be eternal.

Amazon CEO and Founder Jeff Bezo
As a midlist writer, likely approaching the end of his career, there is a flicker of hope that e-books and booksellers like Amazon will be entirely more friendly to my aspirations than traditional publishers have been.  Publishers, despite arguments to the contrary, are and probably must be dismissive of writers who haven’t achieved a brand name level of recognition. Unless a writer is a big name or can become one quickly, you are not a product that publishers can promote or big booksellers can sell, save Amazon or-late-to-the-game Barnes & Noble. I say this as a member of the Guild, as a writer recently published by Penguin and, again, as a person who buys his books from independent bookstores.  And I say that as someone who has never read a complete book — other than my own during the editing process — on anything battery operated.

However, I like to think of myself as a realist.  While the specific direction of publishing and all its possibilities cannot be foretold, the general direction is clear.  What we are witnessing is an adjustment in keeping with all the adjustments we humans are making in all areas in an increasingly inter-connected world.  Just as third world countries jumped from having no telephones to suddenly having smart ones, just as we are now downloading movies on Wi-Fi, getting our news on i-pads, covering wars with twitter and getting our maps without unfolding that giant piece of paper over the steering wheel, we will eventually get most of our books on a device or on multiple devices.   The transition may not be absolutely total, but it is inevitable.

The battle that we are witnessing has nothing to do with serving you the reader or, frankly me, the writer.  The battle is about who owns the business.  It’s a battle waged by CEOs and boards of directors, shareholders and public relations firms.  It was truly difficult to feel the pain of Borders as a corporation in a capitalist society when they ran aground, when only a short time earlier they cleverly and coldly defeated their competition. They were responsible for shuttering the doors of who knows how many small book businesses, just as Starbucks brought an end to a zillion mom and pop corner coffee shops. 

But consumers embraced the huge bookstores for awhile.  Read a book, have a scone, pick up a date.  Some writers thrived, especially the best selling ones.  On the other hand, many of us, writers with a modest but loyal following, suffered from brand-name dominance the big box bookstores provided. Many of us, successful in the previous book world populated by independent bookstores and libraries, where we could get some attention, were tossed out of our comfy nest by the success of Borders and its big box cousins who lusted after the best selling brands.*
Scott Turow, President, Authors Guild

Then Amazon happened. Live by the sword, die by it.  The big stores were victims of changing times, new technology and, apparently, smarter competition. When the e-book revolution began, Amazon led it.  Now Amazon is threatening to blow the lid off the publishing establishment, not just in the pricing of e-books, but as publishers themselves.  What we are witnessing with these lawsuits is the ugly grappling among corporations, all of them — Apple, Amazon, and half a dozen conglomerate publishers not to mention other vested interests — all larger than you and I — as they play king of the hill.  

As an old-fashioned consumer and a writer in need of occasional inspiration, I am not happy about this.  I love walking into bookstores.  It’s inspiring in a way that searching the pages on Amazon’s web site isn’t.  But as a writer, who likes to write and wants to be read, I have to either give up the idea of being published — or adapt.  And there are some advantages to the average writer when some of the old-fashioned limitations are lifted.  One of them is that we don’t have to sell 100,000 copies to succeed.

In the end, I think, we all have to understand, there are fewer and fewer video stores, very few public telephones, almost no yellow pages and fewer and fewer watches.  The time, like everything else, is on the smart phone.  When travelers pack for a long trip, they don’t have to have an extra bag for their books.  When they drive, they can have their device read to them.  If they are in a strange place with nothing to read and no place to buy a book, they can download one, instantly and for less.  What do we think is going to happen?

I repeat, the battle isn’t about you and me.  It’s about who owns the business.  There is the old guard and the new one.  And as it is in any other business, there might very well be some bright exceptions to the trends — maybe some exciting niche publishers.  Maybe there will be new ways writers can (successfully) get into the marketplace on their own — and it is far more difficult that some would lead you to believe.  But I’m not sure the future of publishing is in the court system or in trying to circumvent the future.  It will come through smart ideas, through innovation.

The times, someone once said, they are a changin’.
*Post script:  Nothing wrong with best selling authors.  I am a fan and regular reader of several of them.  My point is only that when big box bookstores ruled, many midlist writers were dropped because of economies of purchase and difficulties of distribution.  The rise of Amazon, while it doesn’t diminish the sales of the great brand names, allows greater potential for writers with smaller followings to publish as well and continue to gain notice if the work warrants it.

1 comment:

Teri-on-the-sandbar said...

What a concise and thorough assessment! Well said.