retail news in context, analysis with attitude

The Wall Street Journal reports that Amazon has reached "a new multiyear print and digital contract" with a publisher that will set the prices of digital books, with certain allowances for discounts that could be set by the retailer.

However, the publisher was Simon & Schuster, not Hachette, with which Amazon remains engaged in a longterm dispute over pricing negotiations that have not been able to be resolved.

In announcing the deal, Amazon said that "the agreement specifically creates a financial incentive for Simon & Schuster to deliver lower prices for readers" … which is what it has said Hachette is willing to do.

As the Journal reports, "Amazon’s dealings with publishers have come under greater scrutiny lately amid author criticism of its negotiating tactics in the dispute with Lagardère SCA’s Hachette. As a result of that standoff, which centers on e-books, Amazon no longer allows consumers to preorder Hachette titles. The retailer has also reduced the discount it offers on many Hachette books and delayed shipment of some Hachette titles. The two sides have been at odds since early May."
KC's View:
Even if Amazon were to reach some sort of accord with Hachette, the broader debate into Amazon's power and influence is likely to continue, and Amazon may in the long run regret poking this particular bear.

Reacting to a piece last week in The New Republic that called Amazon a 21st century monopoly that needs to be addressed, Salon has a piece this week that says, in part:

"Americans may need to look to Europe, with its skepticism toward Silicon Valley powerhouses like Uber and Google, for inspiration. In the end we may need to treat the Web as we once treated the airwaves: as a public resource that can house for-profit enterprises, but which must ultimately be administered for public benefit.

As we write these words, and as if to prove the truth of the suspicions harbored against it, Amazon is in court defending its predatory behavior toward low-paid hourly warehouse workers. The contempt that it displays toward its wholesalers and customers extends to its workforce as well, resulting in a trifecta of abusive behavior that’s almost comically Dr. Evil-like in character.

"But Amazon’s aggression is no laughing matter. It’s not innovative, either. It’s as old as predatory business practices, in fact, accelerated and amplified by the newest technology. And Amazon’s peers in the tech world are no better. If there is one lesson to be learned from this debate, it is this: We need to think imaginatively about restraining the Silicon Valley juggernaut before it extracts a price from society that we will regret paying for a long, long time."


And New York Times columnist Paul Krugman also weighed in:

(Amazon's) power is really immense — in fact, even greater than the market share numbers indicate. Book sales depend crucially on buzz and word of mouth (which is why authors are often sent on grueling book tours); you buy a book because you’ve heard about it, because other people are reading it, because it’s a topic of conversation, because it’s made the best-seller list. And what Amazon possesses is the power to kill the buzz. It’s definitely possible, with some extra effort, to buy a book you’ve heard about even if Amazon doesn’t carry it — but if Amazon doesn’t carry that book, you’re much less likely to hear about it in the first place.

I get all this … but I also have trouble wrapping my head around some of it.

After all, for decades the New York Times has reveled in the fact that it has been able to create buzz for cultural events. A positive review in the Times could make a book, movie or, especially, a Broadway play. And a negative review could destroy them. (I don't see Krugman bemoaning that kind of market power.)

I think it can be argued that at the same time as Amazon wields an enormous amount of market power, it also democratizes the process. Sure, it can give a book buzz or take it away. But I remember years ago, when I was interviewing author Robert B. Parker, he told me that it was his publisher who essentially made him a best-seller - he had a big enough backlist to warrant the attention, and it knew that with aggressive marketing, it could turn his Spenser novels into hits. Which it did.

I've said it before and I'll say it again - Michael Sansolo and I have sold a lot of books because of Amazon, and it would've been a much harder and longer process if we'd had to depend on a big publisher and traditional bookstores. So I'm torn … though I do think that the bigger debate, about power and influence as practiced in a 21st century economy, does need to be conducted.