What Is The Authors Guild’s Endgame in Its War With Amazon?

In case you’ve been living under a publishing rock for the past few weeks (and, seriously, who hasn’t? They have great wifi!), a number of groups, including The Authors Guild, Authors United, and the Association of Authors’ Representatives, have taken up arms against Amazon. (Yes, that’s a staggering number of “A”s in one sentence. Damn the torpedoes! Full alliteration ahead!)

A lengthy letter has purportedly been sent to the Department of Justice in the wake of last year’s contract dispute between Amazon and publisher Hachette, calling for the DoJ to investigate the online retailer for “derail[ing] the benefits of a revolution in the way books are created and sold in America” among other things. Never mind that Amazon was at the forefront of the revolution in question.

There’s an excellent dissection of these organizations and their motivations in this article on TechDirt. I think it’s pretty clear, despite having “Author” so prominently in all of their names, that these groups truly have only a small number of actual authors among their constituency. Namely, those authors whose interests align with the Big 5 publishers.

The Authors Guild states, on a page devoted to the Hachette dispute (bolding mine):

It is to protect this value of books that we have spoken out against Amazon’s tactics in the Hachette dispute, its monopoly in the book market and its unfair treatment of independent authors. At the same time, we have also challenged the major publishing houses to revisit the parsimonious stance they’ve taken on authors’ e-book royalties. Though the Amazon-Hachette dispute was resolved in November 2014, the issue of fair compensation for authors remains a central concern.

Again, never mind that Amazon attempted on three different occasions to compensate the affected authors during the dispute. Saber rattling is an effective tool for drowning out logic, isn’t it?

Interesting is the attempt to include and welcome Indie authors under the AG’s umbrella of its actions. Indies have been vociferous in their defense of Amazon against the AG et al. They see a window of opportunity with the recent change to the Kindle Unlimited payout method, which has had many Indie authors up in arms. Maybe the AG is looking to boost its membership since they begrudgingly agreed to start admitting Indie authors who can successfully jump through a number of barrier-to-entry hoops.

But that can’t really be their endgame in all this. So, what do they hope to accomplish? Lee Child offered some insight in a comment on The Passive Voice blog recently:

The end-game I would like to see is a gentle nudge to remind them [Amazon] to behave like a fabulous retailer – equal and normal (by all means tough, combative and adversarial) treatment of all book suppliers, without the weird Gazelle Project agenda in the background, which is explicitly designed to bankrupt incumbent players to Amazon’s advantage.

The Gazelle Project he refers to comes from a book published in 2013 by Brad Stone, called The Everything Store. In it, Stone described Amazon’s attitude toward small publishers.

Mr. Bezos said Amazon “should approach these small publishers the way a cheetah would pursue a sickly gazelle.” A joke, perhaps, but such an aggressive one that Amazon’s lawyers demanded the Gazelle Project be renamed the Small Publishers Negotiation Program.

Many would view that as harsh, or ruthless, but those qualities are also often admired in business circles.

Child also says, in another comment from the same blog:

This isn’t about how Amazon treats products, or my book vis-a-vis yours. This is about a specific antitrust obligation that says a dominant retailer who chooses to also become a competitor must henceforth negotiate within an altered framework when dealing with a pre-existing supplier of now-competing goods.

The competition he refers to isn’t Indie authors, but rather Amazon’s own imprints — subsidiaries operating as essentially autonomous publishing companies in their own right — which include Thomas & Mercer, 47 North, and Montlake Romance, among others. These subsidiaries seek out and acquire books in much the same way that other publishers do, although, by all accounts, they offer much better contract terms to their authors than the standard New York fare. Child’s argument, or worry, seems to be that because Amazon is a direct competitor, as well as the largest single retailer, that their dealings with the Big 5 and other, smaller publishers, falls into a different category than it did before 2009 or 10 when Amazon started establishing itself as a publisher.

The concern is a valid one, I think, and something worth looking at, but if that is what the AG et al are really after, why not say that?

Here’s the list of main concerns from the Authors United letter to the DoJ from July 13, 2015:

In recent years, Amazon has used its dominance in ways that we believe harm the interests of America’s readers, impoverish the book industry as a whole, damage the careers of (and generate fear among) many authors, and impede the free flow of ideas in our society.

    • Amazon, to pressure publishers over the past 11 years, has blocked and curtailed the sale of millions of books by thousands of authors;

    • Amazon, during its dispute with Hachette in 2014, appears to have engaged in content control, selling some books but not others based on the author’s prominence or the book’s political leanings;

    • Amazon has used its monopsony power, and its ability to threaten punishment, to extract an ever greater share of the total price of a book from publishers, which has resulted in less revenue to support midlist authors and certain kinds of books, effectively silencing many voices;

    • Amazon routinely sells many types of books below cost in order to drive less well capitalized retailers — like Borders — out of business. This practice, known as “loss-leading,” also harms readers by reducing the amount of revenue available for publishers to invest in new books.

    • Amazon routinely uses its market power to steer readers toward its own books and away from books published by other companies;

    • Amazon dictates pricing to self-published authors, requiring them to price their books within a specific range or be subjected to a 50 percent cut in royalties.

Six items there, the first five of which are directly related to how publishers and Amazon’s competitors are treated by the company, with authors only obliquely mentioned. The last bullet point, about how self-published authors should price their books sold on Amazon, neglects to mention that the “50 percent cut” still comes out to be about twice the royalty offered in the standard Big 5 contract to their authors. Point five hints at Mr. Child’s objection, but is more of a complaint about unequal advertising and promotion rather than concern about how the company treats with someone who is a competitor as well as a supplier.

The last several paragraphs of the letter drone on about Amazon somehow controlling the flow and content of ideas on the Internet (really?) and ends with:

…no temporary price cut can compensate for the costs to free expression and the health of America’s book industry that have resulted from Amazon’s abuse of its dominance in the world of books. Accordingly, we respectfully request that the Antitrust Division investigate Amazon’s power over the book market, and the ways in which that corporation exercises its power, bearing in mind the very special constitutional sensitivities that have historically been applied to any business that has established effective control of a medium of communication.

Price. Amazon is pricing books, and more specifically ebooks, too low for the tastes of AU/AG/AAR/ABA/and all the other “A”s (read Big 5 Publishers). The biggest book seller on the planet, who got to that position by selling books at lower prices and making more money for publishers and authors in the process than they’d seen for the previous two decades or more, has somehow become the bad guy to several groups who claim to have the best interests of authors at their heart. Come again?

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But let’s get back to my original question: what’s the endgame? What outcome do Authors United and the Authors Guild see as a benefit from the DoJ presumably finding Amazon guilty of some, or all, of the nonsense they proposed?

The two antitrust cases I can find that even remotely correlate to this (one of which AU mentions in its letter) are Standard Oil and AT&T. In both cases, the government decreed the break up of the companies in question into several smaller companies. In both instances, however, years later, through mergers and acquisitions, the end results were nearly the same as when the whole process started. Technology disrupted the phone industry and Exxon eventually gobbled up many of the Standard Oil pieces to become one of the largest corporations in the world.

If Amazon was broken up into a number of smaller companies, would that enable and foster more competition? How would that even work for books? Would they propose splitting it up by fiction and nonfiction? Maybe by genre? I know! Let’s have a separate store for each section of the Dewey Decimal System!

Coming back to pricing, which we must because that’s the real cornerstone to the house of cards the AG and AU have constructed, control, and even fixing, is the desired result here. They can’t come out and say that, of course, because price fixing is illegal and is essentially what got the Big 5 in trouble, in cahoots with Apple, a few years ago. Publishers regained some control over pricing in this last round of negotiations with Amazon, resulting in higher prices for many ebooks and subtlety denoted by Amazon on its site by the “price set by the publisher” appellation which now appears on thousands of books. Evidently, whatever control they wrestled away from Amazon wasn’t enough, otherwise I’m sure Hachette would be quietly advising Doug Preston to pipe down and go sit in the corner.

The bottom line is: all these people want you, the reader, to pay more for books. And especially ebooks. Because reasons, and logic, and, and, and because they said so, dammit!

My personal take? Don’t trust any group with the word “Author” in its name. None of them speak for all, or even most, of us.

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About Alan Tucker

Writer, Dad, Graphic Designer, Soccer Coach … not necessarily in that order!

Posted on August 4, 2015, in Books/Writing and tagged , , , , . Bookmark the permalink. 4 Comments.

  1. Yeah, it’s always about making more money, in the end. To my thinking, books are already expensive enough. Short paperbacks cost $15.95, and hardbacks start at around $25 and go up from there. Enough is enough! If Amazon can afford to offer books for significantly less, and save me $4 or $5 a title, I’m going for it. That means I can buy more books over the course of a year. I use Amazon’s used book store all the time and routinely save bucks. You just have to be willing to buy your books a month or two after they come out, so some guy can spend full price on it and then offer it used for half off. Good deal for everyone.

    • Well, and the main reason the publishers want to keep the price of ebooks high is because they are eating away at their paper sales. Widespread paper distribution is one of the few remaining advantages the publishing houses have over self publishing. Once that diminishes to a point of irrelavance, why sign a terrible contract, giving away all of your rights, with them?

  2. Really thought-provoking. Well written! 🙂

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