Amazon and the publisher
This is an illustration from 2012 of Amazon CEO Jeff Bezos at a press conference in Santa Monica, California, where he unveiled the Kindle reading device.
Publisher Hachette, and some of its authors, are complaining that Amazon is cutting them out. Amazon and Hachette are in the middle of negotiations over pricing. As a negotiating tactic, Amazon allegedly is listing Hachette’s books as unavailable, delaying shipping, and advertising similar books at lower prices.
“I can see on the page that Amazon is trying to tell people to buy other books at lower prices elsewhere and that my book won’t ship,” says writer and illustrator Nina Laden. Laden’s book, “Once Upon a Memory” sank precipitously in the book rankings as a result, she contends. “I find myself caught in the middle.”
Laden’s complaint belies a not uncommon concern over Amazon’s dominance of the book business. Amazon controls more than a third of the book business in the United States, but it’s far from a monopoly, says Jerry Guttman, a publishing consultant with Lexicon Group. “In fact, what they would say is all they’re doing is trying to get the books to consumers at the cheapest possible rate.”
In the long run, Amazon promises more returns for authors, according to best-selling author Joe Konrath.
“In the past publishing has had as much power as amazon and they were incredibly irresponsible with that power,” says Konrath. “Amazon is keeping prices low, they’re giving authors much better rates than any publisher in history ever has – 70 percent compared to 12.5 percent.”
Konrath left Hachette to publish through Amazon. He says authors upset with Amazon’s treatment of the publisher have the option to switch.
It’s not clear, however, whether there is a single winner for consumers. “The outcome of this dispute, even if it in the short run leads to higher prices or contract terms that prevent Amazon from discounting, that’s not so bad for consumers,” says Geoffrey Manne, director of the International Center for Law and Economics. “Consumers don’t want to pay high prices – but if it maintains profit margins allowing companies to enter into the market” and compete, “those things are good for consumers.” Amazon wants lower prices now, but perhaps slightly higher prices would invite companies such as Apple to compete with Amazon, bringing lower prices later.
Regardless of what, ultimately, will benefit consumers most, “It’s a fight over margins. Both publishers on the one hand and Amazon on the other are struggling for profits right now.”
But in the short term, from the perspective of the affected authors, it’s like the Kenyan phrase, “when elephants fight it’s the grass that suffers.”
Correction: A previous version of this story misspelled Jerry Guttman's name. The text has been corrected.