Amazon’s war on books, writers and publishers

I got the word through a post on Facebook by one of my favorite writers, Margaret Maron.

“When elephants fight, it’s the grass that gets trampled.” Amazon has turned into a real bully, blocking a publisher’s sales in order to squeeze more money out of them. Last year, it was the Macmillan Group; this year, it’s my publisher, Hachette. I would urge my readers to order from your local bookstore or from Barnes and Noble. Up until this week, Amazon was taking preorders for my book, Designated Daughters. No longer.

For those who don’t know her work, she writes mysteries.  Her primary focus over the last few years has been on a North Carolina judge and her huge extended family.  Along the way, Maron comments on contemporary issues and national and local politics.  My late mother always used to ask me if there were any new books about that judge as she was an avid reader.  But I digress.  Maron included a link to a  New York Times story.

Amazon’s power over the publishing and bookselling industries is unrivaled in the modern era. Now it has started wielding its might in a more brazen way than ever before.

Seeking ever-higher payments from publishers to bolster its anemic bottom line, Amazon is holding books and authors hostage on two continents by delaying shipments and raising prices. The literary community is fearful and outraged — and practically begging for government intervention.

“How is this not extortion? You know, the thing that is illegal when the Mafia does it,” asked Dennis Loy Johnson of Melville House, echoing remarks being made across social media.

The battle is being waged largely over physical books. In the United States, Amazon has been discouraging customers from buying titles from Hachette, the fourth-largest publisher by market share. Late Thursday, it escalated the dispute by making it impossible to order Hachette titles being issued this summer and fall. It is using some of the same tactics against the Bonnier Media Group in Germany.

Hachette publishes Maron’s books.

Publishers tried to rein in Amazon once, and got slapped with a federal antitrust suit for their efforts. Amazon was not directly a party to the case but has reaped the rewards in increased market power. Now it wants to increase its share of the digital proceeds. The publishers, weighing a slide into irrelevance if not nonexistence, are trying to hold the line.

Late Friday afternoon, Hachette made by far its strongest comment on the conflict.

“We are determined to protect the value of our authors’ books and our own work in editing, distributing and marketing them,” said Sophie Cottrell, a Hachette senior vice president. “We hope this difficult situation will not last a long time, but we are sparing no effort and exploring all options.”

The Authors Guild accused the retailer of acting illegally.

“Amazon clearly has substantial market power and is abusing that market power to maintain and increase its dominance, which likely violates Section 2 of the Sherman Antitrust Act,” said Jan Constantine, the Guild’s general counsel.

Independent booksellers, meanwhile, announced they could supply Hachette books immediately. The second-largest physical chain, Books-a-Million, advertised 30 percent discounts on select coming Hachette titles. Among the publisher’s imprints are Grand Central Publishing, Orbit and Little, Brown.

Maron urged her readers to purchase locally or from Barnes and Noble – which still has actual bookstores.

And there is a second New York Times story which points out that Amazon has walked into the predictions of critics who never like the way it did business.

Physical bookstores sell books at a huge markup, which necessarily reduces the number of books that people can afford to buy. Amazon sells printed books, e-books and audiobooks for much, much less. Anyone who has used Amazon’s services has noticed how that fact changes one’s attitude toward books. Through its Prime program, through the Kindle, and through its audiobook subsidiary Audible, Amazon has made it possible to buy books on impulse.

Just wait, the company’s critics have always shot back. Wait till Amazon controls the whole market — then see how well it treats authors, publishers and customers.

Now Amazon is walking right into its detractors’ predictions. There are a couple obvious reasons this is a bad strategy. It’s bad public relations — if it doesn’t already, Amazon may soon control a monopolistic stake of the e-book market and its tactics are sure to invite not only scorn from the book industry but also increased regulatory oversight.

Maybe the local bookstore does charge more, but there are places other than Amazon where you can get discounts.  And not everyone loves e-books. Higher prices probably do mean fewer impulse sales, but publishers and writers are fighting back.  The first Times story reports

The confrontations with the publishers are the biggest display of Amazon’s dominance since it briefly stripped another publisher, Macmillan, of its “buy” buttons in 2010. It seems likely to encourage debate about the concentration of power by the retailer. No firm in American history has exerted the control over the American book market — physical, digital and secondhand — that Amazon does.

James Patterson, one of the country’s best-selling writers, described the confrontation between Amazon and Hachette as “a war.”

“Bookstores, libraries, authors, and books themselves are caught in the crossfire of an economic war,” he wrote on Facebook. “If this is the new American way, then maybe it has to be changed — by law, if necessary — immediately, if not sooner.”

Mr. Patterson’s novels due to be released this summer and fall are now impossible to buy from Amazon in either print or digital form.

The retailer’s strategy seems to be to drive a wedge between the writers, who need Amazon sales to survive, and Hachette. But this does not seem to be working the way Amazon might want. Nina Laden, a children’s book writer, was one of many Hachette authors lashing out at Amazon in the last week.

“I have supported Amazon for as long as Amazon has existed,” she wrote in a Facebook posting she also sent to the retailer.

She went on to say that she was “frankly shocked and angry at what you are doing” to her new book, “Once Upon a Memory.” “It has made me tell my readers to shop elsewhere — and they are and will,” she wrote. (Amazon customer service wrote back, saying “We will be glad to investigate this issue further” if Ms. Laden would provide additional information.)

Physical books are, unfortunately, under siege and this doesn’t help.  So if books are important to you, I think it is important to stop shopping for them on Amazon.



Will books – and bookstores – survive?

I am surrounded by books.  I’ve always kept my books, carting them from place to place, but things began to get out of control when I bought my first house in Virginia and I had the room to have bookshelves.  Then 19 years ago I married another collector.  Luckily we live in a large space because we not only combined libraries, but we continue to acquire books at an alarming rate.  We started cataloging our books on a year ago and are still less than half way done at 2,100 books.  We get our books from many sources:  online used book dealers, yard and library sales, used book stores, independent stores wherever we vacation, Barnes and Noble and our local independent for new books.  So I was happy to see this story in the Washington Post this morning.

On Monday, Barnes and Noble announced that the chain’s CEO, William Lynch, was stepping down.

It’s never a good sign for a company when its CEO resigns, leaving it provisionally leaderless. In the case of a struggling chain like Barnes & Noble, it’s enough to make people wonder how long it’ll be until it declares bankruptcy. But headlines, in this case, are deceptive. Lynch’s resignation doesn’t show Barnes and Noble is doomed in the age of Amazon. It shows how Barnes and Noble can survive — as long as it doesn’t try to compete with Amazon.

Ah, the Nook.  I had a coworker with two teenagers that read a lot.  She got them Nooks for Christmas one year.  One of them loved it, the other wanted real books.  I understand there might be times when reading a book electronically might be convenient, but for me that convenience is outweighed by a physical, print book.

If you’ve got a teleological conception of new technology as something that eventually drives the old into oblivion, Barnes & Noble is doomed. It sells physical things in a digital world, and other companies are better at selling digital things than it will ever be. Blockbuster and Tower Records essentially disappeared from the face of the earth, after all, and we should have no illusions that Barnes & Noble won’t go the same way.

Here’s the thing: Bookstores, more so than movie rental and record stores, are oases in the middle of cities (and even in suburban malls). We go there to kill time, expose ourselves to new stuff, look for a gift without something specific in mind, and maybe pick up something on impulse while we’re there. Even Borders’ disorganized warehouses left holes in the urban fabric when they disappeared, and Barnes and Nobles would do the same–they’re a kind of public good, at a time when the public is getting less good at supporting libraries.

So, is there a way for Barnes & Noble to survive? The answer is yes–in a vastly different form.

There’s a happy storyline buried in Barnes and Noble’s overall revenue picture. The Nook disaster clouds the fact that the physical stores actually aren’t doing that badly, generating a comfortable $374 million profit last quarter. The chain got a significant bump when Borders closed 399 stores, and it’s now the only national bookstore chain in the country. It’s been shedding unprofitable real estate, letting expensive leases expire, and consolidating into the spaces that actually generate revenue.

“When you look at the financials on the retail stores, it’s basically a pretty good business,” says Al Greco, a professor of marketing at Fordham University School of Business.

It’s also got a hidden weapon: The academic market. Barnes and Noble now manages some 700 university bookstores, which are essentially monopolies over high-priced textbooks as well as collegiate merchandise. They’ve been moving into textbook rental and e-books there as well, and the millions of students on financial aid that includes textbooks are more willing to shop local rather than scour the internet for deals.

Finally, they’ve got an important friend: The publishers, who hate the idea of an all-Amazon world. To help keep the only large physical retailer alive, they might be willing to do things like offer some inventory on consignment, so that the bookstore doesn’t have to eat the cost of unsold books. They could even help offer e-books with the paper version at cut-rate prices on the Nook, whoever ends up owning it, or open-platform tablets like the Nexus.

The company’s management has noticed. Len Riggio, who started the chain and is now back running it, is interested in splitting off the retail stores and taking them private. Without the Nook, the business would get hammered by the markets anyway, so it’s best to avoid them. Absent the pressure of quarterly earnings statements, he might be able to try some radical new ideas, like drastically shrinking their square footage and offering a smaller selection of books curated by a knowledgeable and passionate staff.


The Brookline Booksmith which is the other store where I buy books has a wonderful staff  – and they send out a great weekly email newsletter.  Not that the BN folks where I go aren’t helpful, just that it can be more difficult to find one of them.  I have to admit that I use BN online a lot especially when I know what I want.  But there is nothing like roaming around a bookstore:  one never knows what treasure one will find.

And besides, print may be one of those things that never vaporizes entirely, just as newspapers still put out daily editions because they pay the bills. People like giving books as objects, having shelves full of them as decoration, traveling with them and not worrying about them getting stolen. Even in a smaller form, Barnes & Noble could be there to serve them.

“Will it survive? Yes it will,” says Greco. “We will still be buying and selling printed books in the U.S. in the year 2020. There will be a decline, but print is not going to disappear.”

Is 2020 supposed to be comforting?  That’s not very far away.  I’m hoping for way longer than that.  And will continue to do my part by buying books.

Photograph:  Brookline Booksmith