Harvard Used Book Store, BY-CC-SA 2009

All The Word That’s Fit To Print — The NYC Big Five vs. Amazon

There’s a war going on, and it’s not one you’re part of.

In a sort of celestial mortal combat the forces of good and evil, their respective roles being still up in the air, Amazon on one side, Hachette and its much less verbal yet co-signing ally Bonnier on the other, light up the skies. We, mere mortal writers and readers, scramble for shelter and are quick to declare sides lest, in the inevitable end, we’ll be left behind.

While titans clash high above we suffer the consequences. Amazon’s refusal to fulfill orders from Hachette stock (or, at the very least, delay deliveries) hurts the writers and readers of the publishing giant’s books. It doesn’t so much harm the giant itself. Hachette’s unwillingness to apply savings in production to book prices, colluding to keep them artificially high, and dropping writer margins hurts, once again, those who read and write, not Hachette’s bottom line.

Read any news outlet owned and operated by allies of traditional publishing or the companies itself and a pretty black and white image emerges: fair publishing is under attack and the only way back into a writer- and reader-centric world is to abolish Amazon, the sole cause of writers’ and readers’ problems.

The traditional publishing model is one of powerless creators and consumers and powerful middlemen. Acting as gatekeepers, and main beneficiaries of the written word, the “New York Big Five,” colluding with book sellers in brick and mortar installations, don’t “publish” as much as they “prevent”. With such power comes a specific delusion of grandeur. Publishers see themselves not as a needed henchman to those whose words want out and those who want them, but as the sacred temple of the “right word”.

Hachette has its allies in those who had found favor with the gods. Those writers and agents secure in their knowledge that their livelihood, albeit small, was protected against incursions by newcomers and outliers.

“You need us,” the rallying cry of the middlemen, is well understood there. Since the emergence and subsequent rise to prominence of eBooks and online reading, providers of the traditional printing and publishing industry pushed hard to maintain this control despite changing technologies. Publishers conspired with Apple to fix prices and attempted to block access to the new publishing platforms which pose the very real threat of obsolescence to most of the middleman structure. One last hurrah of former monopolists against the power of the masses who must be kept powerless to feed the gaping maw of the publishing moloch.

German News this week about Amazon: “Authors against Amazon,” “The Dictatorship of the coming Monopoly”

Writers’ associations friendly to the Old Guard of publishing (my home base, the German Union “Verband der Schriftsteller” has more or less devolved into a Hachette mouthpiece against Amazon) do what writers do best: rally against the perceived aggressor in long tracts studded with talking points and words designed to evoke images of epic struggles, much like the one I used in the intro to this piece. Writers, not reporters, so they may be forgiven for the lesser sin of ignoring realities. Realities such as the fact that not Amazon but Apple and its co-conspirators in an attempt to fix prices and drive out competition, Hachette, Simon and Schuster, Macmillan, Penguin, and HarperCollins, can legally and realistically be called a monopoly.

Amazon’s PR department in an email, on the other hand, reminded writers of long-past memories of the industry’s reaction to paperbacks. Old school publishing’s resistance to cheaper publishing (and “flimsier covers”) was, too, based not in fact but fear, the fear of loss of control and books becoming a mass market phenomenon, dependent on lower margins and higher volume.

Not unlike back then, Amazon and its supporters assert, easier access to publishing, combined with higher revenues for writers and lower cost for readers, gives more of a voice to the common man. Loud common voices, the oligarch’s greatest enemy.

Amazon has its supporters as well. Independent and self-published authors celebrate the elimination of the gatekeeper middleman. Living in a world in which the average earnings for any book are zero due to publisher rejections, even the $5000 or less made from self-publishing sound like a good deal.

Amazon, realizing it did not need to feed and protect the multi-headed dragon of the publishing industry, diverts earnings to itself and its customers, the writers and readers. The only loser in this scenario are old school publishers.

Like paperbacks, this threatens not the written word or its creators and consumers but those who benefit from keeping it an elite affair, publicity only through the favor of the reigning king, access to the word only by its leave (and the availability of a book store nearby or non-reluctant shipper).

Hegel writes in “The Science of Logic”:

It is said that there are no sudden changes in nature, and the common view has it that when we speak of a growth or a destruction, we always imagine a gradual growth or disappearance. Yet we have seen cases in which the alteration of existence involves not only a transition from one proportion to another, but also a transition, by a sudden leap, into a … qualitatively different thing; an interruption of a gradual process, differing qualitatively from the preceding, the former state.

The eBook transformation did not start yesterday. Part of it, the availability of hand-held readers, spread of smart phones from a privileged class to the commons, and Internet access permeating wide and far, is in the making since the early 1970s.

Some, such as Amazon and Google, joined the transformative effect early, staking their first claims as soon as feasible. As first time stake owners this was easy, starting out in new and uncharted territory the new digital frontiersmen had little to lose and a chance to shape the new frontier to their liking. Others, such as Hachette and Bonnier, had to be more reluctant. Transferring time, money, and effort into the new world meant to enter unfamiliar and potentially disastrous new ground.

As not just one of the the first inhabitants but the shapers of Digital, Amazon invested exclusively and, while braving the risks that brought down many of its online-only peers, reaped the rewards. Hachette’s caution might have saved it from a fate similar to those of buy.com or eToys. At the same time, however, this meant moving into a new city already saturated with service and goods offered by the former frontier pioneers. A city everyone wanted to live in. As sales and service demands plummeted in the heartland the need to move became more and more apparent, now not marred by fears of failure but demands that directly contradicted century old practices.

In true Hegelian fashion both forms of transformation happened. A gradual move into the new digital frontier, interspersed with cataclysmic events such as the release of the first iPhone and Amazon Kindle in 2007 and the iPad in 2010.

Amazon’s blockage of Hachette’s books has ruffled feathers and could be seen as a poopiehead move — and it pretty much is. Hachette’s visceral reaction, though, is more that of a former monopolist all too familiar with this tactic as an in-house tool to control bookstores and publishers than one of a benevolent master concerned for its charges.

In 2012 Hachette Book Group, Inc., HarperCollins Publishers, Macmillan Publishers, Penguin Group, Inc., and Simon & Schuster, Inc, together with Apple, faced a landmark lawsuit claiming they had conspired to keep eBook prices high on Apple’s iBookstore.

While the five publishers settled out of court, Apple’s case went to trial, disclosing some of the harsh facts of publishing in the process. According to the complaint, the publisher defendants regularly met to discuss the threat of lower middleman margins from eBooks and colluded to, “window” new releases, withholding eBook versions from Amazon as long as possible (United States v. Apple Inc., U.S. 12 Civ. 2862). Hachette, now the chief instigator of a narrative which accuses Amazon of hurting writers and readers by gating and windowing access to books, was the main proponent of this tactic.

Amazon, learning of this collusion in 2010, began a campaign of “disintermediation,” a move in which writers would cut out the publisher middlemen and offer directly to readers via Amazon’s platforms. In return, Amazon would raise writer margins to 70% and lower book prices to between $2.99 and $9.99, lowering eBook costs to half and almost tripling creator royalties. As the agent to roughly 90% of eBook sales, Amazon was in a good place to make this offer and be taken seriously.

In July 2013, the United States District Court for the Southern District of New York found Apple guilty of violations of the Sherman Act, illegally colluding with publishers to artificially raise book and eBook prices in a bid to inflate middleman profits while employing a range of tactics to prevent cheaper sales benefiting writers and readers.

The complaint and public case documents in United States v. Apple Inc., U.S. 12 Civ. 2862 are a fascinating read, including morsels like this Steve Jobs quote about Amazon when asked how the iBookstore’s $14.99 could compete with Amazon’s $9.99: “The price will be the same […] Publishers are actually withholding their books from Amazon because they are not happy.”

Hachette’s war in the skies is one for superiority, control, and income, not creator and consumer rights and access. It’s the last stand of an ageing monopolist whose survival depends on total control of all means of delivery and absolute power over the publishing cycle.

Bookstores siding with Hachette, fearful for their existence in the light of downloadable books, easily forget the many times the old guard, too, delayed shipments or blacklisted brick and mortars for alleged or real infringements or challenges to the publisher. And, of course, no mention of the flipside: under pressure by the Big Five and genuinely believing their narrative about an evil Seattle assault on writing, most booksellers refuse to this day to stock books published by Amazon. What was evil of the goose is still good for the gander.

In a nutshell, the fight between Amazon and traditional publishers can be boiled down to a simple change in perception. Where the old guard believes that money can be made from a tight control over writers and readers, Amazon hopes that it can be made by connecting the two openly and providing technology. Amazon is the middleware that challenges the middleman.

There is no conceivable scenario in which higher prices and less access are a winning proposition for anyone but those middlemen. Likewise there is also none in which feeding a machine exclusively designed to connect writers and readers should become the life goal of content and consumer. Hachette is one of five monopsonists born from necessity, a necessity that is becoming less and less certain.

In the words of Hugh Howey, award winning author of the NYT bestselling “WOOL” series and Molly Fyde saga:

Why show support for a corporation that may lower royalties to 30% in the future when you can celebrate a corporation that pays 17.5% today? Why show support for a corporation that may raise prices in the future when you can champion a corporation that colludes to raise them today?

The days of the New York Big Five Publishers are coming to an end. Not because we don’t need middlemen, we still do, but because the days of monopolies gobbling up every publisher and printer and pressing bookstores using the same tactics Amazon used against them, are over. Hachette still has its place, there’s a need for curated, well edited, limited access, printed books. Amazon also has its place, there’s a need for fast and reliable access to those books, fast and cheap publishing, barrier free entrance into the market, and eBooks.

If there is something to be done by us, the readers and writers, it’s not to side with either front in this celestial war, it’s to lay now the foundation to ensure that Amazon, the currently more benevolent of two rulers, will never enter a state of exclusivity that could turn it into the next Hachette.

To be fair, the current state of publishing isn’t entirely Amazon’s fault. Traditional publishing never met an invention after 1776 it didn’t hate. The public’s demand for eBooks and faster access to reading was met with infighting, incompatible technologies, and electronic bookstore wastelands. Each publisher created their own “online experience” and eBook format, jealously guarding it against any notion of compatibility and user friendliness.

The common publisher narrative of Amazon putting bookstores out of business is a false dichotomy. It wasn’t Amazon that destroyed brick and mortar booksellers, technology did. Technology, combined with the emergence of discounter book megamalls. In the eat-or-be-eaten world of the written word, those massive book seller chains killed the smaller mom and pop shop before facing competition from Amazon and losing the fight themselves.

By creating user-centric and writer-reader-supportive models, embracing competition and open standards, becoming more 2014 and less 1776, all those publishers could and would survive. Small bookstores could fill the void between online ordering and casual browsing, ensuring both Amazon and Black Books have a place in this world. Sure, monopolies and control have their draw, but there’s something to be said about following a calling and providing a service rather than jealously guarding old claims against the very populace, the writers and readers, one claims to serve.

That Amazon, a young upstart company, could upset the powers of the New York Five, the great and powerful Oz behind the publishing curtain, is not a sign of Amazon’s strength but one of those giant’s weaknesses. Grown complacent and demanding over the decades as undisputed rulers over the written word, they did what every aging predator would do: collude and conspire, engage in tactics and aggressions, while dutifully using the tool at their disposition, the word, to not only paint themselves as the victim but shift blame away and onto a newcomer and unfamiliar face: Amazon.

By embracing the fact that publishing is changing, that the future is digital, fast, and open, we can serve those who truly power the written word: the creators and consumers thereof. A new publishing landscape may mean the demise of the Big Five and even Amazon, but the future, one of open access to publishing, is bright.

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