Friday, March 16, 2012

Presumed Inane

Scott Turow was interviewed in Salon.com a few days ago, explaining why we should fear Amazon.

Scott said: "The concern is that they are getting so large and they compete so ruthlessly that there’s a lot of fear for what the world with Amazon in charge is going to look like."

This is entirely understandable. I mean, when one company has the majority share of any particular market, they always abuse their power. For example, how about...

Um...

Well, what about that famous case of... uh...

There have to be plenty of examples of this happening, right? How people get screwed once some company winds up with the lion's share of the market?

Just because Scott didn't list any examples, and because I can't think of any, doesn't mean this isn't a huge problem that happens time and again in the US.

Lemme consult Google, see what I can find.

(please hum the theme to Jeopardy in your head, and then send the copyright holder royalties)

Okay, I'm back.

I couldn't find any examples of any US companies who dominate a marketplace and then start screwing customers.

Ironically, I used Google, and one could probably call Google a dominant company. It certainly is the most popular search engine in the world. But it doesn't seem to be screwing over customers. In fact, it keeps innovating and improving customer experience.

Ditto Twitter, and YouTube, each also dominant.

Hmm...

Scott said: "Look, if what they’re into is maximizing profits, then if they were to have a monopoly there’d be no rationale not to use the monopoly power to increase prices to consumers. That is historically what monopolies do. There is plenty of precedent for that. It’s only rational to fear what they’re going to do with this accumulation of power."

That's historically what monopolies do? Okay, so show me the precedent.

Microsoft has pretty much dominated the market with Windows. Has Windows become more expensive since it first launched because MS has a monopoly on operating systems?

It launched in 1985 for $99.00. In today's dollars that equals $212.00

The latest version of Windows is $179.00.

But Amazon must have a track record for doing this, right?

When the Kindle was released in 2007, it was $399. Now that is has an overwhelming market share, how much did Amazon jack up the price?

The Kindle Fire is $199. The bare-bones Kindle is $79.

Hmm...

I'm old enough to remember Ma Bell having a true monopoly on telephones. You had no choice. You couldn't even own your own phone--you had to rent from them.

Am I off base, or did prices seem to get higher once the Department of Justice broke them up?

Monsanto owns 98% of the US soybean market, and 79% of the corn market. Last I checked, both corn and soy were still pretty cheap.

Where is all this precedent? Can't Turow offer a single example? Just one to show the bad things that happen when a single company controls an industry?

Certainly OPEC is an example, but that's a cartel, not a single company. They all agree on the price of oil, and we've seen how crazy oil prices have become. We're hitting $4.00 for a gallon of gas in Chicago right now. All because they collude to fix prices.

I mean, four bucks for gas is outrageous. It's almost as bad as paying $14.99 for an ebook.

Hmm. That's sort of ironic, isn't it? Because the Big 6 also fit the definition of a cartel, and they're being investigated for collusion.

Seems like cartels want to keep prices high, when Amazon wants to lower them. That's the reason the Big 6 colluded, remember? Amazon was selling ebooks for less than the cartel wanted them to be sold for. So the Big 6 forced Amazon to take the agency deal, resulting in LESS MONEY FOR AUTHORS.

I put that in caps because Turow and the Authors Guild support the agency model, when authors make less money from the agency model. And the rationale behind it is so funny it hurts:

The Big 6 wanted to control ebook pricing so they could keep the prices high, because they were afraid of Amazon becoming a monopoly which might raise the price of ebooks.

How about Wal-Mart? They certainly have a commanding market share. And look how they're gouging their customers with large selections and low prices, and how they keep appearing in more and more areas so more consumers can benefit from them.

And yes, I know some people hate Wal-Mart. For a nice counterpoint to all the hate, watch the Penn & Teller episode of Bullshit where they talk about all the good Wal-Mart does. It's on season 5, and you can get it on Netflix.

Hey, there's an example! Netflix is close to being a monopoly. In fact, they are one of the most visited sites on the Internet (#22 in the US). And look how poorly they treat their customers by charging an outrageous $15.98 a month. Compare that to cable TV companies, who have plenty of competition. Yet for some reason I still pay over $50 a month for cable.

Hmm. Cable (which has competition) screws me, and their customer service is laughable, and Netflix (the monopoly) is a fraction of the price and gives me great service.

"Scott said: This was something that Amazon pioneered. They would sell you a [just-released] book on Day One, buy it back from you on Day Two, and then resell it to another customer on Day Three. This was legal, but certainly not what anybody ever intended.

So Amazon decides to go into competition with the publishers by reselling the book they just bought. The publisher gets paid nothing, and neither does the author. It’s a pure profit for Amazon."

So Amazon pioneered selling used merchandise alongside new merchandise?

Have you ever been to a car dealer, Scott? They've been doing that for decades. So has Gamestop. They buy used videogames, and sell both new and used games, systems, and equipment. Best Buy is doing this now as well.


Record stores have been doing this forever. And I know plenty of indie bookstores who sell both new and used.

Apparently used sales don't hurt new sales as much as Scott would like us to believe. Or perhaps they do. Perhaps once Amazon began selling used books alongside new books, new book sales plummeted. I'm sure he's got reams of data that shows this was the case.

Funny he didn't share any of that data, or give a single example. As president of the Authors Guild (aka the Mouthpiece for Big Publishing) he certainly could contact some of the Big 6 and ask them how their new book sales on Amazon plummeted when Amazon began selling used books.

Used bookstores have been around for hundreds of years, yet the new book market has continued to survive, if not thrive.

I wonder what Scott and the Authors Guild think of libraries. They buy one book, and loan it out hundreds of times. Doesn't that hurt new book sales too?

Well, Random House thinks it does. They just increased their price of ebooks to libraries as much as 300%.

But Random House isn't a monopoly. It is part of a cartel.

Am I the only one getting the impression that calling Amazon a monopoly is just a tactic to scare authors, when authors should be fearing the disaster that is the Big 6 cartel? The Big 6 are the ones raising prices and giving authors poor royalties. Amazon is giving authors great royalties and lowering prices, which leads to more ebook sales.

BTW, see how I'm proving my points by linking to examples? Where are Scott's links?

Scott said: "One way that 25 percent of net became the standard royalty for e-books was because publishers said, “We all know they can’t go on selling e-books at a loss forever and sooner or later this pricing structure has got to change.” They told authors they couldn’t agree to a different royalty because everyone knew that Amazon wouldn’t be paying them $14 to $15 per title indefinitely."

Wow. This is such utter BS.

First of all, the 25% ebook royalty rate existed long before Amazon invented the Kindle. I've got book contracts to prove it.

Second of all, they couldn’t agree to a different royalty because everyone knew that Amazon wouldn’t be paying them $14 to $15 per title indefinitely--SERIOUSLY?!?! The Big 6 FORCED Amazon into the agency model. The Big 6 are the ones who cut author profits and guaranteed Amazon was no longer paying $14 to $15 per title.

So the Big 6 were worried Amazon would no longer pay them $15 per ebook, so they forced Amazon to take a deal where Amazon only paid them $7 an ebook.

In-fucking-credible. And of course, the author got screwed. And the Authors Guild endorsed this screwing.

Scott said: "Amazon responded by removing the buy buttons not just from all of Macmillan Publishing’s e-books — about which you can say, yeah, there’s a legitimate dispute — but from their print books, too. Paper, physical books! It was another demonstration of their ability to abuse their market power."

Actually, Amazon was the one being bullied here. Macmillan forced them to take the agency model. Amazon had deals in place with Macmillan, and Amazon was allowed to price their ebooks however they wanted to. That's how retail works. So Amazon decides they don't want to be bullied by a supplier, and they stop selling the supplier's ebooks, and that's an example of abusing power?

When someone smacks me in the mouth, and I smack them back, am I abusing my power too?

Scott said: "Barnes and Noble developed the nook because they really had no choice but to compete with Amazon. "

Amazon didn't force B&N to develop the Nook, Scott.

Readers did. Because readers decided they wanted ebooks. And smart companies try to pay attention to what readers want.

Unless, of course, they are part of a cartel and can control price. Like the Big 6 did for decades, releasing an overpriced $25 hardcover a year before the affordable $7.99 paperback. Why not release them both at the same time?

Oh yeah, because you can't gouge the consumer then. Funny how when a book is finally released in paperback, it pretty much always sells more copies than the hardcover. Perhaps because customers prefer paying less.

Historically, who charges customers less? Cartels like OPEC and the Big 6? Or so-called monopolies like Amazon and Netflix?

How about Apple? Apple is now the biggest music retailer in the world. And did they abuse this monopoly power by raising prices and becoming hostile to their customers? Or have they lowered prices and stopped using DRM, which customers hate?

(A quick aside here--the music business blames piracy for their woes, because their revenue decline coincides with the rise of mp3s. I have a different theory. Customers didn't want to pay $15 for a CD when they only wanted one song. When Apple started selling mp3s individually, consumers only bought the song they wanted, not the whole CD. Hence the sales decline. It wasn't piracy. It was the music business no longer able to bully consumers into buying full CDs. For a hilarious look at how industries inflate numbers, watch author Rob Reid explain Copyright Math.)

Scott said: "Again, my concern is for the sake of literary diversity. If the rewards to authors go down, simple economics says there will be fewer authors. It’s not that people won’t burn with the passion to write. The number of people wanting to be novelists is probably not going to decline — but certainly the number of people who are going to be able to make a living as authors is going to dramatically decrease."

Because there can be no literary diversity without publishers and brick and mortar bookstores, right Scott?

What a silly thing to say. Almost as silly as saying there will be fewer authors.

Actually, Scott, there are now more authors than ever, thanks to Amazon. There are over 100,000 self-pubbed titles in the Kindle Owner's Lending Library, and many more in KDP. And the majority of these authors are making more money than they were in legacy publishing.

Some of these books went out of print. Some were rejected. Some were never even submitted to the Big 6. Some, like me, will never submit again. Now these authors are earning 70% royalties through Amazon, while the Big 6 still only offer 17.5%.

Why don't you mention those authors, Scott? Some are Guild members.

Please, Scott, explain why you are defending the group that screws authors and demonizing the group doing good things for authors?

Is Amazon perfect? Of course not. No company is. But the things you accused them of doing are justifiable, and there is no evidence or precedent for the things you fear they'll do someday in the hypothetical future. At the same time, there is ample evidence that the Big 6 harms authors and disregards readers.

It seems to me that you, and the Authors Guild, are fighting for the wrong team.

After writing this fisk, I asked Barry Eisler if he had anything to add. He came up with these excellent points.

Barry: Joe, that was epic. It was almost painful to see someone so thoroughly demolished for his total failure to mention even *one* supporting example, and for his failure to address all the real-world examples that contradict the theories on which he relies.

Remember, this is not some high school freshman who's learning persuasive writing and argument for the first time. This is a graduate of Harvard Law School, a former Assistant U.S. Attorney, a practicing attorney, and the author of two works of nonfiction. His failure to provide any real-world evidence at all in support of his claims and theories is stunning. So is his failure to respond to this post or the one you and I did over the weekend. No one with any intellectual honesty, or even just dignity, could refrain from defending his arguments after they've been so publicly and thoroughly dismantled.

Just a few additional thoughts:

Look at Counselor Turow's opening argument again:
"The concern is that they [Amazon] are getting so large and they compete so ruthlessly that there’s a lot of fear for what the world with Amazon in charge is going to look like."

There's so much dishonesty in that one little sentence.

First, "the concern is" and "there's a lot of fear" construction. Anytime someone uses the passive voice, or otherwise constructs his sentences to obscure the actors, my bullshit detector starts to tingle. Who is Scott talking about here? Himself, presumably, but no one's going to particularly care about the fears and concerns of just one person, so he can't name himself. And legacy publishers, presumably, but if he were to say, "The concern among legacy publishers is…", people would discount that fear as illegitimate and self-interested. So instead, he twists his syntax to make readers feel like he's talking about the whole world, or at least about all of decent society, without ever having to take an actual position about just who is so concerned and afraid, and why -- a position that he might have to actually defend .

Remember, again, this is a guy who's written countless legal briefs. A professional, who chooses his words with exceptional care. So it's fair to assume his linguistic dodges are not accidental, but are instead done deliberately.

But okay, regardless of who is supposedly so concerned and afraid, what does Scott claim they're concerned and afraid of? "Amazon in charge."

Amazon in charge of what? Book retailing? Book publishing? My health care? The country? The world? What does it mean for a company to be "in charge" of something?

Well, that's just it -- you're not supposed to really know. Your imagination is supposed to just fill in a vague feeling of disquiet at the notion of a corporation being "in charge." So at best, the phrase is hyperbolic. The non-overheated way to phrase it would be something like, "Amazon having too much power in the book business." But that doesn't sound *scary* enough. So Turow deliberately resorts to hyperbole to achieve the scares he seeks.

Now, in fiction, this is fine. But from the President of the Authors Guild, in a letter posted on the Authors Guild blog?

That's just disingenuous.

Why is Turow creating these straw men? The same reason anyone does. Because he knows he can't make or counter real arguments. If he could, he wouldn't have to make shit up instead.

Here's another nugget.

"Barnes and Noble developed the nook because they really had no choice but to compete with Amazon."

Think about that for a moment. Turow makes it sound like mean old Amazon cruelly forced B&N into such a dire situation that B&N had to, like, *compete*, man. And that is so unfair!

Really? Amazon's innovations forced other companies to innovate, too? And Turow doesn't like that? He wishes it weren't so? Turow thinks that's *bad?*

This is what happens when you can't argue with logic and evidence -- when, as Orwell, said, "there is a gap between one's real and one's declared aims." The truth starts to bleed through the bullshit. And the truth is, Turow doesn't like innovation. He doesn't like competition. He likes the cozy, moribund world of establishment publishing that has been good to him, the one with which he identifies and of which he is part. He doesn't want that world to change, and he resents players who are intent on changing it.

Now, for all the Twitterers and commenters who are going to jump in now and say, "Hey Barry, you and Joe are biased, too! You guys are both Amazon authors and have made, and stand to make, a lot of money with Amazon!," let me say this.

Bias is only suggestive of unsound thinking. It is never dispositive. Logic, evidence, and argument are dispositive. So the urge to focus exclusively on what's at best merely suggestive while ignoring what's dispositive is as strange as it is unproductive.

But let's assume the bias-mongers are right. Let's assume Joe and I are biased (and that Scott Turow, bless his disinterested heart, isn't). Let's assume the Amazon model of low prices, high royalties, and high volume works for us, and that we like it the same way Pete Sampras likes carbon racquets -- because they favor our style of play.

Now that that's out of the way, can we address the *merits* of our arguments? Is what Joe and and I have argued here logical? Is it backed with solid evidence? Can it be refuted with solid evidence? And regardless of how one system or another might favor Scott Turow or how it might favor Joe and me, which system, on the merits, is likely to deliver more benefits to more authors and readers overall?

Those are the questions that matter, no matter who is biased in an argument, or how, or why. And anyone who really gives a damn about books and publishing should be trying to answer those questions, not trying to avoid them.

Joe: Thanks for chiming in, Barry. I want to add a bit about proving arguments. I have very little knowledge of monopolies. So when someone tells me something is a monopoly, they need to prove it to me and not assume I can automatically come up with ten examples. I found a few examples of monopolies on the Internet, but it's not my job to study every company in the history of the US looking for monopolies to disprove Scott's ideas. It's his job to prove them and support them, because he is the one claiming that monopolies increase prices, and that there is plenty of precedent for that.

He has to show the precedent, and show how it applies to Amazon, if he wants people to believe him.

If someone claims there is a gremlin in their house, it is not up to me to prove gremlins don't exist. The one who claims experience has to prove it.

I stated quite openly that I don't know of any past monopolies that increased prices once they wiped out competition. I'm saying that the dominant companies I've looked at (Amazon, Netflix, Google) seem to treat consumers better than cartels treat customers. I've provided evidence to support my ideas.

If you disagree with me, go point by point, using logic and evidence to show I'm wrong.

187 comments:

Nicole MacDonald said...

*sigh* there's always the conspiracy theorists with monster chips on their shoulders. "Amazon is going to take over the world!!" But hey, as a indie who just got her first $1000+ cheque from Amazon - they get my vote! ;p
Damsel in a Dirty Dress

Athena said...

He also said, "They (Amazon)now control the print-on-demand market. That’s when you buy a book and only then does a service print a copy — literally on demand. [This is a method used by academic and small presses, as well as by authors with otherwise out-of-print books.] Amazon bought a POD service called BookSurge. Then they informed their customers — university presses and some other publishers who the Guild had organized to do POD for Authors Guild members — that they would not list their books on Amazon’s site unless they paid BookSurge more for their services"

What is he even talking about? He says it in such a way that it sounds like he's claiming Amazon controls the entire POD market. Obviously not true.

Did I read it wrong? or miss something or is he possibly smoking a little crack? Super confused.

Thank you for this post, Joe. You continue to boost my resolve.

Bob Watson said...

Joe,
I like your comment about publishers being a cartel. Seems they have more in common with those who sell drugs than they do as with people with any legitimate business. By that I mean, they seem to put their interests first, then their suppliers (authors). Some where down the chain are the consumers, in last place.

The best thing about Amazon is that they have always put customers first. Customer care has always been a priority with them. Not so with old school publishers and authors. They seem to think that by adhering to this artificial economic bubble they created that it is the only "true way." Like the old soldier said, "When you've got 'em by the balls, their hearts and minds will follow." But Amazon has destroyed that myth.

The readers are the people authors work for, not publishers. Amazon shown that if you give your audience (readers) a good product at a fair price, everyone wins.

Yep, I can see how that threatens the publishing cartel. Suddenly the reader junkies are in charge.

¡Viva la Revoluci√≥n!

Eva Hudson said...

Let me just say - I love Amazon - buy from it, sell through it, love it.

And I don't agree with Scott Turow... BUT I think there are cases where big companies do screw the little guy. Here in the UK large supermarket brands have been exploiting their suppliers (esp. farmers) for years now.

And as authors we're not Amazon's customers - who are and will continue to be treated very well by the company - we are their suppliers. So far I've no complaints - but I suppose there is an argument that as small suppliers we could be vulnerable to changes in the future.

But right now, Amazon rocks.

Top100EbookRanking said...

Scott Turow said: "but certainly the number of people who are going to be able to make a living as authors is going to dramatically decrease."

My response: That's B.S. Getting rid of the middleman (legacy publishers) benefit both the authors and readers. This saving means low prices for readers and higher royalties for authors.

It's simple economic that without an expensive middleman there will be more people who are able to make a living as authors than ever before. And this rate will only accelerate as more authors bypassing the middleman (aka legacy publishers).





This thread I created on the Kindle Boards might be of relevant to this discussion:

Authors who have sold more than 50,000 self-published ebooks to date
http://www.kindleboards.com/index.php/topic,103665.0.html


Many authors are having tremendous success as indie.

Rik said...

Joe - I love your blog; I've been self-publishing for years (still waiting for a touch of luck to get the sales rolling, though).

Concerning monopolies - Microsoft did themselves no favours with Internet Explorer 6. It took court action to get them to unbundle the browser from the rest of their system and I'd say the resulting competition has improved the browsing experience massively.

Some other examples from my homeland ... telephones. The Post Office had a monopoly on telecommunications until the early 1980s. Getting a landline could take up to 3 months, and the choice of phone sets was: black, red, blue, green ... or white.

The other service that springs to mind is British Rail. More of a national joke than a national railway.

As for me and Amazon - I'm not their hugest fan. I'm hoping some of their good service will trickle down to the small fry (like me) over the coming months and years. For now, I'm maintaining my good relationship with Smashwords and Lulu - because when it comes to keeping eggs there's no harm in having more than one basket.

Best wishes!

Thomas Knip said...

Joe, you're a very naughty boy! Poor wittle Scott is just trying to make a point. Any point. And all you use are facts and arguments. How is he supposed to answer on them?!

Anonymous said...

The simple truth is, all tyrants fall eventually; it is just a matter of how long it will take and how easily it will fall.

In the times of past, say the Middle Ages, it could take up to centuries before the people finally got rid of their oppressive institutions; but nowadays in the western world, tyrannical institutions fall much quicker and more easily than they used to. So...I'll let you be the judge on who are the tyrants here...


Lastly, I think most people, Joe included ;), have missed the REAL purposes behind Mr. Turow's recent series of essays that are seemingly against amazon.com. I think as the President of the Author's Guide, emphasis on the word Author, he's actually trying out his hand on writing satirical pieces about the established publishing industry; but thus far Mr. Turow has yet to connect with his readers. I am pretty sure Mr. Turow is genuinely aware of his recent less-than-stellar debut as a satirist; therefore, we can expect him to write more, and hopefully improve on, future essays regarding the topic. Way to go Scott! It really is hard to change genre and it takes a great writer and a lot of courage to do so. BTW, your second piece is getting slightly more amusing than the first! We wish you all the best! When you've finally succeeded in making the transition to writing satires, we will be buying them in your upcoming amazon KDP editions! Keep up the good work, and as they say, write, write, write! You are almost there, buddy!

Top100EbookRanking said...

Another million self published ebook seller. It's Gemma Halliday who blogged about it yesterday:


Just for giggles, I thought I’d add up how many books I’d sold at my former publisher as a comparison to what I’m selling as an indie now.

Total paper books sold: 106, 565
Total ebooks sold: 6,242

So in 4 years at a traditional NY publisher, I sold roughly 1/10 of what I’ve been able to sell on my own in just 2 years.

Isn’t it a great time to be an indie author?
~Gemma



Top 100 Ebook (by genre) Ranked by Readers ($0.99 - $3.99)

David Gaughran said...

Scott Turow's interview with Salon was as laughable as his letter calling for the DoJ to drop their investigation into price-fixing (before it had even colluded).

My favorite part was this:

"How did Amazon’s e-book pricing affect authors?

One way that 25 percent of net became the standard royalty for e-books was because publishers said, “We all know they can’t go on selling e-books at a loss forever and sooner or later this pricing structure has got to change.” They told authors they couldn’t agree to a different royalty because everyone knew that Amazon wouldn’t be paying them $14 to $15 per title indefinitely."


Right, Scott. So publishers paying a crummy 25% of net was Amazon's fault? That might be the most ridiculous claim he has made to date (which is saying something).

Jude Hardin said...
This comment has been removed by the author.
Darlene Underdahl said...

I enjoy getting your perspective on these things… thanks.

Jonas Saul said...

Talk about perspective. Wow. This, to me, is like doing a petty crime, getting caught, arrested, held over night until the bail hearing and dropping the soap.

Limping home the next morning - you wonder if the petty crime was really worth it.

Scott may be near the limping home, tail between his legs part soon...there is no reason to his words and absolute sanity in yours.

Well done.

Jonas

JohnMWhite said...

I don't have a huge problem with Amazon and their growth, but the idea that monopolisation and domination of a market doesn't lead to abuse because the author cannot think of any examples is asinine. Ticketmaster charge ridiculous fees every time you want a ticket for something, and since they dominate the field, you generally have no option but to pay it. AT&T had a stranglehold on iPhone users for a while and charged a premium on their data while capping it, because they knew the customers had no alternative. AT&T also happens to be the only Internet provider in my area, charging way more than I would be paying if there were competitors around as there are in places nearby. Lack of competition frequently drives prices up, and it's not a conspiracy theory to be concerned about that.

That being said, I'd much rather have a platform like Amazon where the multitudes can enter the market and make it or fail on their own than the closed system of old-school publishing cabals who select what they will allow into the world seemingly on a whim, while colluding to fix prices to destroy any sense of competition, even to the point of trying to legislate that they be permitted to force retailers to do so (see the issues in Sweden recently).

Devin Rose said...

Companies want to make money and if they can leverage their market dominance to do so, they will. One person brought up one way Microsoft did this until anti-trust suits were filed against them.

Monsanto controls the seeds farmers plant through patents (round-up ready), and sure food is cheap enough, but using GMO seeds and dousing them with round-up isn't a good thing for the soil or long-term environment. So there are other costs involved, but companies need to increase revenue and that can come at the expense of competitors or the environment or suppliers and ultimately the customer (directly or indirectly).

I'm a self-published author through Amazon CreateSpace and KDP and am quite grateful for the services provided by Amazon, but I have a more guarded attitude on what companies can and will do if they gain dominance.

Ursula said...

So it figures the places we patronize heavily in our family are at the root of all evil in the world: Amazon, Netflix and Wal-mart.

Next thing you know the Easter Bunny will turn out to be a Vampire.

Honestly, this wag the dog spin is such a total load of steaming crap. I don't understand how people buy into it.

DJ said...

Joe, please, there are countless examples of how monopolies abuse consumers. There's even a game about it - it's called Monopoly. But cartels can be just as bad and more insidious as they give the illusion of there being competition. One of the biggest things monopolies and cartels do besides driving up prices is squash innovation - in product offerings and in cost structures. So of course the Big 6 want to preserve this - their entire raison d'etre is built on it.

But the more I think about this whole issue (thanks to Joe and Barry for pounding the drum) the more I realize how stupid it is to "fear" Amazon getting a monopoly. Some bright young entrepreneurs are going come along and build better and better models and that will force Amazon to keep innovating. Maybe even a few of the Big6 will get their heads out of their collective asses and doing something creative for a change. Stranger things have happened.

This is an age where innovation can truly thrive, and that's a great thing. When is the last time there has been any real innovation in the publishing industry ? That consumers actually have choice and ability to get exactly what they want at a fair price, and 70% of the price they pay goes directly to the artist that created it ? It's unheard of.

I find it sad that Turow is being such a bitch about this. He's too close to the insiders, he's become one of them. It reeks of the cartel trying to build a paper trail of support for their DoJ case.

David L. Shutter said...

Another great retort, thanks Joe.

And another illogical gem from Mr. President:

I don’t like losing sales, but
the real problem is at the margins. Midlist authors have been struggling to survive for decades now. If you start eating into the publishers’ returns, then at the bottom of the food chain, those books are just not going to get published. We have seen that happen.


Ok? Soooo mid-list writers, who've always struggled under legacy terms, will suffer worse with Amazon?

Some kind of "trickle-down" price dropping, instituted solely from an evil Amazon, is what's going to ultimately screw mid-listers?

Is he trying to imply that mid-listers can only survive, albeit at a "struggling" level, only if big publishing survives?

"We have seen that happen."

He mentions the classic mid-lister plight as another ominous warning but then counters himself by saying it's happened elsewhere

Where has it already happened for real?

It's happened with a pittance 8 to 17.5%, with non-existent promotion and a single-spine out.

No one needs to point out, on here anyway, how ridiculous this is.

This is from an awfully smart guy who's been in publishing for 25 years. Read his *Wiki page. Yet there's isn't a milligram of logic in a word he's saying.

This all reeks of a fear for losing the status quo. Plain and simple.

*"Controversy" was added to his Wiki page, just this week, about his original Amazon comments. Funny. Dave Gaughran's Indiereader column is listed there as a resource too.

Anonymous said...

What the publishers and the legacy authors should be afraid of is not Amazon, but the massive power of READERS, who, freed of horrible prices, vote with their dollars and pursue inexpensive stories. And, since in this case, there are as many ebooks available (ie, no shortages, artificial or otherwise) as those pesky readers want at those prices, suddenly those who supply what is wanted find themselves in the driver's seat. Thank goodness ebooks are not fattening - because you can almost literally have as many as you want.
Riverboat pilots on the Mississippi had a monopoly on transporting goods safely to the sea; the pilots union was ever-powerful and only shared information about shoals and sandbars with its members. Their monopoly reigned - until the railroads did an endrun around them - and they lost all their power to manipulate shipping prices.
Amazon is doing that same endrun around traditional publishing. The riverboat pilots didn't like it, either.
ABE

Anonymous said...

Scott's take on predatory pricing and the inherent risks of any monopolies that may result therefrom is correct. That's why the antitrust laws are on the books. That's why the DOJ refuses to allow certain mergers.

That said, there's almost no risk of Amazon ever becoming a book monopoly. First of all, Amazon produces almost zero books. It is primarily a distributor of books produced by others. Further, the digital world is ever-evolving. No one will ever be able to hold a monopoly on a digital delivery system. At any given moment in time, there will be some who are better than others. Amazon holds that position currently. But if it ever got too extreme, either to customers or authors or publishers, there would be a backlash, a void would develop, and someone else would come in to fill that void.

Splitter's Blog said...

Literary diversity...like when a relative few used to decide what was going to be available to readers and when? Like when readers had only their neighborhood bookstore instead of a huge database? Or, do you mean like before a reader could punch in a few key words and get right to the type of book they wanted to read?

There are many things I could pick on in that article, but this one just jumped out at me. He is complaining about loss of control while praising the diversity that such control produced. Impossible.

Note how many buzzwords were used. We, as authors, tend to get up in arms before we as a group THINK publishing situations through. He is preying on that group think mentality. That's predatory.

Splitter

Matt J said...

Great response as usual to a letter completely grounded in an outdated belief system. However, on a related note, I was wondering how you, Joe, and you, Blake feel about using DRM when uploading to Kindle. Should we ebook writers use it, or is the idea of a work being shared and seen by more people (legally or not) part of the new digital revolution? Will no DRM actually increase sales? Part of me thinks DRM is part of that antiquated publishing industry thinking, but another part of me understands a writer's right to have his or her work as protected as possible. I'm uploading my first book next week and I'm not sure which way to go. Any advice?

Ken Marable said...

I agree that Scott's points aren't helpful, but I do think there is one potential worry with an Amazon monopoly. Wal Mart is actually a very infamous example of this - it doesn't necessarily hurt customers, but it does hurt suppliers. Wal Mart's bullying of suppliers is notorious and has been quite harmful.

Despite any language Amazon may use, authors are suppliers not customers. Quite simply authors give Amazon product not money. If you look at the influence of monopolies on supply chains, then picture does change.

However, personally, I don't think it is severe enough to be all doom and gloom, but enough to at least keep my eyes open and realize that Amazon's interests generally align with authors, but not absolutely 100%. They appear smart enough to keep their authors happy, but attitudes can change especially in the years to come when those making decisions now move on.

Todd Trumpet said...

Scott Turow, The Reader's Digest Condensed Version:

"I made a lot of money selling books the old way. I think I'll make less money selling books the new way. Therefore, the new way is bad. For everybody."

Todd
www.ToddTrumpet.com

P.S. Counselor: "No, YOU'RE out of order!"

elias said...

I agree that Turow's arguments are silly, and that he's obviously shilling for the Big 6. But Joe, your examples are lacking.

You seem to confuse "market leader" and "monopoly." The reason we don't have many recent examples of monopoly abuse is because monopolies have been illegal for a while.

Netflix is not a monopoly, Apple's music business is not a monopoly. They are market leaders, but competitors exist. In most areas where cable companies operate, those companies do have monopolies, since customers only have one choice of service provider. And for your Microsoft example, they were investigated and found to be in violation of antitrust laws in the 1990s.

Turow is correct that historically monopolies lead to abuses of power. He's wrong about most of what he says but that part is true. The problem is, the whole talk about Amazon becoming a monopoly is completely irrelevant. I don't see any evidence that Amazon will actually ever get to that point, and even if they did, governments would step in and break it up.

Kevin Michaels said...

Literary diversity? Did Turow even think about the words coming out of his mouth before he spoke? Point made earlier - the Big 6 (and the agents who cater to their needs) are the ones that have a stranglehold on literary diversity. There is more diversity and variety in the marketplace today because of e-readers (and specifically Amazon) than ever before....maybe not all of the indie books that are out there are first-rate but the choices for readers are greater than they have ever been....

And re: monopolies....even with monopolies dominating industries, we live in a free-enterprise society which creates innovation and competition. Somewhere, somehow, some day, somebody is going to create a product that shakes up the norm and cuts into the industry leader's market share because that product is newer, different, priced better, technologically advanced, etc. First rule of business is compete or die (not sit on the sidelines and whine like a bitch).

elias said...

Sorry, rather than saying monopolies are illegal, it would have been more correct to say that the abuse of monopolistic power is illegal. There are of course historical examples of monopolies that have been sanctioned by the government.

Tom Maddox said...

I was hoping you would take on the Salon piece. I read it the other day and even I could smell the crap he was spreading. I love how he conveniently forgets that the Publishers forced the Agency systems on Amazon and the Agency System is the cause of both the Publishers and the Authors make less money for each book sale (while, ironically, Amazon makes more).

Once again this seems to be a case of some authors being so scared of some hypothetical future, where amazon keeps the authors under their thumbs that they are willing to forgive the legacy publishers who are already keeping the authors under their collective thumbs.

Jon Olson said...

Ouch. Snap. I'm surprised that I don' see Scott Turow responding here. But then responding to a successful indie's blog would be legitimizing him.

Nice stuff, Joe.

Jon O.
The Petoskey Stone
The Ride Home

Joe Konrath said...

And as authors we're not Amazon's customers

Actually, Amazon considers authors to be customers. I've heard half a dozen Amazon employees say that. I also just got a survey asking me to grade Amazon Publishing on how it is doing, and am chatting with them about it next week.

Think about that. Amazon asks its authors to grade it and help it improve. That's unprecedented.

Joe Konrath said...

Ticketmaster charge ridiculous fees every time you want a ticket for something, and since they dominate the field, you generally have no option but to pay it.

Ticketmaster is a good example of a dominating company, bordering on a monopoly. And their fees can get pretty high. I don't know enough about them to comment.

AT&T made a deal with Apple to be exclusive on the iPhone, but you did have a choice in phones and could have gotten a comparable Android. And since then, Verizon now offers iPhones.

I've switched internet providers three times, and can confirm that switching doesn't result in saving a lot of money. It may save a bit the first year, but then it always winds up evening out--that cartel effect again.

Adrian said...

I'm not afraid of Amazon. I think Scott Turow is fanning the flames of fear because he thinks the old system works in his favor.

But using Microsoft, AT&T, and Monsanto as examples of monopolies that don't/didn't routinely screw their customers (and non-customers) is ludicrous.

Joe Konrath said...

Joe, please, there are countless examples of how monopolies abuse consumers

In my blog post I begged for examples... and you haven't provided any. If there are "countless" can you name 50? 25? 10? Even 5?

Ticketmaster seems to be a good example. What are the countless others?

I agree with your comments about cartels, but I think the fear of monopolies may alarmism without justifiable proof.

Joe Konrath said...

Scott's take on predatory pricing and the inherent risks of any monopolies that may result therefrom is correct. That's why the antitrust laws are on the books. That's why the DOJ refuses to allow certain mergers.

Can you show me some examples where predatory pricing put competition out of business, or where monopolies abuse their power?

And if there aren't cases of this, why is that? Because the DoJ steps in (like they are with the Big 6 collusion?)

If the DoJ always steps in, why did the Big 6 have to collude? Wouldn't the government have slapped down Amazon?

smober said...

I've been self-published since the beginning of the year, but I've done a lot of reading and researching as to what the best option was before self-pubbing. I can't see how an author would want to go trad pub over self-pub now, but it still seems to be a lot about preference. For me, the toughest part of being self-pubbed is marketing, but I'm doing my best to figure it out. That would seem, to me at least, the only advantage to being trad pubbed, but still not really worth it when all other factors are considered.

Since January, more than 4,000 copies of my two books have been read. I know I would never have numbers like that if I had submitted for traditional publishing; hell, I'd probably just be holding on to rejection letters at this point instead of increasing my income!

Joe Konrath said...

I was wondering how you, Joe, and you, Blake feel about using DRM when uploading to Kindle.

I don't use DRM on any of my ebooks. I'm okay with people file sharing me. Search for "piracy" on my blog for me in-depth views.

Joe Konrath said...

You seem to confuse "market leader" and "monopoly." The reason we don't have many recent examples of monopoly abuse is because monopolies have been illegal for a while.

I'm not confusing them. I simply can't find any monopolies to use as examples, so I have to use market leaders.

But is the reason we don't have monopolies because they are illegal and the DoJ keeps breaking them up or preventing their formation? If so, where are the many examples of this? Turow talks like this must happen all the time. But I'm not seeing it happen. I want to know where this fear of Amazon is coming from.

Joe Konrath said...

But using Microsoft, AT&T, and Monsanto as examples of monopolies that don't/didn't routinely screw their customers (and non-customers) is ludicrous.

Then you have to explain why these are ludicrous examples, with data to back that up.

I admit ignorance here. I'm seriously trying to rack my brain and come up with examples of harmful monopolies, or even harmful market leaders. I googled for half an hour, and those were the only examples I came up with. And, to me, Microsoft, AT&T, and Monsanto don't seem to be screwing customers. At least not in the way Scott fears Amazon will.

Matt J said...

Thanks, Joe. I have an idea for Mr. Turow, by the way, since I think his problem is a skewed perspective: Scott, you're a very talented and successful writer; just for sheets and goggles, write one of your blockbusters under a pseudonym and publish it as an ebook. You don't have to tell anybody, just tell your agent your doing an experiment. Then sit back and see what happens. Understand what it means not only to receive a 70& royalty, but to never go out of print. Do you think your story and plotting and dialogue and everything else will simply get swallowed up and disappear in the sheer mass of digital prose out there? Give it a try; see what happens.

Matt J said...

And by the way, at this point, writing an ebook under a pseudonym is probably a good idea.

Mike Dennis said...

Great post, Joe. You and I both know Scott Turow's problem is, HE doesn't want to lose the warm, fuzzy security of HIS big 6 contract. That's why he's dissing the Amazon/self-publishing/ebook revolution. "Hold off the barbarians so I can continue living high!"

R. E. Hunter said...

I agree with your conclusions about Turow's article, the fact that the Big 6 publishers are a cartel, and that Amazon is not a monopoly.

But Microsoft was definitely a monopoly for a while, and abused the power. It was more than just the retail price of Windows (which was increasing until they lost their monopoly to Apple and Linux, forcing them to be competitive again). It was the destruction of potential competitors by coercion of distributors (sell exclusively Microsoft or lose the right to distribute Microsoft products at all), by sabotage within the OS itself (e.g. Netscape, WordPerfect), and through various other dishonest techniques (e.g. bad faith participation in consortia while doing an end-run). It wasn't by fair competition and having a better product and/or better prices that they got to where they are.

If you want two classic examples of monopoly abuse, look up Standard Oil and IBM.

In the long term free markets take care of such things - monopolies become lazy and uncompetitive. But in the short term they do a lot of damage. Whether government intervention significantly reduces the damage is open to debate.

Sam said...

Encourage the Big 6 to charge $20 for e-books. The agency pricing cartel is the indie author's friend!

RE: "Amazon bought a POD service called BookSurge. Then they informed their customers — university presses and some other publishers who the Guild had organized to do POD for Authors Guild members — that they would not list their books on Amazon’s site unless they paid BookSurge more for their services" What is he even talking about?

I published with BookSurge back in 2007, when it cost about $200 to get a book simply set up and for sale on Amazon. Then CreateSpace came along, with free access to Amazon and only $40 for their pro-plan, and I made the switch.

Amazon bought both companies, combined both into CreateSpace (resulting in lower fees for former BookSurge customers), and now recently dropped the $40 pro-plan fee. (Though you do need to pay if you want "expanded distribution.")

Now you can publish a POD book for FREE, and have it for sale on Amazon tomorrow! So yes-- what the heck is he talking about?

Most university/small presses have always used Lightening Source, which I have no experience with.

Jude Hardin said...

Do you think your story and plotting and dialogue and everything else will simply get swallowed up and disappear in the sheer mass of digital prose out there?

Actually, that's probably exactly what would happen with a single title published under a pseudonym, no matter who wrote it.

Not to diminish anyone's talent, but take away the brand name and the co-op placement and the huge print runs and the longstanding auto-land on the NYT list, and bestselling authors are just another face in the crowd.

Joe Konrath said...

It wasn't by fair competition and having a better product and/or better prices that they got to where they are.

But how was the customer harmed? I've always had Windows pre-installed in every computer I've owned since 1985, and I've had over a dozen. The user experience has consistently improved (bugs aside) and the price of computers with the Windows OS has kept coming down. You can get a brand new computer with a monitor and Windows 7 for $350. How are consumers being hurt by that?

I don't doubt they hurt competition. I liked Wordperfect. I liked Netscape for a while (but the little I know about Netscape, they hurt themselves more than MS hurt them.)

I agree with Standard Oil, but they are pat of the oil cartel.

IBM abused its power, but they lost that power, partly because they made big mistakes.

I'd really love to see an analogous example to what Turow fears about Amazon.

Matt J said...

Here's an interesting quote for y'all from a Huffpost article titled 'What is the Best Novel of All Time According to Huffpost Readers'. Say's a lot about the attitude of the Establishment. The article asked Readers to nominate their favorite books, with the caveat: 'And self-published authors: we love you dearly, but this isn't the moment to nominate your new erotic political werewolf thriller. You know who you are.' My answer - Screw You!(You know who you are). Those childlike self-pubbers; have to keep them in line . . .

Devin Rose said...

For examples, take Intel, the dominant market leader for a long time in the computer processor world. Many reports (and lawsuits won by AMD) alleged that Intel used its dominance to compel computer makers to use their products at the exclusion of AMD. http://en.wikipedia.org/wiki/AMD_v._Intel

I think the upshot was Intel paying over $1 billion to AMD for the settlement.

Edward G. Talbot said...

Joe - I completely agree with all your conclusions here. And there's a reason you've had trouble finding monopolies - they're damned hard to accomplish, and usually DOJ steps in before it gets to that point.

However, you did ask if you were off-base about prices after Ma Bell broke up, and for the most part you are. Both local and long distance service are cheaper now than they were under Ma Bell. Long distance is vastly cheaper, while local service is cheaper at least in comparative dollars. Long distance prices in particular went down pretty quickly after the breakup.

However, Ma Bell is not a good predictor of the current situation. It was a heavily regulated industry with massive barriers to entry (phone lines, etc.). That's far different than Amazon.

I think we'd all love it if the various entities in the book world were all actively innovating, adapting, and seeking how best to serve customers. But they're not. Even if we granted that Amazon might gain such dominance that it could and would start screwing consumers, suggesting that we start backing the less competent alternatives is lunacy. It's like the Vonnegut short story, Harrison Bergeron.

Joe Konrath said...

Long distance is vastly cheaper, while local service is cheaper at least in comparative dollars.

Good to know. But is it cheaper because of competition, or because tech prices and services seem to naturally come down over time?

You can now get free Wifi almost everywhere, when five years ago you paid out the ass for it. 2G has become 3G has become 4G, but prices aren't going up for faster speeds or higher bandwith.

Remember when we paid per text? Now we get reasonable plans with unlimited texting.

I'm seeing some good examples in the comments of how businesses screwed their competition. But in Amazon's case, that means B&N. Not readers or authors. Or am I missing something?

Anonymous said...

Amazon can't be a monopoly, it's a retailer (I believe it even sells socks now). KDP competes with the Big Six and it's outlet is the Kindle Store, and even then it's not a publishing house because we are the publishers.
The truth is that the Big Six isn't losing to Amazon, they are losing to me and my 100,000+ friends who self publish. Scott T. should fear me, not Amazon. I'm the one that is screwing up the old system. However, this time there's no Sarah Connor to save the future. Big Six beware. The terminator is coming and he has 'Indie' painted on his forehead. (Weirdly enough Amazon could have been Sarah Connor if the Big Six had played ball and supplied content enough to satisfy the masses. KDP might never have come about and Skynet would never have been created. Happy apocalypse, Big Six. You created it.)
P.s. I would almost agree Amazon is a monopoly as an online retailer. I just thing that we see KDP as Amazon and ita not. KDP is a tiny section of a bigger store. It probably isn't even Amazon's most profitable section either...

Paolo Amoroso said...

Joe, brace yourself. In Italy, gas costs the equivalent of over 7$ per gallon.

Concerning expensive concert tickets, have you watched the documentary The Great Ticket Scandal? Is the described situation a monopoly or a cartel? Or maybe something else?

Eric Christopherson said...

Turow is worried about the wrong thing. Amazon is closer to a monopsony (the only buyer that matters) than a monopoly (the only supplier that matters). A monopoly eventually leads to artificially high prices, and the attention of the Justice Dept.'s anti-trust division, whereas a monopsony leads to artificially low ones, and probably a free ride from Justice.

Monopsonies keep prices low by squeezing their suppliers--to the point where many will go out of business and few will do well. Witness what's happened to Walmart's major suppliers over the last twenty years. Or pay attention to how Amazon has already begun tightening the screws on its suppliers (Independent Publisher's Group most recently). The Big Six are more suppliers than competitors to Amazon and their turn will come to be sweated (in a way it's already begun). Authors too will feel the heat one day in the form of declining royalty rates, unless a decent buyer emerges to oppose Amazon or unless anti-trust policy returns to Pre-Reagan era policy and the Justice Dept. seeks to preserve competition again. (That last bit probably made every Libertarian reading this blog throw up, but history ain't on your side, guys. It was thirty years of deregulation in the financial sector that caused the Great Recession.)

Aron White said...

I think there's a distinction missing about what Scott Turrow is saying. I'm not trying to put words in his mouth, but when he references monopolies, I get the impression he's actually inferring serfdom. "If Amazon is allowed to dominate the book market, we'll all be serfs working on someone else's land and making less than table scraps for a living," or some such sentiment like that. Monopolies like Microsoft, Ma Bell or Standard Oil have in specific instances stifled innovation or hurt competiton (scenarios which tend to never be permanant and are corrected over time), but as I said before, I get the feeling Mr. Turrow is trying to scare writers into the belief that Amazon dominance will lead to some sort of serfdom which is utterly false and flies in the face of recent U.S. history. Nice try, Scott. Epic fail!

Edward G. Talbot said...

Good to know. But is it cheaper because of competition, or because tech prices and services seem to naturally come down over time?

With the caveat that I agree with your overall points, here's one piece of hard data. out of state long distance was a dollar for a couple minutes in many places right before the breakup. Within 5-7 years, it was less than half that, and the likeliest cause was not a change in technology, it was the sea of competitors in long distance. Another supporting piece of data is that out of state long distance rates came down much more quickly than in-state long distance in most places. That's because the settlement created higher bars for entry into that local market than the long distance market, so there were far fewer competitors.

I don't think this changes your point about Amazon. Examples are few and far between. Microsoft is the closest example, and as you noted, prices have not gone up. And here's the thing - in order to have prevented MS from gaining such dominance on the desktop with its mediocre OS, one would have had to favor either less innovative (IBM) or more expensive (Apple) competitors.

Matthew said...

I agree with elias that unfortunately cable companies come closest to Turow's "monopoly" definition only because they often have localized monopoly power which has in any cases resulted in higher prices and fewer choices and less innovation for consumers.

But the thing is, the monopoly that Turow invokes is the rarest kind - one that has barriers to competition and becomes complacent because of this protection.

Cable companies operating in local monopolies are one of the sole examples of this kind of thing - and even then, there is some erosion of their complacency as for example they have had to fight the telephone companies' DSL services with creation of cable modems, and diversify into new areas and attempt to package cable, internet, phone, and even security services now. Granted, it's still quite expensive and Time Warner and Comcast, etc. don't get to duke it out in markets against one another, but divvy them up instead. But they do get to face AT&T or Verizon, at least.

Amazon is formidable, without a doubt. But parts of its business don't necessarily have high barriers to entry. And existing players such as Apple can certainly jump in anytime Amazon wishes to simply hand off its advantages.

If Wal-Mart chose to jack up prices across the board, they'd be cut to pieces by Costco, Big Lots, Target, and pretty much every other major seller that already competes with them.

There is a huge world of difference between being a dominant player in a market and being a true monopoly.

A true monopoly is a very rare beast, and almost always relies on being a protected (through government regulation) monopoly. With the deregulation of phone and many utilities, the typical regulated monopolies around in most localized markets are cable, taxis, some utilities such as water and gas, and so on. And many of these have regulations relating to rate fares and increases they can charge. I can't think of a national monopoly that could compare to any of these.

A dominant market player - if they have anyone who's attended at least the first few weeks of a freshman business class - knows that dominant market players can fend off competitors as long as they continue to utilize their advantages of being the top player (which covers a range of things but doesn't exclude being aware that the market doesn't like complacence when there are alternatives). Top companies more often topple because they grew complacent and literally handed away advantages to competitors who are always waiting in the wings, or because they simply couldn't adapt to new realities. And these falls from grace happen very quickly and accelerate once they get going.

Anonymous said...

Also, just to muddy thongs up completely, Amazon's biggest competitor would be Walmart in the US. Internationally, Amazon has presence, but it's got HUGE competition from both online and physical stores.

Also, where I live there is Yahoo and a domestic company, which is massive, plus some incredibly big department store chains that are very strong. The ebook side of Amazon is non-existent and the population doesn't really use them due to lack of books in their language (Amazon is weak for languages). The same goes for East Asia and other parts of Europe. Furthermore, in my home country Amazin is overpriced and can't compete with an established company that has outstanding marketshare and is better in a few ways (if not as cool looking.)

Also, the Big Six are whining a bit. The US market is not the only market - it's just the biggest English speaking one. I've seen heaps of countries with tons of bookstore chains. These people are making good money (especially as Borders has gone bye, bye.) moreover, back home smart phones aren't cheap and with a book being $2 more expensive than in Amazon's e-store countries, it's easier to go to the library (i don't think they even have e-books at the library yet - too expensive) or go buy it at the store. I doubt Big Publishing cares though. The US is the only important market (for statistic purposes and propaganda that is.)

William Doonan said...

Me small potatoes - I sold twelve copies of 'Mediterranean Grave' last month at bookstores. But last week alone, I had more than 2,000 Kindle downloads. Thank you, Amazon, for your monopoly or whatever you want to call it. Whatever it is, I don't care.

William Doonan
www.themummiesofblogspace9.com

jtplayer said...

I try to spread my purchases around, between Amazon and the brick & mortars. I like the savings I get online, but I also love bookstores, and in years past I loved record stores. I don’t view Amazon as the enemy, but common sense says the bigger they grow and the more market share they grab, the less chance the physical outlets have of surviving.

All of this hinges on the virtual vs. the physical. Many of you express the idea that this is simply progress, that things change all the time, so deal with it.

But nowhere is it ordained that ebooks are destined to be our only reading choice, and the truth is many millions of people will never embrace them. I do both, ebook and paper, and still I prefer holding a book in my hand.

And laugh all you want, but in my mind the future of books in general will suffer a blow if traditional publishing were to go away completely, leaving us with nothing but independently vetted and published works. I believe there’s room for both.

Anyway, I don’t get all the venom directed at Turow. He believes what he believes, for whatever personal motivations he has. Just like you and me and Joe Konrath all have our own opinions.

It seems some of you should take that publishing chip off your shoulder and embrace the choices you’ve made, and direct your time and energy towards improving your art rather than railing on about a guy you view as out of touch and irrelevant.

elias said...

But is the reason we don't have monopolies because they are illegal and the DoJ keeps breaking them up or preventing their formation? If so, where are the many examples of this? Turow talks like this must happen all the time. But I'm not seeing it happen. I want to know where this fear of Amazon is coming from.

Monopolies are difficult to build in the first place if they aren't government-sanctioned. Once a company grows large enough to be in danger of violating competition laws I think they will usually tread carefully to avoid that. Another factor that I think makes this more rare is that big company mergers require approval from the FTC.

Whenever a company grows large enough there will always be people, usually competitors, who fear it (and will frame it as a fear of it turning into an abusive monopoly). There are people who are afraid Google will take over the world, for example.

Monsanto is actually probably a good example of a currently active abusive monopoly, though I don't think the rampant corruption there really translates to most other large companies.

Stella Baker said...

Ursula said: "Next thing you know the Easter Bunny will turn out to be a Vampire."

Have you not read James Howe's insightful Bunnicula? :-)

Anonymous said...

"Can you show me some examples where predatory pricing put competition out of business, or where monopolies abuse their power?"

Go to any law library and pull up the digest of cases under the federal antitrust laws. You'll find many hundreds of examples.

Joe Konrath said...

Go to any law library and pull up the digest of cases under the federal antitrust laws. You'll find many hundreds of examples.

How is that showing me?

I'm asking for examples, not asking how to become a lawyer.

Everett Peacock said...

love the analysis!

Anonymous said...

To begin, one who responds to legitimate points in a glib manner does appear more intelligent or successful, it causes that individual to look like a twit.

Since I'm sure that you already have some pseudo-intellectual response to provide, I'll make my point point as best I can. You have heard of John Nash, correct? Since I'm sure that you have, you must be familiar with his ideas of economic theory. In essence, the point he makes is that a company that does not keep competitor's in mind, and only looks out for its self interest, will find quickly that it has brought about its own destruction.

And you truly plead ignorance in terms of a monopoly? Okay, let's take a close look at one of your "market leaders," Microsoft. What happens when little to no competition exists for a major company. What's the incentive to improve one's products? After all, no competition exists, and guess what, you get Vista, probably the worst OS platform anyone has ever seen. If Apple hadn't begun a resurgence at that point, what would the majority of people use? What would have been the incentive to improve the software?

Finally, "doing research on the internet" (i.e. Wikipedia) does not count as actual research. Here's a little tip: hypocrisy is not the same as pedantry.

Tom Maddox said...

@Eric Christopherson

"Or pay attention to how Amazon has already begun tightening the screws on its suppliers (Independent Publisher's Group most recently). "

I refuse to condemn Amazon for tightening the screws on IPG for one major reason, and that is because I have only heard IPGs side of the story. I have seen absolutely no details on what the old deal was and what new deal Amazon wanted them to take. As far as I know maybe Amazon was asking them to go Legacy and do the 70/30 split like everyone else.

IPG seems like a great way for small publishers to get their books into bookstores across the nation but what value does IPG add to e-books when I have the exact same ability to distribute an e-book that they do? Why are they taking a part of that pie?

So until somebody can show what deal they used to have and what deal they were asked to take I refuse to blindly support them based simply on their word that Amazon’s deal was untenable to them.

Kiana Davenport said...

Joe's analysis is brilliant, I agree with every point he makes. But monopolies ARE out there. And Amazon COULD become a monopoly , although I think they're too smart and too concerned for the consumer.

In defense of the Author's Guild, their legal counsel just successfully defended me against Penguin Publishing, at no charge. They were ready to duke it out with Penguin for terminating me without legal grounds. Penguin backed down.

Yes, The Authors Guild is still in sympathy with legacy publishers, but they are also encouraging authors to self-publish. They are prescient enough to understand this is the future. Yes, they are caught in the middle of the Legacy War. Yes, they are working 'both sides of the street.' But give them a little slack, they are still out there battling for authors rights.

Not everyone at The Author's Guild agrees with
Scott Turow. His arguments are pure sophistry and embarrassing to many members of the Guild.

For a view of the Legacy Wars from someone who just staggered in from the frontlines, please see
my latest blog. MARRIED TO THE HIT MAN.
www.kianadavenportdialogues.blogspot.com

Most importantly remember, there would be no publishing industry without us. Writers are still in the catbird seat. Imua! Press on! God bless us all.

Joe Konrath said...

I allow anonymous comments to encourage healthy debate.

To begin, one who responds to legitimate points in a glib manner does appear more intelligent or successful, it causes that individual to look like a twit.

Reread that three times. It makes zero sense.

In essence, the point he makes is that a company that does not keep competitor's in mind, and only looks out for its self interest, will find quickly that it has brought about its own destruction.

What point are you trying to make? What are you arguing for or against? What comment did I make that you are attempting to reference?

What's the incentive to improve one's products? After all, no competition exists, and guess what, you get Vista,

Which is why we all still use Windows 1.0, because Microsoft never had any incentive to improve.
Oh, wait... we're up to Windows 7. And that's all because of Apple, you say? Because the Mac is such a fierce competitor with its 14% market share. Great point.

Here's a little tip: hypocrisy is not the same as pedantry.

Again you are making zero sense. What are you referencing with this non sequitor?

Turow made all of these statements, and didn't back any up. I back up my statements, and when I'm not sure about the evidence I ask for clarification.

Where are all of these harmful monopolies Turow is talking about? Where are all of these companies gaining control and raising prices?

Ticketmaster is the only good example I've seen so far, but even Ticketmaster isn't the main villain in that industry--it's the promoters allocating choice seats to online brokers. That's why scalped tickets are triple the cost.

Dude, try to make a clear point and link it to something I've said.

Joe Konrath said...

Monsanto is actually probably a good example of a currently active abusive monopoly, though I don't think the rampant corruption there really translates to most other large companies.

I know very little about them, so I don't doubt they are abusive.

But Scott's argument specifically concerns the fear that Amazon will gain monopoly control and raise prices. Is Monsanto doing that?

Tomas Rofkahr said...

@jtplayer

buyers are pretty good at vetting self publishers. They vette with their wallets and flaming 1 star reviews.

You're right - it's not ordained that ebooks are the future. They'll die a horrible screaming death the moment a better format / platform comes out.

Then the great ebook vs. neural implant reader wars can begin in earnest.

Tony said...

Good two articles on Scott's rants. Very informative.

I do have one question though. Forgive me if I'm missing something or am just dense.

If Amazon is no longer pressured to maintain the agency model by the big 6 (settlement talks and investigations of collusion etc), then what? Would they change their current model?

The agency model is, imho, one of the major boons for independant authors since they too are filling the publisher's shoes. You get to set your own price, and that's what the customer pays. Play with it all you want to find a price that suits you.

Would self pubbed authors still be able to set their own price, or am I missing something here.

(personally, I think that Amazon would retain the agency model regardless, because that is what other distributers like Apple are already doing).

Shaun said...

Thanks Joe. I'll keep this post with the other with you and Eisler.

Anonymous said...

I like Scott Turow's books, but I must say that he has an amazing ability to come off like a raging a**hole at times. Such as this last week with his comments on behalf of the Author's Guild and even more when he appeared (for some unknown reason) on ESPN's documentary about Steve Bartman when he claimed that if he had been in Bartman's seats on that infamous foul ball he would not have reached for it because he is such an aware fan and anyone of Turow's pedigree as a fan should have known better.

What a douchebag.

Roy Finch
Author of The Emperor of Glitter Gulch

Anonymous said...

I used to work for a small airline, running two routes between a small town and two big cities. One of the large legacy airlines came in and started offering those seats for $56 ech way, a price they could afford because they make so much money on other routes, but that we could not afford to operate on (our cheapest price was double that). We lost market share, and eventually the airline. That big carrier, once there was no competition, jacked up the prices to two and a half times what our price was, leaving the customer with no airline choice, and huge fare increase. It also pretty much ended commerce in the small town too.

Joe Konrath said...

BTW, I love the fact that pinheads on Twitter say I'm wrong, but don't refute any of my logic or points.

This blog is an open forum. If you think I'm wrong, fisk me like I just fisked Scott. How about trying to debate instead of whining like little bitch boys? I'd welcome the opportunity to hone my arguments.

Joe Konrath said...

That big carrier, once there was no competition, jacked up the prices to two and a half times what our price was, leaving the customer with no airline choice, and huge fare increase. It also pretty much ended commerce in the small town too.

That's a great example, but why are you posting anonymously? And why aren't you naming the airline or the town? Who was the airline that did this? Who was put out of business? Was anything done about it?

There's an old trick that Christians use while debating religion. They say, "You can't prove God doesn't exist."

Actually, the one claiming experience needs to show proof, not the one claiming non-experience.

If you claim you have a gremlin in your house, it isn't up to me to prove you don't.

In Scott's case, he claimed there’d be no rationale not to use the monopoly power to increase prices to consumers. That is historically what monopolies do. There is plenty of precedent for that.

If he claims precedent, he needs to show precedent.

I'm saying I don't know any monopolies that have increased prices. It is not my job to study every company in the history of the US, looking for monopolies. He says they exist, he needs to show me.

People in the comments say they exist. So far I've only seen one verifiable example: Ticketmaster. And I don't believe Ticketmaster is analogous to Amazon, because of many factors (Ticketmaster is a service, Amazon is a retailer, Ticketmaster has no competition, Amazon does, Amazon pays authors, Ticketmaster has nothing comparable, there is no cartel complaining about Ticketmaster, etc.)

Can't anyone argue my points or show me examples where I'm wrong?

David L. Shutter said...

Can't anyone argue my points or show me examples where I'm wrong?

Here's another question...has there been a responsive blog post, article, tweet from anyone, anywhere , on either side of the fence, saying: "Phew! Thank God Turow took a stand against that Bezos scumbag! Thanks Scott, for setting the record straight!"

I haven't seen anything, anywhere defending or praising him. Anyone else...or is even the traditional community staying quite about his outlandish and unsupported claims?

Gwen Hayes said...

I'm quite happy to work with both my legacy publisher and Amazon KDP, and I find myself pretty much in the middle of both sides of this argument.

That said, Monsanto is pretty much the devil as far as I'm concerned and I would be much more worried about them than Amazon, Walmart, or Penguin Publishing any day of the week. If you don't know about Monsanto, the things they do to farmers, and the state of our food supply, I encourage you to find out more. A good place to start is Food, Inc or anything by Michael Pollan.

And the reason corn and soy are so cheap are because they are government subsidized, not because Monsanto chooses not to abuse its power. You can be sure we are not their customer anyway.

Anonymous said...

Joe, whilst I agree with many of your sentiments regarding Amazon, I'm not sure I agree with your conclusions about corporations.

You will find many examples of anti-competitive behaviour when it comes to dominant companies in any market. These companies DO stifle innovation, they DO put pressure on component/crop (etc) producers. And they DO affect the end user experience either through pricing, quality or choice.

You can find examples in any industry, be it manufacturing, retail or processing. In most countries any retail grocery chain is usually reeking havoc on SMEs and producers (thereby raising the social cost). Commodity extraction companies are doing the same across the world. Utility companies, construction companies.

But it's not just monopolies, duopolies too can create an environment of suffocation for producers and end users.

Microsoft products may seem 'cheaper' now but there was a period of time that their anti-competitive behaviour amounted to little more than bullying tactics. Just ask anyone who was in computing back in the late eighties and early nineties. British Airways did the same to Virgin. The sugar industry was the same, so to the banana industry. Of course, there's the minerals industry as well. Many of the huge companies involved in these markets have, at one time or another, had to be pulled back from absolute market control. Just because there are other smaller competitors in a market it doesn't mean there is competition.

Anonymous said...

BTW: I would love to read Barry's take on the company thing.

Care to weigh in, Barry? You seem to be pretty informed about this stuff.

Barry said...

Anonymous, I'm flattered you would ask, but I have to admit my knowledge of the history of monopolies and of antitrust law is no better than Joe's. He and I were both struck by Turow's strange failure to include examples of companies that had: (i) used predatory pricing to eliminate competition; and then (ii) abused their resulting monopoly to charge usurious prices. Look at Turow's exact words again -- it must have physically hurt this Harvard educated former U.S. Attorney to not include even a single piece of evidence in support of his argument:

"If [Amazon] were to have a monopoly there’d be no rationale not to use the monopoly power to increase prices to consumers… That is historically what monopolies do. There is plenty of precedent for that."

And, counselor, that precedent would be…?

My God. Any former litigator who left out the evidence after those two last sentences must have been in agony.

Anyway, when Joe and I were talking about it, we realized it wasn't just Turow who was referring to this monopoly theory without providing cites; in fact, neither of us had ever heard *anyone* offer a real-world example. That's why Joe is asking for real world examples here. We'd both like to know. It's pretty obvious Turow doesn't know of any, either, but that doesn't mean the examples don't exist.

Though it is a little strange, and telling, for Turow to express such certitude about the history of monopolies when he demonstrably knows so little about the subject.

Barry said...

Joe, that was epic. It was almost painful to see someone so thoroughly demolished for his total failure to mention even *one* supporting example, and for his failure to address all the real-world examples that contradict the theories on which he relies.

Remember, this is not some high school freshman who's learning persuasive writing and argument for the first time. This is a graduate of Harvard Law School, a former Assistant U.S. Attorney, a practicing attorney, and the author of two works of nonfiction. His failure to provide any real-world evidence at all in support of his claims and theories is stunning. So is his failure to respond to this post or the one you and I did over the weekend. No one with any intellectual honesty, or even just dignity, could refrain from defending his arguments after they've been so publicly and thoroughly dismantled.

Just a few additional thoughts:

Look at Counselor Turow's opening argument again: "The concern is that they [Amazon] are getting so large and they compete so ruthlessly that there’s a lot of fear for what the world with Amazon in charge is going to look like."

There's so much dishonesty in that one little sentence.

First, "the concern is" and "there's a lot of fear" construction. Anytime someone uses the passive voice, or otherwise constructs his sentences to obscure the actors, my bullshit detector starts to tingle. Who is Scott talking about here? Himself, presumably, but no one's going to particularly care about the fears and concerns of just one person, so he can't name himself. And legacy publishers, presumably, but if he were to say, "The concern among legacy publishers is…", people would discount that fear as illegitimate and self-interested. So instead, he twists his syntax to make readers feel like he's talking about the whole world, or at least about all of decent society, without ever having to take an actual position about just who is so concerned and afraid, and why -- a position that he might have to actually defend .

Remember, again, this is a guy who's written countless legal briefs. A professional, who chooses his words with exceptional care. So it's fair to assume his linguistic dodges are not accidental, but are instead done deliberately.

But okay, regardless of who is supposedly so concerned and afraid, what does Scott claim they're concerned and afraid of? "Amazon in charge."

Amazon in charge of what? Book retailing? Book publishing? My health care? The country? The world? What does it mean for a company to be "in charge" of something?

Well, that's just it -- you're not supposed to really know. Your imagination is supposed to just fill in a vague feeling of disquiet at the notion of a corporation being "in charge." So at best, the phrase is hyperbolic. The non-overheated way to phrase it would be something like, "Amazon having too much power in the book business." But that doesn't sound *scary* enough. So Turow deliberately resorts to hyperbole to achieve the scares he seeks.

Now, in fiction, this is fine. But from the President of the Authors Guild, in a letter posted on the Authors Guild blog?

That's just disingenuous.

Why is Turow creating these straw men? The same reason anyone does. Because he knows he can't make or counter real arguments. If he could, he wouldn't have to make shit up instead.

Barry said...

Here's another nugget.

"Barnes and Noble developed the nook because they really had no choice but to compete with Amazon."

Think about that for a moment. Turow makes it sound like mean old Amazon cruelly forced B&N into such a dire situation that B&N had to, like, *compete*, man. And that is so unfair!

Really? Amazon's innovations forced other companies to innovate, too? And Turow doesn't like that? He wishes it weren't so? Turow thinks that's *bad?*

This is what happens when you can't argue with logic and evidence -- when, as Orwell, said, "there is a gap between one's real and one's declared aims." The truth starts to bleed through the bullshit. And the truth is, Turow doesn't like innovation. He doesn't like competition. He likes the cozy, moribund world of establishment publishing that has been good to him, the one with which he identifies and of which he is part. He doesn't want that world to change, and he resents players who are intent on changing it.

Now, for all the Twitterers and commenters who are going to jump in now and say, "Hey Barry, you and Joe are biased, too! You guys are both Amazon authors and have made, and stand to make, a lot of money with Amazon!," let me say this.

Bias is only suggestive of unsound thinking. It is never dispositive. Logic, evidence, and argument are dispositive. So the urge to focus exclusively on what's at best merely suggestive while ignoring what's dispositive is as strange as it is unproductive.

But let's assume the bias-mongers are right. Let's assume Joe and I are biased (and that Scott Turow, bless his disinterested heart, isn't). Let's assume the Amazon model of low prices, high royalties, and high volume works for us, and that we like it the same way Pete Sampras likes carbon racquets -- because they favor our style of play.

Now that that's out of the way, can we address the *merits* of our arguments? Is what Joe and and I have argued here logical? Is it backed with solid evidence? Can it be refuted with solid evidence? And regardless of how one system or another might favor Scott Turow or how it might favor Joe and me, which system, on the merits, is likely to deliver more benefits to more authors and readers overall?

Those are the questions that matter, no matter who is biased in an argument, or how, or why. And anyone who really gives a damn about books and publishing should be trying to answer those questions, not trying to avoid them.

Alan said...

I don't agree with the point of Turow about Amazon risking to be a monopoly either.

However, you asked how Amazon does hurt his customers. It hurts customers the same way Sony hurted them with Betamax, and Apple with its OS, and Android with its format : by being a proprietary format. By limiting the freedom of use (I have to use Calibre to convert PRC or Mobi files).

I would as a customer have prefered to use epub ebook file directly on the Kindle, for example.

I know it is rather utopian to hope big companies collaborate to offer the better shared technology to customers. Still, the proprietary formats enclaves people.

What you do not see, Joe, is the indirect consequence of monopoly or even market dominance. When Windows was near to be a monopoly, it crushed concurrence, and when you crush concurrence, the customer doesn't benefit from better products from concurrence. You have to think on a more global basis.

With Windows, we had to wait for a very long time to have a decent OS, and I'm pretty sure we can blame it on weakened concurrence. Believe me, for one, I have had to suffer many many times from the crashes of my computer and reinstalling Windows.

Rik said...

Is Amazon really benign?

You can self-publish hardcopy books, and get a listing on Amazon, through CreateSpace.

You can also self-publish a hardcopy book, and get a listing on Amazon, using Lulu.com - but if you want to do that, you have to add a 'retail markup' to the cost of your Lulu book - which pretty much doubles the price of the book. I think the retail markup is added in so that Amazon can then sell the book at the wholesale price (ie 50% off the cost of the cover price).

All well-and-good, except that anyone who goes to the Lulu website to buy the book has to pay the full cost of the book.

I like Amazon as a customer - I regularly buy stuff from them, but as a supplier of goods for sale ... I'm more wary. I know how supermarkets can treat their suppliers in their crusades to offer the cheapest prices to their customers and, at the end of the day, Amazon is first and foremost an online supermarket.

Thom said...

http://www.hg.org/article.asp?id=6025

FAMOUS ANTI-TRUST BREAK UPS

Kodak; forced by the anti-trust law to license its color processing--which many would argue was a good thing.

Bell System; previously discussed. Broken up by the Reagan administration, BTW.

Alcoa;

Standard Oil; the most infamous anti-trust case, breaking up one company into 34.

Our Progressive ancestors believed there was good reason to have anti-trust law. They seem to have fought hard for it. Restraint of trade, secondary boycotts (you buy x product, we won't sell you ours) are both good reasons to have this law on the books.

Having said that, and not being a lawyer but an average, thinking person, I can't see how Amazon is a trust. I think those who claim it is are reaching.

But if it turns into one, the Alcoa case alone should give comfort; companies can be broken up even if the trust is doing good.

But I don't think that's going to happen with Amazon.

Matthew said...

Anonymous said: After all, no competition exists, and guess what, you get Vista, probably the worst OS platform anyone has ever seen. If Apple hadn't begun a resurgence at that point, what would the majority of people use? What would have been the incentive to improve the software?

Um, no.

First, the "worst OS platform anyone has ever seen" can be said about several more OS platforms than for Vista. Vista functionally was probably fine for most people. It was not fine for enthusiasts and gamers who shunned it widely in favor of the more svelte and mature XP. And it was shunned by many IT departments because a compelling reason must be had for changing an entire company's systems to a new OS, and Vista didn't offer enough at release.

All OS releases take a year or more to gain acceptance. New personal computers ship with the new OS - which helps - but upgrade licenses need to be sold, IT departments swayed, etc. Most enthusiasts and IT groups have a policy of waiting for at least the first major Service Pack (usually a year away) before committing.

Microsoft got plenty of "meh" similar to its Windows ME release from these influential users plus tech blogs, etc. Software bloat, missing features that had been planned, and general slowness compared with XP for some apps didn't help. So Microsoft took elements of its Vista platform, improved and slightly expanded it, and released Windows 7 which had been being worked on concurrently with Vista already.

Apple had nothing to do with that. Saying that Microsoft fear of Apple made them release Windows 7 is pretty ridiculous. Apple's market share of computers has been negligible as well as a fast-declining share of their business for years as they've shifted away from the less-profitable smaller-margin and mature arena of computers and more toward evolving new gadgetry.

Microsoft cares about adoption rates of its new releases. When they aren't meeting goals, they fix it - either with service packs or an accelerated release of the next OS, just like they did with the Windows ME fiasco that yielded to XP.

Steve Jobs in 2007 and 2008 could not have cared about fighting Microsoft in OS adoption and the grabbing great shares of the PC market. What was he and Apple doing in 2007 and 2008? Oh, that's right - the iPhone. Sure, they refreshed the Mac and Macbook lines a little. But their focus was forward on new gadgetry and not on competing in a business they saw as mature, not as profitable with low margins, and where they had a very small share of the computing market.

The iPad came out 6 months after Windows 7 and initially there was a lot of "huh?" as far as whether people would really utilize tablets. They have, because computers have always been overkill for the majority of users who typically only utilize a fraction of the power of their hardware and little of their software capabilities.

Matthew said...

Alan wrote:

However, you asked how Amazon does hurt his customers. It hurts customers the same way Sony hurted them with Betamax, and Apple with its OS, and Android with its format : by being a proprietary format. By limiting the freedom of use (I have to use Calibre to convert PRC or Mobi files).

I would as a customer have prefered to use epub ebook file directly on the Kindle, for example.


To be honest, I doubt the overwhelming majority of people with Kindles even understand the difference between MOBI and ePub. They buy their Kindles from Amazon, and they shop for the Kindles on Amazon. They wouldn't know how to shop with their Kindle on Barnes & Noble or a few other eBook sites.

A small percentage of people are probably "hurt" (or more likely inconvenienced) by the format. Because only a small percentage of people are even aware what MOBI or ePub are. If anyone doesn't believe me on this, ask a room full of people what a MOBI or ePub is, or if they have a device that can read MOBI or ePub. You'll get blank stares. Ask them if they have a Kindle or Nook, more people will know what that is.

The small percentage of people who even know the difference between a MOBI or an ePub have a good number who can at least technically make the conversion if they want to.

And yes, different formats *limit* freedom of use. But they don't entirely restrict it. And there are plenty of alternatives. Both Amazon and Barnes & Noble offer reading apps for pretty much every computing device. Some people may end up reading their ePubs on their smartphone using a free Nook or Kindle app rather than buying a Nook or Kindle.

Format differences always exist, sometimes as a form of competition (Betamax vs. VHS, Blu-Ray vs. HD-DVD), sometimes for proprietary reasons (Apple's OS, MOBI), sometimes evolutionary overlap.

With Windows, we had to wait for a very long time to have a decent OS, and I'm pretty sure we can blame it on weakened concurrence. Believe me, for one, I have had to suffer many many times from the crashes of my computer and reinstalling Windows.

Windows 95 OSR2.5 was a pretty good release, almost comparable to Windows 98SE. Windows 2000 and XP were even more solid for enthusiasts and gamers. Windows 7 is even better. I haven't heard among enthusiasts and gamers a great need to reinstall any particular Windows OS in a very long time. Although it's always been if you want rock-solid stable, you go Linux (or Apple OS).

Matthew said...

Rik wrote:

You can self-publish hardcopy books, and get a listing on Amazon, through CreateSpace.

You can also self-publish a hardcopy book, and get a listing on Amazon, using Lulu.com - but if you want to do that, you have to add a 'retail markup' to the cost of your Lulu book - which pretty much doubles the price of the book.


I think you mean physical copies (trade paperback format).

CreateSpace has similar retail costs as soon as you expand distribution to Amazon and additional retail channels. You'll always get the highest royalty if someone were to buy a book directly through CreateSpace. But few people will do that. So when they buy it from Amazon, you get a smaller royalty - and have to price it a few bucks more than you would selling directly through CreateSpace.

jenny milchman said...

Amazon is doing great things for authors. So, incidentally, are the Big 6. Not the same group of authors, perhaps--but that's OK.

The problem with monopolies is not higher prices, in my view. But I don't fear monopolies because I trust the public to speak for what they want and that what they want will line up roughly with quality and value (in the valuable sense of the word 'value').

I don't imagine that Amazon will replace everything--there are too many other sources of great things out there. Bookstores being one. Fantastic books coming out of a wide range of publishers being another.

Amazon is one source--indie authors I could name, or Encore authors like Karen McQuestion. But independent presses and the majors are producing stupendous books and their authors seem pretty happy.

I'm not sure why this conversation is becoming so polarized. Like many other debates in the US (women's right to choose, or not, for example) it's in the tolerance of shades of gray that true wisdom and truth lie.

Mike said...

Recently signed a deal with Thomas & Mercer (an Amazon imprint) because the Big 6 wouldn't consider my new series despite having save books published. Now thinking of dropping my Authors Guild membership given the leadership's train of thought regarding how authors make living.

Daniel Bo said...

Monopolies can abuse their power when the barrier to entry is high and they often attempt to make it higher. (e.g. Microsoft's exclusive OEM deals in the 90s.) No, they didn't raise the price of Windows to the consumer, but you have to remember that Microsoft has been selling revisions of that same operating system (NT) since the mid 90s. It has been almost all profit. Also remember that MS started out in a monopoly DOS position, meaning that the price was probably higher than it needed to be (and was higher than the "competition" at the time). Their price should have naturally dropped over time as they amortized their development costs, but it didn't.

This isn't a rant about Microsoft. It's a call to look at the whole picture. Advertisers complain about the cost of Google Adwords. Amazon (like Walmart) also probably unfairly competes in physical goods.

I don't think that this matters that much for the independent writer, however. The barrier to entry for publishing your own work is stupidly low. Lots of people do it from their own websites. You can use any of the other publishers, too.

JDuncan said...

Perhaps I'm being naive, archaic in my thinking, or just plain hard-headed, but but regardless of all the changes going on, regardless of price-fixing by publishers or predatory pricing by Amazon, regardless of who or what will be most beneificial to authors in the long run, I'm still bothered by the idea that this whole mess is driving the value of books toward zero.

I continually hear the refrain, "So what, I make more money selling more copies cheaply than I ever could at higher prices."

I'm certainly not bitching at writer's (still a scant few) ability to make a living selling their books. For the 1% that do, great for them. They deserve it. It's the "so what" that continually makes me hesitate over the notion that this change is so fabulous.

Don't get me wrong. I'm not pining for the nostalgia of the "usual" either. It's this idea that writers are perfectly content with the idea that the public is going to perceive their books to be worth a dollar. I don't believe public perception is there yet. There's such a dearth of poor writing out there, that readers who get a good store at that price feel like it was a great deal. But if the environment continues to push the price of all books (fiction at least) down toward the bottom, reader perception is going to gradually change. It's not hard to see a not too distant future where it's expected that all good stories are only worth a dollar.

I can see a time when authors will lament that, "I used to be able to open with $.99 and then move up to $2.99, but now nobody will buy it for that."

I may be overly pessimistic in my assumptions of consumer behavior, but if you tell people long enough that something is worth a specific amount, then they will come to believe that is fact.

Again, some writers may say, "So what? If I'm making money, I don't care."

So, call me old-fashioned or short-sighted, but stories are worth more than a dollar. All economics aside, it bothers me that people can complain more about the $5 they paid for a book, than the coffee they bought to drink while reading it. It's disheartening to see the general reading public's value of story-telling sink toward zero. Making money or not, I think there's something inherently wrong with that.

Robert said...

This may be a tad off topic, but I wanted to follow up on what Joe said about Amazon treating writers like customers.

I know a lot of writers complain that they never get any satisfaction from customer service in regards to whatever their issue is, but I've never really had a problem until just this past week. It came to my attention that one of my titles in the UK market had been tagged, for whatever reason, “child sex abuse fiction” and “paedophile fiction." The thing is, my book has NOTHING to do with either of those two things. I don't know much about tags, but I can't imagine many readers really consider them much when deciding to make a purchase, but I figure it might play into how Amazon recommends the book, so I contacted Amazon UK about possibly having them deleted, explaining how those two tags grossly misrepresent my book.

I received a reply saying sorry, but the tags don't fall outside of their guidelines, so they can't be deleted and that they want the feature to be something all customers find useful. I had actually figured this might be the case, but replied anyway, mentioning how one of their guidelines is that customers should not create “tags that promote illegal or immoral conduct” and I asked how those two tags do not fall under that umbrella? The reply I received then basically said the same thing as the first reply, that there was nothing that can be done about it.

My point? I don't really know. I just find it irritating, I guess (I know there are crazy tags out there, and it would be one thing if someone had tagged the book "sucks" or "awful" but THOSE two?), but I think if I were a customer-customer complaining about those tags, the answer would have been much different than as an author-customer. As it stands, I just have to ignore it and move on and hope that eventually those two tags will fade away. After all, shit happens.

Anonymous said...

I love these little lectures on fairness and ethics from someone who supports a company like Random House who have just published Fifty Shades of Twilight, sorry Grey - a non copyrightable fan fiction piece 'pulled to publish' from fanfic.net that had its 'serial numbers filed off' by changing the names of the characters from the Twilight names to new ones and making a few other superficial changes. After a brief sojourn at an Australian publishing chop shop set up specifically to re-badge fan fiction, Random House scooped it up and hurried it back on to the market with no further editing. Yup, these are the kind of stand up guys and gals writers you want to be in business with. Sorry for going OT with this Joe but trad publishing just surrendered whatever moral high ground they thought they had with this bullshit move. Ethics? Morals? Respect for another author's intellectual property? They have none. They're as much about the money as anyone else.

E. Wylie said...

Amazon is not a monopoly, nor are they ever likely to be with regards to ebooks. On the other hand, the Big Six are not a "cartel." No matter how many times you or Barry call the Big Six a cartel, it does not make it so. Sorry. Do I want to get between two sides redefining terms to fit their own arguments? No, I don't.

You're asking readers of your blog a lesson in economic theory, complete with case studies? Go to business school. I did. If you want a crash course in competition law (covering issues such as monopolies), Wikipedia has an extensive section that goes into quite a bit of detail:

http://en.wikipedia.org/wiki/Market_power

AJI said...

"Monopolies" abusing customers is one of those things taken as a fact without a lot of supporting evidence, mostly because there have been very few real monopolies.

If monopoly on an essential product and also a stranglehold on the ability to provide that product, then you have the ability to truly abuse customers. Standard Oil is a good example. You can't sell oil unless you have an oil well, and if one company controls most or all of the producing fields they have a stranglehold.

A "monopoly" based on popularity is far more fragile. Apple has had a virtual monopoly on music players since the iPod was introduced. While Apple does enjoy premium pricing on its products, it is not abusive priced. If they decided an iPod should be $1,000 because they "owned" the market, they would force customers elsewhere, and other competitors would arise.

Even Microsoft couldn't have maintained its dominance on operating systems with abusive pricing. If they'd gone to Dell and HP with 300% increases how much do you want to bet another system would have been used?

Amazon can't become a monopoly. They can't stop anyone else from opening an online store. With their current KDP model they are not locking anyone in to staying with them, so they are not even tying up existing ebooks, much less future ones. The dominance of the store itself is based on maintaining customer satisfaction.

If they became abusive to authors, and sharply reduced royalties they'd not only get a ton of bad press, they also help out any competitor by making it worthwhile for authors to flee to another option.

There is a difference between terms never changing and truly abusive behavior. For example, let's say they cut royalties to 60% in a couple years, but the market is twice as big. You may not like that they cut the rate anymore than you like the supermarket raising the price of Captain Crunch, but would that be truly abusive?

Even a significant degradation in terms in the future, IF that happens, still leaves a better deal than current publishing contracts. So what is the possible logic behind the argument to take the very, very low deal because the really good deal MAY become somewhat less great in the future.

By that logic kill yourself now, because someday you might get sick.

AJI said...

For examples, take Intel, the dominant market leader for a long time in the computer processor world. Many reports (and lawsuits won by AMD) alleged that Intel used its dominance to compel computer makers to use their products at the exclusion of AMD. http://en.wikipedia.org/wiki/AMD_v._Intel

Bad example for this point. The only one really injured by Intel was AMD, a competitor. This had little or no effect on consumers. Possibly the Intel chips exerted the tiniest upward pressure on prices of PCs, but that market is so cutthroat it is doubtful that nay pressure could have forced the box makers to pass on much in the way of higher costs.

AJI said...

or unless anti-trust policy returns to Pre-Reagan era policy and the Justice Dept. seeks to preserve competition again.

I am SO not going to get into a protracted political discussion on here, but anyone who thinks that the government's bloody tentacles haven't been in every corner of the US economy for every second of the last 30 years must have been doing the really GOOD drugs to be so removed from reality.

Newflash - the government was in every single aspect of the mortgage industry, the SEC regulated Madoff, etc.

The 2000 Internet bust could more reasonably be blamed on the private sector. This recent debacle has the government fingerprints all over it.

Aric Mitchell said...

@JDuncan: I understand this fear, but that isn't what seems to be happening. Indies have been testing out the waters and are finding better performances above the $2.99 threshold than below.

The thing about 99-cent books is this: You could very well get someone to buy you with that price, but it's a crapshoot whether they actually read you.

I have several 99-centers that I bought at the spur of the moment, but after wrestling with a first chapter of typos and logic lapses, I abandoned them and learned not to buy any more from that author.

I have gotten lucky a time or two, but it's been more the exception than the rule, so my buying habits have adapted to the reality of the ebook selling environment. If you go to the Amazon reader forums, I think you'll see a lot of people feel the same way.

I am now willing to pay more if I find an indie that I respect, like Guido Henkel, David Gaughran, or Adam Pepper. But these guys worked hard to earn the business they have, and it shows in the writing.

Furthermore, they're out here in "the community," making themselves known the right way, adding insightful commentary about the industry as a whole, and showing off strong samples for the books they've produced.

I feel safe plunking down money for them, because I know they're not going to do moronic dumb-ass things like put misspellings in their synopses and churn out four typos per page from Chapter 1. Their stories have a sense of fun, and their writing is informed to the mechanics of storytelling.

And just for the record, they don't have to make comments on this or any other blog for me to try them out. I discovered David through his insights, but Adam and Guido I bought because I stumbled across their books. It was only afterward that I realized they were indie authors.

But with that said, there is an epublishing sweet spot, and $12.99, $16.99, and $19.99, are not "it." That, in my opinion, is what Mom and Pop Book Shops are for.

Why should I buy the new King for that, when I can wait a few months and pick it up used on eBay, Amazon, or my local readery for $6?

It's not like I'll have a hard time finding anything to read while I wait.

Publishers hate the fact the prices they would like to charge are deflating because they know in the end, the only essential elements to a book are the author, editor, and cover designer.

The digital marketplace is a sign of things to come, and it scares the holy hell out of them because it means they'll eventually have to wake up from their collective naps and find a way to adapt to an environment that is changing because of the consumer more than anything else.

They just want to blame Amazon. But the customer will pay what the customer will pay, and in the end, they're the ones, who should be considered "right."

Besides, it's really hard to justify $12.99 for an eBook when there is next to nothing by way of overhead.

Charlie Martin said...

Am I off base, or did prices seem to get higher once the Department of Justice broke them up?

Actually, oin that one you are off-base -- I pay rather less for two lines today, with voice mail, extra features and all -- than I paid in constant dollars for one line and no cell phones at all in 1980.

But never mind, you're on a roll.

Anonymous said...

@Alan

I would as a customer have prefered to use epub ebook file directly on the Kindle, for example.

If Amazon sent a firmware upgrade that allowed every Kindle reader to display epub files and then did an auto convert of every Kindle book they sell and listed them as available in the Kindle Store, what would happen to BN, Kobo, Apple, and most other online booksellers?

JEH

M. M. Justus said...

Only one tiny nitpick. Where I live, the cable company *is* a monopoly (satellite can't compete, because not everyone has a place to put a satellite dish -- like me in my condo), and they do take advantage.

Other than that? I have to say I agree on the whole.

Alan Cramer said...

Wow Joe you really know how to make a point. You need to be writing speeches for politicians.

Kevin S. said...

My real job is being a history teacher. Standard Oil was a ruthless monopoly and I mean ruthless. John Rockefeller believed, literally, competition with him was a sin. Lots of businesses complained about Standard Oil (now ExxonMobil) but I have never read any historical accounts of the public consumers of Standard Oil's products complaining.

The Trusts of the day however did screw consumers. The Legacy publishers don't act quite like the business trusts of old, but they would probably do so if it was legal. In effect, a trust is nothing more than a cartel that fixes prices, market share and guarantees profit margins for the companies who make up the trust.

By the way, before anyone screams about the evil oil companies and the price of gas, chew on this. Federal, State and local governments make more "profit" via taxes on a gallon of gas than the oil company does.

At any rate, I am not losing any sleep at all about Amazon. In fact, I sleep better due to the much needed extra income.

Joe Konrath said...

No matter how many times you or Barry call the Big Six a cartel, it does not make it so.

Really? How don't they fit the definition of cartel?

Hmm. You didn't explain your position. So they aren't a cartel because you say so? How persuasive.

Why don't you click on the link where Barry described cartels? Maybe that will help you understand a bit better.

Go to business school. I did

And yet you offer no examples, just like Turow offered none. Even though I've asked repeatedly.

Remember that persuasion thing I talked about above? Learn how to do it. Then you won't sound like such a pinhead.

Do you know what fisking is? Try it with me. Try to debate using logic and examples. Try to take my points one by one and tear them to shreds, like I do on a regular basis.

But we both know you won't, because you can't.

Patrice Fitzgerald said...

Joe: Thanks for your continuing work to take on the big names when they aren't being honest.

Naturally it's shocking - SHOCKING! - that Amazon is in this to make money. And we all know that traditional publishers are entirely concerned with great art, and not filthy lucre.

Fortunately they have Mr. Turow to defend their tender vulnerability.

[Note that my captcha word is "Ecookin!]

Robert Bidinotto said...

Joe, thanks for giving Mr. Turow -- and more than a few of your readers -- a basic lesson in free-market economics.

Simply asking them to put forward historically verifiable examples of the Terruble Evuls of Capitalist Monopolies seems to have tied your critics in knots. As one of my favorite presidents once said, such people "know" so many things that aren't true. That faux knowledge includes what has been conveyed to generations of students, via history books authored by Progressives with axes to grind against free markets.

For a refreshing alternative account of American economic history, I might recommend the books of historian Burton Folsom. He lays waste to many of the fatuous claims and manipulative fairy tales about 19th Century "Robber Barons," tales that have created an enduring, bogus Narrative about free markets, which plagues us to this day.

Incidentally, you can buy his books on Amazon.

Mary Lisa said...
This comment has been removed by the author.
Matthew said...

Kevin S. said:

By the way, before anyone screams about the evil oil companies and the price of gas, chew on this. Federal, State and local governments make more "profit" via taxes on a gallon of gas than the oil company does.

Taxes are revenue. Revenue does not equal profit. Profit is what's left over after revenue encounters outlays and expenditures.

Oil companies derive profit from selling gasoline.

Taxing authorities derive revenue. Very few state budgets have been running surpluses (I suppose one could call them "profits") lately, and gasoline taxes aren't one of the largest sources of revenue in any event for most states.

California's revenues by source:

http://www.lao.ca.gov/2007/tax_primer/tax_primer_040907.aspx

Using them since they're one of the largest states and in the top three for gasoline taxes.

California also breaks down the components of price in a gallon of gasoline sold in the state:

http://energyalmanac.ca.gov/gasoline/margins/index.php

The bulk of the price is the cost of the underlying crude. Lesser components are refinery costs and various taxes, followed by marketing expenses.

The Department of Energy has a similar breakdown:

http://www.eia.gov/petroleum/gasdiesel/

CNN tried to break down actual profit for the crude portion, but admitted it depends on the actual cost of production which can vary widely:

http://money.cnn.com/2008/03/13/news/economy/gas_gallon/index.htm

However, the EIA provides average costs for production for certain regions, with the Middle East coming in at the lowest end:

http://www.eia.gov/tools/faqs/faq.cfm?id=367&t=6

Technically, some Russian crude has relatively low production costs, but crude comes in different flavors. Light-sweet which ends up refined into gasoline isn't the same as heavy crude.

Justin Alexander said...

You've never heard of Standard Oil, IBM, Bell Telephone, or Microsoft? And you were unable to find them with Google?

You seem pretty savvy when it comes to publishing. When it comes to economics (and Google searches) you are apparently somewhat lacking.

J. Tanner said...

I really enjoyed Matthew Yglesias take on the whole collusion situation over on Slate:

http://www.slate.com/articles/business/moneybox/2012/03/doj_vs_book_publishers_who_cares_if_apple_and_publishers_are_colluding_to_raise_e_book_prices_.html

My favorite quote:

"Conversely, whatever the facts of the case, the Justice Department’s notion that we should fear a book publishers’ cartel is borderline absurd, on par with worrying about price-fixing in the horse-and-buggy market."

Ouch.

Eric Christopherson said...

I am SO not going to get into a protracted political discussion on here, but anyone who thinks that the government's bloody tentacles haven't been in every corner of the US economy for every second of the last 30 years must have been doing the really GOOD drugs to be so removed from reality.

I wouldn't get into a protracted discussion if I were you either. There really isn't a debate as to whether there's been financial deregulation over the past thirty years, the left and right agree it happened, and Alan Greenspan himself has apologized for his part in making it happen.

Eric Christopherson said...

Anyway, when Joe and I were talking about it, we realized it wasn't just Turow who was referring to this monopoly theory without providing cites; in fact, neither of us had ever heard *anyone* offer a real-world example. That's why Joe is asking for real world examples here. We'd both like to know. It's pretty obvious Turow doesn't know of any, either, but that doesn't mean the examples don't exist.

I'm already on record in this thread as maintaining that Amazon is closer to a monopsony than a monopoly and therefore in no danger of raising prices, but I can think of at least one example of monopolies leading to higher prices.

The Government Accountability Office once did a study of the pharmaceutical industry comparing government-created monopolies of new drugs via the patent system with older, generic drugs, which are a competitive market by contrast, and the study found huge differences in price inflation over time. The monopolized drugs increased in price much faster than the generic drugs.

Anonymous said...

~.99 books will never become the norm.

A) Professional writers won't work that cheap. They will move on, leaving hobbyists.
B) It's not in Amazon's best interests. Books are money. Why cut further? Amazon would need a totally different business model for that to come about (Ad-driven perhaps).
C) A heft percentage of authors would remove their work and start doing the rounds. Big publishing would pick up authors. Amazon would lose it's supply.

On the otherhand, royalties might go down one day, but I will have earned out my time and effort by then. Book prices would also go up as self publishers, who were used to 70%, adjust upward to cover the loss in income. An ebook might hit $9.99 then (back to the old world we go.) Amazon would likely drop agency pricing to force things back to their norm.

I don't know what the future holds, but I'm running a near 1% expense business (given 10 years sales life for a book before it's buried forever). When things get wild, I'll still probably win in the end as i'll have earned out long ago.

Joe/Barry:
What do you think life will be like if agency died? Sorry to go off topic, but I'd love to hear your opinions.

Anonymous said...

Of course, don't forget that the 70% royalty is set at 2.99 to 9.99 for a reason. Amazon is being clear about where it wants it's prices to be. Go under or over and you are punished firmly to the tune of 35% less. Look at Amazon Singles if you don't believe they can make money on a .99 work at 70% (Although there's bulk sales and branding at work.) They could probably free us to 70% at .99 if the choose to, but why do that? 30% of 2.99 is a lot more than 30% of .99. People don't mind paying well more than 2.99. It's in Amazon's best interests to keep things up as long as possible and royalties are the carrot they use to achieve that.

Anonymous said...

When AT&T was broken up the cost of long distance service came down but local service got some increases. It was a regulated monopoly before the breakup, however, so it probably isn't an example to hold up.

I will say that Microsoft has a huge margin on Office, and Office is a defacto monopoly in the business world. If there was real competition the price of Office would be lower. And yes, I know about Open Office, but the business world wants to consolidate on a standard.

Another example of how a monopoly can inflate prices is the drug world. Compare the price of Viagra in the U.S. where generics are not available vs. the price outside the U.S. where it has to compete with generics.

And we can look at history to see how a monopolistic position has been abused in the past. That's why we have anti-monopoly laws.

John Yeoman said...

You asked: 'when one company has the majority share of any particular market, they always abuse their power. For example, how about..'

Couldn't find an example? How about PayPal's recent bid to ban books with 'offensive content' that PayPal didn't like? As a near monopoly, PayPal was stepping right outside of its remit as a utility to impose its own highly selective moral values on its customers.

Fortunately, public outrage - and the great work done by Mark Coker at Smashwords - forced it to back down. But suppose it had succeeded? A return to McCarthyism...

Joe Konrath said...

Standard Oil, IBM, Bell Telephone, or Microsoft?

I said Scott needed to provide examples of how people get screwed when one company controls the market.

Once the govt broke up Standard Oil, look how gas prices have dropped. Not.

Bell isn't a bad example, but how long ago was that?

IBM and Microsoft may have been ruthless with competition, but show me how consumers were being hurt.

The pharmaceutical companies are interesting examples, but it cost so much to bring a new drug to market it is tough to blame them for pills costing so much. Also, they could only be considered monopolies for individual drugs, as there is more than one drug company.

Paypal is a pretty good example, but look what happened--they backed down.

I want an example of a company that becomes a monopoly and jacks up prices, screwing customers. Scott insinuated this happens all the time. So there should be a multitude of examples, right?

My point stands. Scott was full of shit with that comment. He can't come up with a single example of a company that did what he fears Amazon will do.

Anonymous said...

Joe, you can't come up with any examples of monopolistic behavior because the Sherman and Clayton Acts outlawed such behavior in 1890 and 1914, respectively. Turow knows this.

And the instances where the Justice Department investigates and punishes anti-trust violations are relatively few.

Like, oh! Now!

How can a smart man make these arguments as the DOJ threatens to sue his publisher for the very conduct he accuses Amazon of?

JL Bryan said...

"Lots of businesses complained about Standard Oil (now ExxonMobil) but I have never read any historical accounts of the public consumers of Standard Oil's products complaining."

Consumers didn't complain because the price of oil kept falling & falling during Standard Oil's dominance. No consumers were harmed by the company's rapid increases in efficiency and lowering of price. Again...it was the fear that they might *someday* hurt consumers that led the the government breaking them up.

Here's one article explaining this:

http://www.fff.org/freedom/0592c.asp

suzanne white said...

Once again, it's Geezer City. In the Sixties ( I am a geezer and I was there barefoot in Paris and in Ibiza and in San Francisco) Back then it was the Geezers who ranted against the younger people who dug Dylan's winds blowing through their long hair, who were moving toward something new and were not afraid of espousing change. In those days the Geezers didn't have the internet or cell phones or TED or ringtones or blogs. Well let's face it. In those days the geezers only had the police. The pigs. The Man. But now they have lawyer/novelists who head up guilds which pretend to be for authors, which charge authors dues to belong to their Geezer club, but which, in truth, pimp for publishers. I, for one, am a disappointed geezer dues-paying Authors Guild Member. If more authors wore long hair and brandished tambourines, would it make any difference to Scott Turow? Not by your chinny chin chin it wouldn't. He works for the Man. He was born in 1949 (OX) . Barry was born in 1964 (DRAGON) and Joe Konrath? (1970 DOG). Don't blame Amazon. Blame history.

Anonymous said...

As someone who earned a grand total of $1200 dollars under legacy publishing in 20+ years, and has earned $10k in the last five months as an indie publisher, I think Scott is full of it.

Viva the ebook revolution!

Adam Pepper said...

The Big 6 and B&N are not the only competition. Deep pockets like Apple and Google along with upstarts line Smashwords and Kobo will keep Amazon from getting complacent. It won't be easy because Amazon has taken such a strong position but don't count out innovators like Apple and ambitious leaders like Mark Coker at Smashwords.

Aric, thanks for the kind words. It means a lot to me. And to know my work is being discovered by random browsers and readers looking for something different tells me I'm on the right path.

Anonymous said...

*sigh* Microsoft is not a monopoly.

Here's how I know it's not a monopoly without having gone to either business school or law school.

If I want a computer, I can go buy one with a Microsoft OS on it or I can go buy a Mac OR I can go build one from scratch and put a free OS on it like Linux or the other 20+ that exist. Not as convenient sure and maybe a bit more expensive (in the case of a Microsoft OS computer not so much a Mac because those fuckers are SUPER expensive) and I can also use free software to do all the things I could do on a Microsoft OS-laden computer like create and share documents, spreadsheets, presentations and databases; play games and play on the internet.

I have choices.

Ma Bell was a monopoly because while I could make my own phone, if I didn't use their service it was a motherfucking paperweight.

I had no choices.

TADA!

What is and is not a monopoly explained for the high-falutin' business/law schools wonks and the average person.
Monopoly = a single provider of a good or service that I want or need that I have no choice to get from anyone else
Monopoly ≠ multiple providers of a good or service that I want or need so that I have choices but I just don’t like them

And, yes, Microsoft was slapped with an anti-trust suit and they backed down and I can now use Chrome or Firefox or IE on my fun little computer. Could they have become a monopoly? Yes, indeed-y but they didn’t because regulation was in place to prevent it. And the DOJ keeps their eye on these kinds of situations so they can step in BEFORE a monopoly is allowed to develop.

On to Amazon, Amazon cannot become a monopoly ever because it doesn’t fit the definition as it does not provide a good or service, Amazon only retails goods and service.

Amazon is not a monopsony nor can it ever become one because it doesn’t fit the definition as it is not nor it cannot be the SOLE provider of A good or service, it retails many goods or services and I can buy books or socks or grills from tons of places like the dreaded Walmart or Target or the warehouse store either online or in a brick-and-mortar location.

On to the Big 6 … they’re NOT a cartel? Are you sure oh-so-few-posters who rebut that designation?

Straight from Wikipedia (the internet competitor of the encyclopedia which used to be a monopoly, ha ha):
“A cartel is a formal (explicit) agreement among competing firms. It is a formal organization of producers and manufacturers that agree to fix prices, marketing, and production. Cartels usually occur in an oligopolistic industry, where there are a small number of sellers and usually involve homogeneous products. Cartel members may agree on such matters as price fixing, total industry output, market shares, allocation of customers, allocation of territories, bid rigging, establishment of common sales agencies, and the division of profits or combination of these. The aim of such collusion is to increase individual members' profits by reducing competition.”

What’s that say?
Formal agreement (they met on purpose and agreed to fix an agency model of pricing – it’s not as if they met in a park by chance and casually agreed that maybe at a later date some of them could hang out to play a pickup game of b-ball if they were in the park at the same time).
Small number of sellers (uh, six is pretty small) involving a homogenous product (like books which may seem diverse but a book is a book is a book regardless of what the words say).
Price fixing (see re: above Formal agreement)
Collusion (see above re: Price Fixing) (see above re: Formal Agreement).
Sounds like they’ve been nailed as a cartel.
And DOJ is investigating them.


I repeat … TA DA!

Eric Christopherson said...

Joe, you can't come up with any examples of monopolistic behavior because the Sherman and Clayton Acts outlawed such behavior in 1890 and 1914, respectively. Turow knows this.

This, plus the current policy focus on consumer prices. In a nutshell, you can't believe Turow unless you're also willing to believe the DOJ isn't doing its job.

Unpublished Guy said...

And furthermore holding Microsoft out as an example of a monopoly that didn't have a negative impact is disingenuous. The DOJ did intervene. Not sure I believe this but I do like using the word disingenuous.

Unpublished Guy said...

Now you're intentionally being obtuse. Don't know if I believe that, but I do like using the word obtuse.

wannabuy said...

@Splitter: "Literary diversity...like when a relative few used to decide what was going to be available to readers and when?"
I think this is the #1 real complaint. The old guard has lost their gate-keeping power and profits.

Because of the loss of 'gate-keeping power' we have had a revitalization in every mass market paperback genre and quite few more.

I'm also amused, like Barry, how innovation is expressed as a negative. Shall we have a cloth mill smashing party?

Neil

wannabuy said...

I find this discussion ironic as Amazon business, in one sector, was severely hurt by their focus on physical media (CDs/DVDs) versus digital media (iTunes/Netflix).

The difference is Amazon learned. They went back to their roots (books) and created a 'fortress market' to go back into the other media markets.

The Kindle Fire proved Amazon is thinking of how to serve the broader customer demand. (Hint: Put out a model with a front facing camera for Skype.)

Lightsaber

Selene Kismet said...

Reading the Anonymous comments on this blog has been the highlight of my weekend so far, and I say this while sitting in front of March Madness on the TV.

I think arguing the whole concept of monopoly (like arguing the concept of censorship) distracts from the main point of this post, which is that Scott Turow can't back up his words with evidence. He's ranting based on fear and prejudice against new business models that make it harder for him to stand out in the crowd.

A Little Night Magic

frank palardy said...

I think he has a point about Amazon, although his legal logic doesn't work. There's nothing illegal about what they do, but it generally isn't good to have one company with too much power. The bigger problem for writers is going to be so many books available with little promotion. It will force you to give away your book. Then you're back to square one before you had the kindle when you could put your book on the internet. The publishing houses will be gone or limited to a small number of writers.

Wayne said...

Frank, Kristine Rusch has a blog post about the scarcity model. And how some of her books are getting blogger reviews now that have been out 5-10 years. Writers who take the long view and put lots of books up will be found over the years and people will grab all their content. One writer comments for example about how once he finished his trilogy then a bunch who were waiting went and bought it.

Neither her or her husband Dean Wesley Smith are big fans of giving away free books without lots of content to sell once you've got readers attention.

http://kriswrites.com/2012/03/14/the-business-rusch-scarcity-and-abundance/

Christopher Smith said...

I haven't been here for awhile. I've been working hard on finishing two novels before work starts on the next set, which I'll be self-pubbing in spite of three offers to sign with the Big 6...because why would I ever sign? Amazon has allowed me and so many others great success. And continued, innovative success. Anyway, Joe, that was one fantastic, focused, often funny but always on-point rant in which the truth came through in ways that it needed to. Well done.

xdpaul said...

I've got a great example, Joe, that blows your theory to shreds:

Scott Turow has absolutely cornered the Scott Turow market. He's operating as a monopoly. After all, the only supplier on the planet of Scott Turow stories is Scott Turow.

And that is absolutely killing all the would be non-Scott Turow producers of Scott Turow materials. The man can name his price, screw the customer, crush any rebellion, and damn innovation.

So, you think this "monopoly" is a phantom? Well, maybe so.

But that phantom's name is Scott Turow.

Zathras42 said...

Having worked for over 20 years for Waldenbooks/Borders, one can see the result of refusing to allow Amazon to "force" a company into creating/marketing an e-reader.

The stalwart, strong, proud company that 'stands up to the bully', and fights for the 'traditional business model' goes down in flames of hubris, while the poor, abused Barnes & Noble is still alive and kicking.

What killed Borders was not the Evil Kindle-Monger, but the short-sighted arrogance of the clowns running "Borders Group".

Mr. Turow is seriously confused on many issues.

The Authors Guild should be concerned about the Publishers practice of farming out the proofreading work involved in e-book conversion to India (for example) resulting in egregious errors due to (let us be charitable and say)an uncertain level of proficiency in the language. Witness the recent difficulties encountered by Stephen R. Donaldson with Random House (detailed on his website: stephenrdonaldson.com).

The Author's Guild should be working with the publishers on a sensible and forward-looking evolution of the current marketing paradigm, instead of defending the 'horse and buggy industry' whilst throwing molotovs at Henry Ford.

You can either prepare for the future (and thus mitigate its impact on your industry)or stand proud and inflexible while the future kicks your ass.

What's it gonna be Scott?

Splitter's Blog said...

Neil,

You are very right about the revitilization. I remember reading not all that many years ago of the impending death of the printed word. The theory was that consumers would demand only entertainment like movies and video games.

Now look at what has happened to books. People are finding new ways to procure and read them.

As a writer, I feel like people of Scott's ilk want to keep me out.

As a reader, I feel like "they" are telling me that they will be the judges of what I should be reading.

Will Amazon abuse its position? I do not know, but I think they are smart enough to see why that would ultimately be bad business. In the here and now, they have readily accepted my work and given me tools to get it into the hands of readers. As a reader, they have given me tools to find exactly what I want to read. From either side of the fence, they have been a good partner.

Things may change tomorrow, but for now, they are helping me more than traditional publishing is willing to help.

Splitter

wannabuy said...

@Splitter:As a writer, I feel like people of Scott's ilk want to keep me out.

As a reader, I feel like "they" are telling me that they will be the judges of what I should be reading.


So true. By preventing the meeting of new authors with new readers, they have unintentionally shrunk the reading market.

I don't care what people read, as I believe *any* reading is better than watching TV/movies.

So many genres are being revitalized now that the gate keeping has dropped.

One book per year per author? Seriously, why? Neither the reader nor the author like that arrangement.

Lightsaber

Lisa Daily said...

AJI said:

"If they became abusive to authors, and sharply reduced royalties they'd not only get a ton of bad press, they also help out any competitor by making it worthwhile for authors to flee to another option."

Just like Big 6 has paved the way for Amazon.

Deke said...

Reading all of this makes me wonder whether everyone is looking at things the wrong way.

To explain - Mr Turow is, as has been pointed out, a skilled lawyer. As such he is well used to using his words most carefully, and making sure that he provides examples and precedents whenever and wherever appropriate (some might say, "possible"). When he fails to do so in his rants against Amazon, people seem to be happy to jump on him, asking how a lawyer as skilled as he can miss these important elements out.

Maybe it's just me, but isn't this obvious? He's in a position where the facts and the law both seem to be against him. Maybe he's not arguing in the way he is because he's not a skilled lawyer. Maybe he's arguing like this precisely because he is more a skilled (and perhaps hidebound) lawyer than anything else, and just cannot see how else he can respond.

I am starting to wonder if he is simply falling back on the old lawyer's aphorism: "If the facts are on your side, bang on the facts. If the law is on your side, bang on the law. If neither the facts nor the law is on your side, bang on the table."

Patricia Preston said...

Pour me some more Amazon Kool-Aid!!

J. R. Tomlin said...

@jtplayer, would you care to tell me where someone said that Scott Turow was irrelevant? Perhaps you are unaware (from the tone of your remark, I suspect so) that he is President of the Author's Guild. This means he is by no means irrelevant because the point of the AG is supposed to be to protect authors. Instead, under Mr. Turow what it does is protect publishers and their right to screw authors over.

You mentioned that we think he is out of touch. Well, I suppose it is possible that he is out of touch. It is also possible that he is lying pond scum who cares only about himself and his profits and not the members of the organization he heads. I won't say which I believe.

dafaolta said...

Legacy Publishing has much to fear from Amazon's business model. As far as their intentions towards writers, generally, I don't think there's a whole lot to fear. I am reminded of the mysterious invocation of their ultra-vague TOS regarding some erotica, the way Selina Kitt and others were delisted with no explanation and no recourse. She was able to switch the banned titles to B&N with little trouble and, apparently, some profit.

Since then, I've been careful to buy books from both stores, because even tho B&N still has the worst website possible for selling anything, I want to keep them as an alternate outlet.

That said, I wouldn't want to go back to a time without Amazon and the Kindle. I suspect that, whether they knew it or not, Bezos has been planning to reform book distribution since he started Amazon.

Mira said...

I really appreciate this post and the comments!

Although I adore Amazon and what it has done for the writer, I was nervous about a potential monopoly. But reading Joe's post and the comments, I've relaxed. I realize Amazon won't become a monopoly for three reasons:

a. the internet is too powerful, and any corporation that abuses it's power is now under immediate scrutiny and pressure. Look at Paypal's recent reversal. Yes, some corporations are still massively destructive, but that will change too. The internet has barely begun to be felt as a major force.

b. Authors can unite. With legacy publishing, authors were kept in fear of blackballing and were afraid to speak up. With the power of choice and the immediacy of the internet, authors could become a united force to be dealt with.

c. There are many companies that can compete with Amazon. Legacy publishers, for example, have parent companies with pockets that make Amazon look like a pauper. Apple is worth three times the value of Amazon.

This fear that Amazon will take over is spin - as noted by many here - there are many corporations who could enter this game - if they want to.

I do want to say a quick word about Turow's motives. I don't know him, so I have no idea if his motives here are self-centered. They may be. But I've also noticed that those who work in legacy publishing tend to bond with their agents and editors, etc. - they have friends and care about the people they work with in publishing.

To take a stand against your professional colleagues can feel as though you are betraying them. And I think some published authors are feeling loyal and guilty because they don't want to hurt the people they like and see them lose their jobs.

I really understand this dilemna, especially since it's hard to see that in saving the system as is, you are betraying other authors. That's more abstract while seeing someone scared about their livelihood is very real.

It's easier for me to speak out. I think that a system that is exploitive of authors is not acceptable, regardless of how good the people are who work in it. But I can type these words knowing I'm not betraying a friend by saying them.

So, I'm not defending Turow. He is a representative of authors and in a position of power. He needs to take the responsible road here. He needs to help authors finally gain their power and freedom. That is so much more important and so much bigger than maintaining a system that is exploitive because you care about the people within it. But I do realize he and others may be facing something heartbreaking.

jtplayer said...

J.R. Tomlin-

I’m well aware of who Scott Turow is and his role as President of the AG.

I also know, from reading the responses here and at CrimeSpace and The Writer’s Caf√© and DWS’s blog and other sources, that most of you don’t hold the guild or Turow in very high regard.

Now maybe it’s just the two recent pieces from Scott that has fueled so much venom towards him and the AG. I doubt that though, and suspect that the negativity I’ve been reading these past few weeks has been long festering.

Joe Konrath said...

I've been anti Turow since he said the biggest problem facing publishing is piracy.

Seriously, haven't publishers learned a single thing from the music industry? They fought like dogs, they sued like mad, they became universally hated, and now profits are down and DRM is off iTunes.

If the music industry had tried to monetize Napster rather than destroy it, there would be no iTunes today.

Sonorous said...

Monopolies may not always screw consumers, but they do screw suppliers. Walmart and Apple are famous for wringing out costs from their supply chain -- profit for the suppliers and wages and good working conditions for their (suppliers') workers. In the publishing world, that'd be us, the writers.

But personally I don't believe it applies here. In the digital world everything is a tap or a URL away. If there's no profit to be had on Amazon then there will be no good books, either, and readers will download another app or visit another site. Amazon controlling ebooks would be like Andre the Giant putting a headlock on the air we breath.

Jim Thomsen said...

Sherman Alexie echoes Turow's fearmongering:

"When I attack Amazon, I am not attacking Internet literary culture, which I am firmly and happily a part of,” he writes. “No, I am attacking a huge corporation that has escaped most liberal and literary rebel moral and economic scrutiny. I don’t think many or most people realize that Amazon wants to put bookstores out of business. All bookstores. That’s the only explanation for their business practices. And for you e-fundamentalists who are addicted to that $9.99 e-book price, you will be sobered up when Amazon gets their monopoly and begins to raise praises. To put it in recent terms, Amazon is in the 1% and independent bookstores are in the 99%. So who are you going to fight for?”

http://www.nwbooklovers.org/2012/03/15/amazon-is-the-1/

J.T. Dunsmere said...

Eric Christopherson wrote: "Or pay attention to how Amazon has already begun tightening the screws on its suppliers (Independent Publisher's Group most recently)."

IPG is a major distributor of print books. However they demand that their customers solely distribute their ebook versions through IPG of which IPG takes 10% of the net revenue for the simple task of uploading the file to Amazon, B&N, etc. After abusing their clients for years, now IPG claims it is the victim. This is blatant extortion and I'm glad to see Amazon call them on it.

Tom Maddox said...

Well, I don’t know who Sherman Alexie is but I am not surprised to see that he is a Big 6 author.

Is Amazon really a threat to independent bookstores any more than B&N or Borders were years ago? It seems like 13 years ago I watched “You’ve Got Mail”, a movie whose central plot point was the conflict between the chain stores and independent book sellers? Apparently the indie book sellers survived that conflict are under attack yet again. Or are they?

Doesn’t Amazon also create paper copies of the books that are part of their publishing imprints? Wouldn’t they want these paper copies in actual book stores? I would think that the answer to that question is yes, that is as long as the book seller is not boycotting all Amazon published books. So, not only does Amazon not want to put them out of business, they want to put books on their shelves to sell.

It is not Amazon that will be the end to some independent bookstores. If that was the case then it would have already happened with their (and other big box retailers) heavily discounted prices on the same print copies that these stores sell. No, it will be the e-book format itself that will kill some bookstores if they don’t adapt, much the same way that MP3’s, and not Apple, were the downfall of record stores. The only way to blame Amazon is if you think e-books are synonymous with Amazon, but we know that is not the case. Whether it is Amazon, B&N or another company someone will exploit the consumer’s desire for e-books. Amazon’s enormous success is just hastening the inevitable.

Amazon, in my opinion, is actually out to get the publishers more than the book sellers.

wannabuy said...

@JT:If the music industry had tried to monetize Napster rather than destroy it, there would be no iTunes today

An industry adapting and controlling its own fate? Naaa... won't happen.

Neil

Dave the WiredNun said...

"Am I off base, or did prices seem to get higher once the Department of Justice broke them (AT&T) up?"

Remember, AT&T was a CARTEL of regional Bells (Pacific Bell, Bell South, etc.) and prices went way down on long distance after they were broken up. What do you pay for long distance now? Flat fee unlimited in the US...it used to be $0.20 a minute or more, in 1970s dollars. All of which proves your point, of course. Bravo

Yuwanda Black said...

If Amazon is a 'future monopoly' to be feared, I say, "Bring on the future and monopolize the hell outta me!"

Thanks for continuing to tell it like it "t-i-s" tis Joe.

Proud self-publisher.

Stephen Leather said...

"Actually, Amazon considers authors to be customers. I've heard half a dozen Amazon employees say that. I also just got a survey asking me to grade Amazon Publishing on how it is doing, and am chatting with them about it next week."

I think that's because you are a special case, Joe. Certainly in the UK a lot of Indie authors have had problems with KDP and are finding them very difficult to deal with. I've been ignored by them on several issues (despite being the Number 2 British seller on Kindle, behind Lee Child).

Authors are definitely suppliers and not customers and I for one do worry that what was initially a very supportive environment for authors is becoming less so. Amazon's Customer Service is second to none, but they are a lot less helpful towards authors and I thing that will worsen as the years go by. I'm happy to be proved wrong though!

Linda Pendleton said...

I love publishing with Amazon Kindle and Createspace!

Turow failed to mention that at least 12 years ago, the Authors Guild (of which I still am a member since 1990—and beginning to wonder why), had their back-in-print program in conjunction with iUniverse (POD and ebook) program. I published a number of my husband’s book through that program. Was I happy with iUniverse? No.

A few years ago, I canceled those books with iUniverse and published those same books with Amazon Createspace and Kindle, along with a large number of other books. Am I happy with Amazon? You bet I am!

I’ve not been in an actual bookstore in more than a decade except for my own two book signings at a local independent store. Do I need Barnes and Noble? No. I have Amazon—not only for all my book needs as a reader and an author, but for just about anything else I want to buy.

Anonymous said...

Ahh, those who forget or fail to learn about history are doomed to repeat those same mistakes...

Does anyone remember a little telephone company called "AT&T" also known as "Ma Bell"?

Not that their break-up actually did any good for the market, but there is an example.

I will still NEVER do business with AT&T. EVER.

Their abhorent behavior in the 70s meant people could only talk to their families on the opposite side of the world for ten minutes between midnight and 12:10 on Saturday (or was it Sunday?) and still pay the amount of a mortgage payment for that one call.

But then again, those big banks and investment houses that failed in the early days of Obama's first term didn't take advantage of their customers, either.

Not to mention the mortgage companies who managed to take down tons of homeowners when they failed. They certainly didn't abuse their customers by charging outrageous interest rates. Right?

And PLEASE don't get me started about PayPal!

Amazon IS working at cross-purposes with many authors by burying SOME of them in the back yard, while some remain on their front page... T&A for the masses.

Let's not be those who bury our heads in the sand. Wake up. At least be aware of the beast with whom you are doing business, lest it get hungry and eat your soul.

Or your next mortgage payment.

Certainly there are those who scream conspiracy at every bump in the night. But just because you are paranoid doesn't mean they aren't really out to get you.

Take a step back and start looking at the small steps that are being taken. The journey of a million miles always begins with small steps.

Just be aware. Walt Disney's view of every story culminating with a happy ending is a fairy tale. Life doesn't work that way. And people (and corporations) are greedy by nature. They will turn on you.

Erotica today
Romance tomorrow
fiction of "questionable content" the next day

And all the while, PayPal, Amazon and all those hypocrites who are part of the market will glady take our money every step of the way.

Then tell us we are bad people, who can't write anything proper, and should burn in hell.

Well, stoke the fire for me when you get there!

Francis - mortal kombat said...

this is a good post! thank you for information!!

Jennifer Archer said...

Information to back up the negative impact of Monsanto's move toward a monopoly on consumers, and competing small farmers: http://farmwars.info/?p=219

http://disasterandemergencysurvival.com/archives/monsanto-the-seed-monopoly-that-caused-genetically-modified-food-to-start-showing-up-on-nearly-every-dinner-table-in-the-united-states

http://blog.friendseat.com/monsanto-seed-monopoly

C. T. Blaise said...

Gee. Imagine anyone seeking success in publishing wanting to do business with a failing company. No wonder Amazon is kicking ass.

Ron Edison said...

I suspect the Tea Party is scripting Turow's material. That would explain the wild assumptions and his apparent disconnect from logic and reality. Thanks to Joe and Barry for fighting the good fight.

Karin Kaufman said...

@Ron: The Tea Party? Really? Good grief, that's silly.

@Joe: Another excellent refutation of Mr. Turow. Thanks again for all you do. I uploaded my first ebook last July. I'm now making money--not much, but it's a start--rather than checking my email in-box for responses to my queries (on the off chance an agent cared to respond). I've taken control of my writing life, and I love it.

Karin Kaufman said...
This comment has been removed by the author.
Optional Delusion said...

Usually I'm with you Joe, but you defeat your own argument when you bring up the big 6. Yes they are a cartel. A cartel is almost by definition a monopoly. They collude and act as one. So when you say cartels fix and raise prices then you are basically agreeing than monopolistic forces will work to screw customers when there is no real competition. Instead of looking up monopoly you should just google "price fixing" and you'll see all the evidence you need. It's also a little short sighted to think that price is the only way to screw customers. Limited choice is another. When you bring up Apple (which I love, don't get me wrong) they very frequently kick people out of their sandbox. They even tried to make it illegal for people to jailbreak their own paid for hardware. Limiting your choices, limiting content, bad customer service, ... there are a thousand ways to screw customers.
http://www.mentalfloss.com/blogs/archives/35353

wannabuy said...

@ J. Tanner: "Conversely, whatever the facts of the case, the Justice Department’s notion that we should fear a book publishers’ cartel is borderline absurd, on par with worrying about price-fixing in the horse-and-buggy market."

ROTFLMAO

Neil

Anonymous said...

Had the misfortune to meet Scott Turow once. I have never and will never pick up another book with his name on it. He may be a smart man but he needs to get out more.

DCS said...

For me, the most risable statement in Turow's interview is this:

"New authors traditionally are nurtured by bookstore personnel, especially in independent bookstores. These people literally hand sell books to their customers, by saying, “I’ve read this. I think you’re going to love it.” Not to mention the fact that a bookstore is a small cultural center in a community. That’s definitely a loss.

Again, my concern is for the sake of literary diversity. If the rewards to authors go down, simple economics says there will be fewer authors. It’s not that people won’t burn with the passion to write. The number of people wanting to be novelists is probably not going to decline — but certainly the number of people who are going to be able to make a living as authors is going to dramatically decrease."

What a crock! I'm a self-pubbed indie. I'm not making a living writing, but that was never my goal. I am published, thanks to KDP, Pubit and Smashwords. People have read my stuff and I like to think more will in the future. In Scott Turow's world, I'd still be pitching queries to agents and accumulating rejections. I don't see a nurturing independent book store owner in my future. I'm willing to trust the free market. If my writing is good enough and I apply myself to marketing then I just might increase my sales. That will never happen in Turow's elitist, snob-infested world.

Anonymous said...

Hey, I don't know how well you get around the internet but I just read a column in subtopian magazine on issuu.com and it was all about how ereaders aren't going to take over the world. it seems like there was a pretty interesting arguement in there.

Wicked Christa said...

re subtopian article (http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=3&ved=0CD0QFjAC&url=http%3A%2F%2Fissuu.com%2Fthesubtopian%2Fdocs%2Fsubtopian_2&ei=3c5tT57nF8ecgwf_tsBr&usg=AFQjCNHst323FCNPexfH7uu5QB9umzvHcw) -- that has as many holes in it as my lace panties.

Re monsanto -- Joe, Monsanto was about the worst example you could have used. Yeah, prices are still low but find some farmers to discuss Monsanto with. The writer to writer argument on Amazon is not about end user prices, it's about how the content creators are treated. It's a bad argument to raise Monsanto as an example of a monopoly and only address the consumer end when they are so very (dare I say) evil on the producer end. (And even on the consumer end when you look beyond price.)

http://current.com/tags/85538011_monsanto/

For the record, I'm not worried about Amazon screwing me over on what % it will give me, etc. There are too many ways to deliver content now, with cost of entry for new distribution platforms so incredibly low that there's no putting the indie beast back in its cage. :-)

Wicked Christa said...

I know you're going to come back and say it was perfectly reasonable to address Monsanto on consumer pricing only because you were addressing Scott's comment of "Look, if what they’re into is maximizing profits, then if they were to have a monopoly there’d be no rationale not to use the monopoly power to increase prices to consumers. That is historically what monopolies do. There is plenty of precedent for that. It’s only rational to fear what they’re going to do with this accumulation of power."

But justifying a monopoly on one positive factor when there are so many negative factors is flawed. Additionally, this is a long game, both for Monsanto and Amazon. Whose to say where Monsanto is at in its game of conquest? So, even then, on a price only factor, we can only say how it is now, today, not next year or a generation from now.

Joe Renzo said...

You are so right, not for nothing this guy is a complete asshole, he's supposed to represent AUTHORS, not publishers, the members need to fire his ass...

Mark Asher said...

Barry said: "And regardless of how one system or another might favor Scott Turow or how it might favor Joe and me, which system, on the merits, is likely to deliver more benefits to more authors and readers overall?"

My best guess is robust competition among the middlemen for the products of the suppliers (writers) and the sales to consumers (readers) will deliver the most benefits.

If one entity gets in a position where it doesn't need to robustly compete that entity will be able to extract concessions from the suppliers and raise prices for consumers.

The real question is what will create and maintain the most competitive environment where several middlemen can thrive and compete with one another so that suppliers have several viable buyers for their work and consumers benefit from lower prices?

Jane said...

J.A., I have a question I hope you might be interested enough in to pursue.

In traditional publishing, there's an audit system whereby writers can verify that their royalties match their sales.

In the case of Amazon/KDP, there appears to be no way to audit records. Authors are given reports generated by Amazon and have no way, to my knowledge, of verifying the accuracy of sales data.

I became curious about this a few weeks ago, when 7K+ downloads were had during a 24 hour Free promotion. Yet, two days after the free period ended, an additional 334 free downloads showed up.

During another, non-free time, I experienced a skyrocketing number of returns. It's been my experience that more returns happen after free promotions because people don't see that the book has gone back to not-free, but this was a whole three weeks after my last promotion day, and the figure was wild. 84 returns out of 110 sales. My book has been up for months, so I knew it wasn't a formatting or downloading issue.

So my question is -- do you think Amazon should have independent auditors? Do you think this is something authors should demand?

Jane said...

J.A., I have a question I hope you might be interested enough in to pursue.

In traditional publishing, there's an audit system whereby writers can verify that their royalties match their sales.

In the case of Amazon/KDP, there appears to be no way to audit records. Authors are given reports generated by Amazon and have no way, to my knowledge, of verifying the accuracy of sales data.

I became curious about this a few weeks ago, when 7K+ downloads were had during a 24 hour Free promotion. Yet, two days after the free period ended, an additional 334 free downloads showed up.

During another, non-free time, I experienced a skyrocketing number of returns. It's been my experience that more returns happen after free promotions because people don't see that the book has gone back to not-free, but this was a whole three weeks after my last promotion day, and the figure was wild. 84 returns out of 110 sales. My book has been up for months, so I knew it wasn't a formatting or downloading issue.

So my question is -- do you think Amazon should have independent auditors? Do you think this is something authors should demand?

D. Nathan Hilliard said...

Amazon and Createspace rock. It's just that simple.

With the growing number of indies out here in the world, the "Writer's Guild" needs to be a little more honest about who they represent. Because in this case it certainly isn't writers.

Maybe indie writers need their own guild.

Jen said...

I love your blog and everything you write on it. Does anyone know that hospitals are buying up doctors offices and leaving the doctors as employees so they can monopolize fee payment from the HMO's as a conglomerate they can tell the HMO's we will not longer accept you as a plan. I haven't seen one word written about this. Amazon is allowing authors that wouldn't have been known otherwise to get their work out. I have tried many authors because the book was 99 cents and I was quite pleased with the work. I borrow books from the library now because the hardcover prices are outrageous, plus I have no more room in my house for stuff. Amazon is a smart company. BTW I read that Apple stood with the publishers when Amazon wanted to lower the prices of ebooks. Maybe Amazon is a company looking out for its customers.

Gigi said...

First, I want to say that I love your blog Joe! I'm sory that I haven't been groupie stalking you like I used to. I finished reading "Shaken" I thoroughly enjoyed it. I can't wait to get "Stirred." Love your books!

Anonymous said...

Just found this blog, looks like a interesting place.
As far as the Amazon's treat of being monopoly, I would not worry too much. I am pretty familiar with real monopoly of companies in eastern Europe, and Amazon is nothing like that.

Gordon Kessler said...

Joe, what a great post! And what a great and selfless service you've done for us indie authors--thanks so much.

I've mentioned you, your blog and your book,as well as Barry Eisler on my blog post: "EBook Sales Tanked? There's Hope!"

Please drop by--it'd give me a great boost, as well as my readers. And, if you have time, leave a comment and tell me why I'm wrong/right/need to look at it another way.

Also, it'd be great to get you to do a blog interview with me sometime!

I wish you great and continued success. Again, thanks for all you do.

http://gordonkessler.com/2012/04/01/your-ebook-sales-in-the-tank-theres-hope-8/

London Crockett said...

Joe, I promised to give this topic a rest, but your lack of understanding of monopolies was significant enough that I can't help myself. Pardon me if I miss one of your points—I'm only going to deal with your assertion that monopolies somehow result in lower prices, something absolutely no economist would argue.

Microsoft: Microsoft has an incredibly powerful competitor for it's products, one that generally trumps it in the marketplace: previous versions of their own software. I freelance and have been in a good number of large companies. It is extremely rare for them to be running the latest versions of Office and Windows. In fact, in the past five years, I have */never/* worked in an office that had completely upgraded their MS software. MS drops or maintain prices because it's hard to get people to upgrade. Arguably, their monopolization resulted in bad upgrades (AKA, Vista), although that worked against them, so it was probably monopolists complacency rather than greed that lead to that debacle.

Google has increasingly turned to abusing their own privacy policies to increase add-revenues; stealing data from Yelp and other sites; and manipulating their search results to favor Google services. Their business is delivering consumer data to advertisers: You wouldn't see any pricing increases as a consumer, as you're their product. YouTube is owned by Google and run for the same end. They are under DOJ supervision because of their abuses.

Facebook has a near-monopoly and has frequently changed privacy policies to increase ad revenues without proper notification. They basically follow the Google rules of advertising monopolies.

Netflix's primary competitor is cable. They have to keep prices low enough that people add Netflix to their services instead of getting their movies from cable. Cable is a monopoly in most areas and charges outrageous prices while offering little service. ISPs in America lag many other countries where real competition between ISPs exist.

Oil is a commodity. OPEC hasn't significantly impacted the price of oil since the '70s—every OPEC nation games their output to maximize their profits. The price increases are due to increased global demand. US demand has actually declined while our production has increased, yet prices have risen.

Utility companies (aka, monopolies) can't overly gouge consumers because they're regulated monopolies. Prior to regulation, they routinely gouged consumers.

Air fares were significantly higher before Carter-era deregulation forced them to compete on fares. You can get home telephone service for under $5/mo now that AT&T is broken up. Long distance used to be so expensive it was rare to call distant families; now its usually free.

Corn is massively subsidized by the government. Monsanto and other ag firms use their monopoly power to force farmers to purchase new seeds every year, a massive change over pre-monopoly agriculture. They have also used their lobbying power (derived from their monopolist positions) to get legislation that makes it illegal to criticize their products and actions in many ag states.

I'll let you, Scott and Smashwords (http://blog.smashwords.com/2012/03/does-agency-pricing-lead-to-higher-book.html?spref=two) argue over the rest, Joe, but I'd love an update where you take back all the nonsense about monopolies. It makes you look ill-informed and not particularly thoughtful.

Anonymous said...

Isn't the worry for the Big 6 and other publishers more that with Amazon as a monopoly they will start to squeeze the Publisher out and the Publishers cut out?

Now right now people will say thats not a problem because Publisher's are trying to fix prices and screw authors. But what happens when the Publisher is gone or vastly reduced?

You'll have less books on the market that are a high standard surely...thats not to say lots of indie publishers don't produce great books - but lots also produce a load of tosh.

So surely if one company has a monopoly they can start to put the squeeze on those people that supply them - as Eva Hudson suggests thats fine now but in the future will that mean the end or complete change of certain publishers?

That will be the interesting bit - at the minute Amazon isn't the devil as they provide a large platform in both books and eBooks for people to sell on - but keep lowering the price so that Publisher's have to offer eBooks at penny prices and how can you expect them to make good on those profits at a low royalty rate?

Richard J. Schneider said...

Right on, dudes. As a "new" old author (64 and going strong), I invested one year in the traditional path of find and agent then a publisher. Let me rephrase that. I "wasted" 6% of my remaining years based on life expectancy charts. I need to get my Vic Bengston Investigation series in the hands of baby boom readers now - not when Big Six finally get around to it. Yes, the readers and authors are always left out of these discussions over the inevitable changes in the publishing industry. You two have done an excellent job of analyzing Turow's phony argument.

Amazon has put me in the game and given me hundreds of new readers who can comment on the first book and spread the word. Amazon will enable me to publish the trade paperback, which gets me into bookstores. Along the way I am learning and putting together marketing and promotions (which I would have had to do anyway with a legacy publisher).

Remember, the shortest distance between author and reader (which is the point, right?) is the internet.

Keep hammering away..

Athena Grayson said...

Joe, I hope you'll be able to address Jane's comment above about reporting sales. That may very well lie at the root of some of the discomfort about Amazon.

The root of any author group should be ensuring that the author's rights are protected, that the author's payments are delivered accurately and timely, and that the contracts the author signs are adhered to in good faith and good practice.

As far as monopolistic behavior goes, I don't think anyone has yet pointed out that the cable companies that provide high-speed internet, being functional monopolies for their market, have played around with bandwidth throttling, tiered service, and pay-for-play prioritizing data delivery as much as public disgust will let them get away with.

And yes, Monsanto is evil. 99% of all "soybean" stuff is Monsanto, genetically-modified, patented soybeans. They've changed the definition of what a soybean is, and eliminated actual real soybeans by making it illegal to save those soybean seeds. It's pretty scary to think that if Monsanto can't or won't sell seeds one year, our food supply would be devastated.

Sarah Writing Online said...

The Rockefellers built a dynasty that lasts to this day based on raising prices after they had established a monopoly.

And, the price of corn and soy are so cheap because they are subsidized by the US government - not because Monsanto has a big heart and altruistically decide to keep the price in check.

~Sarah

Anonymous said...

Let's see:

Microsoft (releasing versions of Windows so bug riddled and byte hungry that people forced to buy a new computer deleted the new version and installed the previous).

McDonalds (cornered the fast food market by using inferior products such as "pink slime," reconstituted and bleached mechanically seperated chicken (McNuggets) and added the nuerotoxin MSG to virtually every one of their products, among other unethical business practices.

Nike (plenty about them on google).

Your local cable company.

Just to name a few off the top of my head.

Russell said...

Monopolies are abusive. Amazon might, for all I know, crave that sort of power so they can abuse authors or consumers, or just fall into bad habits one day... except... there's no lock in.

Maybe Amazon thought there would be locking up consumers when they started producing the kindle, but as the readers become cheaper, buying a second ereader from someone else is easy and cheap enough to become the common case. So consumers aren't locked in.

Maybe Amazon thought that they would one day be able to get exclusive epublishing rights for swathes of books and then, someday, be what Nintendo once was - but the ereaders are too cheap to allow that sort of lock-in, and "programming" text for multiple devices is too easy to provide real barriers for publishers, either (as happened with video games back when Nintendo ruled the roost). Few could afford two game systems back then, and few game publishers could afford to program the same game for multiple devices because they were so very different. In contrast, there's just no lock in for ebooks and ereaders, now, or especially, in the future. If Amazon thought there was a huge monopoly waiting for them at the end of the ereading rainbow, they just guessed wrong.

The one huge advantage Amazon still has is their review system; it can't be duplicated in a day and Sony and Goodreads aren't in a position to threaten there - yet. But at least one alternative will emerge, even if it takes facebook to do it (or facebook could buy goodreads). If the big publishers really want to control the future book market, it's Amazon's recommendation systems they should tackle head on, and pronto, before the cost of entry there climbs even further. That's the golden egg. Right now Amazon is Google for books, pretty much, and you can ask Microsoft how much fun it is trying to come in late and compete with Google while losing billions doing it.

I can't help but think that at some point the publishers (without colluding on book prices) will get behind other ereader systems boasting elegant and expensive recommendation and review systems with some very substantial investments, to ensure that Amazon isn't their only real choice of epublisher. Unless their cash runs out before their minds concentrate, of course.

Drew McArton said...

As an economist, I can explain the example of a monopoly to which Mr Turow referred. Standard Oil used to have a monopoly on oil. The trustbusters therefore broke up into five parts, which - with two other companies - became what we economists refer to as an "oligopoly". This is better. My economic model has proven conclusively that oil prices are now going down.

Joan Hall Hovey said...

Thanks so much for your article on Writing for Harlequin. I made even less of a royalty with Zebra/Kensington - 2% with the first book 'Listen to the Shadows' and '4% with the second 'Nowhere To Hide' because I had an agent. Wow!! Yes, distribution was great, but so what.

These days, I am finally making some very good money writing the type of suspense novels I love to write. I still have a publisher, albeit primarily an ebook publisher (although she also makes the books available in paperback.) I don't begrudge her a penny for all she does - formatting, promoting, etc. I'm in a happy place. -:)

Anonymous said...

"Microsoft has pretty much dominated the market with Windows. Has Windows become more expensive since it first launched because MS has a monopoly on operating systems?"

Pricing is not the only issue! Microsoft's monopoly let them sell a lousy product at artificially high prices because no one could break into the market to compete!

It took the advent of the internet and mobile computing to pull the rug out from under that, and suddenly, surprise(!), Microsoft was shown to be the dinosaur that it was.

But for DECADES consumers had to pay ridiculous prices for LOUSY software. And a lot of much better products and approaches were strangled by MS because they had the pockets to do so. The only reason Apple and the rest did an end run around MS was that MS had gotten so sclerotic that they didn't even get what was happening.

The dangers of monopoly are less in ABSOLUTE pricing, but in absolute VALUE. A monopoly, by definition, can set the price to be whatever they want. By definition, they can also sell you a product of a quality of any level, because YOU HAVE TO BUY FROM THEM.

It's either a giant blind spot for you not to see this Joe, or too much Amazon worship. I fear the latter, and am tired of people wanting to replace the Publishing Industry of yore with a new King.

Truth: ebooks are open format. We don't need Kindles. We don't need Amazon.

Anyone who says anything else is selling you something, and it's not their book.