Wednesday, July 15, 2015

Fisking Douglas Preston

Douglas Preston, the brains behind the brilliant think-tank Authors United (see what I did there?) was interviewed by Salon today as part of a media barrage meant to show the general public how stupid he is. There were also "articles" in the New York Times, by staff stenographer David Streitfeld, and by the perennially unbiased (not) The Bookseller.

I recently shredded Authors United's letter, intended to be sent to the Assistant Attorney General at the end of the month, probably by FedEx. But Salon has served up a floater so now I can shred Preston's own words.

Salon: The group Authors United came together last fall during the fight between Amazon and the Hachette publishers. Now, one of its founders, thriller writer Douglas Preston, is speaking to the Department of Justice about larger abuses by the online retailer, who he says has established something like monopoly power in the book world. Preston sent a letter on Monday to fellow authors, explaining: “The settlement of the dispute did not change the fundamental problem: That one corporation now dominates the book market in the United States. We believe Amazon has used its power in ways that harm the interests of authors, readers, booksellers, and the publishing industry as a whole.”

Joe sez: If my publisher couldn't close a deal that prevented my books from being sold by the largest bookseller on the planet, I'd be miffed at my publisher. It's bad faith. Hachette had a contractual responsibility to sell to as many markets as possible on behalf of its authors.That's why authors signed with Hachette. If Hachette was pursuing its own needs ahead of its authors' needs, Hachette authors should have sued them for breach of contract.

But instead, Preston (who has made a mint through Hachette) thoughtlessly defends his corporate master, because he wants to continue to get gigantic advances from them. I don't fault him for that. But don't claim it's for some grandiose, universal good.

Amazon does not harm authors. It sells more books than any other retailer. It pretty much single-handedly created the ebook market. It has allowed more writers to earn money than ever in the history of writing.

It does not hurt readers. It offers the widest selection, fastest delivery, and lowest prices anywhere on the planet, and has brought books to many who don't live near bookstores.

It has hurt competitors, but that's legal, and pretty much the point of capitalism and a free market.

It has also hurt publishers, but who cares? Other than authors getting multi-million dollar contracts?

Salon: We spoke to Preston from his home in Maine. The conversation has been slightly edited and condensed.

Why don’t you start by telling us about the letter you’re sending to the Department of Justice and what motivated it.

Preston: It arose out of the Amazon-Hachette dispute and the way Amazon treated its authors. A lot of what they were doing was unfair, outrageous, harming authors, and harming the whole publishing ecosystem. We consulted with some antitrust lawyers, and they told us about some ways Amazon was skirting the edge of antitrust violations.

Doug, Doug, Doug, I'm really getting tired of the same bullshit talking points.

Amazon tried THREE TIMES to take authors out of the firing line during the negotiations with Hachette. When Amazon contacted you, proposing a solution, you refused to listen.

Preston: The thing that said that was most interesting and surprising was that never in American history had any corporation achieved monopoly control over a vital marketplace of information. 

Amazon is not a monopoly. Repeatedly whining that it is one doesn't make it so.

Last year I interviewed lawyer Paul Biba:

Paul: Amazon is not a monopoly. There are plenty of competitors in the book and ebook arena - B&N, Kobo, Smashwords, etc. If Amazon were a monopoly it would have put these guys out of business. A monopoly is NOT illegal. The illegality comes in GETTING the monopoly. If you get a monopoly by legitimate pricing techniques, unique product, good customer service, etc. then that is just fine. If you get the monopoly by predatory pricing or other illegal activity then that is what is illegal, not the monopoly per se.

Predatory pricing, to make it simple, is when you price a product so low that it drives competitors out of business. Generally, that means pricing below your cost. To be honest, this doesn't happen too often because doing it hurts the seller who has to have pretty big coffers to sustain it. Amazon is clearly not engaging in predatory pricing because one can see many other sellers selling the same stuff at similar prices. To be "predatory" Amazon would have to sell most, or all, of its books and ebooks at prices so low that no other company could possibly compete. This is clearly not happening.

On the whole predatory pricing is not a viable antitrust theory any more. This is because the Supreme Court has set a very high bar for proving it (because by lowering prices the consumer is actually benefited) and, as a practical matter, not many companies can afford to do it.

I would categorize Amazon as a typical large business that uses normal, everyday business practices, just like the businesses I have worked with all my life. What makes Amazon unusual are two things: first, they are so good at what they do. Second, in the publishing area, what they do is so different from that the publishing industry has done over the centuries that it is a complete mystery to those involved in the industry. I am continually amazed that the publishing industry is astonished by Amazon's activities. I've been to enough conferences with the top execs of the publishing companies to see that they somehow think that the publishing business is a special, unique thing that is unlike any other business in the world - and should be treated as such. Amazon doesn't buy this and so it has become the publishing industry's bugbear.

Joe sez: Also, Amazon doesn't control any so-called "marketplace of information", because they don't control the Internet and don't own every bookstore in the world.

Books are not special snowflakes, Doug.

Preston: Even before there was no antitrust law at all, when the first telegraph wires were being strung across the continent by Western Union, the Congress  in 1866 passed the Telegraph Act to keep one company from monopolizing this means of communication. 

Joe sez: The telegraph was a utility. Amazon is a retailer. They aren't comparable.

Preston: Since the 20th century, the Congress and the courts have been absolutely diligent in protecting against monopoly in newspapers and radio and even the book business. And yet, here one corporation has achieved monopoly control of the book market. Amazon’s control of the entire book market is about the same as Standard Oil’s when it was broken up into 34 separate companies.

Joe sez: Let's look at the US Department of Justice's ruling on the Standard Oil case:

"The evidence is, in fact, absolutely conclusive that the Standard Oil Co. charges altogether excessive prices where it meets no competition, and particularly where there is little likelihood of competitors entering the field, and that, on the other hand, where competition is active, it frequently cuts prices to a point which leaves even the Standard little or no profit, and which more often leaves no profit to the competitor, whose costs are ordinarily somewhat higher."

Doug, show me where Amazon charges excessive prices where it meets no competitors. Then show me some competitors it drove out of business.

Wait... you can't? Perhaps because Amazon isn't a monopoly, or engaging in illegal business practices that drive competitors out of business? There are still a lot of bookstores, both online and physical. In fact, haven't you heard? The number of indie bookstores is growing.

Preston: This is very concerning. Even if Amazon were a benign corporation, this would be very concerning, but we’ve all seen that it’s not at all a benign corporation.

Salon: Tell us a little more about what you mean by that.

Preston: Starting with the smallest and weakest publishers, since about 2004, whenever they get into a commercial dispute with a publisher, they take it out on the author.

Joe sez: No, Doug. When Amazon has a commercial dispute with a publisher, they take it out on the publisher. The author who signed a deal with that publisher may suffer because of their publisher's bad negotiating skills, but Amazon is not directly targeting authors.

Preston: They make the books harder to sell, they claim “shipping delays,” say the book isn’t available – in every way mess with the book’s sales. Because Amazon is so powerful, they can actually destroy a publisher by doing that. This has happened to dozens and dozens of small publishers over the last 11 years. It’s just one way Amazon has harmed the publishing eco-system.

Joe sez: First, name these dozens and dozens of publishers Amazon allegedly destroyed.

Second, tell me how, by destroying a publisher, the author is also destroyed. You mean the author can't find another publisher? Or self-publish? Amazon somehow prevents that?

Preston: And over this time period, Amazon has been demanding a larger and larger percentage of the sale price of a book. What that does is suck money out of the publishing ecosystem, to Amazon, which has caused a lot of publishers to take fewer chances with midlist authors, to drop midlist authors, and so a lot of voices have been silenced by this removal of money from the publishing world.

Joe sez: Doug, publishers are middlemen that take a much larger chunk of an author's money than Amazon does. And if Amazon really is destroying the corrupt, archaic, lazy bullies who have run the paper distribution cartel for decades, giving them the ability to screw thousands of authors... well, they deserve an award.

Salon: Defenders of Amazon will said, “They have a large market share because they’ve worked for it fair and square.” You call it “unprecedented power” in your letter. How do you respond to people who say, “They’re good at what they do, they’re convenient, they know their audience…  That’s why they have a dominant position in the marketplace.”

Preston: Everything you said is true: Amazon is very good at what it does, it presents a warn and friendly face to the public, it’s one of the most admired companies in America. John D. Rockefeller was one of the most visionary businessmen of the 19th and early 20th century. And because of his efforts, the price of kerosene and petroleum products went down by about 50 percent. But along the way he completely destroyed hundreds, maybe thousands, or smaller businesses through extremely aggressive tactics.

So just because a company’s actions result in price-cutting doesn’t mean it’s good for our company. 

Joe sez: "Our company"?

Holy Stockholm Syndrome. Did Doug even recognize the Freudian slip there?

And that was the oil market: We’re talking about a vital informational market. Amazon, by its actions, has been interfering with the free flow of ideas.

Joe sez: Are you noticing the buzzwords? "vital information market", "free flow of ideas", "marketplace of information".

I wrote about this last year in my post The Name Game about the disingenuous use of words Preston and his pundits were using during their press junkets:

Amazon is not a monopoly. But people know monopolies are bad and illegal, so the term keeps getting used.

Publishers don't create culture. They don't create anything; authors do. But Authors United want you to believe publishers are indispensable. And they aren't.

Books aren’t commodities. Well, yes, they are. They’re bought and sold, after all. AU wants to say they aren't, that people recognize the importance of literature and are above crass, plebian capitalism. But publishers print prices directly on book covers -- if that’s not a product, what is? 

Writing is a job. It isn't some special calling for the elite. It isn't some form of magic where the shaman practitioners must be deified. I'm a writer, and damn lucky to be one, but I'm no better than someone who makes toasters on an assembly line.

Authors aren't being targeted. Amazon's goal isn't to put books in their crosshairs for systematic termination. In fact, Amazon has tried, three times, to compensate authors for the duration of the negotiations. Hachette no longer has a contract with Amazon, but Amazon is still graciously selling Hachette’s titles. If Amazon truly wanted to leverage Hachette into signing a new contract, it could stop selling all Hachette titles. But it hasn't done that.

Amazon isn't delaying Hachette titles. It simply isn't stocking Hachette books, and why should it when there is no contract in place?

There isn't any boycott or sanction. Hachette books are available elsewhere. Amazon isn't blocking any sales.

Amazon isn't reducing book discounts. They're pricing books according to the prices Hachette itself stamps on books. They aren't refusing preorders, either. Is it a smart practice to sell titles that haven't been released yet when there is no surety that they'll ever be able to fulfill those orders if they can't come to terms with Hachette?

Amazon isn’t punishing writers who are helpless. Writers are only helpless in that they signed a contract with a publisher who refuses to negotiate with Amazon because the publisher wants to protect its paper oligopoly by keeping ebook prices high. Amazon isn't negotiating with writers, it is negotiating with Hachette. Writers are collateral damage--and writers put themselves in harm’s way by signing with a member of a cartel with a specific agenda. 

Look at these words again: reducing, refusing, boycott, sanction, blocking, delaying, targeted, commodities, culture, democracy, monopoly, punishing, helpless. They’re all being used to deliberately mislead.

And now we can add all of this crap about Amazon blocking the flow of information. Blocking information is bad! Nobody wants that!

(Well, unless it's the Authors Guild, who wants SOPA to come back.)

Preston: During the Hachette dispute, the New York Times has been able to show that Amazon exercised content control – sanctioning some books that had a certain political event, and not sanctioning books by very powerful politicians and not others. That’s very concerning.

Joe sez: See? Sanction. Sanctions are bad.

But Amazon didn't sanction anyone, and the NYT didn't show anything of the sort. But if you repeat a lie as truth often enough, maybe people will start to believe it.

Salon: Are there misconceptions about Amazon? How does the average American view the company, and what are they missing?

Preston: Amazon is like any other corporation; it has two goals. One is to increase market share, and the other is to increase profits. So anyone who thinks that Amazon is their friend is deluded. Is Exxon the friend of everyone who fills up their tank with gas? I don’t think so. Anti-trust laws are to prevent the natural growth of companies to grow to a monopoly status, and then use that monopoly power to stifle competition. And that’s what Amazon has been doing.

Joe sez: Nope. Anti-trust laws are 100% okay with the natural growth of companies. See Biba's words above.

And Amazon isn't stifling competition. Competition abounds. B&N. Smashwords. Kobo. Scribd. Oyster. Over 2000 indie bookstores (a number up 27% from 2009.) Who is being stifled?

Preston: Another thing that Amazon has done is to use books as a loss leader – to acquire customers and sell them consumer good at a higher margin, like televisions and shoes. They sell millions of books below cost, acquiring customers with good data, good demographics, to sell them other stuff with more money. That has really damaged the publishing industry.

Joe sez: First of all, loss leaders are legal, and many retailers use them. Second, the publishing industry isn't a retailer, and not in competition with Amazon. If Amazon does destroy the publishing industry, it doesn't violate any anti-trust laws.

Salon: What happens if Amazon continues to move forward this way with no opposition? What are the real-world consequences?

Joe sez: Um... low prices on a large selection of products, coupled with excellent customer service? You know, like Amazon has been doing for the last 20 years.

Preston: I think Amazon is going to continue capturing more and more of the book market – that’s only going to increase. And Amazon will continue to use its overwhelming market power toward those two goals – increasing market share and increasing profits. Amazon is a barely profitable company, and Wall Street clearly expects Amazon to make big profits sooner rather than later. 

Joe sez: I agree. It's been 20 years. Any minute now, Bezos is going to raise prices on everything and focus on profits.

Any minute now...

Preston: Amazon stock is soaring, and the only way those investors are going to get a return is if Amazon starts making big profits. So what is Amazon going to do when it acquires an even larger market share? To increase its profits in the book/publishing universe.

Joe sez: I'm clueless when it comes to the stock market, but isn't it possible to make money on stocks without being paid dividends? You know, buying low and selling high? Isn't that how a lot of stockholders make money?

Salon: Companies make money all the time – that’s what they do. What do we have to worry about it Amazon keeps growing? What do we lose as they get bigger?

Joe sez: We lose the bloodsucking publishing industry. I won't be attending the funeral.

Preston: I think what we lost most of all are a vigorous diversity of debate in country. The most important and nuanced debate we have in our democracy is generally in books. Newspapers, radio and TV are fine, but books are where the big ideas are developed with complexity. That’s what were gonna lose.

Joe sez: Wait, what was that? I missed it because I was in the middle of a deep discussion with my copy of Green Eggs and Ham.

Joe: So would you, could you, on a boat?

Green Eggs and Ham: I would not, could not, on a boat.

Joe: I see your point, and appreciate the discourse.

Joe sez: Okay, debate over. I'm back. I see Doug is still pushing that meme about Amazon destroying books, even though it sells more books than anyone else. And Amazon, which allows anyone to self-publish and list their books, is preventing big ideas (buzzword!) by allowing anyone to self-publish.

Green Eggs and Ham: I will eat them in the rain!

Joe: We're done with that joke. Go eat somewhere else.

Green Eggs and Ham: But what about the vigorous diversity of our debate?

Preston: According to George Packer in the New Yorker, publishers are retrenching, taking fewer risks, [signing] fewer midlist authors, taking fewer risks with nonfiction. 

Joe sez: Doug, for the love of all that's good, stop confusing the publishing industry with the people who actually write the damn books. You know. They're called "writers". There's a buzzword for you.

Preston: A lot of authors who would have been published 20 years ago are not being heard – publishers are going after the big bestsellers and celebrity authors. They’re getting much more attention from publishers rather than a more diversified list. That’s a real impoverishment of the intellectual life of our country.

Joe sez: Well, I'm certainly seeing a real impoverishment of intellectual life, but I'm not looking at Amazon when I see it...


Bob said...

So strange. Here is Douglas Preston's author page on Amazon
Am I missing something?

Joe Konrath said...

Preston also has a Prime Day Deal coming up on Amazon today.

This is how Amazon attacks one of its largest, most vocal critics: by putting his book on sale so it'll sell a shit ton of copies.

Anthony Pero said...

Still reading through a lot of this. Love your blog and the clarity of thought it presents. But this...

Joe sez: First of all, loss leaders are legal, and many retailers use them. Second, the publishing industry isn't a retailer, and not in competition with Amazon. If Amazon does destroy the publishing industry, it doesn't violate any anti-trust laws.

By destroying legacy publishing, and monopolizing both self-publishing and the eBook trade (assuming that either of these things happens), Amazon will have effectively accomplished the equivalent of bombing its competition's supply chain. If that is an intentional goal, the DOJ could view that as a breach of antitrust laws. I don't know that it is, but its a real possibility at this point.

The reason, however, that I don't think any antitrust suit regarding the publishing industry will EVER be brought against Amazon is the simple fact that, as you have said, unless someday Amazon owns the internet, it would be IMPOSSIBLE to prevent competition. I could quite easily start a website tomorrow and sell eBooks on it. I could sell eBooks that are in the public domain, or ones that I've written, or my friends.

The only POSSIBLE way that Amazon could get tagged with an antitrust suit in the digital age is if they made the mistake of buying an ISP.

Nirmala said...

"Preston: A lot of authors who would have been published 20 years ago are not being heard – publishers are going after the big bestsellers and celebrity authors. They’re getting much more attention from publishers rather than a more diversified list. That’s a real impoverishment of the intellectual life of our country."

And so how on earth is that Amazon's fault when publisher's profits are steady or increasing? Does Amazon tell publishers which authors to publish? No. And yet somehow everything the publishers do is Amazon's fault. Stockholm syndrome on steroids.

Data on publisher's profits is here:

Joe Konrath said...

Amazon will have effectively accomplished the equivalent of bombing its competition's supply chain.

Not exactly, Anthony. Writers can still be published. Destroying the previous venue that they published through doesn't prevent books from reaching readers. It's only destroying a middleman.

It's like a bakery buying a mill so they can make their own flour from grain. They still need the grain. But the middleman who turns grain into flour is disintermediated. I don't believe the Clayton, Sherman, or FTC Acts consider that anti-competitive, but I'll bow to someone who knows more than I do on this issue.

David L. Shutter said...

"Am I missing something?"

I know what I'll be missing...everything Preston's written. Those are crazy high book prices to me. Especially with an ocean of lower priced thrillers out there. 40$ for a hardback??? I can sure see why he's pissed. I have no idea what his royalty statements say but I have a feeling it's not good.

Brian Rush said...

To this I'll add that destroying the Big 5 is not equivalent to destroying publishing, even if by "publishing" one excludes self-publishing -- i.e. it's not equivalent to destroying publishing COMPANIES, except for certain big dinosaurs.

Lots of smaller publishing companies are springing up these days, using a new business model that consists of providing actual services to authors to justify their share of the book's revenues (which is also smaller than the Big 5 grab, at least w/r/t e-books). Amazon itself is doing the same thing, but its publishing arm doesn't seem to be putting small publishers out of business, and it doesn't do something like refuse to publish books from other publishers.

Nathaniel Hoffelder said...

" staff stenographer"


Alan Spade said...

"Amazon itself is doing the same thing, but its publishing arm doesn't seem to be putting small publishers out of business, and it doesn't do something like refuse to publish books from other publishers."

You must have meant "refuse to sell books from other publishers", but it's not Amazon's publishing arm that does that, it's the Amazon website.

You have almost touched the flaw in Amazon's armor. Joe said on this very blog post: "Hachette had a contractual responsibility to sell to as many markets as possible on behalf of its authors."

So, Amazon's publishing arms (or Amazon imprints) should have the same responsibility, don't you think? Of course, many booksellers refuse to carry Amazon's books, either Amazon's imprints books or Createspace POD books. That's a fact, so as far as paper books are concerned, it's not Amazon's fault.

But as far as I know, Amazon's imprints don't distribute their ebooks on Kobo or Apple, or Google. So, here is the flaw. Of course, Amazon has probably written its publishing contracts in order to avoid to bear the responsibility to sell to as many markets as possible.

I do think that this demonstrates Amazon's egocentricity: the everything store. Like a planet attracting objects, without caring about other planets.

Before Amazon imprints were created, "the contractual responsibility to sell to as many markets as possible" was widely known. It was like a universal truth to us authors, because it was in adequation with an economical reality. Have your books translated. Make audio books. Have your books in each and every bookstore in the world.

Now, the truth has shifted. The authors have to make deals where lies most of the money, even if it's in a single marketplace, a single corner of the Internet. That's why you will never have an author of an Amazon imprint suing her publisher.

By acting like that, Amazon's imprints also mirrors what self-publishers did for decades. Self-published authors, before ebooks, weren't able to get access to a wide distribution. They were content to sign their books in the places where they were accepted.

That's why for many indie authors, it is not shocking to sell only on one corner of the Internet. It is not shocking to have to make their ebooks exclusive to Amazon in order to get more visibility, whereas the publishers don't have to make their ebooks exclusive to gain the same visibility.

That was my rant of the day.

Regarding the wave of propaganda we are witnessing these days from the legacy authors like Douglas Preston, it came to my mind that in legacy publishing, you are preparing the Christmas season in July. Maybe we'll have a hot Christmas season...

Nathaniel Hoffelder said...

"But as far as I know, Amazon's imprints don't distribute their ebooks on Kobo or Apple, or Google."

I've found Amazon titles in the Nook Store. From what I can see, they're distributed through Ingram.

Alan Spade said...

Nathaniel, these were books, not ebooks, right?

It is possible for an author self-publishing with Createspace, with extended distribution, to be distributed by Ingram on Barnes&Noble (good luck in finding the actual books on the B&N brick & mortar shelves). The same may apply with Amazon's imprints.

But, as far as I know, ebooks are not concerned, and you won't find them on the Kobo store or on Barnes & Noble.

I have recently checked with a book published on Amazon Crossing.

Alan Spade said...

Sorry, published by Amazon Crossing.

Laura Resnick said...

One point I want to address (yet AGAIN) is the repeated claims by AU and their like that Amazon "blocked" and "prevented" sales of Hachette books, "sanctioned" Hachette authors, "made books unavailable," etc., etc.

Every single time I saw an author make this claim throughout the Amazon-Hachette standoff last year (including authors like Preston and Patterson, who I saw make this claim multiple times over the months), I would go and do a quick search of their name on Amazon... and in every single instance, at the very time I saw them making that claim online or in print or on TV or on panels, it was 100% completely false.

In every single instance, their books were available in Amazon at the exact same time they were claiming the books were NOT available on Amazon.

Their books were available for immediate downloads as ebooks (except in instances where no ebook edition existed at all). Their newer books were available for immediate shipment. In -some- instances (not all; some), some backlist had a shipping delay of several weeks** if you wanted the print edition rather than the (immediately available) ebook edition.

In other words, those writers kept repeating bald-faced lies--lies which any marginally competent "journalist" should have followed up on after doing a simple follow-up verification that way I did. (Oh, hell, you don't even need to be "marginally competent" to know you should do that before posting the story; an overcooked stalk of broccoli ought to have the sense to do that!)

**And for people too young to remember, prior to Amazon, it was CUSTOMARY to wait several weeks when you mail-ordered a book and/or special-ordered it through your local bookseller. And, as has been repeated many times before, the delay was not Amazon "blocking" those books, but rather it was the result of Amazon choosing not to RESTOCK those Hachette backlist books while it had no distirbution agreement with Hachette in place, though it apparently DID continue restocking newer books, since those were always available for immediate shipping from Amazon in EVERY SINGLE INSTANCE that I followed up

MrTroy said...

Always love the blow-by-blow, but this article really only needs one blow to lay it flat.

"We consulted with some antitrust lawyers, and they told us about some ways Amazon was skirting the edge of antitrust violations."

or in english:

"We consulted with some antitrust lawyers, and they told us about how Amazon wasn't breaking any laws."

If they were breaking laws, Preston could say so. They're not, so he has to make it sound like they are if you skim-read too fast.

John Ellsworth said...

In law school we were taught that under U.S. antitrust law monopolies are not per se illegal. What's illegal is the abuse of monopoly power. AU's repeated painting of Amazon as a monopoly and claiming that alone invites DOJ prosecution represents a basic misunderstanding of antitrust law.

If there is an abuse of monopoly power, I would ask the AU to give us, the readers of the AU letter, the facts: dates, places, parties involved, acts, results and so forth. Just running into the fire station over and over and yelling "Fire! Hot! Fire! Red!" won't get the engines rolling. More is required before we can fairly judge the absence or presence of an abuse of monopoly power.

Rex Kusler said...
This comment has been removed by the author.
Terrence OBrien said...

Amazon stock is soaring, and the only way those investors are going to get a return is if Amazon starts making big profits.

Investors would be very surprised to learn they didn't make money when they sold Amazon stock for more than they paid. Many would be very surprised to learn they didn't do it several times.

Now we have some author telling them they can't do what they did.

Wayne McDonald said...

Amazon stock is soaring, and the only way those investors are going to get a return is if Amazon starts making big profits.

No, all Amazon would have to do to make big profits is stop opening up new businesses. Many of their oldest core businesses are wildly profitable. It just gets sunk into newer startups. Now even things like Amazon web services is making something like 17% profit I believe it was? (Might be way off if someone is more familiar please correct me).

Anonymous said...

The 'our company' comment was not a Freudian slip. Both Salon and Preston are socialists and claim ownership of Amazon and every other enterprise. And because they think that they are smarter than the rest of us, propaganda mouthpieces Preston, Salon, NYT, etc. will show the world that they are better businessmen than Bezos because they care about fairness. What a crock.

Anthony Pero said...


Joe said: Not exactly, Anthony. Writers can still be published. Destroying the previous venue that they published through doesn't prevent books from reaching readers. It's only destroying a middleman.

I apologize, I should have been more specific. I did say that this was dependent on Amazon monopolizing the distribution of self-publishing and eBooks. I was specifically referring to the physical book market, which only really works as an industry when economies of scale are applied, which is only really possible on a wide scale with large companies paying for large print runs.

Ultimately, I think this is what all this is about from the publisher's end (and, by proxy, AU)--slowing the adoption of ebooks, in order to protect the margins of large hardcover printings. I was told by someone in the industry about 6 years ago that the big 6 had (at that time, fairly recently) invested a rather large chunk of money in robotic infrastructure for their large warehouses. This person said they were expecting to be able to pay them off in about 20 years time... but this was before Kindle, before the recession. Having to write off an investment that large, that soon as a total waste of time can get CEOs fired by their parent conglomerates.

The Other Stephen King said...

Joe, as usual I agree with nearly everything you say. In this case, though, you said "But instead, Preston...thoughtlessly defends his corporate master...."

Nope, you have it wrong, I'm pretty certain. Pretty obvious to me that Preston has put plenty of thought into this.


Anonymous said...

Anthony -

Not to nitpick, but how can Amazon monopolize the distribution of self-published print books when the other print retailers choose not to sell them voluntarily?

Christina E. Pilz said...

"Publishers (were) going after the big bestsellers and celebrity authors" LONG before Amazon stepped up to the plate. They were gatekeepers that only wanted to make loads of money. There isn't anything wrong with that, but I hate it when they hold that business model up as some kind of "holier than thou" process that propagates high-minded literature.

Literature (once known as best sellers back in 1802 or whenever) was written out of life experiences, but at the same time, authors were paid by the WORD or the LINE. Heck, even Dickens churned it out, and now he's studied in school and stuff. So really, these publishers that Preston is always going on about should get off their high horse and get back to "cultivating" and "handing out advances" and actually encouraging authors to do the thing that they do best.

Also, if they are sending this particular letter via FedEx, I hope that they don't use Whale Money to pay for the invoice, otherwise, it won't get where it's going.

Anonymous said...

Honestly, people throw around "monopoly" like they throw around the word "socialist." Don't use either if you don't understand the actual meaning. If the cable companies can't be sued for a monopoly (I have exactly one option for cable where I live), then how can Amazon be one?

But cable is a good example for another reason--the industry's short-sightedness has made digital competitors spring to life. By refusing to compromise and offer a la carte channel options or any other consumer-oriented option, they are going the way of the dinosaur. I think of trad publishing the same way. They waited too long to change their business model, and now it's everyone else's fault.

Jen Rasmussen said...

How many times must words like monopoly and sanction be defined for this man? He demonstrates absolutely no command of the language that funds his writing shack.

Joe Konrath said...

How many times must words like monopoly and sanction be defined for this man?

This is a press junket. He's hoping his buzzwords get said so many times they're accepted as truths.

Franklin Kendrick said...

As a Mainer, I am embarrassed at most of what this man says. It doesn't take a huge intellectual brain to see the truths throughout - and most of the complainers have never worked in retail in their life. When prices are too high for a retailer to make a profit on a product, the retailer throws out the product and replaces it with a cheaper alternative. Books are no different a product than chicken tenders in the world of commerce. Not making enough money on one brand of chicken tenders? Stop supplying that brand and switch it out with a different one that gives you a better profit margin. The same with books. Why would Amazon sell books that don't give them control over the price they charge? As long as the publisher gets their cut (and divvies it out to the rest of the group involved) then what's the big deal? There are local book stores down the street from me that are selling the new Harper Lee book cheaper than Amazon! Is that wrong? No. I will buy it from them!

christo1 said...

Nice fisking again!

My takeaway about Mr. Preston goes two ways:

1. He want's the BPH to have a monopoly. They don't want "culture" to thrive in the way we think of it (artists having an open market). Instead, he and his cohort want to CONTROL the culture.

2. If not mendacious, he has zero understanding of economics. He may sincerely believe that it's a zero-sum game, gathered by what he's said here.

In his mind, Mr. Konrath, because you sell books on Amazon means that a True Author can't get published by the guardians of culture. Because Amazon sells books means that other websites cannot. He may sincerely believe this.

Either way, he wants the government to swoop in and make indie markets illegal. And this is bad bad bad news.

Let's hope he fails fantastically.

Markus said...

Preston at his best?
Preston: Amazon is like any other corporation; it has two goals. One is to increase market share, and the other is to increase profits. So anyone who thinks that Amazon is their friend is deluded.

Just exchange "Amazon" with "Hachette" and you come to another enlightening truth:
Hachette is like any other corporation; it has two goals. One is to increase market share, and the other is to increase profits. So anyone who thinks that Hachette is their friend is deluded.

Seems just to be a paragraph to mislead the readers, right? And I really loved Preston for his science-focused thrillers that seemed to be based on a lot of research and often misled readers for the benefit of a furious plot. This ongoing Amazon battle and Hachette glorifying is either extremely bad researched ... or - more likely - a well-orchestrated effort in misleading the readers and even the government for the benefit of his own big plot. But isn't in his thrillers misleading always used to hide the real bad guys?

Tim Tresslar said...

I know some midlist authors who got booted from traditional publishing. But that happened in 2008-2010 for economic reasons and it had nothing to do with Amazon or ebooks. It had everything to do with other economic factors, like the global financial system going off the rails, higher production and shipping costs, etc.

David L. Shutter said...

“for many consumers there is simply no other way to get many books than through Amazon.” Many cities and most suburbs and towns in America no longer have bookstores.

And most of them were already gone before Amazon took the market share it has now. Am I the only one that remembers Borders and B&N slaughtering countless indie books stores and gobbling up the smaller chains during their ascension? B. Dalton? Waldenbooks? Dozens of other regional chains? Anyone remember them? A lot of the SU signatories are old timers that were around then and I don't remember any full page newspaper ads condemning it. Oh yeah, that's probably because they were getting unprecedented storefront coop space.

"Amazon routinely engages in other actions that may violate antitrust law. These include: Buying out competitors...the list includes Goodreads,"

SCHREEECH...stop! Me and Mr. Gaughran can't be the only ones that remember that when Zon bought Goodreads, the largest NY publisher also made an acquisition, not only at the same time but for nearly the exact same price. Penguin bought Author Solutions. Because they had "skills" the Penguin could use, the CEO said. Zon chose to acquire a treasure trove of reader data and the largest reader interaction site while Penguin chose to go global with a service (scam) that fleeces writers with generically published books they never intend to sell to anyone, anywhere.

And Preston and SU are on their side?

Staying with RPH, has everyone seen the animation of all their imprints?

Wow! That's a lot of smaller fish they've gobbled up over the years. But Preston and SU don't have any problem with that?

The comments at Salon (all 30 of them, last I checked) are pretty telling. Usually anti-Zon rants from Legacy friendly outlets get the occasional "so refreshing" and "good to hear some truth about..." handful of cents thrown in. Sorry Doug, but no one wants a bite of this turd sandwich.