Literary elites v. Amazon: yes, it's class warfare

[DuckieTigger]

Originally Posted by CommonReader

A company that controls 65% of the market - as Amazon does on the US ebook market - isn't just any big retailer that can demand favourable terms from its supplier.

No, with that market share they are really not just any big retailer. They are the biggest retailer - and as such they have higher chances to demand and receive favourable terms than any other retailer. It would actually surprise me if Amazon would freewilly agree to terms that are worse than any of their competitors.

It has market domination and it has to be scrutinized closely if it abuses this position.

Abuse how? In a contract between retailer and supplier both sides have to mutually agree. If Amazon had so much power as you like to believe, than negotiations would be over within a week.

[rkomar]

I don't have anything to say about the highbrow/lowbrow dichotomy, but I think it's wrong to equate it with class struggle. The latter has to do with political power, while the former has to do with aesthetics. Of course, the two sets of people overlap a fair bit, but it's easy to move between the highbrow/lowbrow camps, and hard to do so between the high/low classes. I don't think it makes anything clearer by bringing class into this argument about literary aesthetics.

[eschwartz]

Originally Posted by ApK

Or maybe the point is that the prestige should not--and never should have--come from just publishing, regardless of how hard it was to do or how exclusive the club was. Maybe, in the field of authorship, it should come from being able to say stuff like "I wrote the book that is considered the definitive work on the subject by the most respected people in the field..." or "...is loved by millions of people..." or "...that led to a cure for cancer..." etc.

Ah. I thought that is what I meant. Authors should always have quantified just what the heck it means to "publish a book" but Amazon's way may force it into happening.

[darryl]

Originally Posted by CommonReader

Companies like Amazon and the way they operate are a political issue. If you want to claim otherwise then you should look at the UK, where companies like Starbucks and Amazon are facing a political backlash even from traditionally business friendly, conservative parties, for the way they conduct their business.
Amazon itself is under investigation by the EU commission for receiving illegal subsidies from the nice tax arrangement they have with Luxembourg.
These are political issues that have to be addressed in political terms.

By this reasoning, virtually any post is arguably political, so political views would be legitimate and relevant comment in any thread.

It's also obvious that Amazon's PR tries to portray publishers as greedy. It is legitimate to point out that Amazon operates on the basis that financial advantages to the consumers shall be financed by their suppliers, not by Amazon itself.

This thread should not be about Amazon's PR. Nor is this thread about how Amazon is financing "financial benefits to the consumers", though it is interesting that you seem to accept that the consumer is getting financial benefits. And iIf Amazon's PR is portraying publishers as greedy, then I would have to say that I have seldom seen such an accurate portrayal in a PR context.

Finally, the basis for this thread is a piece by an author who rants about class and elites. It is ironic that you accuse my contribution of being a "political rant" when the very basis for this thread is exactly such a "rant" as well.

If the article did warrant a political rant, it would have been nice if it had more than marginal relevance. The thread had moved to some discussion on accessibility of books. Not to a discussion of greedy billionaires and work practices and allegedly "parasitic" business models. Nor of the taxi industry in your particular part of the world.

Finally, it is interesting to note that you avoid any discussion of the conduct of the traditional publishers but actually praise them!

[darryl]

Originally Posted by DuckieTigger

No, with that market share they are really not just any big retailer. They are the biggest retailer - and as such they have higher chances to demand and receive favourable terms than any other retailer. It would actually surprise me if Amazon would freewilly agree to terms that are worse than any of their competitors.

Abuse how? In a contract between retailer and supplier both sides have to mutually agree. If Amazon had so much power as you like to believe, than negotiations would be over within a week.

I would point out too that Amazon is a long way from having a monopoly of either retail or publishing. The jury on this dispute is still out, and it is no foregone conclusion that Amazon will win. The BWM did in fact have a monopoly, or, to be precise, an oligopoly. This is currently broken, and I doubt it will ever be restored. Nor do I expect that Amazon will achieve a monopoly in the fact of competent competition, though I do expect they will do very well.

[eschwartz]

Originally Posted by darryl

I would point out too that Amazon is a long way from having a monopoly of either retail or publishing. The jury on this dispute is still out, and it is no foregone conclusion that Amazon will win. The BWM did in fact have a monopoly, or, to be precise, an oligopoly. This is currently broken, and I doubt it will ever be restored. Nor do I expect that Amazon will achieve a monopoly in the fact of competent competition, though I do expect they will do very well.

In other words, they will achieve a monopoly, but it isn't their fault.

For the record: I am okay with that.

[darryl]

Originally Posted by eschwartz

In other words, they will achieve a monopoly, but it isn't their fault.

For the record: I am okay with that.

I am okay with it too. Any problems should be dealt with if or when erise.

As for competent competition, you may well be right. Though I wasn't thinking only of the BWM, who are so caught up in trying to save their now obsolete business model thay cannot see any opportunities. But who knows? I was thinking as well of the possibility of competition from other sources. Subscription services (though I do not expect these to dominate), Apple (though they do not seem to be interested in competing), Google and of course new entrants to the market or expansion of existing players, perhaps by acquisition or financing.

[DuckieTigger]

Originally Posted by eschwartz

In other words, they will achieve a monopoly, but it isn't their fault.

For the record: I am okay with that.

Originally Posted by darryl

I am okay with it too. Any problems should be dealt with if or when erise.

I am okay with that as well.

It is more likely that Amazon reaches ebook retail monopoly before coming close in publishing. As of right now publishing requires both ebook and pbook to satisfy all readers. Amazon's low cost indie titles simply don't work as well with paper distribution - not without significant price increase. Access is important, and that is perfectly catered to by ebooks. It is fast and cheap distribution even in rural areas.

There may be room left for readers that still want to call themselves "elite", because they cling to traditional paper books. It is only circumstantial that the majority of higher educated people live in densely populated areas. Easy access to paper books will always be easier in bigger cities that can justify book stores with sufficient selection. Content matters too, but that should be independent from pbook vs ebook. Different target audiences need different books (content) to be satisfied. The ones that want to be elite simply look like a snob from the other side.

[rhadin]

Originally Posted by darryl

rhadin and pwalker. What the BWM publishers attempted with their price-fixing cartel went well beyond setting their own prices. What they tried to do is eliminate competition by themselves taking control of the retail market. Amongst other reasons they wanted to stop Amazon discounting their books. To reverse your argument, surely Amazon as a wholesaler, having purchased the ownership of the books concerned, is the one entitled to set the price at which they sell their property. What the BWM publishers were trying to do was eliminate competition, having experienced it for the first time in I don't know how long and not finding it much to their liking.

First, so what. If you don't like the price set by the BPHs, whether set individually or via conspiracy, don't buy the books they publish. It isn't as if there is a lack of books available. And if the only books you want to read are published by the BPHs, then either pay the price or boycott them. No matter what the BPHs do, they cannot control the retail market except for the books they publish.

And the arguments here on MR have been inconsistent. Some argue that books are interchangeable -- don't want to pay the price for Stephen King, well there are numerous indie alternatives. Others say each book and author is unique and there are no viable substitutes. If the former is correct, then BPH pricing -- conspiracy or not -- makes no difference because there are numerous cheap alternatives. If the latter is correct, then let the market work. Let the BPHs set the price and don't buy the book until the price comes down to where you want it to be.

As for Amazon buying the books, Amazon doesn't buy the books until it sells the book. If it never sells the book, it never pays for the book. That is true under the wholesale model for print books where Amazon sets the retail price and it is true under agency pricing for ebooks where Amazon gets a fee for each sale. In neither case does Amazon "buy" the book until it has already sold the book.

[rhadin]

Originally Posted by Ninjalawyer

Well, unrestrained capitalism allows pricing fixing conspiracies, which has anticompetitive affects that tend to drive up prices. So despite being able to charge whatever price you like in most capitalist markets, there are controls (e.g., laws against price-fixing conspiracies) that try and prevent anticompetitive behaviour. It's not enough to simply not buy a book where there's price fixing rigging the game.

True, but we aren't discussing conspiracy to fix prices; we are discussing whether the publisher or the retailer should be able to set the price. As even the DOJ conceded, agency pricing is not illegal; what is illegal is entering into a conspiracy.

Originally Posted by Ninjalawyer

I think the following quote from the author addresses the argument in your first paragraph:

The fallacy here is that it assumes there is an entitlement to have immediate access to all things. Being able to own a car is also important. The fact that I can't afford a Rolls Royce doesn't mean RR needs to lower its price so I can buy one. I need to wait and save my money. Readers aren't entitled to immediate access and if they want immediate access, they spend the money on the book instead of a meal out or some other thing. We all have to make choices in daily purchasing.

As for being part of the conversation, the fallacy with the argument is that it assumes (a) everyone wants to be part of the conversation immediately and (b) that everyone is entitled to be part of the conversation immediately. Neither has never been the true and never will be true. Even the vaunted Athenian democracy only allowed certain citizens to participate. And it was centuries before women were allowed to participate in the conversation and when the suffrage movement was active here in the United States, many more women opposed suffrage than supported it.

Originally Posted by Ninjalawyer

The middle paragraphs in your post are more strawman than anything. I don't think anyone is saying that all things should be cheap, and it's certainly not the argument of the article that's the subject of this thread. Complaining that people should let the market just work also seems strange when that would seem to be an argument for Amazon to sell books for whatever price they like and negotiate whatever price they like with their suppliers (i.e., the publishers in the case of books).

The argument to let the market work for itself cuts both ways, but in the end, in the discussion about whether publishers or retailers should set prices, it is an argument as much in favor of agency pricing as against agency pricing. So I am not certain what your point is.

And I never suggested that the article said that all things should be cheap. I was saying that there is no particular reason to single books out to be cheap but not other more-in-demand commodities. If all books should have a ceiling price, so should every other commodity.

Originally Posted by Ninjalawyer

One of the more interesting points of the article was that most people attacking Amazon aren't spending much time defending the big publishers because the big publishers are hard to defend. That certainly seems to be the case for your post.

I don't think BPHs are hard to defend at all, except here on MR where Amazon is king and BPHs are the villains. And it is hard here on MR because so many commenters are blind to any of the arguments that favor pricing higher than they believe books should cost. Inability to defend BPHs has nothing to do with facts; it has to do with people's mindset and unwillingness to accept that there may be another side to argument.

[Barcey]

Well to be consistent the natural alternative in the free market you describe is for the consumer to acquire the ebook at the best price they can and not worry about breaking the law. The alternative is they should just download from a torrent.

[doubleshuffle]

Class warfare.

Che Bezos vs. BPH Rockefeller.

Of course.

[SteveEisenberg]

Originally Posted by darryl

Finally, it is interesting to note that you avoid any discussion of the conduct of the traditional publishers but actually praise them!

Go to the book clubs section of MobileRead:

https://www.mobileread.com/forums/forumdisplay.php?f=245

Then look at the threads on nominations and voting.

I haven't worked out the statistics, but most of those titles are from large commercial publishers, even though the great majority of available eBooks are self-published.

So, when it comes to what counts most for me -- product quality -- not only do I praise the traditional publishers, so do a great many of us here, as shown by actual behavior. And this is despite being in a forum unusually friendly to self publishing.

Originally Posted by darryl

Though I wasn't thinking only of the BWM, who are so caught up in trying to save their now obsolete business model thay cannot see any opportunities.

One part of their business model that's becoming obsolete is the cookbook. It is being harmed by free recipes on web sites. But that's not what these threads are about.

Not obsolete is the model of paying advances to narrative authors on speculation that their book proposals, or manuscripts in need of editing, can be shaped into profitable products. This still works by producing books I wish to read. And the model of high prices for customers who who buy books shortly after release, and lower prices (or free through library borrowing) for the masses who wait, still gives them moderate profits, and me great reading experiences.

[pwalker8]

Originally Posted by cfrizz

When Amazon decides to break the law, govt agencies will start scrutinizing and punishing them as well.

As for Amazons dominance in the market it is dominant because WE THE PEOPLE gave it to them because of their excellent prices and service! When those two facts change, we the people will stop giving them our money.

This is not rocket science or any great conspiracy, so either remove your tin foil hat and stick to the point of this thread or retreat to your bunker and wait out the apocalypse!

Ironically, an article in WSJ last week mentioned the Amazon actively went to the US government and got them to file the lawsuit against Apple and the published (link - http://online.wsj.com/articles/amazo...ent-1410217281). If you google "Amazon Loves Government" you might be able to get past the paywall. I'm not sure, I have a subscription, but I've been told that method works.

The relevant quote is
" ...
Amazon could have continued with its wholesale model—but the publishers were protesting the company's tactics by withholding popular hardback or e-book titles for several months. Thus for the first time Amazon had in Apple an e-book competitor with a potentially superior selection of books.

So in February 2010 Amazon posed as the victim, and associate general counsel David Zapolsky submitted a confidential white paper to the Federal Trade Commission and Justice's antitrust division on "the collective nature of the publishers' action to take control of digital book pricing."

DoJ then picked up Amazon's legal argument and used it to sue Apple. DoJ claims that the iPad and the publishers' acceptance of Apple's new arrangement "forced" Amazon to flip to the agency model and thus higher (albeit temporary) consumer prices.

..."

Hopefully that isn't too much of a quote.

I'm afraid that I can't share your faith in the US government as a fair and unbiased arbitrator. The term "crony capitalism" came about for a reason. For all practical purposes, it's impossible to maintain a monopoly without government support and intervention.

Once again, the parallels between the Apple anti-trust suit and the Microsoft anti-trust suit are quite striking.

[darryl]

Originally Posted by rhadin

First, so what. If you don't like the price set by the BPHs, whether set individually or via conspiracy, don't buy the books they publish. It isn't as if there is a lack of books available. And if the only books you want to read are published by the BPHs, then either pay the price or boycott them. No matter what the BPHs do, they cannot control the retail market except for the books they publish.

I don't like the prices the BWM publishers would like for their books, and I don't buy them at that price. Having said that, if I come across one of their books where I think the price is justified, I will pay it. But I haven't yet.

Your comment dismissing so lightly a conspiracy to rip-off consumers which has been before the courts and for which the perpetrators have or will be paying compensation is breathtaking. I take it you do not in fact condone such breaches of the law? Or do you feel the law is unjust in this respect?

The wholesale model which applied for so many years was not broken. The market was run, as are many markets, by wholesalers selling their books to retailers, who then sold to the public. It is an industry where, pre-cartel, the wholesalers set their prices to the retailers, who bought the goods and set the prices to the consumer. The purpose of the conspiracy was to take control of retail prices, something the BWM did not enjoy up until the implementation of the cartel. The purpose of taking control of retail prices was to prevent discounting at the retail level. The BWM actually made less per book sold! If they wanted higher prices, they should have sought to achieve this legally by means of the wholesale prices they did and do control for their products.

Originally Posted by rhadin

And the arguments here on MR have been inconsistent. Some argue that books are interchangeable -- don't want to pay the price for Stephen King, well there are numerous indie alternatives. Others say each book and author is unique and there are no viable substitutes. If the former is correct, then BPH pricing -- conspiracy or not -- makes no difference because there are numerous cheap alternatives. If the latter is correct, then let the market work. Let the BPHs set the price and don't buy the book until the price comes down to where you want it to be.

The truth is whether books are interchangeable varies not only with the individual but the book. It is not particularly relevant here. In either case, I am happy for the market to work. Let the BWM publishers set their wholesale prices, and Amazon and other retailers set their retail prices, just as used to happen before the cartel implemented its price-fixing scheme.

Originally Posted by rhadin

As for Amazon buying the books, Amazon doesn't buy the books until it sells the book. If it never sells the book, it never pays for the book. That is true under the wholesale model for print books where Amazon sets the retail price and it is true under agency pricing for ebooks where Amazon gets a fee for each sale. In neither case does Amazon "buy" the book until it has already sold the book.

Another irrelevancy. The terms between Wholesalers and Publishers no doubt vary greatly. Some businesses pay for physical stock on delivery, some are invoiced but take advantage of trade credit, some receive goods on consignment etc. It just doesn't matter. Under a wholesale model, the sale is between the retailer and the customer, and the customer gets good title to the goods. Under the agency model, the sale is from the principal to the customer, and a fee or commission is payable to the agent per sale. However, in the case of agency the retailer has no control over the prices.