Amazon’s Monopsony Is Not O.K.

Dopedangel · 10-20-2014, 05:53 AM

http://www.nytimes.com/2014/10/20/op...is-not-ok.html

Amazon.com, the giant online retailer, has too much power, and it uses that power in ways that hurt America.

O.K., I know that was kind of abrupt. But I wanted to get the central point out there right away, because discussions of Amazon tend, all too often, to get lost in side issues.

For example, critics of the company sometimes portray it as a monster about to take over the whole economy. Such claims are over the top — Amazon doesn’t dominate overall online sales, let alone retailing as a whole, and probably never will. But so what? Amazon is still playing a troubling role.

Meanwhile, Amazon’s defenders often digress into paeans to online bookselling, which has indeed been a good thing for many Americans, or testimonials to Amazon customer service — and in case you’re wondering, yes, I have Amazon Prime and use it a lot. But again, so what? The desirability of new technology, or even Amazon’s effective use of that technology, is not the issue. After all, John D. Rockefeller and his associates were pretty good at the oil business, too — but Standard Oil nonetheless had too much power, and public action to curb that power was essential.

John F · 10-20-2014, 06:20 AM

Quote:

Originally Posted by Dopedangel

[Shortened URLs not allowed - MODERATOR]

Amazon.com, the giant online retailer, has too much power, and it uses that power in ways that hurt America.

O.K., I know that was kind of abrupt. But I wanted to get the central point out there right away, because discussions of Amazon tend, all too often, to get lost in side issues.

For example, critics of the company sometimes portray it as a monster about to take over the whole economy. Such claims are over the top — Amazon doesn’t dominate overall online sales, let alone retailing as a whole, and probably never will. But so what? Amazon is still playing a troubling role.

Meanwhile, Amazon’s defenders often digress into paeans to online bookselling, which has indeed been a good thing for many Americans, or testimonials to Amazon customer service — and in case you’re wondering, yes, I have Amazon Prime and use it a lot. But again, so what? The desirability of new technology, or even Amazon’s effective use of that technology, is not the issue. After all, John D. Rockefeller and his associates were pretty good at the oil business, too — but Standard Oil nonetheless had too much power, and public action to curb that power was essential.

Maybe you could use a quote tag, or use some quotes?

fjtorres · 10-20-2014, 06:36 AM

Remember this?

http://www.litigationandtrial.com/20...azon-monopoly/

Quote:

A “monopsony” is when one buyer of a particular productive or service is able to control the market. (Consider, for example, if there were several commercial airplane manufacturers, but only one commercial airline.) “Monopsony” is potentially a better fit for Amazon than “monopoly,” because Amazon’s real pricing power is that it can push a hard bargain with publishers when it buys the ebooks, whereas with consumers Amazon sells the books at or below the prevailing market prices. And, indeed, publishers feel obligated to deal with Amazon given its position as the largest retailer of ebooks.

But the claim just doesn’t hold up. In a monopsony, the monopsonist refrains from buying to force the suppliers to start discounting against one another (because there are no other buyers), until they are no longer making a profit. That simply isn’t the case here. First, the publishers have total control over where they sell their ebooks, and they exercise that power: the “Big Five” chose to not participate in Amazon Unlimited. Second, the ebooks are available all over the place, like Walmart and Target. Apple, for example, has used the feud as an opportunity to discount Hachette’s books. There’s nothing wrong with Apple doing that: this is competitive capitalism working for the benefit of consumers, as it should.

At least somebody there got a rant out of their system.

John F · 10-20-2014, 06:44 AM

From the article,

Quote:

... It’s not just about the money, although that’s important: By putting the squeeze on publishers, Amazon is ultimately hurting authors and readers. But there’s also the question of undue influence. ...

I have problems with "Amazon is ultimately hurting readers". As far as a can tell, so far, Amazon has been good for readers. They "may" hurt readers in the future, but than again, they may not.

As a consumer/reader, a bird in the hand ...

JSWolf · 10-20-2014, 07:56 AM

Quote:

Originally Posted by John F

From the article,

I have problems with "Amazon is ultimately hurting readers". As far as a can tell, so far, Amazon has been good for readers. They "may" hurt readers in the future, but than again, they may not.

As a consumer/reader, a bird in the hand ...

Amazon already HAS hurt readers/customers. They sold eBooks before the Kindle and when they stopped selling them, they also stopped allowing them to be downloaded to update the DRM. So if anyone needed to download to update the DRM, they were screwed. This was Amazon's fault and not many seem to remember this.

frahse · 10-20-2014, 08:07 AM

I consider a vicious diatribe (and he seldom uses any other type) from Paul Krugman against Amazon to be a resounding sign that Amazon is doing GOOD!

Heck, maybe I should get a second Prime membership!

Fbone · 10-20-2014, 08:14 AM

Quote:

Second, the ebooks are available all over the place, like Walmart and Target.

Walmart and Target sell ebooks?

hardcastle · 10-20-2014, 08:48 AM

Quote:

Originally Posted by JSWolf

Amazon already HAS hurt readers/customers. They sold eBooks before the Kindle and when they stopped selling them, they also stopped allowing them to be downloaded to update the DRM. So if anyone needed to download to update the DRM, they were screwed. This was Amazon's fault and not many seem to remember this.

Citation? The only thing I'm aware of is that Amazon shut down Mobipocket as it existed.

We should also note that may not have been Amazon's decision to make.

Quote:

Originally Posted by Fbone

Walmart and Target sell ebooks?

They sell Nooks and iPads, I guess?

DiapDealer · 10-20-2014, 08:59 AM

Quote:

Originally Posted by hardcastle

Citation? The only thing I'm aware of is that Amazon shut down Mobipocket as it existed.

We should also note that may not have been Amazon's decision to make.

No, he's right—even if it's not relevant to monopsony discussions (and not like anybody who's been in the ebook game long enough hasn't been burnt by numerous vendors because of DRM).

Amazon sold ebooks before mobipocket/Kindle. I believe they were PDFs. People who hadn't downloaded/updated their purchases by a certain point got burnt. Just like people have been burnt by DRM time and time again by numerous vendors.

I take the fact that Kindle 1 owners can still use their devices to buy and read Kindle content as evidence that Amazon learned a valuable lesson from that early experiment in ebook-retailing concerning customer satisfaction; and applied those lessons appropriately.

fjtorres · 10-20-2014, 09:07 AM

Quote:

Originally Posted by Fbone

Walmart and Target sell ebooks?

They sell books. And pbooks are still two thirds of the market for special snowflakes.
Target has an ebook club and Walmart sells ebook gift cards and is supposed to be looking into setting up an ebookstore. Google and Apple also sell ebooks and by now are both outselling Nook and Kobo. And still growing.

The market doesn't lack for challengers. HC just started selling ebooks direct, Hachette is planning a store and not doubt so does the rest if the cartel. They coordibate those things. On the one hand the mouthpieces claim Amazon is the only buyer for ebooks while at tghe same time the challengers pop up weekly.

Considering Amazon is supposed to be a threat to all that is holy in publishing, you need to consider everything, not just the little corner of the world where Amazon lives.

As Mr Montoya said: those words don't mean what they think they mean. And repeating the same lie over and over is simply bringing more light to their own activities. Calling for more DOJ action is only going to hurt them.

hardcastle · 10-20-2014, 09:10 AM

Quote:

Originally Posted by DiapDealer

No, he's right—even if it's not relevant to monopsony discussions (and not like anybody who's been in the ebook game long enough hasn't been burnt by numerous vendors because of DRM).

Amazon sold ebooks before mobipocket/Kindle. I believe they were PDFs. People who hadn't downloaded/updated their purchases by a certain point got burnt. Just like people have been burnt by DRM time and time again by numerous vendors.

I take the fact that Kindle 1 owners can still use their devices to buy and read Kindle content as evidence that Amazon learned a valuable lesson from that early experiment in ebook-retailing concerning customer satisfaction; and applied those lessons appropriately.

I can't find any articles relating to this topic at all, which is why I asked for a citation. I'd still like to read one.

Kindle 1 owners can still read Kindle content is more indicative of a smarter contract on Amazon's part. Changing the DRM scheme very likely means making a new agreement.

fjtorres · 10-20-2014, 09:15 AM

Quote:

Originally Posted by DiapDealer

No, he's right—even if it's not relevant to monopsony discussions (and not like anybody who's been in the ebook game long enough hasn't been burnt by numerous vendors because of DRM).

Amazon sold ebooks before mobipocket/Kindle. I believe they were PDFs. People who hadn't downloaded/updated their purchases by a certain point got burnt. Just like people have been burnt by DRM time and time again by numerous vendors.

I take the fact that Kindle 1 owners can still use their devices to buy and read Kindle content as evidence that Amazon learned a valuable lesson from that early experiment in ebook-retailing concerning customer satisfaction; and applied those lessons appropriately.

In that particular case Amazon literally couldn't do a thing because Adobe shut down the servers after switching to a different DRM scheme. (Not too different from what Overdrive did to fictionwise.)

And yes, they learned a lesson: that they needed to control their entire customer relationship so Adobe couldn't screw their customers again.

patrickt · 10-20-2014, 09:28 AM

So far, JSWolf agreed with you, Doped.

For me, I live in Mexico. For thirteen years I read what I could find. Now, I can read what I want. I can also order actual stuff from Amazon and get great service. I'm typing on a DAS keyboard I got through Amazon two weeks ago. Amazing.

On the list of things hurting America, if Amazon is even on the list it's so far down as to be irrelevant. But, Nov. 4th is coming so be sure to vote if you're eligible to vote in the U.S.

Barcey · 10-20-2014, 11:22 AM

Another great example of reporting from the NYTimes. The publishers have followed the time honored tradition of consolidating until they can form a cartel. Leverage the cartel to restrict the terms and conditions offered to authors, reduce author compensation and raise consumer prices. That's all fine and "American".

Amazon has the nerve to make demands in their own business interest and not capitulate to the cartel demands. That must be stopped because it's hurting America.

[Another hard days work, now off to lunch with my NY publishing industry friends]

Leyor · 10-20-2014, 01:33 PM

Amazon is right now helping to both lower the prices of e-books for consumers as well as increasing the availability of books globally.

As a consumer I think that is amazing. You should too.

I think special interest groups like this one, often develop a form of Stockholm syndrome due to our close connection with the established businesses feeding our interests.

We're seeing the effect of digitization and "new services" has on other established industries, like the music industry and how these businesses are fighting tooth and claw to keep their old business models.

My personal view is that it's up to the publishers to figure out how to compete in the new market. Either by offering new services with higher earning potential or turn value added services into high earners. There's a market hungry for special collectors items that is hardly tapped into.

Until they do so, I enjoy how much better as a consumer I have it, compared to just a few years ago. Part of my thanks for that goes to businesses like Amazon.

10-20-2014, 05:53 AM	#1
Dopedangel Wizard Posts: 1,759 Karma: 30063305 Join Date: Dec 2006 Location: Singapore Device: Boyue	Amazon’s Monopsony Is Not O.K. http://www.nytimes.com/2014/10/20/op...is-not-ok.html Amazon.com, the giant online retailer, has too much power, and it uses that power in ways that hurt America. O.K., I know that was kind of abrupt. But I wanted to get the central point out there right away, because discussions of Amazon tend, all too often, to get lost in side issues. For example, critics of the company sometimes portray it as a monster about to take over the whole economy. Such claims are over the top — Amazon doesn’t dominate overall online sales, let alone retailing as a whole, and probably never will. But so what? Amazon is still playing a troubling role. Meanwhile, Amazon’s defenders often digress into paeans to online bookselling, which has indeed been a good thing for many Americans, or testimonials to Amazon customer service — and in case you’re wondering, yes, I have Amazon Prime and use it a lot. But again, so what? The desirability of new technology, or even Amazon’s effective use of that technology, is not the issue. After all, John D. Rockefeller and his associates were pretty good at the oil business, too — but Standard Oil nonetheless had too much power, and public action to curb that power was essential. Last edited by Dopedangel; 10-20-2014 at 11:32 PM.

10-20-2014, 08:07 AM	#6
frahse occasional author Posts: 2,314 Karma: 2064403292 Join Date: Sep 2011 Location: Wandering God's glorious hills, valleys and plains. Device: A Franklin BI (before Internet) was the first. I still have it.	I consider a vicious diatribe (and he seldom uses any other type) from Paul Krugman against Amazon to be a resounding sign that Amazon is doing GOOD! Heck, maybe I should get a second Prime membership! Last edited by frahse; 10-20-2014 at 10:39 AM.

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10-20-2014, 09:28 AM	#13
patrickt Wizard Posts: 1,221 Karma: 8381518 Join Date: Oct 2009 Location: Oaxaca, Mexico Device: Paperwhite 4 X 2	So far, JSWolf agreed with you, Doped. For me, I live in Mexico. For thirteen years I read what I could find. Now, I can read what I want. I can also order actual stuff from Amazon and get great service. I'm typing on a DAS keyboard I got through Amazon two weeks ago. Amazing. On the list of things hurting America, if Amazon is even on the list it's so far down as to be irrelevant. But, Nov. 4th is coming so be sure to vote if you're eligible to vote in the U.S.

10-20-2014, 11:22 AM	#14
Barcey Wizard Posts: 1,531 Karma: 8059866 Join Date: Oct 2007 Location: Canada Device: Kobo H2O / Aura HD / Glo / iPad3	Another great example of reporting from the NYTimes. The publishers have followed the time honored tradition of consolidating until they can form a cartel. Leverage the cartel to restrict the terms and conditions offered to authors, reduce author compensation and raise consumer prices. That's all fine and "American". Amazon has the nerve to make demands in their own business interest and not capitulate to the cartel demands. That must be stopped because it's hurting America. [Another hard days work, now off to lunch with my NY publishing industry friends]

10-20-2014, 01:33 PM	#15
Leyor Ninja Librarian Posts: 179 Karma: 347750 Join Date: Sep 2009 Location: Denmark Device: Sony PRS-950, Cybook 3. gen, Sony T1, Kindle Paperwhite	Amazon is right now helping to both lower the prices of e-books for consumers as well as increasing the availability of books globally. As a consumer I think that is amazing. You should too. I think special interest groups like this one, often develop a form of Stockholm syndrome due to our close connection with the established businesses feeding our interests. We're seeing the effect of digitization and "new services" has on other established industries, like the music industry and how these businesses are fighting tooth and claw to keep their old business models. My personal view is that it's up to the publishers to figure out how to compete in the new market. Either by offering new services with higher earning potential or turn value added services into high earners. There's a market hungry for special collectors items that is hardly tapped into. Until they do so, I enjoy how much better as a consumer I have it, compared to just a few years ago. Part of my thanks for that goes to businesses like Amazon.

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