Amazon’s Monopsony Is Not O.K.

[rcentros]

Originally Posted by tompe

I thought the article was clear and convincing about what the problem is.

I didn't think so. I thought it came across as one-sided propaganda. It's amazing how many anti-Amazon hit pieces are coming out now ... "almost" as if they were on cue for Hatchette's negotiations.

[tompe]

Originally Posted by DiapDealer

So you were unconvinced going in and the article convinced you? Or did it simply confirm a bias you already held??

Well, the argument in the article was not what have been discussed here. And the argument as presented was good as I could see.

I can ask you similarly. Did your bias make you misread the article or did you just not understand it. In the same spirit like your question.

[tompe]

Originally Posted by Dopedangel

Most of you have gone off topic how about how Amazon has been good or bad for you. The article is not about how Amazon is effecting you the customer but publisher and authors that are the sellers. I have updated the link to the article.
As much as I hate publishers I have to agree that Amazon has too much power to make or break a new author. But I think partially the publishers themselves are to blame.

Exactly. The article specifically says "who cares" about the argument that Amazon have good customer service and so on. And historically something was done about this kind of power accumulation.

[tompe]

Originally Posted by rcentros

I didn't think so. I thought it came across as one-sided propaganda. It's amazing how many anti-Amazon hit pieces are coming out now ... "almost" as if they were on cue for Hatchette's negotiations.

What was the propaganda? Was the facts about accumulation of power and comparision with historical examples wrong do you mean?

[Barcey]

Originally Posted by tompe

What was the propaganda? Was the facts about accumulation of power and comparision with historical examples wrong do you mean?

1) The comparison to Standard Oil is flawed. Oil is a physical commodity with very expensive infrastructure to refine, store and distribute. If you corner the market on a physical commodity the barrier to competitors is huge. There is no comparison to selling virtual goods, anyone with an existing ecommerce site can enter the market in a month. The barrier to entry today is huge because you'd have to do a better job then Amazon and be price competitive. If Standard Oil abused their power there was no alternative, if Amazon abuses their power there are alternatives for both the customer and the supplier. He's smart enough to know his comparison is flawed.

2) The publishers have a life plus 70 year monopoly on individual books. That power is absolute and can be abused just as much (if not more) than Amazon's power. They accumulated and consolidated that power in the last few decades and that is also damaging. There is loads of evidence that they've also colluded. When he doesn't consider those facts objectively it comes off as one sided and propaganda.

[tompe]

Originally Posted by Barcey

1) The comparison to Standard Oil is flawed. Oil is a physical commodity with very expensive infrastructure to refine, store and distribute. If you corner the market on a physical commodity the barrier to competitors is huge. There is no comparison to selling virtual goods, anyone with an existing ecommerce site can enter the market in a month. The barrier to entry today is huge because you'd have to do a better job then Amazon and be price competitive. If Standard Oil abused their power there was no alternative, if Amazon abuses their power there are alternatives for both the customer and the supplier. He's smart enough to know his comparison is flawed.

2) The publishers have a life plus 70 year monopoly on individual books. That power is absolute and can be abused just as much (if not more) than Amazon's power. They accumulated and consolidated that power in the last few decades and that is also damaging. There is loads of evidence that they've also colluded. When he doesn't consider those facts objectively it comes off as one sided and propaganda.

I do not get 1. Since the barrier to entry is huge we have the same situation. And Amazon is abusing its power when negotiating with the publishers.

And 2 is strange. If A, B and C is bad then it seems strange that an article talking about A and how bad it is must mention that B andC are bad also. Why, since the article is about A?

[DiapDealer]

Originally Posted by tompe

And Amazon is abusing with its power when negotiating with the publishers.

With which publisher(s) is Amazon abusing its power again? The one that's screaming bloody murder? Or the one that seems to have reached a deal it's quite happy with in a relatively quick and peaceful manner?

[rcentros]

Originally Posted by tompe

What was the propaganda? Was the facts about accumulation of power and comparision with historical examples wrong do you mean?

The comparison between Amazon and Standard Oil for example is pure hyperbole. Standard oil, in 1904, controlled 91% of production and 81% of final sales. By 1911 they were broken up for anti-trust violations. Amazon has not been charged with any anti-trust violations.

Here's more on Standard Oil (from Wikipedia).

The federal Commissioner of Corporations studied Standard's operations from the period of 1904 to 1906[29] and concluded that "beyond question... the dominant position of the Standard Oil Co. in the refining industry was due to unfair practices—to abuse of the control of pipe-lines, to railroad discriminations, and to unfair methods of competition in the sale of the refined petroleum products".

And ...

"Almost everywhere the rates from the shipping points used exclusively, or almost exclusively, by the Standard are relatively lower than the rates from the shipping points of its competitors. Rates have been made low to let the Standard into markets, or they have been made high to keep its competitors out of markets. Trifling differences in distances are made an excuse for large differences in rates favorable to the Standard Oil Co., while large differences in distances are ignored where they are against the Standard. Sometimes connecting roads prorate on oil—that is, make through rates which are lower than the combination of local rates; sometimes they refuse to prorate; but in either case the result of their policy is to favor the Standard Oil Co. Different methods are used in different places and under different conditions, but the net result is that from Maine to California the general arrangement of open rates on petroleum oil is such as to give the Standard an unreasonable advantage over its competitors"

Put the Big Six (Five) Publishers in place of the Railroads and put Apple in place of Standard Oil and you've got a much closer comparison than any comparison to Amazon.

Oh, maybe that's why the Big Six (Five?) and Apple were charged with anti-trust violations and Amazon wasn't?

[Barcey]

Originally Posted by tompe

I do not get 1. Since the barrier to entry is huge we have the same situation. And Amazon is abusing its power when negotiating with the publishers.

And 2 is strange. If A, B and C is bad then it seems strange that an article talking about A and how bad it is must mention that B andC are bad also. Why, since the article is about A?

Sorry, I meant the barrier to entry is huge today because Amazon is executing well and not abusing their power to consumers. If they did abuse that power by jacking up the prices they would open the floodgate for competitors to come in and actually drive the consumers to the competitors. Apple has already demonstrated that they could enter the marketplace in a month. After the competitors enter it's not like Amazon could just lower their prices again and say, "Sorry, it was an accident. We didn't mean it, please come back."

It's the same thing if Amazon actually did abuse their power with the suppliers (publishers). They have a monopoly on the books so Consumers that want the books would have to go elsewhere.

[SteveEisenberg]

Originally Posted by rcentros

The comparison between Amazon and Standard Oil for example is pure hyperbole. Standard oil, in 1904, controlled 91% of production and 81% of final sales. By 1911 they were broken up for anti-trust violations.

When Standard Oil was broken up, its market share in refined oil had declined to about where Amazon's eBook market share is now. And there was a time, before agency, when Amazon had the same overwhelming market share in eBooks you mention for Standard Oil.

Amazon has not been charged with any anti-trust violations.

Part of the reason is that attitudes towards the largest businesses, and the tycoons who run them, has changed a lot in the last fifty years or so. Here's the US president speaking in 1910:

The absence of effective State, and, especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power. The prime need to is to change the conditions which enable these men to accumulate power which it is not for the general welfare that they should hold or exercise.

Contrast with:

I talked to Jeff Bezos yesterday, and he was so proud of the fact that he wants to see every employee at Amazon continually upgrade their skills and improve. And if they've got a dream they want to pursue, Amazon wants to help them pursue it.

This is not a party-political thing. Both parties have shifted. The average American has shifted.

US antitrust a century ago was mostly about protecting small to medium sized businesses. Antitrust today is more about protecting consumers. We can argue whether this is good or bad. But it does suggest that Amazon is not being judged by the same anti-trust standards Standard Oil (or the A&P) faced. Instead Amazon is being judged by the newer standards that have largely allowed WalMart to escape antitrust attention.

This isn't to predict the future. The pendulum could swing back.

[rhadin]

Originally Posted by Barcey

2) The publishers have a life plus 70 year monopoly on individual books. That power is absolute and can be abused just as much (if not more) than Amazon's power. They accumulated and consolidated that power in the last few decades and that is also damaging. There is loads of evidence that they've also colluded. When he doesn't consider those facts objectively it comes off as one sided and propaganda.

This is not correct. In almost all instances, today, copyright is held by the author not the publisher. In the olden days it was the publisher who owned the copyright, but not today. (And before you go point to specific examples, yes, there are instances where the publisher holds it. I am speaking generally and not in a specific instance.)

There isn't "loads" of evidence of collusion and the "evidence" that was presented is equally open to the interpretation of no collusion when looked at objectively.

[crossi]

Originally Posted by rhadin

This is not correct. In almost all instances, today, copyright is held by the author not the publisher. In the olden days it was the publisher who owned the copyright, but not today. (And before you go point to specific examples, yes, there are instances where the publisher holds it. I am speaking generally and not in a specific instance.)

Oh, you mean the authors can sell ebook versions of their books on their own website if the publishers don't have one, or even if they do, after signing with the BPHs? If they can't then the publishers own the copyright or at least any rights that actually matter (the sort that the authors can make money from).

[Barcey]

Originally Posted by rhadin

This is not correct. In almost all instances, today, copyright is held by the author not the publisher. In the olden days it was the publisher who owned the copyright, but not today. (And before you go point to specific examples, yes, there are instances where the publisher holds it. I am speaking generally and not in a specific instance.)

If the publishers decide to not allow you to resell you can not go direct to the author and get the books so it's your statement that is not correct.

There isn't "loads" of evidence of collusion and the "evidence" that was presented is equally open to the interpretation of no collusion when looked at objectively.

There is a lot of evidence that the publishers are colluding. Contract terms that I would consider abusive to the authors are consistent across all and unless you're a huge name, can not be negotiated. Author compensation that is the same and change at the same time. That's all beyond the substantial evidence the DoJ submitted to the court.

[fjtorres]

Originally Posted by Barcey

There is a lot of evidence that the publishers are colluding. Contract terms that I would consider abusive to the authors are consistent across all and unless you're a huge name, can not be negotiated. Author compensation that is the same and change at the same time. That's all beyond the substantial evidence the DoJ submitted to the court.

They even coordinate release dates for their big name releases so they don't compete against each other during the release window. Best proof was August 2013 when, for the first time in decades, three pre-announced big name sellers saw overlapping releases because they were being watched by the Feds and couldn't coordinate.

[eschwartz]

Originally Posted by rhadin

This is not correct. In almost all instances, today, copyright is held by the author not the publisher. In the olden days it was the publisher who owned the copyright, but not today. (And before you go point to specific examples, yes, there are instances where the publisher holds it. I am speaking generally and not in a specific instance.)

Your problem is that you are talking about copyright and we are talking about rights.
They are totally different.

The only right that copyright gives the average BWM author is the right to have their name written in pretty letters on their books.
The other rights are owned by the publishers. But like you said, they don't own the copyrights.

I call a Red Herring.