Business Technology

Tuesday 23 September 2014

Is Amazon a force for good or evil if you're an author?

Another Angle

Published 05/06/2014 | 02:30

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Amazon dominates book sales – both in print and digitally for its Kindle eReaders
Best-selling teen fiction author John Green

Is Amazon abusing its position as the world's biggest bookseller? Is it bullying the multinational publisher Hachette for its own narrow reasons? Or is it fighting for affordability and consumer choice? Moreover, are those ends mutually exclusive?

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A protracted dispute between Amazon and Hachette recently spilled into the public domain when Hachette claimed that the retail giant was removing some of its titles from its online sales shelves and disabling useful features such as 'pre-order' buttons for major upcoming releases.

The publisher, and several of its high-profile authors, claimed that the move was an escalation tactic used by Amazon to push its way to a forced agreement.

Amazon said that it was simply "negotiating with suppliers for equitable terms and making stocking and assortment decisions".

Because of Amazon's extraordinarily dominant position in selling books, the row raised some fears of market share abuse.

"Amazon wants to control book buying, book selling and even book publishing," said best-selling fiction writer James Patterson, adding that the company "sounds like the beginning of a monopoly."

Other authors also weighed in.

"What's ultimately at stake is whether Amazon is going to be able to freely and permanently bully publishers into eventual non-existence," said best-selling teen fiction author John Green (pictured). "The breadth and quality of literature is in no small part due to the work that publishers do, and it's very unfortunate, in my opinion, to see Amazon refuse to acknowledge the importance of that partnership."

But not all authors – or publishers – agree. For many, Amazon brings efficiency and standardisation to their business. The company also pays much more rapidly than traditional book retailers, while offering innovative features such as accessible reviews and demanding less punitive discounts.

"What is this all about? Disagreements between Amazon and Hachette over Amazon's electronic pricing of their books," wrote Martin Shepard, co-publisher of the US literary publisher 'The Permanent Press'. "It has nothing to do with actual books being sold, but that Hachette wants more of the electronic pie, and if they can't get it howl and rage about it."

So what is the truth? Is Amazon a bully that's out of control? Or an emancipating force that's taking on a centuries old industrial cartel?

At the heart of this issue is another, more basic, question: should books be subject to a completely free market? Or do they represent a 'special' category of goods that could wither if not protected from the rigours of competition?

That was one of the underlying battles being played out when Amazon went up against Apple two years ago. Then, Apple sought to give traditional book publishers succour by allowing them more control over the pricing of books (to the benefit of Apple's nascent ebook enterprise). That put them directly in collision with Amazon and, as it turned out, courts and regulators handed Amazon a symbolic victory in the name of competition.

In Europe, we have a sharply divergent approach to the regulation of books and books sales. Supra-national authorities, such as the European Commission, default on the side of open competition. But national legislatures can be more sensitive and defensive. France operates a much more protective policy about sales of literature with stricter limits on the power of retailers to sell books cheaply.

In Ireland, the books market has also become a very sensitive environment. Three separate publishers' representatives I contacted here about the Amazon-Hachette spat politely declined any comment.

Whether that has anything to do with the Irish book market's sustained slump is difficult to say. But the figures aren't good. Recent statistics from Nielsen show that the Irish market is down over 10pc for the year and down almost 40pc in the last five years.

"The story of Irish book sales is not a pleasant one," writes Irish publishing expert Eoin Purcell in his excellent blog, EoinPurcellsBlog.com. "These figures confirm a continued downward trend and the corresponding fact that average selling price is being driven down in an attempt to stem the reduction in sales but it is not working."

Ebooks are not proving to be a magic bullet, either. Irish publishers generally put the percentage of sales from ebooks down at between 5pc and 20pc, depending on the category. But it's not making up the shortfall in revenue.

So if Amazon is driving down prices, is it also driving down quality and variety, as some fear? Or are ebooks actually facilitating previously restricted authors to bloom? Again, there won't be many straight answers on this coming from within the industry. After all, a publisher can hardly say that its printed titles of recent years are a pale imitation of what it published a decade ago.

Both Amazon and Hachette say that they expect their dispute to continue "for some time". But it seems facile to reduce the argument to one of good versus evil. Amazon may be a juggernaut with some domineering tendencies, but multinational book publishers, such as Hachette, are no shrinking violets either.

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