Is Amazon Really the Devil?

As the dispute between Amazon and the Hachette Book Group over new terms continues, most members of the book industry support Hachette and oppose what they call Amazon’s “bullying” negotiating tactics. But some book professionals and publishers take issue with the conventional wisdom that Amazon is the devil incarnate and is bent on destroying all of publishing and bookselling.

Some industry observers point out that big trade publishers have always had strong relationships with their most successful authors. So, they say, it’s no surprise to see bestselling Hachette authors James Patterson or Stephen Colbert denounce Amazon. Some industry observers view the much-vilified Amazon far more favorably than they do Hachette, emphasizing how Amazon has expanded reading and access to books, not to mention digital reading, while empowering untold numbers of self-published authors, many of whom were once rejected by traditional publishers. All the while, Amazon pays these self-published authors far better royalties than the Big Five houses offer (Amazon authors receive royalties as high as 70%). In light of the current standoff over terms, some also point to a double standard in the mainstream media coverage of the dispute, especially when compared to a similar standoff last year between Barnes & Noble and Simon & Schuster, also over terms, that led to blocked and delayed sales of the books of S&S authors.

The Authors Guild has called Amazon’s negotiating tactics with Hachette “bullying” and accused the online retailer of acting illegally and abusing its “substantial market power.” But mention e-book royalties and the Authors Guild is quick to acknowledge another side to this dispute. Asked about fairness to authors and the e-book royalty issue, Authors Guild president Roxana Robinson said, “We have always been in favor of raising the e-book royalty.” She emphasized that it’s “a question of who’s being the biggest bully at the moment” and that the Guild still feels Amazon is “taking an unfair position.”

While showing no support for Amazon position, Robinson acknowledged that authors don’t completely support the Big Five publishers, which have refused to raise the e-book royalty rate of 25%, which is generally considered too low for a format that has low production costs. “The [author-publisher] partnership based on mutual cooperation and shared success that was traditionally part of the publishing world is being lost,” she said. “Publishers used to split their profits with authors, after accounting for the costs of production, 50/50. Now [publishers] are treating authors as hostile opponents. It’s not a good economic model, and it’s not a way in which anyone prospers or makes money. It doesn’t bode well for the future of publishing either.”

Mainstream media accounts of the dispute often make dire predictions not just for bookselling, but for the future of literature itself, if Amazon is able to secure better terms from a supplier. Bestselling author James Patterson raised the specter of the end of literature in an Amazon-ascendant marketplace, in his remarks at the recent BookExpo America. He received a standing ovation. In a recent segment on public radio, Joe Nocera, a highly regarded business journalist commenting on the dispute, seemed convinced that better terms for Amazon meant he wouldn’t be able to get big advances—or even competent editing—for his own books in the future. How’s that for disinterested journalism? In these scenarios, if Amazon gets better terms from Hachette, book publishing, Western civilization, and literature—not to mention advances, book tours, and access to professional editors—are all on the line. The truth of the matter is bit more mundane. National retailers and publishing conglomerates face off over retail terms and pricing on a regular basis.

“It’s gotten a little nutty,” said Porter Anderson, a journalist, publishing industry pundit, and director of the AuthorHub at this year’s BEA, when asked for his reaction to the anti-Amazon pile-on. “Hachette will do just fine even if Amazon gets better terms. It’s still a multinational publishing conglomerate; there will still be author advances, art and publishing will continue.” Anderson also said that he was perplexed over the ever-changing factions in the publishing retail wars, noting “at one time B&N was the enemy. They were the ones held responsible for closing bookstores. And why didn’t anyone get upset about what was happening to S&S authors last year?”

“The industry is a hysterical bunch. They like a crisis even if it’s a generated, fabricated crisis. There’s always going to contractual disputes,” Anderson said. “We now have the biggest retail channel for books in our history. Publishers sell more because Amazon exists to sell their books all around the world in a flash. Amazon made e-reading come alive.”

Not all authors and all publishers are anti-Amazon. Self-publishing figures, like novelist Hugh Howey, who have used Amazon to sell lots of books, have spoken up for the online retailer. Novelist Barry Eisler, a self-publishing activist who also has a traditional publishing history, offered Amazon support in a piece in the Guardian. Eisler said he was “bewildered” by the “anti-Amazon animus” of fellow authors such as Patterson, Scott Turow, and Richard Russo. He pointed out that Amazon has enlarged the book revenue pie for everyone by generating real e-book revenue with the Kindle digital reader, as well as with “the world’s first viable mass-market self-publishing platform,” which has enabled “thousands of new authors to make a living from their writing for the first time in their lives.” He also took issue with the notion that literature can only exist with the support of Big Five publishing conglomerates. “It is written by authors,” he wrote.

Martin Shepard, copublisher of the Permanent Press, a small literary publisher, chided the New York Times on his blog, the Cockeyed Pessimist, about its coverage of the dispute, calling some of the Times reporting “a mixture of hypothesis and rumor,” while “painting Amazon as the villain.” Shepard gave Amazon a “four-star rating” for “leveling the playing field” for small literary publishers like his own, citing Amazon’s efficiency, lack of returns, e-book earnings for authors and publishers. One more thing: Amazon pays promptly within 30 days (“Nobody else in the industry comes anywhere close to them,” he wrote).

A small independent publisher, who declined to be named, said that while he “applauded” Hachette’s efforts to resist Amazon’s demands, “Amazon sells books.” He was also quick to note that “it’s B&N that’s really evil, although now they’re supposed to be so great. They make us change covers, editorial, all kinds of crap, and the returns. B&N used to be just under a quarter of our sales but with massive returns.” To this publisher, the Amazon-Hachette dispute “is not a new issue for books. In negotiations everybody screws everybody.”

Amazon, the publisher said, is about a quarter of his sales, with almost no returns, quick payment, and growing e-book revenue. As for fears of the end of literature and publishing, “nothing ends publishing; besides it’s always ending anyway. Someone will take over from Amazon and find a better way.”

Joe Biel, founder of Microcosm Publishing, an alternative publisher/distributor focused on environmental and counterculture titles, also called Amazon a bully, but said that the online retailer is “best ignored.” Biel said Amazon represents about 8% of Microcosm’s sales. “We genuinely ignore Amazon and encourage the authors to promote through other sales channels, like our own website, where we offer sliding-scale pricing based on the consumer’s choice,” Biel said.

One Midwest genre fiction publisher, who also preferred not to be named, remains wary of Amazon. “You can only give them so much discount,” the publisher said. “Right now we’re not unhappy with our terms, but when it’s time to renegotiate I get a little scared.” But the publisher also seemed a bit perplexed over the dispute, pointing to Hachette authors like Patterson. “These are really big authors. I would think people would go buy their books elsewhere,” the publisher added. But the publisher also emphasized that however the dispute ends, “it’s not going to change publishing. Amazon needs content, it doesn’t want to self-destruct.”

“No one wants to see a book publishing industry with a single retailer,” Anderson said. “That’s why publishers need to start selling directly and reach out to readers. Publishers have to learn to sell to consumers, and they are.” He cited the throngs of readers at BookCon, BEA’s recent consumer event. “Find the readers rather than bitch about Amazon,” Anderson added. “I think Jeff Bezos is a visionary and he’s given the book publishing industry a lot more than he’s taken away.”

HBG Sales Performance Among Top 100 Bestsellers