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Amazon Escalates Its Battle Against Publishers
An anonymous reader sends this excerpt from the NY Times:
"Amazon, under fire in much of the literary community for energetically discouraging customers from buying books from the publisher Hachette, has abruptly escalated the battle. The retailer began refusing orders late Thursday for coming Hachette books, including J.K. Rowling's new novel. The paperback edition of Brad Stone's The Everything Store: Jeff Bezos and the Age of Amazon — a book Amazon disliked so much it denounced it — is suddenly listed as 'unavailable.' In some cases, even the pages promoting the books have disappeared. Anne Rivers Siddons's new novel, The Girls of August, coming in July, no longer has a page for the physical book or even the Kindle edition. Only the audio edition is still being sold (for more than $60). Otherwise it is as if it did not exist. Amazon is also flexing its muscles in Germany, delaying deliveries of books issued by Bonnier, a major publisher."
Think they're flexing their muscles now just wait for the drones!
Two links, both to paywalled articles.
Fantastic.
Weird. Both Times articles opened fine for me. I'm in the US, and I don't have an NYT subscription.
I am not a crackpot.
Next, we'll hear he's patented not selling books on the Internet.
I happily go to O'Reilly and pay $40 for a physical and unencumbered PDF copy of a book. What publishers aren't doing is moving with market forces. The value of book is not what it used to be. The average American is not making what was the previous expectation. We are in a deflationary period. Amazon is under pressure to show a better return on investment. They do not have to sell products when the supplier wants excessive value. It is like a restaurant not selling Coca Cola products. SOme don't because Pepsi cuts a better deal.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
Thank God Apple's e-book "monopoly" was crushed! Now we don't have to worry about there being a single, monolithic, insane entity controlling the entire marketplace dictating terms with impunity to the publishers.....yeah...good thing...
Apple and the publishers were trying to ensure there was a choice in eBook providers.
What Amazon is showing is the consequence of allowed, through government action, Amazon to utterly control the online eBook (and just plain Book Book) market.
Amazon wields way too much power and whatever publishers - and other book vendors - can do in response should be allowed.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
the question is; is it abusing a dominant market position?
I don't know enough about law to answer.
The Passive Voice blog has been covering this, and apparently Hachette's shipping department is running incredibly far behind on orders. Like ten days or more.
It sounds like Amazon finally gave up on accepting orders until Hachette catches up, or stops playing games with Amazon, whichever the problem really is.
right up and until the point where you wield monopoly power. In this case, Amazon has hit that point.
Yeah, that's true. I mean, no-one can go to a book store and buy these books, can they? Amazon have a monopoly, and there's nowhere else the publisher can sell these books if Amazon refuse to do so.
Amazon is using tried and true business methods here to lower costs by strong arming the producers. As long as they aren't a monopoly (and they aren't unless B&N goes out of business) there is absolutely nothing illegal about what they are doing. In fact it might just lower prices for consumers at the expense of revenue for the publishers and I'm not convinced that's a bad thing.
Consider their goal is lower prices overall I support their push to force publishers to lower book prices. eBook prices in particular are absurd, publishers took the opportunity to dramatically boost profit margins (I wouldn't be surprised if eBook pricing had boosted profits triple their dead tree version) and I love the idea of Amazon using their size and sales volume as a weapon to bring those prices back in line with dead tree versions. Publishers fuck the authors over just like the music and movie companies and they all deserve a healthy slap and dramatically reduced margins, selling a book shouldn't net more than 10% ROI IMO and should be closer to 3%.
It doesn't always show the paywall, they've put in a few workarounds here and there so that people following links get the content. It's just more dishonesty in their attempts to monetize a website.
They also seem to send daily ads out pressuring you to get a subscription to their website, if you've given them your e-mail.
I wish content providers trying to sell their content would focus on their content instead of the money. Else what the heck are you selling?
RTA: " The paperback edition of Brad Stone's The Everything Store: Jeff Bezos and the Age of Amazon — a book Amazon disliked so much it denounced it — is suddenly listed as 'unavailable.' "
Stupid people should not post: "Amazon, which is under immense pressure from Wall Street to improve its profit margins, is trying to get better terms on e-books out of Hachette, the smallest of the top five New York publishers, as well as Bonnier. For several months, Amazon has been quietly discouraging the sales of Hachette’s physical books by several techniques — cutting the customer’s discount so the book approaches list price; taking weeks to ship the book; suggesting prospective customers buy other books instead; and increasing the discount for the Kindle version."
There is no way I can go to a Barnes and Nobels to buy books. There aren't two in my city alone, and also their website. There also aren't other general purpose retailers who sell books and tons of other good like Amazon. We certainly don't have 5 Targets, 10 Walmarts, 3 Costcos (and associated websites) in town. There also aren't any local booksellers or anything. And of course you can't buy eBooks from anyone else, certainly not from Apple, who's market capitalization far exceeds Amazon's.
I think some geeks like the GP need to get out of their house more often.
Amazon: Big on Net Neutrality, not so much on Book Neutrality.
Edith Keeler Must Die
It could also be interpreted as the publisher couldn't charge more to iTune users than they do anywhere else. The publisher still set the price.
These comments are my own and do not necessarily reflect the views or opinions of my employer or colleagues...
Yeah, and? If the publisher is upset by high prices, they can cut the price they sell the books to Amazon before. If the book is taking a long time to ship, the customer can go to the local book store.
Oh, you're not going to tell me their local book store doesn't stock these books, are you?
The market position is 'bookstore' - so the question is 'is refusing to carry one book or one publisher's book out of dislike for the subject abusing it's position as a bookstore'?
'Sensible' is a curse word.
The middle man is the one who pays the author an advance, so he doesn't starve while working on his book full-time. The middle man also has dedicated marketing and fulfillment departments that do the same work for many authors, spreading time and costs.
Finally, the publisher spreads the risk around. If you are a self-published author and your first book does not sell well, you're out a lot of time and effort, may be bankrupt, and you may never write another book again. If you are with a publisher and your first book does not sell well, but you show promise as an author, you get to try again.
This is all in theory.
Are they trying to bury the Hachette?
Like many things in law, it probably comes down to intent. Refusing to carry a book critical of their CEO is likely protected in most cases, since they aren't a "common carrier" required to deliver any content a customer requests. Refusing to carry or demoting the books of a given publisher unless they get paid more is trickier, if they are found to be abusing their effective monopoly to force those concessions.
Of course, if they are found to be abusing a monopoly, the resulting settlement could include requirements that they carry all books from certain publishers, which could then lead to them carrying books like the one critical of Bezos against their will.
It doesn't hurt to be nice.
The article summary appears to misrepresent the situation.
The retailer began refusing orders late Thursday for coming Hachette books, including J.K. Rowling's new novel.
They made it sound like JK Rowling's novel is on the market and Amazon deleted its page. That's not the case. Amazon kept the page intact, but they stopped accepting PRE-ORDERS
The publisher wants them to start taking orders for an item that is not even available to ship yet, because the publisher has not released it yet.
The paperback edition of Brad Stone's The Everything Store: Jeff Bezos and the Age of Amazon — a book Amazon disliked so much it denounced it — is suddenly listed as 'unavailable.
Again.. the page says in stock and available to order.
Anne Rivers Siddons's new novel, The Girls of August, coming in July, no longer has a page for the physical book or even the Kindle edition.
A page for the physical book came right up, when I searched for it; stating unavailable with an option to e-mail me when it becomes available.
I think it's clear that what we have here is a MARKETING dispute. For one reason or another; Amazon has decided to stop collecting pre-orders on some books. Perhaps because the Publisher has not signed the proper contracts or made the proper agreements with Amazon, required for them to offer that publisher's books on a pre-order basis.
By selling at cost, becoming dominant in the field, and forcing other players to negotiate steep discounts with you. Now when you sell at cost it's below everyone else's cost. Amazon does the first. That's pretty much the entire point of Amazon. They also do the second, and even have the muscle to force shippers to change their business practices. OTOH, pretty much any big online retailer tries to do the same damn thing.
When they stop being a hard-ball retail company that sticks up for it's customers, and become Monopolistic Tyrants is a hard judgement call to make.
IMO if the NYTimes article is right they're pretty damn close to tyrant territory.
By selling at cost, becoming dominant in the field, and forcing other players to negotiate steep discounts with you. Now when you sell at cost it's below everyone else's cost. Amazon does the first. That's pretty much the entire point of Amazon. They also do the second, and even have the muscle to force shippers to change their business practices. OTOH, pretty much any big online retailer tries to do the same damn thing.
So in this scenario, they become lowest cost seller of everything? And this is harmful to customers, how?
If they decide they're a "monopoly" and jack up their prices - what do you think happens in the realm of online retail?
Let me get to the point. I don't think an "effective monopoly" is remotely possible in online sales, absent government intervention.
Is Amazon going to buy out all the search engines so people can't find cheaper retailers? How can Amazon jack up their prices, earn "monopoly profits", and keep competitors from popping up? If they continue to sell at cost to "kill" competitors, they're not harming customers.
Talking about "online tyrants" is ridiculous.
Under anti-trust law market-leaders have a lot of responsibilities normal companies don't have. Which means your analogy to the local store is irrelevant. Local book stores don't have to deal with the Sherman Antitrust Act*.
If you're a company like Amazon, and your policy is to stock damn near everything, including no less then 19 books by Hitler, you're not supposed to use your market power to screw anyone. You can use your power to a certain extent, but you can't abuse it. And yes, I'm fully aware that abuse is a relative term. That's kinda the point. If it wasn't, then a company could hack it's way around the objective definition very easily.
Keep in mind that if anti-trust law did not exist nobody would be able to read Slashdot unless they used Windows and IE, and that nobody would even have a computer running an open source OS because IBM would just have slapped IBM-OS on the original PC and Linus would never have been able to buy a machine capable of running a kernel he wrote himself.
*Internet factoid of the day: this is not named after the Civil War General, but after his brother, who became a Senator in 1861. He started as a Congressman, and almost became Speaker, but South Carolina managed to block him right before seceding, so he moved to the Senate. At the time William Tecumseh Sherman was known mostly as being Senator Sherman's brother. The loser third Sherman brother was Chief Justice of the Ohio Supreme Court.
You have a lot of very solid logic, backed by wonderful theory, that makes perfect sense. There is nothing at all wrong with any of the reasoning you used, or the facts upon which said reasoning is based.
That doesn't mean it's not BS. Like all theories a single data point that doesn't fit with the theory totally destroys it, no matter how tight the logic.
And this article is that fact. Consumers are hurt when they lose choices. Amazon took away the choice to have Hachette books delivered in a timely manner. Since nobody noticed for months your wonderful theory that online retail can't be monopolized was proven wrong.
I don't know if this will work for Amazon in the long-term, or the government will quash it, or maybe the market will start creating web pages listing back-ordered products by publisher so Amazon can't pull this trick again. Or hell, maybe you can prove that Amazon isn't quite big enough to fall under the Sherman Antitrust Act.
But the simple fact is Amazon has a bunch of consumers who search for products on Amazon first. That means Amazon has a myriad of opportunities to convince them to buy something else. Some are ethical (ie: an ad saying "try this instead"), others are quite sketchy. If it's true Amazon has been delaying deliveries for one specific publisher that's a problem. There are almost certainly others which could be hidden (ie: tweaking search algorithms, emails falsely implying that a product you paid for is not available and would you prefer this substitute and a portion of your money back, etc.). Which means Amazon can screw businesses selling on it's site, which in turn means Amazon can screw consumers by reducing the number of choices available in the marketplace.
And this article is that fact. Consumers are hurt when they lose choices. Amazon took away the choice to have Hachette books delivered in a timely manner. Since nobody noticed for months your wonderful theory that online retail can't be monopolized was proven wrong.
Monopoly is not defined as "power to `hurt' customers" or "customer faces a reduced number of choices", so all the rest of your post is a red herring.
No "monopoly" is not defined that way, but monopoly power is. You in fact defined it that way an entire two posts ago:
"So in this scenario, they become lowest cost seller of everything? And this is harmful to customers, how?"
We can engage in a 10th-grade level grammar debate over whether "Monopolized" only means "the act of being a monopoly," or it can also mean "having monopoly power," or you can respond to my post on reality with something besides theory.
Hachette books does not have an innate right to use Amazon to sell their wares. If they don't like the level of service provided by Amazon, Amazon can do NOTHING to stop Hachette from creating an online store for their readers and shipping books by their choice of USPS, UPS, or FedEx. They could even sell their readers ebooks and not deal with the logistics of killing trees and moving them around.
The rights of a monopolist are red herring.
You do not the right to force IBM to sell you a computer that can run several different operating systems. You do not have the right to force Microsoft to sell you a computer with a browser that can access non-MS-approved websites. But it happened.
Or if that's too much work for Hachette, there a myriad of other online retailers who will gladly work with them to sell their wares.
The very idea of "muscling" in the online realm is ridiculous. Amazon can take their ball and go home but they can't force anyone else to use their ball.
If that was true Hachette wouldn't be losing sales.
You are certainly technically correct. Amazon is not a monopoly. However, they are the 800-pound gorilla, and we've seen this script before.
Essentially their market power allows them to dictate price and the price they demand is well below what the publishers can sustain themselves (as they currently exist) at. This means that they cannot (and will not) give the same price to the competition. This happened with the independent and the chain bookstores as well, and it pretty much drove the vast majority of the independents out of business.
And no, as has been made pretty clear, the strong majority of customers won't look anywhere else besides Amazon. Being unavailable in Amazon is roughly equivalent to having Google search delist your website. Sure, you still exist, and a small number of die-hards have you in their bookmarks, but you're essentially a dead-man (site?) walking.
So, effectively for the publishers, Amazon *is* the only game in town, regardless of legal definitions, and Amazon is playing the Walmart game. This might work well for consumers, unless they're looking for a certain quality of goods, in which case, the practice is deeply worrisome.
If you are interested in lots of cheap self-published fan-fic, then the "Amazonization" of the book industry is not a problem. After all, Walmart serves a significant audience as well. However, if you are well-served by the *current* book market, where books aren't cheap, but you are willing to pay the publishers for quality control (and assume that most good authors would find gainful employment elsewhere if they're asked to write for near-free) , then yes, driving the publishers out of business is not a positive development.
Funny how many authors disagree with you.