An American Editor

March 14, 2012

Amazon’s Assault on Intellectual Freedom

Several weeks ago, I wrote Breaking News: Amazon vs. IPG, which was followed by Worth Noting: Amazon is an Author’s Friend — Or Maybe Not. The first article was picked up by other blogs and at one of those blogs, Bryce Milligan, publisher and editor of Wings Press, as well as an award-winning poet and author of books for children and young adults, posted a comment that caught my eye. I asked Bryce to write a guest article expanding on his comment. That article follows.

_______________

Amazon’s Assault on Intellectual Freedom

by Bryce Milligan

There is an undeclared war going on in the United States that threatens the linchpins of American intellectual freedom. In a statement worthy of Cassandra, Noah Davis wrote in a Business Insider post last October, “Amazon is coming for the book publishing industry. And not just the e-book world, either.” When titans battle, it is tempting to think that there will be no local impact. In this case, that’s dead wrong. Amazon’s recent actions have already cut the sales of the small press I run by 40 percent. Jeff Bezos could not care less.

One recent battle in Amazon’s larger war has pitted it against a diverse group of writers, small publishers, university presses, and independent distributors. It is a classic David-and-Goliath encounter. As in that story, however, this is more than just pitting the powerful against the powerless. In this case, the underdogs have the ideas, and ideas are always where the ultimate power lies.

Wings Press (San Antonio, Texas) is one of the several hundred independent publishers and university presses distributed by the Independent Publishers Group (IPG), the second largest book distributor in the country, but still only a medium-sized dolphin in a sea of killer whales. In late February, IPG’s contract with Amazon.com was due to be renegotiated. Terms that had been generally accepted across the industry were suddenly not good enough for Amazon, which demanded discounts and practices that IPG—and all of its client publishers—could only have accepted at a loss. Yes, that does mean what it sounds like: To do business with Amazon would mean reducing the profit margin to the point of often losing money on every book or ebook sold.

IPG refused to accept the draconian terms and sought to negotiate further. In what can only be seen as a move to punish IPG for its desire to remain relevant and healthy, Amazon refused to negotiate and pulled the plug on all the Kindle ebooks distributed by IPG, marking them as “unavailable.”

Not a big deal? Imagine that Walmart controls everything you eat, and Walmart decides to stop selling fish because it thinks that fishermen are making too much profit. Amazon is the Walmart of online bookselling. The dispute between Amazon and IPG will affect every literate person in America. It is a matter that goes to the heart of what librarians have termed “intellectual freedom.” In other words, the resolution of this dispute, one way or the other, will affect every individual American’s access to certain books. It will affect your ability to choose what you read.

Restrictions on access to literature generally have more politically motivated origins. The banning of certain Native American and Mexican American authors and books in Arizona, for example, is purely political. Attempts in the past to ban literature based on its “moral content” were largely political in nature. This dispute is purely capitalistic, and is much more difficult to fight.

A single practical example. Wings Press had offered up one of its Kindle titles, Vienna Triangle by California novelist Brenda Webster, for the Amazon daily deal— a limited time offer of 99 cents per download. The book zoomed to the top ten of one of Amazon’s several bestseller lists. While it was still listed as a bestseller, Amazon suddenly marked the title as “unavailable.” The trail of loss increases in impact as it descends the food chain: Amazon doesn’t notice the loss at all. IPG sees it as one of its 5,000 Kindle titles that vanished. Wings Press sees it as one of its 100 Kindle titles that vanished. The author sees it as the loss of her book, period.

Lest one think that eliminating a single ebook novel is a loss of little consequence, Wings Press also publishes the works of John Howard Griffin, including Black Like Me, one of the most important works of the civil rights movement and widely considered an American classic. Amazon’s refusal to sell the ebook of Black Like Me should be of serious concern to every American.

Ebook sales have been a highly addictive drug to many smaller publishers. For one thing, there are no “returns.” Traditionally, profit margins for publishers are so low because books that remain on shelves too long can be returned for credit—too often in unsalable condition. No one returns an ebook. Further, ebook sales allowed smaller presses to get a taste of the kind of money that online impulse buying can produce. Already ebook sales were underwriting the publication of paper-and-ink books at Wings Press.

It has been increasingly obvious to independent publishers for the last two years that Amazon intends to put all independents out of business—publishers, distributors, and bookstores. Under the guise of providing greater access, Amazon seemingly wants to kill off the distributors, then kill off the independent publishers and bookstores, and become the only link between the reader and the author. The attack on distributors like IPG and on some larger independent presses is only part of the plan. Amazon has also been going after the ultimate source of literature, the authors.

Having created numerous (seven or more) imprints of its own, Amazon has begun courting authors directly by offering exorbitant royalties if the authors will publish directly with Amazon. Among the financial upper echelon of authors, Amazon is paying huge advances. Among rank-and-file authors, not so. Here they are offering what amounts to glorified self-publication. The effect is to lure authors away from the editors who would have helped them perfect their work, away from the publishers and designers and publicists and booksellers who have dedicated their lives to building the careers of authors, while themselves making a living from the books they love. Even the lowly book reviewer has been replaced by semi-anonymous reader-reviewers. All these are the people who sustain literary culture.

For Amazon to rip ebook sales away from independent publishers now seems a classic bait-and-switch tactic guaranteed to kill small presses by the hundreds. Ah, but predatory business practices are so very American these days. There was a time not so long ago when “competition” was a healthy thing, not a synonym for corporate “murder.” Amazon could have been a bright and shining star, lighting the way to increased literacy and improved access to alternative literatures. Alas, it looks more likely to be a large and deadly asteroid. We, the literary dinosaurs, are watching closely to see if this is a near miss or the beginning of extinction. Fortunately, this generation of dinosaurs is a little better equipped than the last one to take measures to avoid such a fate.

One can choose to buy ebooks from Barnes & Noble (bn.com) or from almost any independent bookstore rather than Amazon. One can buy directly from IPG. A free app will allow one to read those books on a Kindle. The resistance has already begun, and it starts with choice. I invite you to sign the petition at Change.org.

5 Comments »

  1. This well-written article pretty much captures the scene. Thanks for posting.

    I find myself imagining a future with two publishing communities: One, the Walmart equivalent, where availability and low cost are the only criteria. Two, the boutique equivalent where diversity in content and quality are available at higher prices and better service.

    Yes, Walmart wiped out innumerable downtown businesses and helped usher in the era of big-box economy. But it didn’t erase merchandising. Likewise, I think Amazon will ultimately commoditize books and all art media for the masses but the arts will continue through other channels. As in all echelons of our increasingly polarized world, the people most hurt will be the middle. High and and low end will always survive, with low end dominating.

    Like

    Comment by Carolyn — March 14, 2012 @ 6:24 am | Reply

  2. Like Carolyn I basically agree with the thrust of the argument, and dread the day when Amazon and Apple are the only ebook providers left. But I’d have even more sympathy for Mr. Milligan if he had not deliberately chosen to sell the ePub version of ‘Black Like Me’ through Barnes & Noble. They only sell to people with US credit cards. It seems a little disingenuous for Mr Milligan to complain about Amazon’s restrictive practices when he himself restricts the distribution of this ebook – and for all I know all the other ePub ebooks Wings Press sells.

    No doubt he does that for commercial reasons – it may well bring him the best profit. But it should surely reduce the weight of his complaints about Amazon using commercial reasons which don’t suit him.

    Regards, Alex

    Like

    Comment by Alex Bell — March 15, 2012 @ 3:03 am | Reply

  3. No, not at all. Amazon is reacting to renewed freedom provided by the anti-trust investigation into five of the six top traditional publishers. Amazon has a right to sell products at the price it wishes to sell them, or, alternately, not sell them at all. If you buy e-books you’ve noticed that in the last two years prices for ebooks from major publishers have skyrocketed. Amazon’s original agreement with the publishers was to publish ebooks for a maximum price of $9.99. This was fine back when the deal was made. It allowed Amazon to grow the market for ebooks by providing a price advantage over the old paper model. It gave the publishers, at the time, a heretofore untapped revenue stream. Everyone wins!

    Until ebook sales slowly began to take market share from paper books. A couple of years ago Amazon’s sales of new edition (hardcover) ebooks surpassed their physical versions. Today it’s the same for paperbacks. Paper publishing is disappearing and traditional publishers are watching their business model very rapidly fall apart. The two-hundred year-old cash cow is dying. Did these companies scramble to keep up with today’s digital market? Did they open they’re own digital distribution networks? Create their own readers? No, they did nothing, and they are dying like the dinosaurs they are.

    Enter Apple, the iPad and the iBooks Store. The big six publishers are in a bind, the business model is no longer valid, they entered into an agreement (not an exclusive agreement mind you) with upstart Amazon years ago. Amazon is now a behemoth controlling a large percentage of book sales and an even larger percentage of ebook sales. There is only one way to protect their obscene profits in the face of the digital revolution, raise ebook prices. The problem is Amazon wouldn’t budge. When the iBook Store was announced along with distribution agreements that looked a bit odd with five of those six competitors was announced he was asked how Apple could possibly compete with Amazon. The prices announced for titles on iBooks were significantly higher (starting at $12.49) than the same titles on Amazon. His reply? “They will be the same price on Amazon.”

    Apple, apparently, colluded with the publishing companies and fixed the prices. Like I said, there is an anti-trust investigation underway now. Once given Apple as a potential competitor that didn’t have to match their price to compete, Amazon was forced to give in and RAISE EBOOK PRICES AGAINST ITS OWN WILL or risk not being able to sell the titles from five of the big six.

    Now who wins there? Not Amazon and certainly not consumers. IPG is, like they said, a medium sized fish in a very big sea. But it’s a dinosaur-fish with the same, tired old business model that is outdated and they want to fight the digital distribution of books tooth and nail to preserve their own dying cow. There are a couple of things in this article that ring very untrue.

    1. There is no such thing as an ‘unprofitable’ $9.99 ebook. That’s hogwash and the author knows it. It’s a computer file that can be sent to the customer through a computer network for pennies. No printing press, no paper, no ink, no warehouse, no truck, no store, no shelf. It’s 98% profit to be split between the publisher and the retailer.

    2. Ebooks can be returned at Amazon, but that’s not the point. Returns were NEVER A BURDEN TO THE RETAILER. The retailer tore the covers off the books that didn’t sell and returned them to the publisher for a refund. The incredibly low return rate on ebook sales benefits the publisher, not Amazon; they get their money back from the publisher no matter which version they sell. It’s the publisher that benefits from vastly lower return rates and that is compounded by #1 because there are no unsold books ever printed, bound, or shipped.

    What Mr. Miligan is asking you to do is to sign a petition to save his dying business model and revive his 200 year-old cash cow at the expense of consumers. Don’t do it.

    Ezzy Black

    Full disclosure: I currently self-publish three novels with Amazon and it’s affiliate Createspace. The electronic versions are also available at all of Amazon’s major competitors. That is my only relationship with Amazon.

    Like

    Comment by ezzyblack — March 18, 2012 @ 3:56 am | Reply

    • Where’s the like button when you need it? LIKE.🙂

      Like

      Comment by Vicki — March 19, 2012 @ 2:04 am | Reply

  4. >To do business with Amazon would mean reducing
    >the profit margin to the point of often losing money
    >on every book or ebook sold.

    I doubt you are losing money when you sell your ebook for less than you like. Since you have already done the editing for the print version of the book, you are only left with simple reformatting changes to the original file to put it into one or more ebook formats. It’s not that hard or time-consuming. With ebooks that have print book versions, there are virtually no production, distribution, and warehousing costs. Once you have recouped the cost of reformatting the print version’s text file, every other sale of the ebook is profitable, even if you only charge a penny for it.

    Like

    Comment by James English — March 20, 2012 @ 9:40 pm | Reply


RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.

%d bloggers like this: