This has been reposted from Vox. Matthew Iglesias takes a well-balanced, reality based look at all the red-flag waving against Amazon. I’ve followed the silly Hachette-Amazon bout with some interest for it’s entertainment value. Yesterday, seeing that S&S and Amazon came to pricing terms easily before their contract expired brought me to the realization that it’s all been just business as usual. The hysterics were mostly prompted by Hachette’s refusal to see the facts on the ground for what they are… and also a general belief that their old, tired alurels mean they have a lot more power in the marketplace than they actually do. Anyway, I cede the floor to Matt Iglesias and his well-considered arguments…
Here’s a little real talk about the book publishing industry — it adds almost no value, it is going to be wiped off the face of the earth soon, and writers and readers will be better off for it.
The fundamental uselessness of book publishers is why I thought it was dumb of the Department of Justice to even bother prosecuting them for their flagrantly illegal cartel behavior a couple of years back, and it’s why I’m deaf to the argument that Amazon’s ongoing efforts to crush Hachette are evidence of a public policy problem that needs remedy. Franklin Foer’s recent efforts to label Amazon a monopolist are unconvincing, and Paul Krugman’s narrower argument that they have some form of monopsony power in the book industry is equally wrongheaded.
Books are published by giant conglomerates
Wisdom on this subject begins with the observation that the book publishing industry is not a cuddly craft affair. It’s dominated by a Big Four of publishers, who are themselves subsidiaries of much larger conglomerates. Simon & Schuster is owned by CBS, HarperCollins is owned by NewsCorp, Penguin and RandomHouse are jointly owned by Pearson and Bertelsmann, and Hachette is part of an enormous French company called Lagadère.
These are not tiny, helpless enterprises. Were their owners interested in the future of books and publishing, they could invest the money necessary to make their own e-reading apps and e-book store and render Amazon entirely superfluous. But the managers of these conglomerates don’t really care. If they can get famous authors to lobby the government to stop Amazon from killing them for free, then they’re happy to take the free labor.
But they don’t want to invest actual money and energy in competing with Amazon, they’d rather wring whatever remaining profit there is out of book publishing and dedicate the money to dividends or other industries they’re also involved in.
Amazon faces lots of competition
It is undeniably true that Amazon has a very large share of the market for e-books. What is not true is that Amazon faces a lack of competition in the digital book market. Barnes & Noble — a company that knows something about books — sells e-books, and does so in partnership with a small outfit called Microsoft. Apple sells e-books and so does Google.
These are not obscure companies. It is not inconvenient for customers to access their products. And since these are companies that are actually much bigger and more profitable than Amazon, there is absolutely no way Jeff Bezos can drive them out of business with predatory pricing.
Amazon’s e-book product is much more popular than its rivals because Amazon got there first, and the competition has not succeeded in producing anything better. But consumers who prefer to buy a digital book from a non-Amazon outlet have several easy options available, and thus a book publisher who chooses to eschew Amazon will not actually be unable to reach customers.
Publishers are superfluous
In the traditional book purchasing paradigm, when a reader bought a book at the store there were two separate layers of middlemen taking a cut of the cash before money reached the author: a retailer and a publisher. The publisher, in this paradigm, was doing very real work as part of the value-chain. A typed and printed book manuscript looks nothing like a book. Transforming the manuscript into a book and then arranging for it to be shipped in appropriate quantities to physical stores around the country is a non-trivial task. What’s more, neither bookstore owners nor authors have any expertise in this field.
Digital publishing is not like that. Transforming a writer’s words into a readable e-book product can be done with a combination of software and a minimal amount of training. Book publishers do not have any substantial expertise in software development, but Amazon and its key competitors (Apple, Google, and the B&B/Microsoft partnership) do.
Publishers would like writers to believe that the pressure they are feeling from Amazon will trickle down and hurt authors as well. But there is a big difference. Even in the brave new world of e-publishing, authors are still making a crucial contribution to the industry by writing the books. Publishers are getting squeezed out because they don’t contribute anything of value.
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Much of my fiction deals with finding a new home and getting acquainted with it, once you’ve found it. It’s a recurring theme in my writing I suppose, because my childhood was one of almost yearly upheaval and change. New towns, new schools, new friends all meant having to learn to be flexible and adaptive. It was a lesson I took to heart from the time I was in first grade.
Some lessons come harder than others, as I’m sure you know, but some of mine seem to have contained nested lessons. Important points safely tucked inside, that would emerge as I matured enough to understand them.
One of these really began my Junior year of high school. We moved to a very rural setting from a mid-sized town. My High School had over seven hundred students when I was a Sophomore. The next year, there were only ninety six. We’d been living in a suburban neighborhood one year and in the woods the next, with our nearest neighbor a half-mile away. It took some getting used to. For example, for any entertainment, I had to either travel forty miles to get to a large enough town, or I had to make my own from what was at hand. Of course, I felt terribly deprived, but I also knew I had to fit in, so I began to wing it and soak up the prevailing rural culture as much as I could. Eventually I noticed how rich the woods were in entertainment and spent more and more time there.
One of the most surprising lessons, hidden within the general lesson of adapting to small town life, was discovering how incredibly resourceful country folks are. While they are not usually ones to blow their own horns, I found they share an ability to find useful benefits and value in almost any situation or even in discards. I learned how to look for value even in junk, which is useful to this day, despite making my wife cringe at the stuff hanging from the rafters in the attic. Ditto the garage/barn.
Coming from the “city” I had swallowed the urban myth of how country people and kids were less sharp, slow moving and slow witted. I found it exactly the opposite. Looking back, I think that year was the one where I really began to appreciate the intricacies of how other people navigate their lives. The tiny town we were situated in wasn’t even close to a monochrome image. There were huge ranges of contrast between those who seemed to live well, even comfortably and the rest of us, including those who lived hand-to-mouth.
In most cases, those who lived well had found resources or skills they could always exploit for gain, while others who scraped by were always trying to ferret out new opportunities, new jobs, new partners. Always changing, always looking over the fence to see if a better deal was to be had. Needless to say, at first, I thought the more comfortable life came from wealth or land handed down. While it turned out to be true in a few cases, in most it was a matter of folks having learned to simply keep working at what they did best, not wasting effort or resources and staying on the path until they reached their goals. It came from the ability to think out of the box, to be resourceful in their approach to life, and to keep it close. Not telling the story of their struggles and their victories to everyone sometimes made them seem closed-mouth or unfriendly, but I learned it was a smokescreen so that they didn’t attract too much attention to distract them.
Today, the lessons I learned that year and later, working in the woods as I entered college, have prepared me better than the lessons learned in the classroom have. It was also my personal introduction to how foolish it is to misjudge people based on outward appearances. In any case, you really don’t know any real truth about anyone else until they share it with you. Shared truth like that is the highest compliment you can give another human being. It comes directly from recognizing yourself in them, no matter how different they may be.
That common ground is our connection to life itself. Being able to marvel at another person’s ingenuity in the face of trouble means you’re learning. Learning is our main job here and it’s the one we are able to perform every single day. The lessons will just keep on coming, as long as we’re alive.
Are there any personal lessons you’ve found to be really important to your understanding of the world? Let me know…