Latest news about Amazon.com's battles with publishers

We distributed the story I’d dashed off about Berkshire Publishing’s experience with Amazon (https://www.berkshirepublishing.com/2014/06/04/how-amazon-com-is-hurting-readers-authors-and-publishers) and were surprised by how much response it got. It was redistributed by Publishers Weekly and will come out in the Independent Book Publishers Association magazine, and I appeared in an episode of BBC TV’s Newsnight program, and was just interviewed by the New York Times.

New information about Amazon’s ongoing pressure on publishers - large and small, trade and academic – continues to come out, and the questions I’ve received have made me think more deeply about the problem. As one interviewer said, “It sounds like you like Amazon.” In a way, I do. I admire the Amazon platform and appreciate it as a channel to a wide audience. And as an author and a small publisher with a technology background, I understand the frustration people feel with big-box publishing companies.

But recent news from the UK (http://www.bbc.com/news/technology-27994314) and Germany (http://www.nytimes.com/2014/06/25/business/international/amazon-accused-in-Germany-of-antitrust-violation.html) as well as US news about the ebook settlement (http://ow.ly/yHPHG) confirms my sense that Amazon is determined to bully publishers into submission. The fact that their contracts are unilateral (that is, the terms can be changed by Amazon, one party, at any time, like it or lump it), is evidence not of efficiency but dominance - and monopolistic power over the entire book world.

One question I’ve posed, and not yet had an answer to, is this: Why can’t Amazon allow the market to decide what good value is? If we publishers were allowed to compete freely with one another on Amazon, customers would soon tell us what they’re willing to pay. But at the moment Amazon controls pricing and alters search results in order to improve its own margins, and its hold on the markets, not to help the customer get the best possible product at the best price.

I did not have a good answer to one question the Newsnight presenter asked, “How did publishers let themselves get into a situation where they can’t walk away, where they are so dependent on Amazon, where Amazon is dictating terms?” Maybe some of my colleagues will have an answer. I certainly hope we can come up with alternatives, and do what we can to give Amazon some healthy competition. (http://www.thebookseller.com/news/grandinetti-speaks-out-amazonhbg-dispute.html)

Today’s Publishers Lunch headline is “Amazon Revises 20-Year Customer-First Policy.” The article explains:

In brief remarks to the WSJ, longtime Amazon executive Russ Grandinetti has rewritten the core principle that has guided Amazon and its founder Jeff Bezos for the past 20 years…. Their position has always been, ‘We start with what the customer needs and we work backwards.’ They ‘don’t focus on the optics of the next quarter; we focus on what is going to be good for customers.’ There have been ‘three big ideas at Amazon that we've stuck with for 18 years, and they're the reason we're successful: Put the customer first. Invent. And be patient.’

But the newly revised version of that mantra sets out a parental ‘we know what's best for you in the long-term Janey’ paradigm instead: Grandinetti ‘indicated the retailer was willing to suffer some damage to its reputation and was simply doing what is “in the long-term interest of our customers.”’ So Amazon now has insight into the difference between consumers’ long-term interests and their immediate ones, and has empowered itself to put the former above the latter.

We'll be continuing this discussion, and welcome comments from academics and university presses, whose interests are not given much attention in the general press.