Bennett: "Concentration of power"
"The theme of this is really concentration of power and when do we start getting worried?"
It was WME literary agent Tina Bennett who suggested to LIVE From the NYPL's curator Paul Holdengräber that the program have an evening's conversation titled "Amazon: Business as Usual?" on the New York Public Library's (NYPL) series. And as she moderated the panel Tuesday, the point that she and the group kept returning to was the development of a marketplace controlled, as Princeton-based panelist Danielle Allen put it, by one commercial entity.
My colleague Gayle Feldman has filed a report at The Bookseller on the event. She notes that Holdengräber said the discusssion was pulled together in about 10 days' time. He hinted that there could be a follow-up event in the autumn.
By some 50 minutes into the evening, the exercise was notable for an inability or unwillingness of the powerful to speak for itself.
Amazon: The silence of Seattle
Bennett told the audience that Amazon had been invited to have a representative on the panel and had declined. It had, however, recommended that contract attorney and blogger (The Passive Voice) David Vandagriff be there. Vandagriff explained that he doesn't work for Amazon but that he was flown to New York by the company to be on the panel.
Thus the panel comprised six observers who variously are concerned about Amazon's impact on publishing and a seventh voice, hardly passive, trying to counter criticisms of Seattle without the authority to speak for the company.
In fairness to Vandagriff, he found himself in an unenviable position. Several times he made the point that he had no special knowledge or insight. But it was clear that he felt compelled to defend Amazon, particularly in the realm of the author experience.
And while he and the other speakers raised and exchanged valid, interesting points about Amazon, the inability to hear from Amazon was -- not the NYPL's or WMEs or Vandagriff's fault -- perhaps the most keenly felt element of the event.
It's hard to think of anything that could be more constructive for the industry, the community, and for Amazon, than the participation in such events as these of one or more company representatives -- many of whom, such as Russ Grandinetti and Jon Fine, are highly eloquent and effective when they do speak.
Grandinetti, as it happens, has given some interview comments to the Wall Street Journal's Jeffrey Trachtenberg. "This discussion is all about e-book pricing," Grantinetti says in that story. "The terms under which we trade will determine how good the prices are that we can offer consumers."
As The Bookseller's Philip Jones wrote in Friday's leader piece, All about Amazon, "Amazon's view, when we hear it, can be compelling, and often more thoughtful than the headlines would suggest. No one understands this new world quite like the big tech companies that have helped create it."
Kohn: "When Jeff Bezos goes to work every day"
Attorney and Royalty Share CEO Bob Kohn wrote about Amazon as what he says is a monopsony (a lone buyer for a type of goods) in his May op-ed piece in the New York Times. There, he positioned Amazon's activities as predatory pricing. He proposed that all the publishers should "pull all their books from Amazon." And at NYPL on Tuesday evening, he pursued that thinking:
"When Jeff Bezos goes to work every day...his job is to win a winner-take-all game. He's trying to use the network effects [of online retailing] to get people into their [Amazon's] ecosystem. Amazon Prime is one means of doing it."
Kohn was allowed to file an amicus brief with the court on the U.S. Department of Justice's ebook pricing case in 2012. As he said Tuesday, he sees agency pricing as the publishers' effort to "level the playing field" with Amazon, thwarted by the DoJ's antitrust action.
Wu: "This Hachette thing could really blow up"
Bennett had identified what she says is a turning point for Amazon from an original intent of pleasing and serving the customer to "a primary goal of applying pressure to the publishers. I agree that it has historically been their main strategy to please customers in all ways...but this is an interesting moment because they are quite explicitly and deliberately inconveniencing their customer for a larger goal."
On this point, the NYPL event probably was at its most effective. It characterized the retailer's ongoing negotiations with Big Five publisher Hachette as a pivot in Amazon's relationship to book publishing and to the marketplace in general.
The most articulate panelist on this perceived change in the Amazonian stance was Columbia Law School's Tim Wu, the Net neutrality specialist, who said, "I think there's a predictable life cycle to information monopolists or dominant companies. Often, as they gain power in the early days, particularly in communications, they tend to be very good, innovative companies."
Here, Wu agreed with Vandagriff who had spoken up for Amazon and its workers' efforts to, as Wu put it, "improve efficiency and focus on the customer. I've been a backer of Amazon and a defender of Amazon for most of its existence," Wu said.
"But there starts to come a crucial moment...not unlike politicians or political leaders. In the early days of monopolies, it's often like a golden age -- increased scale and bringing benefits to everyone. Even a company like AT&T in the 1920s, a very admirable company.
"The problems begin, I believe," Wu went on, "when the company may feel it begins to face some kind of a threat or [believes that it] may not be able to sustain that kind of model. It stops investing in trying to make things better for consumers and starts to try to defend itself against competitors. It's a critical turning point....I am concerned about Amazon. And let me say why: I'm concerned that they're not serving customers the way they promised them."
Wu's description of "what Amazon is doing" as it removes pre-orders, lists shipping delays, and adjusts pricing on Hachette books "is a little bit deceptive. They've held themselves out as the [unbiased, impartial purveyor of] all the books, but suddenly some of the books are missing. You find out that the search...which most of us always thought gives you the relevant results...is a little bit crooked.
"I think that Amazon is very much at risk of breaking its bond, its covenant with the consumer," Wu said, "where they have promised a platform of books" without qualifications "when in fact, it's 'the books where we have a good deal that we're giving you.' I think that threatens their bond with the consumer and I think they have to be very careful. The Hachette thing could really blow up."
Wu's position -- the only concrete call for action in the evening -- is that the Federal Trade Commission (FTC) may have grounds to consider investigating Amazon for what he sees as a misleading delivery of biased search results.
Entrekin: "Am I not scared enough about it all?"
"So it's a moment," said Bennett. But even as she paraphrased Churchill's line from a May 194o broadcast about "the gravity of the hour," Grove Atlantic publisher Morgan Entrekin had said more than once -- largely without uptake from his associates -- that he does not see the current moment as the crisis many others do, but as a warning of what's ahead.
In some of the most interesting comments of the evening, Entrekin asserted that the marketplace is in fact sorting itself, and that publishers at this point are not suffering unduly.
Bennett quoted industry consultant Mike Shatzkin in saying that publishers have made a major PR mistake in not raising their ebook royalty rates from 25 percent to something closer to Amazon's 70 percent. And, when Bennett asked about publishing innovation as a response -- Entrekin offers 30 percent, not the traditional 25 percent -- he answered, "From the beginning, I decided that my costs were lower and that it was fair that I pay a higher royalty. But separating out the ebook royalty from all the other money the author is given is not a correct way to do the analysis.
"What you have to do," Entrekin said, "is say, 'What is the author's share of the total income?' -- a combination of the physical book royalty and...the advance the author is paid. When a publisher is doing a calculation, they're saying, 'How much can we pay, how much can we give the author? And if you're doing $10 million of billing on a single title, you can give the author 50 or 60 percent."
Entrekin said he sees promise in new models that include digital-only and digital-first publishing" as in the case of Electric Literature. "And new distribution models are being tried. That's a healthy thing." He said that Amazon's presence on the scene "has encouraged publishers to look long and hard and invest in those things."
In his trust in the marketplace, in fact, Entrekin joked, "I sit up here and I think, 'Am I not scared enough about it all?"
Vandagriff: "Contracts...the modern-day ball and chain"
Vandagriff spoke at one point about author-clients for whom he, as an attorney, had worked to break publishing contracts, which he described as "unconscionable." In 1982, he said, contracts had not imposed such difficult provisions on authors.
"I've seen the evolution of those contracts go from much friendlier, much more collegial...into something that is the modern-day ball and chain. You're stuck with that publisher forever and you can't write a book that will compete with anything you write for that publisher forever...I'd love to see competition between publishers on contract provisions."
"A wounded gazelle"
When Vandagriff asserted, "This is a wonderful time to be an indie author" -- his Passive Voice blog is avidly followed by the self-publishing community -- WME's Bennett asked, "Why do they [independent authors] hate traditional publishers so much? I don't understand."
"Because they've been hurt," the author James Patterson responded.
"Your first novel was rejected 37 times, right?" Bennett asked, indicating that Patterson, too, had been hurt but had soldiered on with publishers.
"Yes, and I haven't gotten over it," Patterson quipped back, getting a huge laugh.
He'd drawn an earlier appreciative chuckle, too, by calling himself "a wounded gazelle," a reference to the infamous line attributed to Jeff Bezos about publishers behaving like "sickly gazelles."
Overall, though, Patterson -- who has pledged $1 million to assist independent bookstores in the US and £250,000 for bookstores in the UK -- was relatively quiet during the evening.
At one point, he raised a question about the effects of Amazon on discoverability and the chances that strong literature might have in the age of Amazon's consumer reviews. Bennett had led the group in a question of "books as commodity" under the impact of Amazonian retailing.
"I don't think publishers look at books" as a commodity, Patterson said. "Publishers don't make a lot of money...I think the great fear for me is that if they [publishers] get squeezed out" by tough sales term negotiations (as Hachette presumably is facing with Amazon), "they're not going to have money to experiment, they're not going to have money to bring authors along.
"If Ulysses came out today and Amazon was the publisher, I can see it now...'Couldn't get through the first page!'" in customer reviews.
"Angry and blaming Amazon"
What was not seen by the panel as it talked through the 90-minute presentation was a virtual sideshow of commentary on the Livestream.com client service used by NYPL to stream the event.
It was suggested in one of more than 700 comments during the event that it would have been good for those comments to be projected, scrolling on the screen that backed the panel onstage -- something, perhaps, for NYPL to consider so that the views of a real-time participatory audience are represented.
Punctuated by authors including the industry observer Hugh Howey, this parallel comment-discussion, which is now captured with the stream's video, seemed largely pro-Amazon. There was considerable attention given to the engaged moderation of the panel by Bennett, something for which NYPL's Holdengräber thanked her, saying he'd appreciated her input as an "instigator."
"WOW!!" Howey wrote in comments. "That person on the left is the moderator! I was so fooled."
"It's not even good for publishers if Amazon goes out of business," Howey wrote at another point. "They [publishers] are just angry and blaming Amazon for the inevitable move of shopping online."
At another point, Howey wrote, "Who cares about publishers except in how they serve readers and writers?"
Another commenter, the writer Libbie Hawker, wrote to a colleague during the event, "Let me give you some good advice: stop feeling warm fuzzies for the tradpub dream."
Author Marc Cabot in response to one panelist comment: "Nice implication that an enlightened person could only view Amazon as evil."
In talking about Vandagriff's presence at the behest of Amazon, Gerard de Marigny wrote: "If David [Vandagriff] was a shill he wouldn't have said Amazon asked him to go there. He didn't have to offer that."
A commenter named Ty Johnston wrote: "Sorry, but publishers have done all this to themselves."
And writer Susan Illene commented: "So is Amazon supposed to carry Hachette books no matter what they demand? Maybe they are looking out for their customers. We can't know since we have no idea what the dispute is truly about."
Image from LIVE From the NYPL live stream. From left: Tina Bennett, David Vandagriff, Morgan Entrekin, Tim Wu, Danielle Allen, James Patterson, and Bob Kohn
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