Amazon helps small publishers survive the giants; Groups that have grown fat in a market they have dominated are unhappy

June 1, 2014 4:18 pm

Amazon helps small publishers survive the giants

By Martin Shepard

Groups that have grown fat in a market they have dominated are unhappy

When Jeff Bezos founded the company that has become synonymous with online shopping he initially thought of calling it Relentless.com. In the end he opted for something more serene, but that has not stopped some from seeing an insidious tinge in the retailer’s unrelenting advance.

Amazon now offers everything from bicycles to breadmakers, but it is still in the book trade that it is mightiest – selling perhaps half of all the tomes bought in America and 60 per cent of all ebooks. It has clout that your neighbourhood bookstore (if you still have one) can only dream of. And a public spat with Hachette, the Lagardère Group subsidiary that is the smallest of the top five New York publishers, has prompted accusations that the online retailer is using its might to extract unfair terms – enriching itself and impoverishing a once thriving literary scene.

It is easy to wax nostalgic for an era when bookshops were cultural amenities rather than serious businesses – even if, when it came to making a purchase, most of us preferred chains that offered keener prices and a bigger range. But that era is gone – erased, in America at least, not by Amazon but Borders (now bankrupt) and Barnes & Noble (for ever on the ropes). Among retailers, these are the real victims of Amazon’s success. They have not been mourned.

But those who blame online retail, however unfairly, for the demise of the independent bookstore have also by and large forgiven the alleged villain. By common consent, that contest was won fair and square. The Hachette dispute is different. Now, critics say, we are finding out what happens when a self-styled author-centric publisher stands up to the world’s biggest bookstore and asks for better terms: the means of production are brutally cut off from the principal source of demand. To the dismay of Hachette authors, Amazon has increased the price of their books. It sometimes takes weeks to ship them. And it has made it impossible to place advance orders for forthcoming titles. One of the affected bards accused the Seattle-based company of engaging in a “disgusting negotiating practice”.

As an independent publisher of 35 years’ standing, I beg to differ. The charges – that Amazon is too large, too powerful, and too willing to inflict pain on publishers and authors alike – strike me as a smokescreen, the work of powerful incumbents who have grown fat in a market that they have controlled for decades, and now fear they may have met their match.

From an independent publisher’s point of view, Amazon is a forest in which a thousand flowers bloom

It is, after all, Hachette (along with four more large publishers) that was in recent memory accused of colluding to fix prices in the book market – in cahoots with Apple, another online seller of ebooks. The renegotiations that are now under way, and in which Amazon is accused of behaving unfairly, follow the efforts of the Department of Justice to unwind that illegal scheme.

From an independent publisher’s point of view, Amazon is a forest in which a thousand flowers bloom. The company offers better terms than other retailers. We used to have to print enough copies to stock every bookshop, knowing that many of them would end up being returned unsold. But Amazon, which holds stock only in a few central warehouses, almost never makes returns. This allows us to shorten our print runs. Its algorithms put our titles in front of customers who might want to read them, surpassing even the best curated boutique. And it pays promptly.

If none of this impresses the biggest publishing houses, that may be because Amazon is also a great leveller. Displaying your books prominently in physical stores costs publishers a pretty penny, giving an advantage to companies such as Hachette that can spend lavishly on marketing. On Amazon, though, every book is displayed the same way. It is easier for titles to find their niche. Independent publishers have a chance.

In business, size is power – and in the market that is sometimes pompously called the “literary community”, the biggest publishers were for too long the only players who had either. Amazon has changed that, and the old giants are miffed. Those who love literature would be doing themselves an injury if they sided with the old guard.
The writer is co-publisher of The Permanent Press