Thursday, February 23, 2012

News: Amazon the Bully: The Dispute with Independent Publishers

I have written posts against Amazon before. (see here.) I’ll admit that an outright hatred of Amazon by anyone who cares for books, authors and the publishing industry is a bit myopic.  There is a very good argument that Amazon has done more to expand reading than almost any other entity. By making many books “loss leaders,” Amazon has made “physical books” (see my post above about the use of this term) very affordable. Additionally, Amazon has made it very easy for independent writers to self-publish. In both cases, Amazon has helped put writing in the hands of more people. This is a good thing.

Yet, today, Amazon took a step backwards in this area of expanding reading. They removed about 5,000 titles distributed by the Independent Publishers Group (IPG) from Kindle availability because of a contract dispute. (read more information at Paid Content and Publishers Marketplace) It seems that Amazon thought, given its size and Kindle-reading base, IPG would give in to demands for steeper discounts. IPG, looking out for the well-being of its nearly 400 independent press clients refused. This was clearly the right decision. All publishers, whether small or large, operate on razor-thin margins. Amazon makes billions of dollars a year off many things other than books. Publishers and distributors should not have to help pad Amazon’s profits while putting their own existence in jeopardy. 

At the present time, it seems that IPG feels strong in standing its ground. They report that no other retailers of their e-books have asked for term changes similar to Amazon. The question that remains is how will the current dispute end? Will Amazon’s bully tactics work? More e-book readers own Kindles than other device. If Amazon holds their ground, IPG might feel pressure to concede. I hope that they don't. This is exactly the kind of situation that critics of Amazon have feared. Because of the huge number of loyal Kindle users, publishers have no choice but to sell through Amazon. If a book is not available for the Kindle, many readers will not seek out a print edition, or read a Google Book on another device. And yet, as already stated publishers need to be paid a fair price. The good news is that there is some precedent for Amazon backing down. In 2010, when Macmillan switched to "agency pricing" (see my post linked to in the first paragraph for information on this concept), Amazon initially shut off Kindle access to Macmillan titles before capitulating. Still, the titles published by Macmillan were much more popular and sought after than some of these small press titles.

The bigger question is whether this dispute is a harbinger of things to come. Will Amazon be able to bully other publishers and other distributors for steeper discounts by shutting off access to their titles on the Kindle, even temporarily? I hope not, but I fear that it’s possible.

If there is more to report on the current conflict or any future conflicts, I’ll be writing about it.

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