Authors United’s Divisive Stand on Amazon

In Feature Articles by Porter Anderson

Authors United founder Douglas Preston at New America Foundation on Amazon

Authors United founder Douglas Preston at New America Foundation

By Porter Anderson | @Porter_Anderson

Last Wednesday’s (January 27) Authors United event on Amazon and book publishing had a curiously provincial air about it. It was staged at Washington’s New America Foundation, a nonprofit think tank that includes “impartial analysis” in its description of its work. The event’s loaded title, “Amazon’s Book Monopoly: A Threat to Freedom of Expression?”, suggests that New America’s grasp of impartiality may be partial, but the intent here was to state that Amazon’s market position will, as one participant put it, cause “long-term effects on the global book trade.”

The question of whether Amazon technically has a monopoly in the marketplace, of course, is unsettled. It’s something that some of our colleagues find endlessly discussible. And Amazon’s vast size matters here, both in animating this circular debate and in that quality of provincialism. At many points Wednesday, the event—ably webcast live by New America—looked a bit like earnest but presumptive town folk complaining that a rural electrification program might harm the tranquility of the pastures. This is always a risk, of course, when we take on so large an entity as the Amazonian estate.

How large is it? That’s the first point in which we need some context.

Amazon was understood to be the biggest retailer in the world by market value last year in July: 10 days after Bastille Day. If you just smiled, outwardly or inwardly, come and sit by me. You’re likely one of the people who still can survey the progress of Seattle’s pride without fleeing to the nether regions of rigid opinion, one way or the other.

The reason the July news stormed the business world was, as Bloomberg’s wonderfully named Shannon Pettypiece wrote, that Amazon had reached a value on July 24 of $247.6 billion, as opposed to Wal-Mart’s $230.5 billion market capitalization. “Wal-Mart still dwarfs Amazon in terms of sales,” Pettypiece cautioned, “with about five times its annual revenue. But Amazon has solidified its dominance in e-commerce, forcing its big-box rival to play catch-up. Wal-Mart is investing heavily in its Web operations and developing its own online subscription service to compete with Amazon Prime.”

By last Friday, January 29, the Wall Street Journal’s Greg Bensinger was telling us that Amazon had “delivered the largest quarterly profit in its 20-year history.” Investors, as they frequently are, were still disappointed “despite a profit that more than doubled to $482 million in the holiday period,” per Bensinger, and despite the fact that Seattle had reported its third consecutive profitable quarter for the first time in more than three years. As Bensinger explained, once you are in the black, the pressure of expectations is tremendous.

WSJ’s Greg Bensinger points out that it has taken Amazon 20 years to reach $100 billion in revenue, something Wal-Mart needed 35 years to achieve.

It’s good not to let those expectations eclipse reality. Bensinger: “For the year, Amazon passed $100 billion in revenue for the first time in its two-decade history. It took rival Wal-Mart Stores Inc. 35 years to reach the same mark in 1997, two years after opened for business.”

And contextually speaking, one of the hardest things for some publishing people to do is to keep in focus the fact that Amazon is vastly more than books and publishing. It’s more than lawnmowers and dog beds, too. Its AWS operation, Amazon Web Services, has “a huge lead on rivals in offering cloud-computing services,” Bensinger writes. As a tech company—and that’s what Amazon is—it “easily” outperformed in 2015, writes Bensinger, “other tech giants like Alphabet Inc., Apple Inc. and Facebook Inc.”

If anything, the scope and scale of Amazonian reach can seem clearer at times in Europe.

There, on Thursday, the day after this event, David Gilbert of the International Business Times was writing: “U.S. companies have criticized radical reforms being proposed by the European Union that aim to shut down loopholes the likes of Apple, Google, Facebook and Amazon are using to artificially lower their tax bills…The Anti Tax Avoidance Package was introduced on Thursday by Pierre Moscovici, Europe’s tax commissioner, who said they will aim to ‘hamper aggressive tax planning, boost transparency between Member States and ensure fairer competition for all businesses in the Single Market.'”

All of which throws a huge shadow over events like Wednesday’s in which detractors gather to rail at the feet of a colossus.

Authors United, earnestly led by novelist Douglas Preston, was established at the time of the Amazon-Hachette contract-renewal standoff and remains one of the most polarizing efforts in the author camp. It’s seen by many in the self-publishing world as a consortium of bestselling trade authors who place their interests in establishment publishing over the value of opening the market to independent publishing, as Amazon has done. And one of the things that has dogged the United group from the beginning, of course, is that its author-members sell their books through Amazon. In that light, the hand that feeds them looks sorely bitten each time they mount a complaint. Anyone can understand how tricky this circumstance is in such an event as Wednesday’s.

Broadcast live streaming video on Ustream

‘Between the Citizen-as-Author and the Citizen-as-Reader’

Barry Lynn hosted. He’s the author of Cornered: The New Monopoly Capitalism and the Economics of Destruction (available from Amazon), and he’s the director of New America’s Open Markets Program. While allowing that “on the surface,” the Amazonian advent may look great for readers and authors, Lynn stressed his opinion that something is rotten in Seattle.

“We’re here today to discuss whether [Amazon’s] manipulation of the interaction between the citizen-as-author and the citizen-as-reader, whether this emergence of a master intermediator in the U.S. book market, is a problem that requires the government to act. And if so, what might the government do?”

“This event is not sponsored by any private company,” Lynn said. “We have not accepted money from any publisher. We have not accepted any money from any bookseller or association of booksellers. We are holding this discussion only because we think this is a topic of vital importance to the American public.”

And before handing off to Preston, he raised a fear factor, something that was reiterated several times during the long event. Some who might have liked to “stand with us” and criticize Amazon, Lynn said, were not there to do so because “they were afraid that Amazon would retaliate against them or people dear to them.”

Preston reviewed the Amazon-Hachette background of Authors United and went on to say, “Right now, according to the economist Paul Krugman, Amazon has as large a market share in the entire book business as Standard Oil did in 1911, right before it was broken up into 34 companies.”

And then began what would be a long series of comments from Preston and others that frequently took the form of “everybody knows” assertions most frequently heard in political commentary.

Preston: “We all know that Amazon is not a benign company.” With all respect to Preston, we don’t, in point of fact, all know that Amazon is not a benign company.

Author and attorney Scott Turow: “If somebody from the Justice Department were here today, they would not deny that Amazon is a monopoly.” With all respect to Turow, that’s something we’d want to hear from the Justice Department which, as he pointed out, was not represented.

And as an example of how awkward some of the positions we heard can be, Turow, moments before that line, had said, “The reality for me is that Amazon has been great for me. They’ve sold tens of thousands of copies of my books, probably hundreds of thousands of copies of my books. I don’t object to their effect in the literary world for my own sake. I object to it because they are, as I have called it, the Darth Vader of the literary world. They have not been, overall, a force for good. You paint with a broad brush, and obviously there are ways in which Amazon has been helpful. And certainly the fact that they have lowered book prices to the consumer, as far as the Justice Department, is a good thing.

“The question is how did [Amazon] get there and how did they do it and what is the damage that they’re doing to the literary ecology?”

Smashwords founder and CEO Mark Coker: “At the heart of Amazon’s self-publishing strategy, I believe, is a plan to bludgeon the businesses of its retailer- and publisher-competitors.” To Coker’s credit, he did claim this concept as his own—”I believe”—and that’s more than some of his colleagues speaking did. But as Coker makes clear in his many cogent writings on the topic of the exclusivity demanded of authors by Amazon’s KDP Select program, Amazon is a rival to his own company and many of his authors have agreed to exclusivity with Seattle because it’s through Amazon that they sell most of their books.

“Unless there’s some form of government intervention,” Coker said in a live video feed, “we face the prospect of a nuclear winter in book publishing where most books are produced and retailed by the same company.”

Harper’s Magazine president John R. “Rick” MacArthur: “One of my many conflicts of interest here today—and I’ll just list them for you quickly because I think it’s instructive—I’m an author, first of all, I’m on the board of the Authors Guild. So I’m, like everybody else, pressured, threatened, hostage to the Amazon monopoly. But I’m also a magazine publisher desperately dependent on single-copy sales at Barnes and Noble. So when you think about Barnes and Noble’s survival, also think about the survival of many independent magazine’s survival, like Harper’s…Amazon is so arrogant [that] after we published one of Barry’s [Lynn] pieces, ‘Killing the Competition’ in 2012, Amazon continued to advertise in Harper’s. They’re so arrogant that they just don’t care.”

And in fact, in the article MacArthur referred to, Killing the Competition, you can read the Authors United formulation of monopolistic danger amply positioned by Lynn. He writes:

“These days, we see a different kind of fear in the eyes of America’s entrepreneurs and professionals. It’s a fear of the arbitrary edict, of the brute exercise of power. And the origins of this fear lie precisely in the fact that many if not most Americans can no longer count on open markets for their ideas and their work. Because of the overthrow of our anti-monopoly laws a generation ago, we instead find ourselves subject to the ever more autocratic whims of the individuals who run our giant business corporations.”

This is the underlying theme of many comments from last Wednesday and—harkening back to the reality of Amazon as a tech company—it’s significant, if not surprising, that Lynn in that early article relates part of his thesis to Silicon Valley-based enterprise.

Broadcast live streaming video on Ustream

‘Structural Remedies’

I’ve embedded the two-part video documentation provided by New America at its site for you here. If you have time to view all or part of it, some three hours in total, I recommend it. (The second portion is quite short, about 12 minutes.)

Without the counterpoint of debate on Wednesday, the event’s litany of negative viewpoints became almost numbing after time. Long-familiar characterizations of the asserted dangers in so determinedly focused a setting finally rendered it an eloquent, efficiently presented gripe session. That’s not to say that it isn’t valuable to have a kind of rendering of the collected complaints in one place for the record, but simply that it’s not an easy listen.

Some of the more level-headed commentary near the end, for example, from the University of Tennessee antitrust law specialist Maurice Stucke might easily be missed. Stucke can be heard there for example, warning questioners that jumping to conclusions about “structural remedies” for the presumed over-dominance of Amazon is unwise: “I can’t tell you right now [that] ‘These are the structural remedies I would impose’ until I had full understanding of what are all the anti-competitive concerns. Then we could talk about the punishment.”

While the event was unabashedly one-sided—”a call to bust Amazon’s ‘monopoly'”—as headlined at Publishers Weekly for Bethanne Patrick’s writeup, it is, nevertheless, part of the context in which today’s publishing industry functions. The afternoon was an extensive explication of how the detractors of Amazon’s position in the books industry frame their issues.

And under the overhang of such a large entity as Amazon, it would have been hard for the session not to carry that air of small-town indignation. After all, we can only imagine that those pitchforks arrived via free two-day shipping thanks to Amazon Prime.

About the Author

Porter Anderson

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Porter Anderson has been named International Trade Press Journalist of the Year in London Book Fair's International Excellence Awards. He is Editor-in-Chief of Publishing Perspectives. He formerly was Associate Editor for The FutureBook at London's The Bookseller. Anderson was for more than a decade a senior producer and anchor with, CNN International, and CNN USA. As an arts critic (Fellow, National Critics Institute), he was with The Village Voice, the Dallas Times Herald, and the Tampa Tribune, now the Tampa Bay Times. He co-founded The Hot Sheet, a newsletter for authors, which now is owned and operated by Jane Friedman.