Amazon’s Assault on Intellectual Freedom

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Several weeks ago, I wrote Breaking News: Amazon vs. IPG, which was followed by Worth Noting: Amazon is an Author’s Friend — Or Maybe Not. The first article was picked up by other blogs and at one of those blogs, Bryce Milligan, publisher and editor of Wings Press, as well as an award-winning poet and author of books for children and young adults, posted a comment that caught my eye. I asked Bryce to write a guest article expanding on his comment. That article follows.

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Amazon’s Assault on Intellectual Freedom

by Bryce Milligan

There is an undeclared war going on in the United States that threatens the linchpins of American intellectual freedom. In a statement worthy of Cassandra, Noah Davis wrote in a Business Insider post last October, “Amazon is coming for the book publishing industry. And not just the e-book world, either.” When titans battle, it is tempting to think that there will be no local impact. In this case, that’s dead wrong. Amazon’s recent actions have already cut the sales of the small press I run by 40 percent. Jeff Bezos could not care less.

One recent battle in Amazon’s larger war has pitted it against a diverse group of writers, small publishers, university presses, and independent distributors. It is a classic David-and-Goliath encounter. As in that story, however, this is more than just pitting the powerful against the powerless. In this case, the underdogs have the ideas, and ideas are always where the ultimate power lies.

Wings Press (San Antonio, Texas) is one of the several hundred independent publishers and university presses distributed by the Independent Publishers Group (IPG), the second largest book distributor in the country, but still only a medium-sized dolphin in a sea of killer whales. In late February, IPG’s contract with Amazon.com was due to be renegotiated. Terms that had been generally accepted across the industry were suddenly not good enough for Amazon, which demanded discounts and practices that IPG—and all of its client publishers—could only have accepted at a loss. Yes, that does mean what it sounds like: To do business with Amazon would mean reducing the profit margin to the point of often losing money on every book or ebook sold.

IPG refused to accept the draconian terms and sought to negotiate further. In what can only be seen as a move to punish IPG for its desire to remain relevant and healthy, Amazon refused to negotiate and pulled the plug on all the Kindle ebooks distributed by IPG, marking them as “unavailable.”

Not a big deal? Imagine that Walmart controls everything you eat, and Walmart decides to stop selling fish because it thinks that fishermen are making too much profit. Amazon is the Walmart of online bookselling. The dispute between Amazon and IPG will affect every literate person in America. It is a matter that goes to the heart of what librarians have termed “intellectual freedom.” In other words, the resolution of this dispute, one way or the other, will affect every individual American’s access to certain books. It will affect your ability to choose what you read.

Restrictions on access to literature generally have more politically motivated origins. The banning of certain Native American and Mexican American authors and books in Arizona, for example, is purely political. Attempts in the past to ban literature based on its “moral content” were largely political in nature. This dispute is purely capitalistic, and is much more difficult to fight.

A single practical example. Wings Press had offered up one of its Kindle titles, Vienna Triangle by California novelist Brenda Webster, for the Amazon daily deal— a limited time offer of 99 cents per download. The book zoomed to the top ten of one of Amazon’s several bestseller lists. While it was still listed as a bestseller, Amazon suddenly marked the title as “unavailable.” The trail of loss increases in impact as it descends the food chain: Amazon doesn’t notice the loss at all. IPG sees it as one of its 5,000 Kindle titles that vanished. Wings Press sees it as one of its 100 Kindle titles that vanished. The author sees it as the loss of her book, period.

Lest one think that eliminating a single ebook novel is a loss of little consequence, Wings Press also publishes the works of John Howard Griffin, including Black Like Me, one of the most important works of the civil rights movement and widely considered an American classic. Amazon’s refusal to sell the ebook of Black Like Me should be of serious concern to every American.

Ebook sales have been a highly addictive drug to many smaller publishers. For one thing, there are no “returns.” Traditionally, profit margins for publishers are so low because books that remain on shelves too long can be returned for credit—too often in unsalable condition. No one returns an ebook. Further, ebook sales allowed smaller presses to get a taste of the kind of money that online impulse buying can produce. Already ebook sales were underwriting the publication of paper-and-ink books at Wings Press.

It has been increasingly obvious to independent publishers for the last two years that Amazon intends to put all independents out of business—publishers, distributors, and bookstores. Under the guise of providing greater access, Amazon seemingly wants to kill off the distributors, then kill off the independent publishers and bookstores, and become the only link between the reader and the author. The attack on distributors like IPG and on some larger independent presses is only part of the plan. Amazon has also been going after the ultimate source of literature, the authors.

Having created numerous (seven or more) imprints of its own, Amazon has begun courting authors directly by offering exorbitant royalties if the authors will publish directly with Amazon. Among the financial upper echelon of authors, Amazon is paying huge advances. Among rank-and-file authors, not so. Here they are offering what amounts to glorified self-publication. The effect is to lure authors away from the editors who would have helped them perfect their work, away from the publishers and designers and publicists and booksellers who have dedicated their lives to building the careers of authors, while themselves making a living from the books they love. Even the lowly book reviewer has been replaced by semi-anonymous reader-reviewers. All these are the people who sustain literary culture.

For Amazon to rip ebook sales away from independent publishers now seems a classic bait-and-switch tactic guaranteed to kill small presses by the hundreds. Ah, but predatory business practices are so very American these days. There was a time not so long ago when “competition” was a healthy thing, not a synonym for corporate “murder.” Amazon could have been a bright and shining star, lighting the way to increased literacy and improved access to alternative literatures. Alas, it looks more likely to be a large and deadly asteroid. We, the literary dinosaurs, are watching closely to see if this is a near miss or the beginning of extinction. Fortunately, this generation of dinosaurs is a little better equipped than the last one to take measures to avoid such a fate.

One can choose to buy ebooks from Barnes & Noble (bn.com) or from almost any independent bookstore rather than Amazon. One can buy directly from IPG. A free app will allow one to read those books on a Kindle. The resistance has already begun, and it starts with choice. I invite you to sign the petition at Change.org.

(Via An American Editor.)

21 Comments on Amazon’s Assault on Intellectual Freedom

  1. I understand the sentiment. I really do. But for the life of me I cannot figure out why it’s wrong when Amazon tries to negotiate more favorable terms for itself, but it’s perfectly fine for IPG to expect Amazon to simply play along because the terms were generally accepted elsewhere. Obviously, IPG had a negotiating position that favored its own self-interest. Why is it so audacious that Amazon would come back with one of its own?

    And why is it so strange that, after the agreement failed to be renewed, that Amazon would cease selling IPGs books? If I were in IPGs shoes, I wouldn’t ship books to Amazon without an agreement.

    I run a small business myself, so I get what this means for the small businesses that comprise IPG. At the same time, I also understand I don’t really get to lead larger, more powerful businesses around by their noses.

  2. Wah, wah, wah. Typical self-serving hysteria and bad logic.

  3. Ditto. A ghastly piece of hyperbole ridden, conspiracy theory nonsense.

  4. First of all, it’s quite a stretch to characterise a dispute between two companies as an assault on intellectual freedom. But I’ll leave all that aside, and focus on something else.

    Does anyone know what these terms were? (i.e. what the actual terms were before, and what the offered terms were that IPG refused?)

    It’s really hard to form an opinion without this information and, for me, words like “draconian” just don’t cut it.

  5. The only hole in this argument is the fact that Amazon is not the only publisher in the world. Heck, any publisher can sell their books on their own if they want to, and that includes selling ebooks through their own portal in whatever format they choose. Grousing about Amazon’s bad practices is pretty pointless, when you can just move to another seller (have any of you noticed Barnes & Noble?) and deny Amazon your business.

  6. “One can buy directly from IPG. A free app will allow one to read those books on a Kindle.”

    I assume you mean Kindle Fire. Kindle e-readers don’t have apps like this. Well, I have both a Fire and a K3, and I don’t want to read your books on my Fire, and especially not on some App specifically for just those books I purchase from you that I will most likely need to sideload onto my Fire and that are DRM-locked so who knows what would happen to them if you go out of business. I want to read my books on my e-Ink e-reader. The Fire is for Internet and games and video and such. The K3 is where I do my serious reading.

    So, another publisher complaining that Amazon doesn’t play fair and they can’t compete in their playing field. Fine. Amazon isn’t working for you? – I’ll tell you exactly what to do. Sell your books yourself DRM free, so that I can purchase from you directly and read my books on whatever device I like best at that moment. No more lock in to Amazon or anyone else. No more being concerned about format since I could convert to any format I needed. Hey look! An option that truly promotes competition! I would probably even pay a little more for DRM free – just so I know I will always be able to read the books I buy no matter what device I am currently reading on and no matter whether or not you stay in business after selling to me.

    But do you do this? No. You’re too afraid that your customers are pirates and thieves. Do you do anything at all to make yourself a better option than Amazon? No. You just sit around and whine “Boo Hoo. Woe is me. Amazon is going to destroy the world.” Well, maybe they are. I don’t want Amazon to annihilate the competition any more than anyone else. But you could stop it. You don’t. So go ahead and whine away. I’m not listening.

    When I am stuck with DRM, I am going to atleast commit myself to the company that makes the best devices and that I believe will stay around the longest. Get rid of DRM and you break that hold Amazon has over me.

    And ironically, it is not even that I hate DRM. I am computer savvy and I am sure I could figure out how to break it if I needed to. At the moment, I can live with Amazon and their cloud – they sure have taken pains to make it convenient for me, so big deal. But I would rather have options. Too bad most publishers don’t give us options but then complain that Amazon is going to drive them out of business.

  7. The article is quite clear what Amazon was attempting: “Terms that had been generally accepted across the industry were suddenly not good enough for Amazon, which demanded discounts and practices that IPG—and all of its client publishers—could only have accepted at a loss.”

    In practice, IPG would have to make up for that loss by shifting those costs on to other retailers who would then be forced to pass them along to their customers. Giant Amazon would grow still larger. Other ebook distributors would shrink and die. Not a pleasant situation.

    One of my hobbies is studying corporate environments. I live in metro Seattle, Amazon and Microsoft’s home, the place where Boeing has most of its factories, and where Adobe and Google have a substantial presence. I’ve worked for Microsoft and Boeing. I have friends who work for Amazon, Adobe and Google. Each is encased in a particular corporate culture that isn’t that hard to diagnosis.

    Amazon’s culture is that of a classic bully. You see it in stories that have begun to appear describing what it is like to work in one of their giant distribution centers. Taking advantage of our down economy and locating in community where jobs are scarce, these places are grim sweat shops where workers are pressured to perform and fired if they don’t mean strict performance standard in brutally uncomfortable work facilities. If you know history, it’s a bit like Henry Ford’s notorious River Rouge plant without the high pay.

    You also see that corporate culture in how they Amazon treats publishers, large and small, and by direct extension, who they treat authors. Amazon has threatened major UK publishers for selling their own books at a discount on their own websites. So much for Amazon being for lower market prices.

    A few years ago, friend of mine, a small POD publisher, sued them in federal court in Maine for initiating policies that violated laws against bundling–making one service (listing on Amazon) conditional on purchasing another service (printing on Amazon’s on printers). Knowing it would almost certainly lose, Amazon settled out of court, paying a quite substantial sum rather than go to trial.

    Amazon is a classic bully in the sense that, where it senses weakness, it becomes threatening and demanding, but when it meets a strong counter-force, it becomes cowardly and compliant, backing down from its demands. Much of the history of the last few years has been Amazon retreating when people stood up to them or when conditions went against them, i.e. Apple’s willingness to adopt the agency model.

    Some of you might remember that about a week ago, I remarked on Teleread that Amazon, through a third-party, was selling the Incase Origami Workstation (CL57934) for iPads at twice the $29.95 retail price. Since I happened to be in the market for that very item, I posted that information several places online to warm those who’d be making a similar purchase.

    Well lo and behold, yesterday I discovered that that lucrative-for-Amazon item is now classified “Currently unavailable. We don’t know when or if this item will be back in stock.” Did I do that? I don’t know. But something caused Amazon to act. It may not have any problem with rip-off pricing, particularly when it can use the deniability a third-party seller can provide. But it doesn’t want bad press, particularly when in comes to its reputation among its bread-and-butter: retail customers. That’s the one group Amazon is careful not to bully.

    We need to be realistic. Amazon isn’t going to go away. It has become too big and pervasive for that. But it is a rogue company, likely to do immense harm to the books we all love, unless those it attempts to bully have the courage and support stand up to it. That’s how capitalism works. It’s not that capitalists like Bill Gates, Jeff Bezos, or Steve Jobs are necessarily good people. It’s that, unlike the more aggressive forms of socialism, capitalism offers ways to correct problems. We can make those SOBs behave.

    That, in turn, means that the rest of us need to give those that Amazon is bullying our strong support. In the process we need to quit making excuses for Amazon just because it gave us this book or that book a little cheaper than some other online store. And we should keep in mind that, in this case a group like IPG wouldn’t be standing up to what is almost certainly their largest sales outlets without good and sufficient reason. IPG needs our help.

    If you get the opportunity, email Amazon Customer Support asking why various IPG-publisher titles that you might want to buy aren’t available.

  8. Common Sense // March 14, 2012 at 5:35 pm //

    “Amazon isn’t working for you? – I’ll tell you exactly what to do. Sell your books yourself DRM free, so that I can purchase from you directly and read my books on whatever device I like best at that moment.”

    Exactly.

    Instead of whining about the competition and trying to frame it as an “intellectual freedom” issue (Baloney!!), then start your own competing marketplace. If you don’t want to lose Kindle customers, then make your books DRM-free. Plenty of readers get non-Amazon ebooks from places like Smashwords because they are available in every format and DRM-free. DRM doesn’t prevent piracy, it only prevents honest people from enjoying their purchase they way they want to.

    Amazon is successful because they respond to their customers, they are customer-centric in every way. When the agency model jacked up prices, they started encouraging independent authors through the KDP and started their own imprints to give us well-written, affordable ebooks. They make their books available on almost every platform via their free apps and Cloud Reader. They provide the best customer service experience. Are they perfect? No, but so far, they’re the best out there.

  9. DG- The terms haven’t been revealed. Since the ebooks are non-Agency no one knows what is the problem. Wholesale model with Amazon setting the retail price. Is that not what they want?

  10. @Fbone

    It’s hard to know, isn’t it? I have only heard the vaguest references (and I’ve been searching) to the terms being awful, and draconian, etc. etc. But I have no idea if they are any better or worse than, say, the standard small press gets. No clue.

  11. Your complaint seems to be that Amazon.com refuses to sweeten a deal for a middleman. As a small press we’re delighted to deal directly with Amazon.com.

  12. Vonda Z and Common Sense are spot on.

    For all the publishers want us to believe that Amazon is this evil entity out to destroy all of publishing…just go around Amazon. Sell direct to readers without DRM.

    (Or choose a non-DRM vendor like Smashwords.)

    Or give the authors back their ebook rights and let them sell direct to readers through whatever vendor they want or sell directly on their own websites.

    I am sympathetic to IPG — if IPG and its members cannot accept the terms offered by Amazon, then walk away. Businesses are forced to make those kinds of choices every day.

    But you can do an end-run around Amazon and serve your readers directly…and lead the charge to “slay the Amazon dragon” that so many people in publishing seem so fearful of.

  13. I would like to also point out a fact correction here: Ebooks are indeed returnable. Amazon has a seven day, no-questions-asked policy for returns and mistaken purchases. Look at any of the Kindle royalty statements that Joe Konrath posts and the returns column is clearly listed.

  14. Bill you are right on the money. All of this whining about Amazon and these vicious attacks on Amazon are nothing more than thinly veiled protectionism of the establishment publishers who have been unwilling and unable to move with the times and adapt to a changing market.
    They have had more than enough time. We should have absolutely no sympathy for them. Amazon makes it’s choices of what it ants to pay for it’s product and what product it wants to carry. There is nothing reprehensibly about that whatsoever.
    As Vonda says “Amazon isn’t working for you? – I’ll tell you exactly what to do. Sell your books yourself DRM free, so that I can purchase from you directly and read my books on whatever device I like best at that moment.”

    Yes. Stop WHINING and go sell your own damn product !

  15. I call this “The AG Syndrome”
    Symptom: Endless whining about how big baaad Amazon is so eviiiiilll and must be stopped. Quick everyone support the big dinosaurs.. err.. publishers and all their cronies before it’s too late!

  16. >the publishers and designers and publicists and booksellers who have dedicated their lives to building the careers of authors

    This piece is a joke, right? Tell me it’s a joke!

  17. This is the most laughable piece I have ever read. I am pleased to see the comments reflecting this sentiment.

    The fact is people beholden to publishing, and publishing itself (hello NAPCO) see the writing on the wall. Rather than change the way they run business, which is pathetic, it’s time to play the blame game.

    Hey publishers: GROW A PAIR.

  18. I agree with David.

    It is impossible to come to a defensible position in the Amazon/IPG dispute becuase nobody has shows what the old terms were and what new terms Amazon were “demanding”

    Let’s face the facts here, IPG’s value as a paper book distrubutor may be great indeed. The provide the clout to get the smaller publisher’s books into actual stores and on Amazon.

    What is there value when it comes to e-books. You don’t need their bargaining power or their clout to get an e-book listed on Amazon or any other e-book site. The process could be done by the smaller publishers just as easy. What added benefit is IPG adding to the e-book process that earns them a piece of that pie?

    The way I see it the need for a “distributor” for e-books is not really a priority and IPG are trying to maintain their relevance and profit in a market (e-books) where their services are less critical.

    Of course I reserve the right to change my mind if the terms of the deals ever become public.

  19. Wah, wah, wah. Buh-bye old dinosaurs. The Amazon asteroid is about to take you all out, and I for one could not be more thrilled about it.

  20. I blame authors myself. It’s all our fault. We should have the moral fibre to resist the excellent opportunities and generous terms Amazon offers.

    After all , it’s not like we need the money. Most of us have perfectly good day jobs.

  21. Kevin O. McLaughlin // March 16, 2012 at 4:05 pm //

    Aside from David’s excellent thoughts above, this whole issue really confuses me.

    The distributor claims the deal was IPG got about 50% on ebooks they sold to Amazon, and Amazon wanted them to take a deal which was in some way worse than that.

    Because distributors take a percentage, that means publishers working with IPG were already getting less than 50% on average for ebook sales.

    Since anyone at all can get 70% on ebooks priced at a level that will sell (2.99-9.99) by using KDP, I’m wondering why any small press was distributing with IPG in the first place.

    And even if they were before, why they haven’t uploaded their books already, now that IPG has lost their deal with Amazon?

    If the IPG contract with the publishers who work with them is so draconian that it mandates exclusive distribution rights even in venues to which IPG does not distribute, it seems to me that the problem is not in the IPG-Amazon contract, but in the IPG-publisher contract.

    Yes, uploading bunches of books to KDP is annoying. If you have say 500 ebooks, at about ten minutes each it would take two data entry clerks a whole week off full time employment to accomplish the task. But it’s been weeks now. I’m at a loss to understand why any publisher would not have long since bypassed IPG.

    Bad for IPG. But business models which are made non-viable by new tech die. It happens. And with ebooks, distributors are probably going to get hammered. But good for publishers, since at a very low cost in terms of manpower to upload the books, they’ll make much higher margins on sales.

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