observers to liken the retailer to Vladimir Putin and the Mafia.A bold claim, yes, and a necessary one given the way that the New York media world is characterizing the world's biggest bookstore. Amazon is in confidential negotiations with the French-owned publishing conglomerate Hachette over the future pricing of ebooks; the terms of that agreement are expected to set the template for Amazon's relationship with other major publishing houses. While the talks are going on, Amazon has effectively made Hachette titles unavailable to customers, a hardball action that has led
Hachette on the other hand is being depicted as a gentle, delicate flower—a lonely David facing off against an indomitable Goliath. Or in even more overblown comparisons, The New York Times quotes a literary agent likening the head of Hachette to
"Horatius at the Bridge,"...referring to the soldier of legend who single-handedly saved ancient Rome by fighting off an invading army. "He is carrying the rest of the industry on his back."
That's a real pant-load.
In a new column for The Daily Beast, I argue that when it comes to the selling and buying of books over its 20-year history, Amazon has consistently been on the side of the reader/customer. This current fight isn't any different, especially since it pits Amazon against a publisher that, along with Apple and four of the other largest publishers on the planet, recently settled a lawsuit in which they colluded to force Amazon to raise its prices on ebooks.
As The Wall Street Journal reported when the price-rigging case was settled in 2012, “The five publishers and Apple hatched an arrangement that lifted the price of many best-selling e-books to $12.99 or $14.99, according to the suit. The publishers then banded together to impose that model on Amazon, the government alleged.”
On behalf of authors and publishers, Jobs unveiled what he called his “aikido move,” which would not only change price points but shift to an “agency model,” where the seller gets a commission on each unit sold rather than buying a certain number of units at a fixed price. “We’ll go to the agency model,” Jobs explained, “where you set the price, and we get our 30 percent [commission], and yes, the customer pays a little more, but that’s what you want anyway.”
That’s an interesting line that doesn’t seem to make it into all the love being showered on Hachette by its public champions: Yes, the customer pays a little more, but that’s what you want anyway.
Read the whole thing, which includes a capsule history of attacks by publishers and writers on the practice of discounting books and how most antitrust actions benefit corporations and not customers.
Disclosure: The founder of Amazon, Jeff Bezos, is a supporter of Reason Foundation, the nonprofit that publishes Reason magazine, Reason.com, and Reason TV. I have never had any contact with him or anyone at Amazon except as a customer. Although I greatly admire Amazon as a company and, as a part-time resident of a small town in Ohio, benefit greatly from its services, I am not uncritical of it, either.