Did you know that the book publishing industry is at war with itself? No, wait, you’re a TechCrunch reader, wrong question. Did you know that the book publishing industry still exists?
…This is kind of an awkward time for those of us who love both books and technology. It’s almost like you can’t cheer for both. This week’s example: the ongoing dirty war between Amazon and Hachette.
Background: basically, traditional book retailers are doomed, and publishers are in trouble. In 2012, “online retailers earned 44 percent of Americans’ book dollars.” (2013 numbers aren’t yet available, which says a lot about traditional publishing right there, but I expect online purchases broke the 50% mark last year.) In the UK, e-books are “on course to outsell printed editions by 2018.” And just look at the graphs, and at the death throes of the Nook, the e-reader on which Barnes & Noble had pinned its hopes.
Now mighty Amazon is delaying shipments and refusing to take pre-orders for books published by Hachette, a
downtrodden underdog sickly tentacle of a megacorporation with a market cap of a mere few billion dollars. If that isn’t Goliath vs. David, I just don’t know what is!
I’m torn, I tell you, torn. On the one hand, mine is an Amazon Prime household, and I have grown to view Amazon as an essential utility more than a company. On the other, when not writing software or TechCrunch columns, I write novels, four of which were published by Hodder & Stoughton, one of Hachette’s UK imprints, whose editors are, in my experience, intelligent people who treat authors well. (Alas I cannot say either of those things about my US publishers.) And yet I’m a techie who believes in doing things sensibly and efficiently, which means that the publishing industry seems to me like a shambling Rube Goldberg monstrosity which ought to be put out of its misery posthaste.
The New York Times ran two Op-Eds about the Amazon-Hachette battle on the same day. One accuses Amazon of “engaging in predatory pricing, a violation of federal antitrust laws,” with a few passing words of regret for how Apple and the Big Five book publishers, um, settled with the Department of Justice after accusations of price fixing. (A bit awkward for our David-vs-Goliath narrative, that; as if David was coming off a season-long suspension for juicing.) The other Op-Ed drily observes:
Unfortunately for the publishers, their brilliant idea turned out to be an illegal conspiracy … On some level, the book industry has never fit comfortably in the contours of big business. But over the years, as one house after another was bought by conglomerates, as they merged with each other, as they tried to increase profits with the kind of regularity that pleases Wall Street, they began the process of commoditizing books. Jeff Bezos? He’s only taking that process to its logical extreme.
Bang on point. The publishing industry would like us to believe that what’s good for them is good for books and authors; but that’s not necessarily true. People are beginning to ask: “Is [Hachette's CEO] fighting to protect good books? Or is he fighting to preserve an industry status quo?” and “Is Amazon Really the Devil?” and also observing that the e-book royalty rates which the Big Five publishers pay to their authors are actually very low, especially compared to those paid by…er…Amazon.
Could it be that authors will actually benefit from this war? Could it be that
Dr. Evil Jeff Bezos is actually on the side of the angels?
So far so pass-the-popcorn good … except that virtually everybody, other than Stratechery (last month) and the great Charles Stross (almost three years ago!) is completely missing what’s actually happening here, which is a shame, because a) it’s actually all about the technology, b) the irony is so sharp it could slit your throat.
That longwinded lamentation in the New York Times asks, rhetorically, “How did Amazon attain such monopsony power? By providing valuable services?” No, you fool: it was forced on them by the publishing industry.
Remember, this battle is over e-book pricing; e-books are no longer the future of publishing, they are now the present; …and Amazon acquired their near-total control of the e-book market, at the expense of competition like the Nook, in large part by doing exactly what publishers demanded of them in the first place.
I refer of course to DRM. Publishers were so terrified that books would go Napster that they insisted that all e-book sales be locked down DRM, untransferable, trapped in the platform where they were purchased, … meaning that every single book they sold to a Kindle user sealed that user deeper into the Kindle ecosystem, lest they lose their entire purchased library. Kindle readers can’t switch from Kindle to another platform, because publishers wouldn’t let them.
This inevitably triggered a rich-get-richer partitioning of e-book market share, which in turn led to today’s sterile domination. Amazon’s immense market power was, in large part, forced on it by the publishers, who are now shocked and appalled that Jeff Bezos is actually using the weapon they pressed into his hands and aimed at themselves. You have to admit, the irony is delicious.
Kindle-published books don’t actually have to be DRMed. (I should know; as rights revert to me from publishers, I Kindle-publish my books myself, DRM-free.) And a few imprints, notably Tor Books, have seen the light and no longer chain themselves to that sinking ship called DRM. But it’s probably too little, too late. Publishers could have fought to keep books DRM-free, but they were too terrified by the prospect of Napster-esque piracy; so now they’re trapped between that perceived Scylla and the very real Charybidis of Amazon, which essentially owns the (growing) e-book market, in addition to dominating the (shrinking) market for physical books.
Despite my techie contempt for their business practices, I really do want traditional publishers to survive, because their employees — unlike, I suspect, Amazon’s — tend to genuinely love books in the same way that I do, and because good editors are worth their weight in gold. But it’s hard to see how they can thrive fighting like this. In the long run their only real hope is to disrupt the Kindle ecosystem with a paid subscription model — a “Beats for books,” if you will.
I’m not sure how successful that will be. Books are not like songs. But it’s hard to see where else their future lies. Never mind the current Amazon vs. Hachette skirmish; that’s just a sideshow. Book publishers essentially conceded their long war with Amazon before it ever began, without even knowing what they were doing.