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Is Amazon Evil?

Amazon's cheap books are easy on our wallets, but publishers have been deeply undercut by the rise of large retailers and predatory pricing schemes.

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As a result of this pressure, major publishers have become less inclined to take a chance on new authors and more wary of published authors whose previous works were only moderate sellers. Jamie Raab, publisher of Grand Central Publishing (formerly Warner Books) for 24 years, says that without the independent bookstores to help in the process of “discovery and nurturing,” it became riskier to invest in a talented but unknown writer. Although smaller houses often pick up promising new authors, they don’t always have the resources to pay for preferential status in mega-stores. A full range of new works and authors make it into print, but breakout books for smaller publishers are now rare. And the emergence of Amazon, the biggest of the big-box retailers, has exacerbated these effects while introducing a slew of new headaches for publishers of every size.

 


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In 1995 Bezos’s new online model had the book world atwitter.

Where once a publisher had to worry about competing for limited shelf space, now its entire list of books—old and new alike—could always be available to customers. This was a godsend for small publishers as well as self-publishers, who otherwise had few ways of finding a retail audience. “It’s because of them that our backlist lives,” explains Margo Baldwin, president of Vermont-based Chelsea Green Publishing. “Amazon has been hugely important to us. If you go in as a small publisher and sell to Barnes & Noble or Borders, you have a set of buyers who may or may not take your books. [Amazon has] made the marketplace accessible to everyone in a pretty equal way.”

When Ten Speed Books refused to give Amazon a higher discount, its books disappeared from the Web site.

Publishers were also excited about not having to take so many returns. Bookstores typically order stock from publishers on consignment and return unsold copies, but most of the books Amazon ordered from publishers were non-returnable.

Yet, before long, the mood soured. Over the course of the next decade, Amazon pushed standard discounts to 52–55 percent, with some as high as 60 percent. In contrast, bookstores—even the chains—get discounts that usually top out around 50 percent. That small margin can mean the difference between surviving another day or folding, particularly for a publisher doing modest print runs.

In addition to pushing discounts up explicitly, Amazon began to get creative about what constituted co-op. In 2004 Publishers Weekly reported that publishers were being asked to pay higher co-op rates to Amazon, and those who didn’t sign up would be subject to “such changes as Amazon not selling their books at a discount and not having their titles ‘surface’ in various merchandizing and advertising programs.” There was more: “Amazon also may turn off the search options to publishers’ books, making it possible to find a title only when the correct name of the book or the ISBN is entered.” What publishers were supposed to get in exchange for this co-op, was, essentially, not being made to disappear from the Web site. Winton calls the tactic “a discount grab in the guise of getting co-op”—in other words, a way of getting around antitrust laws that put a cap on the discount a retailer can demand.

Dennis Loy Johnson, head of Melville House Publishing, was one of the publishers approached by Amazon and encouraged to “sign on” to the new program. He refused and two weeks later received a visit from a cadre of Amazon employees at a book convention. “It was one team of guys one day and then another team of guys the next,” he recalled, when we spoke in May of 2009. “They kept saying, ‘Why aren’t you participating in the program?’ in this really heated, aggressive way. I told them we couldn’t afford it.” They countered that Johnson “couldn’t afford not to.”

 
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