May 25, 2014

Boycott Amazon?


Amazon Brings Down Publishing Company & Upsets Literary Community.

I’m sure many would agree that major chain stores such as Walmart have played disastrous roles in putting an end to many privately owned main-street stores all over the country.

Some may enjoy the conveniences of one-stop, inexpensive shopping. Still, there is no denying that it’s just not the same as it once was when people knew their local pharmacists, jewelers, the shoe salesperson, etc.

There is a distinct cycle that occurs with the growth of stores like Walmart:

  1. The company offers inexpensive products due to volume purchases.
  2. People stop shopping at the locally owned stores in town.
  3. Those stores then go out of business, leaving people to need Walmart-type stores even more.

And round and round it goes.

Unfortunately, the same problem is presenting itself in the book business with Amazon, who continues to claim that that they are “the world’s largest bookstore.” This, despite the fact that they are not a store—only a distributor.

Barnes & Noble sued Amazon in 1997 and settled out of court for the rights to use the title of “the world’s largest bookstore” and Amazon still uses the slogan.

Further, it appears that Amazon took on some of the same marketing tactics as Walmart:

Walmart sued Amazon on October 16, 1998, alleging that Amazon had stolen their trade secrets by hiring former Walmart executives. Although this suit was also settled out of court, it caused Amazon to implement internal restrictions and the reassignment of the former Walmart executives.”

Amazon, through careful and cunning marketing, has come up with ways to hold authors and publishers hostage.

At this point there are so few bookstores that remain, that the literary community has become dependent on Amazon to sell their books. And because Amazon is as near to a monopoly as they can get, they can choose to do as they wish when it comes to marketing books, carrying printed copies of books, or even being willing to work with certain publishers.

Recently, there has been a major upset between Amazon and Hachette, a French based publishing company.

According to the Washington Post:

“The dispute has broken out now because of consent decrees signed in 2012. When publishers plotted earlier about how to resist Amazon’s negotiating demands, the Justice Department said they were guilty of collusion and e-book price fixing under antitrust laws. It allowed retailers, including Amazon, to discount publishers’ lists by 30 percent for two years.

Hachette is one of five major publishing houses that agreed to terms under consent decrees. Negotiations between Amazon and the biggest publishing houses, Random House and Harper Collins, still lie ahead. Amazon is trying to set a precedent with the Hachette deal, publishing industry experts say.”

And according to the Wall Street Journal:

“The backdrop to Amazon’s push is that e-books generate much higher profit margins for publishers than print books, where the costs including paper, printing, binding, warehousing, shipping and returns. Bedi Singh, chief financial officer of News Corp, which owns HarperCollins Publishers and The Wall Street Journal, earlier this month told analysts that margins are around 75% for e-books, about 60% on paperbacks, and about 40% on hardcovers.”

The monetary stakes of the e-books are high, and Hachette is apparently not readily agreeing to the unknown terms that Amazon is seeking. In turn, Amazon appears to be taking retaliatory action against Hachette.

Readers of J.K. Rowling, Michael Connelly and other Hachette Book Group authors will have to pre-order their books through retailers other than Amazon. That’s right; they are showing up as “unavailable” when customers try to buy them. Amazon is also raising prices and refusing to ship books on time.

All of this is causing a major crisis in the literary community.

The Author’s Guild feels that Amazon is acting in an illegal fashion and had this to say: “Amazon clearly has substantial market power and is abusing that market power to maintain and increase its dominance, which likely violates Section 2 of the Sherman Antitrust Act,” said Jan Constantine, the Guild’s general counsel (as quoted in The New York Times).

So what is one to do? Are these huge stores the way of the future and if so, must we accept them? Should we boycott Amazon and let our dollars do the talking? Do we wait to see if the lawyers and executives can work this out on their own?

All are hard questions, and I don’t believe that there exists a “one-size-fits-all” solution to any problem.

But, one thing is for sure: the question of what type of resolution will occur and when it will occur will be weighing heavily on many authors’ and readers’ minds.

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Editor: Catherine Monkman

Photo: Wikimedia Commons

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