What are the objections against Amazon?
December 15, 2014 10:55 AM   Subscribe

Some of my favorite writers have spoken out against Amazon, and Amazon does seem to be in the news more frequently over the past year or so, but I don't know enough about the publishing business to understand what the issues are. The whole situation seems rather complicated to me, and I can't tell if the complaints are about Amazon's philosophy or about it's business practices. Will someone please explain? I know MeFi has quite a few members who are in this field, so I thought this would be a good place to ask this question.
posted by sam_harms to Writing & Language (22 answers total) 20 users marked this as a favorite
In the UK, people boycott Amazon because they don't pay their taxes here. There is also the issue that they undercut local, independent book stores.
posted by Dorothea_in_Rome at 10:58 AM on December 15, 2014 [6 favorites]

There are many objections, but they largely focus around Amazon attempting to drive the price of content down (while Apple is trying to keep it higher).
posted by empath at 10:58 AM on December 15, 2014 [1 favorite]

The New York publishing cartel doesn't care for Amazon's ability to dictate terms. They're used to calling the shots with booksellers, and being forced to deal with a retailer on something like equal terms is outside their experience.

As a small-press author, I don't sympathize with either Amazon or the New York publishing cartel. Neither of them are on my side, so I owe them nothing.
posted by starbreaker at 10:59 AM on December 15, 2014 [10 favorites]

There's a Vanity Fair article on this very topic.

The TL;DR: the reason why this has become a thing this year is largely due to Amazon's very public campaign during the Hachette negotiations that struck many as petty. The passage of France's 'anti-Amazon' law, meant to bolster smaller retailers, also lead to increased publicity about Amazon's influence on the publishing and book retailing businesses.
posted by flibbertigibbet at 11:04 AM on December 15, 2014 [4 favorites]

Amazon is rapidly becoming a monopsony, which would give them great power over their suppliers (publishers and authors). Amazon is using that power to drive prices down, which publishers and authors do not like.

They aren't 100% of the market, of course, but they're a big enough part of it so they cannot be ignored.
posted by Chocolate Pickle at 11:04 AM on December 15, 2014 [1 favorite]

Amazon has deals with various publishers that offer different levels of profitability. Periodically, they will renegotiate terms with one or another publishing house, to help increase the company's overall margins, which are slim.

Increasing the profitability of different areas of its business allows them to continue to expand their reach into other, non-publishing markets, like media licensing deals that allow them to serve streaming movies and television shows, and reinvestments into asset management and delivery (such as the Prime Air project you may have seen mentioned on the Internet). It's basically a tightrope to keep shareholders happy and allow the company to expand, while still having products to sell.

They recently attempted to renegotiate terms with a French publishing giant called Hachette, and the renegotiation discussion went public. It became a battle between the public relations teams of two very large companies, and Hachette waged a better PR campaign in the long-term. Amazon's push to renegotiate terms with other companies, while not as public, have set up antagonistic relationships to the extent that some smaller book houses have walked away. Hachette was large enough to publicize the opposition of their authors to Amazon's terms.
posted by a lungful of dragon at 11:16 AM on December 15, 2014

Chocolate Pickle is correct with their diagnosis of monopsony; an explanation from Paul Krugman. Hence the enactment of antitrust laws: if one company has too much market power, it hurts fair competition and consumers. As Krugman concludes:
Don’t tell me that Amazon is giving consumers what they want, or that it has earned its position. What matters is whether it has too much power, and is abusing that power. Well, it does, and it is.
Another concern is Amazon's poor treatment of its warehouse workers.
posted by JackBurden at 11:21 AM on December 15, 2014 [9 favorites]

For me:
- Tax avoidance in the UK (they're registered in Luxembourg which has much lower tax rates, and do financial jiggery pokery so their UK operations don't turn a profit but the Luxembourg branch does)
- various stories of bad working conditions in the warehouses.
- the security screening ruling posted above.
posted by EndsOfInvention at 11:32 AM on December 15, 2014 [1 favorite]

Amazon does not sell decent quality versions of public domain works. They sell print-on-demand versions where human eye has often appeared to have never laid sight on the formatted version they send you. (example here) There is cover art, but we're in general looking at sub-Dover edition levels of care towards the quality of what you're reading.

Maybe that will change, but I find Bezos' rhetoric around elevating the importance of long form reading in popular discourse at severe odds with his every effort to devalue long form works in every single imaginable way.
posted by billjings at 11:36 AM on December 15, 2014

As an author:

-amazon frequently undercuts the prices of other retailers, which is great for the consumer on the short-term but means lower royalties for the author. This also creates the illusion that books are only worth, say, $7.99 or $9.99
-if not allowed to dictate terms with a publisher, they have been known to pull the "buy" or "pre-order" button from books by that publisher, further screwing over the little guy--the author whose books aren't available

(NB: This has happened with B&N too, and isn't limited to amazon)
-They have their own publishing arm where their authors are more heavily promoted than other authors on amazon and where prices are usually a dollar or two cheaper than books by other publishers. This drives up sales and then drives up amazon's books in their own rankings so that they're the first search results.
-friends published by skyscape, amazon's publishing arm, have indicated that they don't have editors who do true editing; they hire out freelance editors instead. Apparently their entire business model is largely numbers rather than quality-driven
-they promote a self-publishing model that means that people like my wonderful editor would be unable to be paid a fair wage

Generally, they claim to be friends of authors but I suspect they see authors as tools to profit. I don't think they care at all about books being, say, good. Only profitable.
posted by PhoBWanKenobi at 11:55 AM on December 15, 2014 [2 favorites]

Response by poster: I watched part of a video where Ursula K. Leguin was giving a speech on the topic, and she seemed to be framing the price issue in terms of Amazon treating literature as a commodity, and how that was degrading the quality of literature. But doesn't every publishing house do that?
posted by sam_harms at 1:32 PM on December 15, 2014 [1 favorite]

No publishing house has ever had the kind of market power that Amazon now has. If a writer wasn't satisfied with the deal they were getting from their publisher, they could try to find another. But there really isn't any choice in dealing with Amazon, because it's a monopsony.
posted by Chocolate Pickle at 2:27 PM on December 15, 2014

Best answer: But doesn't every publishing house do that?

No. Traditional publishing might publish quite a few big moneymakers, but in the past, editors have used the profits from those books to foster passion projects (if you want to fall in love with old school editors, read Ursula Nordstrom's letters). My editor made my books--which probably will never turn a profit for them--better works of art in so many ways, through her tireless dedication to them. And has said she wants to work with me again after, again, not making much money off of me at all. Amazon's actions has the effect of shrinking the midlist. It forces other publishers to be more ruthless in terms of moneymaking, to take fewer chances on less diverse voices, just to compete.
posted by PhoBWanKenobi at 2:58 PM on December 15, 2014 [2 favorites]

Best answer:
Generally, they claim to be friends of authors but I suspect they see authors as tools to profit. I don't think they care at all about books being, say, good. Only profitable.
Amazon makes very little profit right now, certainly in comparison to their turnover. That's not to say they're dumping; they have some loss leaders, but all their divisions do make some profit overall last I checked. But they're much more focused on becoming the absolute number one company in their areas, driving out all competition by slashing prices to the absolute minimum.

Certainly they treat virtually everything as a commodity, and applies the 'stack em high, sell em cheap' model. To books, to widgets, to amazon web services (IT server hosting, which is a surprisingly large part of their business now) - and those cost savings are also achieved by being ruthless on their staff wages and working conditions, the prices they bully out of their suppliers, avoiding paying taxes wherever possible...

They're pretty good at destroying existing, higher profit models with ruthless efficiency and cost cutting. They have tried other ways in a few areas - like their tablet and phones - where they charge the same as everyone else and people kinda went 'hrrrm, maybe not'. They are very much the Walmart of book selling; pushing suppliers very hard to cut their costs, providing an attractive 'out' to authors(for now, at least) to attract them as exclusive sellers, driving prices down across the board to drive out competitors like your friendly local bookstore (and absolutely the big retail stores who don't offer the bespoke advice a real local booklover can).

One fear is that once they've driven out viable large competition, Amazon will then raise prices, while keeping their own costs low - given there'd be no viable competitors left, suppliers and customers would have no other middle man to turn to. This wouldn't probably work for ebooks given the low cost of entry, but may well do for printed books and some other areas.

Amazon are still basically at the internet startup stage of 'build a huge userbase, and the profit will arrive later'. There is rumbling that the shareholders won't let this go on forever, and Amazon will have to make more profit somehow. They certainly have built up a very large database on customers, and that's another fear; what might they do with that information to turn a profit without raising headline prices?

But the publishers hate them with a burning passion because Amazon has stripped away control of the book market from them. It's not the publishers setting prices; it's Amazon. It's not the publishers choosing who to promote or backlist; it's Amazon. It's increasingly not even publishers who publish new books, it's Amazon working directly with authors.

For authors who side with the publishers, who've grown successful under the old model, Amazon is the hurricane coming through to destroy their way of life. Amazon won't nurture new talent like the old publishers, with quality long-term editors and giving time to polish work, won't use the profits from a few bestsellers to prop up a whole host of works that probably will barely get back the cost of printing them.

For authors who've been spurned by the publishers, who couldn't get published except at a vanity press because if you don't know the right people, shake the right hands, the publishing world can be a very closed shop; for them, Amazon can be a way to break out and make a decent amount of money.

For customers; well, getting the same book cheaper and not having to drive to the store is pretty nice. And the Kindle is a very nice ebook reader, and very convenient, and often even cheaper. Nor do many like being told that 'you should be paying 50% more for books because we say so, and otherwise you're stripping out all our profit margins, and we really know how to spend it better than you do! Books are art, not product, and Amazon is destroying books forever by selling them cheaper than we want! So much so, we're all going to collude illegally with one of their competitors and raise prices together to what we think they should be.'

So yeah, Amazon is definitely causing publishers real nightmares. Whether you consider the old cosy, high price model of the publishers (and what they've pulled to try and defend it) a greater or lesser evil than what Amazon is doing probably rather depends upon your point of view. Neither side has clean hands.
posted by ArkhanJG at 5:51 PM on December 15, 2014 [9 favorites]

One other little irony in this battle is the publishers are the ones who've pushed hard to use DRM to stop people copying ebooks. I have a number of self-published and small publisher ebooks that have none, in .mobi format from the Amazon webstore, and/or epub from elsewhere. Yet that DRM also stops people easily taking their existing collections to another ereader*, so their own DRM is locking people into Amazon's market leading Kindle platform which is also trivial to use to get your books on virtually anything; as long as you're using the Kindle app or hardware. Adobe's alternative platform for epubs is fricking horrific in comparison.

* unless you're a nerd who can use the appropriate software to strip that DRM of course. Is it still illegal in the US to tell people how to do that for their own books? I lose track of the changes to the Library of Congress exemptions.
posted by ArkhanJG at 6:08 PM on December 15, 2014 [1 favorite]

Publishing has never been a a high-margin industry. I haven't worked in book publishing for 10 years, and back then it was Barnes & Noble (and Borders to a lesser extent, until they imploded, and Books-a-Million, who never paid their bills) who were the drivers of sales. They mainly wanted publishers to pay for good placement in their stores. Ingram was another huge player. They're a wholesaler. Stores make an initial purchase direct from the publisher, but reorders they will gang a bunch of publishers together and order from Ingram. Ingram keeps a lot of books from all publishers in their warehouse. They charge the same as the publisher would, but they give the stores 30 (or 60, or 90) day terms, and get 120 day terms from the publishers. All their profits come from the interest on holding the money from the difference in terms (at least, that's how it was explained to me). It's all about volume.

Anyway, the big companies who were market drivers in the past just rode along on the traditional business model. Everyone hates Amazon because they are so disruptive. They don't just want to get in on the game, they want to own the game. Now, I'm not necessarily defending the old model; authors (unless they're big stars) get screwed anyway, typically. Though I never saw much luxury in the business in general.
posted by rikschell at 7:24 PM on December 15, 2014 [2 favorites]

The publishing industry is going through the same kind of revolution that the camera industry did about ten years ago: the switch from analog to digital. When that kind of revolution happens, companies die. (Remember Polaroid?) Now it's happening in the book business, and traditional publishers are the ones whose heads are on the chopping block.

Needless to say, they're not very happy about that. But no one these days lights their homes with kerosene lamps, and no one rides horse-drawn carriages, and damned few people use film cameras. Soon no one will buy books printed on paper.

Amazon is leading that charge, and the old companies who are getting trampled are peeved. That's where a lot of the grumbling you've been hearing is coming from.
posted by Chocolate Pickle at 10:16 PM on December 15, 2014 [2 favorites]

Response by poster: Well...that's certainly a lot to think about. Thanks, everyone :)
posted by sam_harms at 11:18 AM on December 16, 2014

First - a disclaimer. I intensely oppose manipulative business practices used by corporations to avoid paying taxes. However, they are able to do this because the laws of many countries allow them to do so. The global business environment, along with the technology and tools that make worldwide business possible changes and evolves (or devolves, depending on your perspective) rapidly; governments change slowly.

Regarding tax avoidance, Amazon is hardly alone in structuring its business to place establishments so as to minimize the taxes they pay. As a consultant who has worked in several global corporations, I can attest that this is a very common practice. And it is legal. Many people would be amazed at how convoluted this gets. If we all refused to do business with companies that use these methods, there are a lot of things in our homes that we would be doing without. Probably most things.

Go to the website of any major corporation and look at where they have offices. Go to the website of one of the big accounting firms and read their "Doing Business in..." guides. Then google "tax havens" and read between the lines. Chances are that most of the corporations that provide the goods and services you purchase have business establishments/subsidiaries in tax-favorable countries. Corporations are not persons; they have no morality or conscience.

And yes, Amazon is a near-monopoly when it comes to books, and they use that power. And they have a strong foothold in the digital content world. Some of the ebooks I have purchased have clearly stated that the book does not have DRM at the request of the publisher.

Being a wage slave in the US is not limited to those making minimum wage at Walmart or an Amazon warehouse. It isn't much fun being a white-collar wage slave either. Think about it.

On the other hand, I use Amazon a lot. My first preference is to support local independent businesses. There are only a few of those that have the things I purchase and I am a loyal customer. I am also a long-time loyal Amazon customer. Why? 1, I never worry about the fact that they have my payment information. I trust them so much more than I do PayPal. Two, when something isn't right and I contact them, they have made it right. Three, their overriding principle is Customer Experience.

Do their changes in their interface often irritate me? Yes. I hate the fact that I cannot sort results alphabetically. Does this stop me from using them? No. I do my best to support the authors I read by buying their books. At this point I am usually buying the Kindle book because "who needs more stuff?"

Viewing Amazon as an online bookseller is only a tiny part of the picture. They realized a long time ago that they are an electronic marketplace platform, service and software provider.

What this all says really is that the same things that are objectionable about Amazon apply to most other large companies.
posted by Altomentis at 11:23 AM on December 16, 2014 [1 favorite]

The same things that are objectionable about Amazon apply to most other large companies.

The same things that are objectionable about Walmart apply to many grocery chains, probably, but because of their staggering size and market power, Walmart is a special cause for concern.

Likewise with Amazon - they aren't the only company with online sales backed by a poorly paid and badly treated warehouse staff infrastructure, but because of their market power, they are worth extra scrutiny.

(My biggest personal objection to Amazon is that they have no taste. Really, once you step outside their curated bestseller lists, it's worse than a flea market with conflicting prices, random search results, and stupidly awful search filters. But yes, I'm still an Amazon Prime member, because sometimes, gifts and breakage replacements and diapers need to arrive in 48 hours and there isn't enough time for a trip to the mall.)
posted by RedOrGreen at 1:10 PM on December 16, 2014 [2 favorites]

Amazon is global, they do the same shit in dozens of countries. Take Germany, it's Amazon's second biggest market, with about 10.000 employees + seasonal warehouse workers, earning Amazon 14,2% (or $10.54 billion in 2013) of their overall global revenues. Amazon however reports lower sales figures and pays less than 2% taxes in Germany.

Now, if you order from Amazon outside of the USA you'll find them listed as Amazon EU Sàrl on the invoice. Amazon EU Sàrl (a Luxembourg company with 300 employees) then transfers most of the money to Amazon Europe Holding Technologies SCS, another Luxembourg company that does not employ one single person and is tax exempt. And that's not the end of it, the two companies move money back and forth in form of loans and royalty payments, and eschew even more taxes. In the end Amazon EU Sàrl barely made any money, some years incurred even (fake) losses.

Amazon is aggressive, and crushing their competition is part of the plan. Amazon rather incurs losses in order to grow than to lose out on potential sales. They figure they can survive longer than the competition. And because they are really good at the hiding money game, they can. Once they establish their dominance they are free to hike up the prices. Amazon already is the most influential retailer in many places.

You might be interested in the Luxembourg Leaks - the documents show how Amazon pays almost no taxes for its non-US earnings
And here is a lot more info regarding your question: wikipedia.org/wiki/Amazon.com_controversies
posted by travelwithcats at 4:20 AM on December 28, 2014

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