The Department of Justice is not the only regulatory game in town: publishers and others convinced of Amazon’s predatory behaviour and the DoJ’s wrong-headedness would do well to look to the Federal Trade Commission in Washington and to each of the 50 states’ individual anti-trust enforcement mechanisms for recourse to reassert balance and ensure a future for a book business in which books are not simply regarded as a pure commodity where the lowest price is all that counts.
That suggestion, by author, Columbia Law School professor, and net neutrality advocate Tim Wu was the single most unexpected, pragmatic, and welcome takeaway from the Amazon-Hachette crisis panel organised last night (1st July) by William Morris Endeavour partner Tina Bennett, whose author Malcolm Gladwell happens to be one of the most prominent authors under the Hachette roof.
Having felt an “ominous silence” from inside the business, Bennett decided to pull together, very quickly, under WME and New York Public Library joint auspices, what she described as a “loya Jirga for book people".
"It’s as though a loved one was being operated on in a room that you can’t enter; someone must be in the room to represents the needs of the author,” she stated at the outset.
Seventy-five minutes of panel discussion and Q&A moderated by Bennett followed, featuring Wu, mega-selling author James Patterson, Grove Atlantic publisher Morgan Entrekin, attorney Bob Kohn, political theorist Danielle Allen, and lawyer David Vandagriff. Amazon refused to send any of its own staff, but asked Vandagriff to attend and paid his airfare, and not surprisingly, he did largely function as a kind of Amazon apologist.
Asked by Bennett to assign a number from one (business as usual) to five (we’re facing a five-alarm fire) for the current situation, Kohn, well known for filing an amicus brief arguing for the agency agreement during the DoJ litigation, chose five: Amazon is “trying to delete the copyright law, to become a huge vanity press [controlling everything] when it’s [succeeded in making] both major and smaller, independent publishers gone.”
Allen and Wu chose four, Allen seeing it as akin to the situation the American colonists faced just prior to the War for Independence when the unfair burden of the British Stamp Act would have made newspapers go out of business, and Wu likening Amazon and other internet giants as “adolescents” who have been “in a bubble” and are now finally encountering the rest of the world. They need to “grow up” beyond lower prices, he argued.
“If adolescents don’t learn manners, they can be extremely dangerous creatures,” Wu warned. “Many tech companies congratulate themselves on efficiency,” but if Amazon cuts publishers “so close to the bone, you will see an undersupply of books.” In the “life cycle of information monopolists,” dominant companies in the early days are “good and innovative,” but not unlike political leaders,” Wu went on, “a crucial moment comes when a company stops investing in making things better for consumers and starts to defend itself against competitors.”
Once upon a time Amazon gave publishers a “deserved kick in the pants,” Wu continued, but now they are reaching the point where they want to make themselves into an insurmountable fortress. “We thought search gave relevant results, but have learned that that’s not true- it’s always been a little bit crooked. Amazon has placed itself at risk of breaking its bond with the consumer.”
Patterson, describing himself as being a “wounded gazelle,” chose three. So did Entrekin – for right now. “Tonight is not a crisis. You can’t discount how Jeff Bezos has made the transition to digital possible.” But for the future, Entrekin placed the danger level as five: we’re seeing concentration in the fewest hands ever in publishing history.”
Vandagriff, who argued throughout the evening for the advantages Amazon has brought to certain independent authors, was alone in choosing a one.
Patterson, Wu, Entrekin and Bennett herself argued forcefully for the role of publishers as enablers of literature who don’t just back already proven sure bets, but still take chances on developing and nurturing unknowns and providing the r&d money that enables what Bennett called “heroic nonfiction” authors like many of those she represents to live while writing their books.
“Publishers could make more money just publishing the kind of junk I write – but in fact they don’t make a lot of money. My great fear is that if they get squeezed, they won’t have the money to bring authors along,” Patterson asserted.
Bennett raised the notion that publishers are doing themselves no favour by keeping ebook royalty rates at 25% with only rare exceptions (Entrekin is one – he pays a standard 30%). But Entrekin pointed out it’s not as simple as that: look at the royalty percentage in context of the total author income, including the advance.
As the evening wound down, Kohn took a different angle and went one step further, asking why Amazon should be getting 30%, more than most authors receive. If Amazon, Apple, B&N et al essentially are acting as selling agents for the author, then shouldn’t they receive an equivalent to the agent’s cut, namely 15%?
It was a rare panel where such ideas floated up to the surface so brazenly. Or, as the NYPL’s Paul Holdengraber put it, Bennett was a “magnificent instigator not for the product, but for the excellence of the book.”