19 November 2017

How the Book Business Dug its Own Amazon Grave

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Michael Wolff, USA TODAY:

"Books, perhaps not surprisingly, are the business of second-class businessmen, who twice in the last generation have lost control of their fate to retailers, allowing them to pretty much dictate pricing terms and product specifications.

In the first go-round, the power passed to Barnes & Noble, the mall outlet that morphed into a chain of stand-alone book superstores, devastating independent sellers and, effectively, turning books into tenants in expensive real estate (instantly evicted if they failed to pay the rent). In the second — subsuming, for all practical purposes, Barnes & Noble and the rest of the book retail trade — power passed to Amazon, which changed not only how books are bought, but also, using its Kindle as further leverage, the form of the book itself.

These changes, and this power grab, have been of such magnitude and relentless progression that it seems somehow churlish, and hapless, to object now. But suddenly, there is an inkling of an uprising against Amazon as it, without public relations regard, tries to enforce its pricing mandates on Hachette, smallest of the big publishing houses — and as Hachette resists.

To date, the various efforts on the part of the business geniuses in books to deal with the challenge first from B&N and then Amazon have been a bust. This has included, most notably, the book industry's efforts to align with Apple against Amazon, which resulted in antitrust prosecution by the Justice Department and a victory for Amazon.

Amazon, ever-more heavy-handed in its tactics, yet remains popular, if not beloved, among consumers — at least those who do not work in the book business — for its one-click efficiency and loss-leader prices.

The book business, on the other hand, is steeped in inefficiencies and illogic, with few fans among writers, whose books it generally fails to promote and sell, or readers, who, amid endless consolidation, long ago lost any sense of the meaning of once-vaunted publishing brands and imprints (it's hard to rally behind — say again? — Hachette books).

And yet Amazon, evident to anyone paying the slightest attention, is a creeping totalitarian state. Its effort is to build a marketplace that will give it the most power to shape the behavior of its customers and suppliers. That is pretty much the definition of "platform," that new word that denotes ultimate commercial and personal control. The stock market gives a platform vast funds to buy consumers and to integrate them into it — you become part of the system.

Indeed, Amazon can be abusive in its tactics (it is openly making it difficult to buy Hachette books) and reckless about its PR because its central proposition is to lower prices, whereas Hachette seeks to raise them — or at least maintain them.

Among the cognoscenti, Amazon commands great awe as a "disrupter," that is, an enterprise that harnesses technological efficiency and outsider ambition to undermine established businesses, cultural assumptions and traditional ways of life. In the up-to-the-minute view, all disruption is good because it comes at the expense of established power — even though it makes Amazon itself ever-more powerful, more powerful, arguably, than the power it disrupted."

Click here for the full article in USA Today.

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