I have refrained from commenting on the ongoing dispute between Hachette and Amazon mostly because it’s boring. Watching two for-profit companies compete with each other for the right to exploit authors as much as legally possible is not my idea of entertainment. If anything, such efforts have become routine in both market segments as evidenced by the Justice Department’s conviction of Apple and a gang of publishing houses on price-fixing charges last year. Because Amazon’s market position is so dominant it doesn’t need to conspire with anyone to fix prices, but that’s the only way to describe what Amazon is trying to do with Hachette, and what it tried to do several years ago with MacMillan. (Detailed explainer here. Latest update here.)
To be clear, Amazon has that legal right. It can refuse to sell products at prices it doesn’t agree with. It also has no obligation to be nice simply because of its market dominance, which verges on monopoly. On the other hand, Amazon’s strident position is obviously predicated on the fact that Hachette can’t sell as many books via other pipelines, and Amazon knows this, so it’s playing hardball when it might otherwise have to take competition into account.
What continues to amaze me is that the main publishing houses (and record companies, and film companies) have not yet banded together to create an independent — and perhaps even not-for-profit — company that could handle online and offline distribution of everything from novels to movies to music. Even if the enterprise only broke even it would would necessarily create competition for Amazon that would improve the negotiating position of those content producers. (I don’t for a minute see this is artist-friendly given the history of predatory practices in those industries, but am simply agog that they are not doing this in their own best interests. There is nothing new to be learned about ordering and distributing products using the web, and I am confident there are plenty of ex-Amazon workers who happy to join such an organization. All the content producers have to do is drop money and they’re in business.)
My main reason for believing the time might now be right is that the once impenetrable branding of Amazon seems to finally be splintering. What used to universally be considered a customer-friendly site is now, more and more, being seen as a bully, opening the door for other players in that space — particularly if the cost of goods is no more than what you would pay from Amazon.com. Given that publishers and other content distributors can set prices on their own site at or lower than those on Amazon, yet pay none of the percentages, fees, kickbacks or other middle-man costs, I’m not sure how Amazon could compete over the long haul, and at the very least I think its negotiating position would be weakened.
If that also allowed independent authors to use the same pipeline for a reasonable percentage or fee — as is already the case on CreateSpace (an Amazon subsidiary) and Smashwords — that in turn would be of real benefit to writers who didn’t want to sign what are often exploitative contracts with publishers. Win-win.
— Mark Barrett