Roundup: Intelligent Debate in the Amazon Hachette Media Circus, Redux

17.10.2014 Nate Hoffelder 11 Comments

While many writers aspire to writing a piece which shifts debate and sways public opinion, sometimes we end up with a piece that leads to less a chorus of agreement than a chorus of people telling us we’re full of it (been there, done that, and would do it again if I could figure out how).

Franklin Foer wrote one such piece in The New Republic last week. In calling for Amazon’s monopoly to be broken, Foer inspired contrary editorials in several major publications. A few days ago I rounded up several responses to his piece, and today I am back with more.

While I am sure that some readers are beyond tired of the ongoing media circus surrounding the evil Amazon, I find it newsworthy that The Boston Globe, Washington Post, and The Atlantic all responded with columns which debunked Foer’s call to the barricades. (Even the BBC weighed in, but since they didn’t say anything original I won’t be quoting them here.)

To start, Derek Thomson took to his keyboard last week to write a witty rejoinder in The Atlantic:

But if Amazon is a retail monopoly, then the word monopoly has no meaning. E-commerce is less than 10 percent of American retail, even after you take out gas, food, drinks, and building supplies. Amazon is less than 20 percent of American e-commerce. Put it together, and you are talking about a profitless company that commands less than 1 percent of its market.

If 1 percent of total sales qualifies as a monopoly, there are a lot of surprising monopolies out there. With 2.5 percent of smartphone sales, Windows Phone is flirting with a monopoly. With 2.9 percent of soda sales, National Beverage, the makers of Shasta and Mr. Pure, is working on its own monopoly in the U.S. soft drink industry. If Amazon Must Be Stopped, then Shasta Soda really, really must be stopped.

It’s a perfect bit of irony that the same day The New Republic published its Amazon cover story, the Wall Street Journal reported that Bezos is opening a brick-and-mortar store in Manhattan to compete with the brick-and-mortar industry that it is supposedly destroying.

Why is Amazon opening a store? Because that’s where people buy things. For all the convenience of e-commerce, retail is still dominated by ambulatory humans browsing shelves and sales racks, passing merchandise over a counter, and walking out of doors with bags.

It would seem that the continued misuse of the word monopoly by Amazon’s detractors is starting to get attention, and not in a good way.

It’s drawing the ire of lawyers (never a good idea), but it is also getting pundits outside of the book world to look at the ongoing media circus and apply logic and reason. Again, not something that Amazon’s detractors want to happen.

For example, Alex Beam wrote this in The Boston Globe yesterday:

I’m also not the first to point out that, in battling the French conglomerate Hachette over e-book pricing, Amazon isn’t exactly kicking sand in the face of a 96-pound weakling. Hachette has profit margins of over 10 percent on $2.6 billion of annual sales. It’s not exactly running a writers’ cooperative, if you gather my drift. How did it get to be the good guy?

What are Amazon’s sins? It has changed the terms of trade in BookWorld, and the Establishment is ticked off. Amazon loves its customers — hey, I’m a writer; they are my customers, too — and it loves to shake up marketplaces. By championing self-published authors and providing them with an efficient, online marketplace, Amazon has shrewdly incited a range war between the Manhattan-centric minions of Big Lit, and the diffuse guerrilla armies of do-it-yourself writers, whose names often pop up in Amazon’s aggressive web promotions, such as the Kindle Daily Deal.

And he’s not the only one to take issue with the illogic of Foer’s piece. On Wednesday of this week David Post skewered Foer in The Washington Post. After first pointing out how it was nonsense to argue that publishers can’t compete with Amazon, Post goes on to add:

Let me get this straight:  we should break up or somehow cripple Amazon – Foer mentions a couple of ideas for doing so, including “strip[ping] Amazon of the power to set prices [or] depriv[ing] it of the ability to use its site to punish recalcitrant suppliers,” though he acknowledges that those ideas “feel like tentative jabs at the problem, rather than coherent solutions to it” – so that publishers can set higher prices for their e-books, which will allow them to continue the “strange inefficiency” of giving advances to authors?

That’s a lot of nonsense to pack into one paragraph.  Even if one believed that author advances are “the economic pillar on which quality books rest,” and a “great bulwark against dilettantism” (Foer didn’t really mean it when he wrote that they’re “the great bulwark against dilettantism” – don’t publishing houses have editors for that purpose?), why does Amazon’s behavior threaten that practice?

Sorry for the long quotes, folks, I am just deeply enjoying seeing this kind of nuanced discussion outside of the book world.

And that’s why I am going to limit myself to but a single additional quote. Reihan Salan responded to Foer’s piece not with an article which took a side but with a piece that looked at why Amazon was so good at disruption. From Slate:

Innovative entrepreneurship is exactly what the American economy desperately needs. You might think that the American innovation system is in great shape because large numbers of highly educated young people are flocking to Silicon Valley to create their own smartphone apps. You’d be wrong. The problem, as Thiel argues, is that although we have large numbers of copycat entrepreneurs, we have very few who are willing to take on the biggest, most difficult challenges. If Amazon weren’t a relentless competitor that threatened the very existence of dozens of hidebound retailers, consumers would endure the same high prices and mediocre service, and shareholders in the various not-Amazons of the world would be sitting pretty. Amazon is the living embodiment of what the mostly forgotten economist Joseph Berliner famously called the “invisible foot” of capitalism.