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David Leonhardt Wants to Save Barnes & Noble, But Has to Make Up Stuff About Amazon to Justify It

The NY Times has published some stinker editorials lately (Ross Douthat’s piece springs to mind), including an editorial by David Leonhardt that was published on the NYTimes site yesterday.

Leonhardt wants to save Barnes & Noble by punishing Amazon for being a better bookseller. He wants regulators to step in and use antitrust law to spank Amazon and (I think) force Amazon to raise prices. He isn’t clear on that point, and Leonhardt also fails to explain how this would help Barnes & Noble given that consumers have shown they do not want to shop at the failing retailer, or why B&N deserves this special treatment.

The piece demonstrates muddy-headed thinking all around, including in its litany of Amazon’s supposed misdeeds, where Leonhardt  tosses out falsehoods and industry myths left and right.

Leonhardt  starts by claiming that Amazon "has never run into antitrust scrutiny" when it has been investigated at least once (during the Apple price-fixing investigation, and possibly a second time when the Authors United astroturfing group was making a spectacle in 2014 through 2016).

He then claims Amazon is losing money on book sales when in fact a DOJ investigation showed Amazon hadn’t been losing money on ebooks at the time the DOJ charged the Price Fix Six. (There is zero evidence on Amazon’s print book revenues one way or the other).

Leonhardt goes on to blame Amazon for Borders’s bad business decision and failure and for publishers abandoning mid-list authors. He is also under the mistaken impression that there are fewer professional authors now than before.

It’s really hard to take Leonhardt seriously after he made that claim; it shows that he didn’t do his research.

The thing is, there are more pro authors now than before Amazon got into ebooks.

Amazon has in fact created opportunities for authors to bypass gatekeepers and bring books to market. Authors get to keep a greater share of the revenues than if they signed with a publisher, which means there are more commercially viable books than before (and not less, as Leonhardt believes).

All in all, this piece is little more than the same old recycled ADS (Amazon derangement syndrome) tripe that we have seen before from the legacy publishing industry. It accomplishes nothing more than showing no one can make a good argument that Amazon is anything more than just unpopular among a small segment of the publishing industry whose sinecures have been disrupted by Amazon.

What Leonhardt is really saying by repeating the gripes of the legacy publishing industry is that  Amazon is guilty of"felony interference with a business model", which is another way of saying that Amazon’s disruptions have cost legacy publishers revenue, status, and marketshare.

As much as they may wish it were, this is not actually a crime.


image by THE Holy Hand Grenade!


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Marion Gropen May 7, 2018 um 12:18 pm

He’s talking about losing money on print book sales, not ebooks, I think. And they do take a loss on many such items.

This isn’t a case of ADS. Amazon controls every author or publisher’s access to readers. That means that they not only can, but are legally and ethically obliged to, drive profit margins down until the remaining pros leave the field.

The **only** way that they would be allowed to fail to do this would be if they could make the argument that they were getting some other business benefit from the continued existence of authors and publishers that made a living from their work. And that seems to me to be unlikely.

Nate Hoffelder May 7, 2018 um 12:28 pm

"Amazon controls every author or publisher’s access to readers. "

I attended a Meetup yesterday where Robin Sullivan shared some of the marketing tips she picked up while being her husband’s business manager. She has a mailing list of 23,000 names. How is that not access?

Paul May 7, 2018 um 1:31 pm

I thought he was using Amazon as an example of how anti-trust regulations have failed because they assume that if the consumer is getting a cheap price, then it doesn’t matter if competition is wiped out?

Its worked really well for airlines (no it hasn’t).

So despite some flaws in his argument there is a valid point here but not simply because of Amazon but because of the mockery of current competition standards in the US (see T-mobile and Sprint tie up).

Marion Gropen May 7, 2018 um 1:40 pm

You’re absolutely right.

Marion Gropen May 7, 2018 um 1:39 pm

That’s marketing. But if you think that most of those people will buy directly from you, the publisher, you’re flying in the face of a lot of data. It **might** be true that you’re different than everyone else, but it’s not likely.

You can reach out to those readers who already know you, but to be discovered by new readers, and to make sales to most of the ones you reach, you need to go through Amazon.

Mark Ritchie May 7, 2018 um 2:14 pm

Wow. Your analyses sometimes don’t make much sense, but calling Douthat’s article "pro-rape" shows me how loony tune your mind really is. Consider me unsubscribed. I have enough idiocy in my life.

Nate Hoffelder May 7, 2018 um 3:32 pm

I’ve removed the reference – I still think it’s apt, but I don’t feel strongly enough to spend time arguing the point.

Nate Hoffelder May 9, 2018 um 8:52 am

I thought about this some more, and –

This is the hill you want to die on? Really?

What a waste.

The thing about Douthat is that he did something vile in that editorial. He took a mental illness and discussed it as if it were a philosophy. He legitimized it, and that is absolutely disgusting.

Incels don’t need sex bots; they need therapy. They also don’t want sex bots; they want to control women. Their position is pro-rape, and describing Douthat’s piece as such is a little inflammatory but not way outside the bounds.

And you want to defend Douthat?

Okay, but I suggest that you reconsider.

Frank May 7, 2018 um 2:49 pm

Douthat’s recent Times Op-ed is about saying that a generation of men think they’re entitled to sex. Then, he claims this problem can be answered only with technologies (like sex robots) to fulfill that sense of entitlement. This article is still bad.
Douthat is a Catholic conservative, pretty much the opposite of a pro-rape type of person.

Allen F May 7, 2018 um 2:49 pm

Ah, this old thing again. 😉

B&N killed many a small bookstore as well as a few chains – it’s their turn to fall. Walmart killed many small shops, where’s the crying over that spilled milk?

TPV has a few also claiming Amazon should be gone after for anti-trust – yet when asked 'what anti-trust thing' Amazon is at fault for they remain mute.

@ Marion, 'Who' do you think is 'losing' money on print books? The publisher? No, Amazon pays them their full asking price (usually about 50% of the suggested price). The author? No, they’re paid by the publisher – though many publishers play games on those payments – but that’s not Amazon’s fault.

Or are you thinking about those super-cheap books? Ah, those are mostly from third party sellers that bought the remainders from – wait for it! – publishers that printed more books than they could sell at there asked for price and sold in bulk for pennies – and as they were sold 'deep discount' the authors got not a penny from the sale. Still not Amazon’s fault.

"Amazon controls every author or publisher’s access to readers."

Incorrect. Readers have found it easier, faster and cheaper in most cases to shop Amazon rather than wasting the time driving to a store that may not even have what they are looking for. And have you checked out B&N’s website? It’s almost like they 'don’t' want you to use it.

Amazon is just the latest online walmart – with a better customer experience. B&N and the rest need to adapt or die, many of them refuse to adapt and will die.

Oh, one other thing to consider and I’ll get off my soapbox. 😉

Our current prez hates Amazon because the Amazon CEO also owns a paper that makes fun of him. With all the noise and bluster Trump puts out, if there was anything – anything at all – that he could throw at Amazon, don’t you think he would have done so by now? Amazon is following all the rules/laws all the other companies have to follow, they’re just showing how much better those other companies could be doing if profit wasn’t the 'only' reason to be in business. And Trump knows it, that’s why all he can do is bluster. Something else he knows is that any rule law he tries to get passed will hurt other companies more than they would Amazon. Amazon may screw up someday, but right now Jeff seems to be doing a pretty good job of it so far.

Marion Gropen May 7, 2018 um 3:08 pm

Amazon has used prices below the amount paid to the publisher (aka loss-leaders) to pull customers into their system.

Look — everyone knows and AGREES that Amazon does a better job of merchandising and of serving customers than any other retailer.


None of that means that Amazon needs to let authors or publishers continue to make a profit. They’re already trimming margins. Just ask the people who want to print through LSI.

They’re already slowly trending downward (with enough gyration around the trend line that it’s hard to see the line) on the per page payment for KU reads.

They’re already punishing vendors in various categories who don’t give them an exclusive, or extra "marketing" payments.

Do you REALLY think that they’ll stop where they are now? As they become more and more and more powerful in the book business, and as they need book publishers and authors less and less, because we’re a smaller and smaller part of their product mix?

WHY would they do that? It’s **illegal** for them to stop. Amazon’s managers have a fiduciary duty to take us to the cleaners, if and as they can.

It has nothing to do with being anti-indie author — I’m not that at all.

It has nothing to do with ADS. I love dealing with Amazon as a customer.

It has nothing to do with anything other than wanting AUTHORS (and editors and designers, etc) to be able to continue to make a living from their work.

And in that respect a publicly traded monopsony is an existential threat.

Allen F May 7, 2018 um 4:01 pm

And that old 'what if' thing too.

Until they 'do' something illegal there’s nothing to worry about. And if they 'do' do something illegal we have laws to nail them with.

KU was and still is an experiment to see if readers and authors would buy into the idea, the moment either side stops KU will be no more.

As to 'authors' making a living from their work? Amazon has allowed more authors to manage that than the publishers ever have. Before you try to call that bullshite, please do recall that most (I think it was figured at over 99% a one point) submissions to a publisher return the author $0 and a rejection form letter. Yes, trad-pub brag about the six or seven figure deals they make with sports stars and such, but you low-end author that wasn’t rejected is being offered $3-5,000 for selling all rights to their work, hardly that 'making a living' you’re looking for.

Oh, and your editors and designers may want to go indie as well, the numbers I’m hearing suggest the publishers aren’t paying them all that well either.

One nice thing Amazon and other online ebook sellers have allowed is authors being able to get their stories out without trad-pub getting in the way. Trad-pub has only so many 'slots' so has to decide which stories to offer? No problem, Amazon has lots of web-space for as many stories as you wish to self publish. Trad-pub taking 2-3 years to get a story out? No problem, if you think your story is ready you can put it up on Amazon and your readers will be able to find it (Amazon says 'within 72 hours', but I’ve had feedback from readers in under 6.) An added bonus with online ebook sales is 'if' an error made it past you and your editor/proofreaders it can be fixed and Amazon will update the sold copies the next time the readers log their kindles in.

As a self publisher, I still have complete control over my stories. Yes, I do have to find/pay an editor, but I’m not bound to what they decide – unlike a trad-pub writer who might end up with an editor that doesn’t understand their style at all. The same for a cover, though there are a lot of options out there these days from stock shots to making some pretty good one-off covers using some of the 3D art programs out there (I’d suggest writers thinking about this check out for just a sample of what one might do.)

I’ve got two ebooks on Amazon (not in KU as they are on other sites as well.) As a no-name, sales are slow, but they are there, and I’d still be waiting for the first to come out if I’d gone trad-pub (and if I hadn’t gotten 'rejected'! 😉 )

YMMV as the kids say, but I’m going to make me some hay while the Amazon sun is shining.

Marion Gropen May 7, 2018 um 6:23 pm

You are making a fundamental error: Amazon is a RETAILER.

When you upload a book to their Kindle store, YOU are the alternative to a traditional publisher.

And what hurts publishers hurts you, because YOU ARE A PUBLISHER.

Amazon is already doing things that hurt self-publishing authors, including forcing them to double their discount on short-discount print books (from 20%, short discount, to 40% trade discount), and forcing them to use CreateSpace instead of LSI.

Is it illegal? No. Is it harmful? ABSOLUTELY.

And, I didn’t restrict my comment to IN-HOUSE editors, etc. I was talking about free-lancers as much as employees. If the margins go away, as they are beginning to do, then first we’ll all be getting dreadful, template-based designs and killing off content editing in favor of a pass for grammar, usage and spelling. Then, as margins fall faster and farther, we’ll lose even the copyeditors and the pros using templates.

[Just FYI — that 2-3 years is because they need that long to get the long-lead reviews and get you into the pipeline for big chain buys and library jobbers — skipping that does cut your sales for this book and all future ones. It’s often worth skipping, if you crunch the numbers as an indie, but it’s not something that you should automatically assume is a good thing.]

And amateur covers are a wonderful thing — if your book will never sell more than a thousand copies total — or maybe two. But if your book has legs, it’s a penny-wise, pound-foolish choice.

So, if you’re a pro and an indie, you may want to think about what I’m saying: which is that you need to support and push alternatives to Amazon.

They’re great for consumers — for now — but they’re dangerous for you.

Allen F May 7, 2018 um 6:50 pm

What is this 'force' you speak of? The one where if you don’t like their rules/rates you are free to go sell your stuff elsewhere? Hate to be the one to have to explain it to you, but walmart does the exact same thing and that’s why you can’t buy a Snapper mower there, Snapper refused to sell at walmart’s price-point. Or are you saying it’s okay for anyone but Amazon to set the rules those selling in their store will play by?

Oh, and as for poor editing and covers, I’m guessing you haven’t read too much trad-pub because that seems to be one of the places they’ve cut back with poor if any editing and stock covers (not that the author sees any of that money.) And of course it ignores the option the indie has of fixing/recovering a book later if they think it needs it – with a trad-pub contract you have no say when their cover for your space opera has a cowboy and their horse on it. 😉

(Another advantage of doing or having your cover done is there are no risks that someone else has copyright on it, something even trad-pub books sometimes run foul of.)

And I do offer my stories at places other than Amazon – but Amazon is where my readers are BUYING my stories from. It would be stupid to not be offering my tales where the readers can be found.

Marion Gropen May 7, 2018 um 8:18 pm

Allen, you’re so stuck on resenting traditional publishers that you’re overlooking the fact that you are one!!

You are in exactly the same danger that they are. And from the same forces.

Bigger publishers are richer targets, and they’re getting scalped first. That’s the ONLY difference.

And even with that, as I said, Amazon is already squeezing the bigger author-publishers, the ones who have significant print sales, as well as ebook sales.

I know you want to make this about the big bad trad publishers. It’s not. Publishers are publishers, and you are in the exact same barrel as any other publisher.

Strange as it may seem, now that you have joined the ranks of your (apparent) enemy, your interests align with theirs.

Think about it.

Allen F May 8, 2018 um 4:00 pm

"Allen, you’re so stuck on resenting traditional publishers that you’re overlooking the fact that you are one!!"

Nope, self publisher, BIG difference. 😉

While my ebooks are on Amazon, they are also on a couple sites that you can read for free. (which is the reason I can’t play in KU.)

I got lucky in a way, wasn’t really thinking about doing more than publishing my tall tales on a couple sites and I got into a couple writers' forums like TPV before deciding to 'publish'. There I got to watch other writers watch and comment about the death of Borders and all the trad-pub games being played by the agents, publishers and bookstores. Oh yeah, and the rise of Amazon in the retail and book business.

Right here and now Amazon is doing the better job of selling my ebooks and those of others. B&N had its day, rather than morn its loss why don’t you point us at the thing that will come after Amazon?

Marion Gropen May 8, 2018 um 6:06 pm

@Allen F: How is a self-publisher different, strategically, than any other type of publisher?

I wish I could figure out how to make someone or some thing else strong enough to compete with Amazon. I have no idea where or how that competition will occur.

Although I do recommend Mike Shatzkin’s latest entry on his Idealog site for a truly sophisticated understanding of where we are, how we got here, and what might come next.

Allen F May 8, 2018 um 8:24 pm

You might want to go over to TPV and help the poor guy out, they’re having way too much fun with Mike Shatzkin’s latest 'entry' … 😉

Peter Winkler May 7, 2018 um 8:58 pm

"but you low-end author that wasn’t rejected is being offered $3-5,000 for selling all rights to their work, hardly that ‘making a living’ you’re looking for."

Only a very naive writer or one who is not represented by a competent agent gives signs away all rights to a publisher.

Allen F May 8, 2018 um 3:39 pm

Considering trad-pub is getting more and more into saying 'take it or leave it', there’s really little choice.

And you did get a chuckle out of me with the 'competent agent' bit, most of whom tell the writer to 'take' the bad contract – because if the writer says no the agent gets 15% of $0 and they’re only in the 'agent' business to make money. (And yes, there are those type out there.)

Marion Gropen May 7, 2018 um 8:20 pm

Oh, and of course Amazon has the right to set its own terms. The only problem is that there aren’t significant alternative retailers through which you can sell your books. Even if one has the sales volume that makes selling through trade channels viable, those channels are drying up quickly.

THAT is why monopsonies are as dangerous as monopolies.

Allen F May 8, 2018 um 3:41 pm

"The only problem is that there aren’t significant alternative retailers through which you can sell your books."

And why is that? The answer is how you beat Amazon. 😉

Marion Gropen May 8, 2018 um 5:35 pm

The primary reason, as everyone admits, is largely because Amazon does online retail better than anyone else.

The second reason is that size has advantages, and they use their advantages strategically, too.

No one is saying that Amazon is evil. No one is saying that they fail to deserve their primacy.

The ONLY issue is that they are OBLIGATED by law and ethics to seize the profits of their vendors (authors and publishers), should they ever have enough of a customer share to do so.

Allen F May 8, 2018 um 8:18 pm

Ah, wall street would wish so, but have you noticed how often Jeff doesn’t do what wall street hopes/expects him to do?

And aren’t you talking about every other company out there – including publishers and B&N? If so then there’s no place to go – so just what are you suggesting we do?
(Amazon can’t be that bad if no other choice is better.)

Barry Marks May 7, 2018 um 8:17 pm

I think most people can agree that the reason for B&N’s losses isn’t so much about Amazon as about B&N doing a poor job.

As for Mark Richie’s comment, you do a lot of name calling in your various articles and I wish you would try to refrain from that and simply report what’s going on and give us your thoughts about it in a polite and courteous manner. I often agree with your opinions, although not always, but even when I do the mean spirited presentation may disturb me.


Chris Meadows May 8, 2018 um 9:53 pm

Eh, if Nate wasn’t irascible and inflammatory, he wouldn’t be Nate.

He’d probably be me. And given that there’s only room for one me around here, I’d rather he wasn’t.

Mark Williams May 8, 2018 um 4:40 am

Marion is spot on on one key point here – Amazon is, for indie authors, a RETAILER, and failure to make that distinction creates all manner of faux arguments, as per this thread.

Allen F.: "Before you try to call that bullshite, please do recall that most (I think it was figured at over 99% a one point) submissions to a publisher return the author $0 and a rejection form letter."

Allen, can you tell us how many submissions to A-Pub get accepted?

As a publisher Amazon is every bit the gatekeeper that PRH or HarperCollins is. The publisher decides what gets published, and how.

Take Allen’s assertion that trad pub dictates covers for indie authors and Amazon sets us free. Or the commonly made assertion that Amazon pays 70% royalties.

Tell that to A-Pub authors. Sure, Amazon’s contracts are more author-friendly than most other big publishers, and pays more (but nowhere near 70%) but as a publisher Amazon dictates the terms just like any of the Big 5.

As indie authors Amazon does not pay us a royalty at all. It pays us what’s left from the sale after it takes its commission and costs like delivery charges. It’s no different from selling on eBay.

Allen talks scathingly about publishers paying advances of $5000, rather overlooking the point that that’s exactly what Amazon’s Kindle Scout publishing programme was offering while it lasted.

Allen talks about complete control, rather ignoring the many restrictions and deterrents Amazon imposes on what authors can do.

Can we list our title at $0.00? Only for five days if we are exclusive or through chance price-matching if we are not. Our pricing strategy is determined by the royalty structure. We are deterred from certain prices by lower "royalties" and hit with lower royalties in some Amazon outlets if we are not exclusive. Complete control goes out of the window when certain benefits offered by Amazon are only available if we are exclusive.

Amazon has plenty of rules a about how we present our work (metadata, etc), about what content is allowed to be sold, about the quality of that content, and what is permissable on covers.

Once we move into other Amazon publishing systems we have even less control over pricing, as per CreateSpace or ACX.

None of which is a criticism of Amazon, just a reality check. Confusing the role of Amazon as a retailer with the role of publisher helps no-one.

Allen F May 8, 2018 um 3:43 pm

Oh, I wasn’t considering Amazon Publishing in my comments, only all the indie/self publishers using them as a retailer. 😉

Marion Gropen May 8, 2018 um 5:48 pm

In that case, why do you not see yourself as having the same interests as all other publishers?

It’s not as if the indie publishing phenomena (and there have been many stages of this, unfolding over 35+ years) has ever hurt mainstream publishing. All books are in competition, but publishers aren’t so much.

Allen F May 8, 2018 um 8:11 pm

"In that case, why do you not see yourself as having the same interests as all other publishers?"

Ah, maybe because I see myself as a 'writer' first? And that by playing in this self-publishing game I can reach readers all over the world without having to deal with some agent and a bad publisher’s contract?

Using Amazon as a retailer I have a lot more freedom of choice and control than I would penned into a one-way contract.

To each there own, but so far you haven’t shown us why B&N or the qig5 shouldn’t be allowed to lay down and die.
(And 'Because Amazon might turn bad' isn’t a good reason to prop up the already dead and dying …)

Marion Gropen May 8, 2018 um 9:38 pm

You ARE a publisher regardless of the blinders you choose to wear.

There is nothing better than Amazon — yet. But that would be why other publishers are asking that the DOJ consider the implications of Amazon’s power, and asking that the legislature consider modifying anti-trust laws.

Allen F May 8, 2018 um 10:21 pm

Not blinders, but still the captain of my own ship, unlike those that have signed contracts limiting their freedom and control of their works.

And the DoJ has looked into Amazon twice now and found nothing to charge them on.

And why would it be 'other publishers' asking this? They can show Amazon they mean business and pull their books – or wait, they could 'agency' their books like they did ebooks – lock the price that Amazon has to sell them at! That would level the playing field don’t you think? Amazon couldn’t sell the books from the publishers any lower than B&N could. (Too bad that means B&N wouldn’t be able to offer 'sale' prices either …)

The 'legacy publishers' hate the fact that Amazon sells so many of their books they don’t dare stop selling through Amazon. This means Amazon has a better idea of what’s selling where and why than they ever had, and Amazon’s 'best seller' lists are much harder to game than the ones in the NYTs.

Then there’s all those little indie/self-publishing bums like me, selling right up there with the big boys and girls without having to go through and give a cut of my book sales to any agents/publishers/consultants like legacy published writers did. That’s probably the big kicker, all those other options out there to catch a reader’s eye and the old middlemen don’t even get a sniff at that money and have no control over it.

And as far as law changing, any law that can hurt Amazon will hurt other businesses as well, possibly more.

I am the captain of my ship, able to set her sails and decide her course. I have little pity for those that even knowing the dangers sign on with skippers that rather than turn their wheels demand that the rocks they have aimed their ship at move out of their way.

If you are so tied to the old ways that you’re screaming for the rocks to move rather than at your captain to turn the bloody ship, then I fear you will sink with them.

Darryl May 8, 2018 um 5:22 am

@Marion. Your comments say so many things which cry out for refutation that it is difficult to know where to start. I have neither the time nor the inclination to address them all, so I’ll pick a couple of the worst.

Do you seriously believe that the interests of the Big 5 traditional publishers align with the interests of an author uploading a single book to Amazon? The Big 5’s interests don’t even align with those of many smaller more innovative publishers who have embraced the opportunities that Amazon offers.

I also feel compelled to ask you for the source of your assertion that Amazon loses money on print book sales. I’m not saying that they don’t lose money on certain titles, but am sceptical that they lose money on such sales overall.

You can define "significant alternative retailers" any way you like so as to attempt to justify your opinion. However, the plain fact of the matter is that there are alternative retail channels, both for ebooks and print books. Certainly there will likely be fewer such alternatives in the future, as obsolete models and bad business decisions continue to take their toll.

And yes, of course Amazon, just like any other successful business, may do evil things in the future as their competitors decline. Or they may not. Certainly their business model gives some hope that they may not, as they seem so far to prefer maximising their revenue rather than achieving the highest possible price. But even if they do, it is hard to imagine that they will be any worse than the Big Publishing oligopoly which has exploited their employees, authors and readers for so long.

And yes, Amazon is a retailer. But it is also a publisher. One of the biggest publishers, in fact. And getting bigger. The Big Publishing oligopoly so exploited authors that few could make a living. To say that Amazon does not need to allow authors (or publishers using their service) to continue to make a profit is true of any many businesses. In fact, it seems to me that Big Publishing’s failure to allow the vast majority of its authors to do so has greatly assisted the growth of self-publishing and will do so more in the future. Never have so many authors been able to give up their day jobs and make a living writing. Unfortunately, if Amazon does choose to drastically cut remuneration as its market share and power grows, Big Publishing has given it a road map showing just how far they can go. Or rather could have gone. If Amazon goes too far barriers to entry into the market for competitors are far less now, and such competitors can quickly appear. Much like Amazon itself did.

Marion Gropen May 8, 2018 um 10:54 am

@Darryl: "Do you seriously believe that the interests of the Big 5 traditional publishers align with the interests of an author uploading a single book to Amazon?"

In most ways, yes, I do. The Big 5 won’t get any benefits from killing off indie publishers, or from destroying Amazon. And won’t ALL publishers benefit from having one or two other big (online or otherwise) retailers become successful?

On Price Manipulations: I did NOT say that Amazon loses money on all print book sales. I said that they choose to lose money on **a number of** print book sales — and that they do so for many reasons.

Example: They buy print books at for a 55% discount off of list. Most ebooks are priced at 60% of the newest print edition’s list price. So how is it that Amazon is selling the print book for less than the ebook price? They have to have some costs for pick, pack, and ship, and for other warehousing and order processing. They **can’t** be making money on those.

On oligopoly busting: Amazon’s publishing operation treats authors exactly the same way that the Big 5 do.

The Big 5 were never an oligopoly. They never had that much market share for the book business as a whole.

Right before ebooks hit the scene, there were **100,000** active ISBN blocks in the US. Darned few of those belonged to the Big 5.

FICTION was more of an oligopoly, since it sold best in the mass market formats, and those had and have HUGE economies of scale and fiscal barriers to entry. But fiction is less than 25% of the business. And it was never a particularly profitable quarter.

Allen F May 8, 2018 um 4:18 pm

"The Big 5 won’t get any benefits from killing off indie publishers …"

Wrong again. They would love it if the indies could only reach their readers through them. Less competition for readers' eye’s and dollars, they get to decide what comes out when and for how much – and they get their cut of the profits!

Right now they can’t get a 'best seller' out there like they used to – there’s too many other (indie) books also coming out, and they are losing eyes/dollars to them.

"The Big 5 were never an oligopoly."

Maybe not by that definition, but they (not Amazon) were caught price fixing with Apple – or don’t you want to remember that bit?

And from what I hear, romance is even a hotter seller than fiction, and Amazon has help bust that gate wide open too.

Sorry but, 'They’re going to kill off all the bad players' isn’t a reason to go after a company doing something the consumers like/want more of.

Sean May 8, 2018 um 3:39 pm

"In most ways, yes, I do. The Big 5 won’t get any benefits from killing off indie publishers, or from destroying Amazon. And won’t ALL publishers benefit from having one or two other big (online or otherwise) retailers become successful?"

Yes. The problem is other existing e-tailors are doing a pisspoor job of it. They have neither the vision or willpower to see past the first few bumps they may encounter in getting such platforms built, and the leadership to support such efforts is, in a word, nonexistant. Thier business plan seems to be:
1. Build website
2. ???
3. Sell more ebooks than amazon!

And when it doesn’t happen a week after they go live, they shut it all down.

Barnes and Noble online operation could have become a solid competitor to Amazon. It won’t ever be as big as Amazon, and it probably would never move the volume of electrons Amazon does, but it could have become a successful competitor that was a decent source of revenue for the company along with the Nook. Instead their online operation got the bottom of the midlist author treatment: not enough time, or money, or willpower invested in it, and so it languishes.
Go ahead, buy a book on and tell me getting it downloaded to your preferred device and reading it in under a minute is as easy as doing it on Amazon.
Thats the sort of platform your going to need to compete with Amazon selling books, and until then, it’s just an exercise in futility.

Same thing could be said for Google. If there’s one company out there that can compete with Amazon in terms of search and reach, you think it would be Alphabet, but their efforts thus far have also been less than stellar. Heck, when is making you look bad, somethings not right….

Big 5 publishing wasn’t an oligopoly, it was a cartel, or the exclusive gated community all the right people lived in, and entrance was restricted to who they approved. And once you were in, if something happened and you no longer fit in their community, they kicked you out, but kept the deed. That most people entered willingly…well, some debates will never end.,

Yes, Amazon treats authors the same way that Publishers do, but there’s a difference: Amazon knows then end of the publishing chain is the READER. Has any legacy publisher ever acknowledged this?

Is Amazon a monopoly? Maybe, but then so are my local electric company, water company, and gas provider. Until they do something illegal, they are allowed to be a monopoly. Seriously, think your electric bill is to high and their service sucks? Try and change your provider…
The only way to break Amazon up is to prove that their practices are harming the consumer in some way. Which right now they aren’t. You have to prove what Amazon is doing right now is wrong, not what they may do.
Amazon’s lack of competition is not their fault. Plenty of people I have read over the years have told me that legacy publishers know what they are doing, know how to market, and know how to sell. If anything, the last ten years or so has shown readers is that legacy publishing is running out of toes to shoot off.

Legacy publishing knows what it needs to do to compete with Amazon. Not win, but compete. And, at the moment, it has neither the willpower, vision, or leadership to do it. And until it does, it’s best efforts are going to be complaining about the current status quo.

And, as someone who built a very successful business platform once said: Complaining is not a strategy.

Marion Gropen May 8, 2018 um 5:55 pm

Sean: "Legacy publishing knows what it needs to do to compete with Amazon."

THAT is the mistake. Amazon isn’t a publisher. They’re not competing with publishers.

Amazon is a RETAILER. Publishers aren’t supposed to be retailers. They (and you) sell books too and through retailers. (And yes, of course mainstream publishers have ALWAYS known and cared about readers.)

Amazon’s competition is OTHER RETAILERS. Which again, publishers not only are not, but aren’t supposed to be.

Amazon is in the distribution chain, not the supply chain, for authors, author-publishers and traditional publishers.

That would be why author-publishers' interests are the same here as traditional publishers' interests are. You’re in the same business.

Oh — and legacy is not polite. Yes, I know that computer folks use it to talk about the old programs upon which they must build, which must be replaced, or which must be worked around.

That would be WHY it’s rude to use that word about companies in your own industry.

Allen F May 8, 2018 um 9:14 pm

"Oh — and legacy is not polite."

Oh, I don’t know, like that old program, they can’t/don’t want to change to better run/operate in the new world they find themselves stuck in. Legacy kinda fits an old company doing an old thing in an old way that no longer works.

And 'legacy' also fits because all these indie/self-publishers are not how 'legacy publishing' was done. (And if B&N is a sample of how 'legacy retailers' did/do things it’s a good thing Amazon came along!)

Sean May 9, 2018 um 11:19 am


So you saying Mike Shatzkin is wrong?

Amazon is a Publisher. They have several imprints. None of which you can buy in a Barnes and Noble….go figure.

"(And yes, of course mainstream publishers have ALWAYS known and cared about readers.)"

No they haven’t.

When they price a book for $7.99, but then wait six months to release a .pdf version of that same book for $15.99, they aren’t caring about the reader. They did that all throughout the early 2000’s.

When the epub version of a book just released is more expensive then the hardback version, they aren’t caring about the readers.

When their websites and apps resemble 2004 Myspace castoffs, they aren’t caring about the readers.

Was Agency an effort to cater to readers?

Lets assume a common starting ground: Amazon is a retailer.
Yes, I agree. Amazon is the largest retailer in the world. They know not only what their customers bought and when, but what other products the customer looked at during their last visit.

If you are a business, any business, whose products have been sold on Amazon, why are you going to ignore what they are going going to tell you about your product? They know what sells, who it sells to, what price it will move the most volume on, they can track in almost real time, adjust pricing on the fly to help move more product. Why ignore that? What possible positive economic outcome can result from that.

And I’m not trying to be polite when I call it Legacy publishing. There are thousands of indie authors out there who, with Amazon and others help, have worked around the walls traditional publishing threw up, found new, faster, more profitable ways for them to make money off their writings.
Traditional, LEGACY, publishing, is not my industry. It is my competitor.
And I’m winning. And so are thousands more like me.

Syn May 9, 2018 um 12:07 am

I think a lot are missing the point. It’s not that Amazon is good, (they are) it’s that Barnes and Noble are bad. They have horrid customer service, I know, I use to be one. It wasn’t because of me but it was because of very unfriendly customer policies that were so bad, my mouth would literally drop open. But Barnes and Nobles method to compete is to say the sky is falling because of Amazon.

It’s not that Amazon losing money on books, (they don’t) its because they have not only great customer policies, it’s that their customer service will sometimes step up in ways you weren’t expecting. Like I once bought a tablet off warehouse deals but its charger was broken. Amazon had me go to their site, find a charger and they put the funds for me to buy it on a gift card. And tonight, I bought a movie in HD then after I watched it I realized it was available in UDH (an extra five dollars) I called and asked if I could be upgraded to the UDH version. They refunded me, told me to rebuy it and they gave me a five dollar credit so I paid the same as the HD version. Its little things like that that makes Amazon so good. If Barnes and Noble or anyone else want to compete, they really are going to have to up their customer experience. It’s not always about price. Many sometimes spend MORE at Amazon because they know customer service will take care of them. B&N not only doesn’t have it, they don’t want it. I realize the perceived danger some fear about Amazon getting too big, but how do you punish a company for being good and rewarding others for doing a half-assed job?

greenwitch May 9, 2018 um 6:36 am

The author also mentioned that Amazon avoids taxes and suppresses wages. You didn’t mention or attack that. Often your blog comes across as a member of Amazon groupthink. A more balanced viewpoint would make for variety and more professional reporting. Thanks.


Nate Hoffelder May 9, 2018 um 7:14 am

you want balance?

Both activities you mention are SOP for businesses. Amazon is just one of the companies that do it, so to single them out is unfair and hence unbalanced.

greenwitch May 9, 2018 um 9:41 am

It is a common and invalid argument and a logical fallacy to state that it is okay for X to do something because Y and Z do it too. So, is it okay that Russia imprisons journalists when Saudi Arabia and Egypt also do it?

Allen F May 9, 2018 um 10:06 am

What? You had to go that far afield for a comeback? 😉

Surely you can come up with companies just as evil as Amazon in the U.S., here, I’ll start things off.

Amazon pays only the taxes required of it – just like every other business! Those third party sellers that sometimes don’t? Not Amazon’s fault nor problem, name and go after them.

And yeah, part-time/temp workers often get few enough hours/pay that they can draw food stamps – just like at Walmart.

Your turn.

greenwitch May 9, 2018 um 10:17 am

My analogy was valid. So do you think it is okay that Amazon gets tax breaks while many of their employees rely on food stamps?

Nate Hoffelder May 9, 2018 um 10:19 am

I don’t thin that’s okay, but I reserve my anger for the gov’t giving the tax breaks.

greenwitch May 9, 2018 um 10:34 am

@Nate. Is it morally acceptable for a very profitable company to pay their employees so little that they must rely on food stamps to survive?

Allen F May 9, 2018 um 10:44 am

States/cities give companies tax breaks to get them to move in all the time. Why the ADS? You should be telling your state/city not to offer tax breaks if you think it’s a bad thing.

And I’ve answered your 'food stamp' ADS, there will always be somebody not working enough hours (or has more kids/larger family) to allow them to draw food stamps.

Nate Hoffelder May 9, 2018 um 8:34 am

BTW, ever since I realized The Guardian can get away with an anti-ebook editorial policy, and if NYTimes can have an anti-Amazon editorial policy, it is perfectly okay to take any side on Amazon I want.

Taking sides is now an accepted practice.

greenwitch May 9, 2018 um 10:04 am

I’ll repost because my browser probably messed up. What you quote is the journalism of reaction and anger. It is not rational or intelligent. I believe you are better than that.

Allen F May 9, 2018 um 10:36 am

Actually I thought he was doing pretty darn good, I know I get tired of having to point out where people are buying the ADS rather that seeing through all the 'fake news' about Amazon.

Let’s take that fake news of yours about 'The author also mentioned that Amazon avoids taxes and suppresses wages.'

And if you were to think about it for a whole few seconds you might wonder why Prez Trump, who hates Jeff and Amazon because Jeff also owns a paper that makes fun of said Prez Trump. Ask yourself, with all those people and all that power, why hasn’t Trump done more than twit nasty things about Jeff/Amazon? Because Amazon isn’t breaking any laws Trump can use to send in the DoJ or the IRS. So, if Trump can’t do it, it’s not actually there.

As far as wages? If there are better wages to be found in the area then Amazon would be having problems getting anyone to work there, but that’s not happening either.

I did like the few 'working conditions are so bad' ADS fake news bits, having actually worked for a living I thought they were the type we would have fired within a week because they just couldn’t do the job. And then there were the tent/mobile home cities in the parking lots of people so eager to work for Amazon that they’d sleep wherever they could – and the fake news companies spun it like they were to poor to sleep anywhere else.

So no, I think Nate’s doing a good job; it’s people like you with the slanted news that I think we have to keep an eye on – and correct when the slant gets too silly …

Allen F May 9, 2018 um 10:48 am

"The author also mentioned that Amazon avoids taxes and suppresses wages. You didn’t mention or attack that."

What? Didn’t you notice the headline?

"David Leonhardt Wants to Save Barnes & Noble, But Has to Make Up Stuff About Amazon to Justify It"

Nate addresses it right there! It’s that 'Has to Make Up Stuff' bit.

Sean May 10, 2018 um 12:46 pm

Name an individual or corporation that willingly pays more in taxes than they are legally obligated too.

If you use an apple product, are you going to stop using it because the working conditions in the chinese factories where some of them were made drove workers to kill themselves?

If not, does that make you a hypocrite? Your using a product that has literally killed people, yes?

By using the standards of that study, I can show how every company in America, be it Google, Microsoft, The times, your local cable company, has at least a few employees on Foodstamps.

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