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Posted by on Apr 22, 2010 in Economy, Media, Science & Technology | 0 comments

Amazon and the sin of profit

Although one would generally describe The New Yorker as a progressive publication, it seems to slip into a reactionary mindset when the interests of the literary establishment are on the line. In this week’s issue, Ken Auletta takes a look at the Kindle, the iPad and the threat that e-books present to old school publishing houses.

The article presents Amazon as the ill-mannered bully that wants to drive publishers out of businesses by selling e-books at a price that is far too low:

“Amazon is a particularly farsighted, powerful, and ruthless competitor,” [one publishing executive] says. “I don’t think we’ve seen a business this competitive in the tech space since Microsoft.”

Why stop with Microsoft? Why not compare Amazon to Genghis Khan or that awful Hun, Attila?

Publishers maintain that digital companies don’t understand the creative process of books. A major publisher said of Amazon, “They don’t know how authors think. It’s not in their DNA.”

Yet the article itself presents plenty of evidence that authors might benefit from an e-book revolution, because it will be easier for them to get published and they will earn more royalties. And if the revolution weren’t good for readers, they wouldn’t be buying all those Kindles and e-books.

What really seems to be at stake here is the noble self-image of the old school publishing houses:

Good publishers find and cultivate writers, some of whom do not initially have much commercial promise. They also give advances on royalties, without which most writers of nonfiction could not afford to research new books. The industry produces more than a hundred thousand books a year, seventy per cent of which will not earn back the money that their authors have been advanced; aside from returns, royalty advances are by far publishers’ biggest expense.

Although critics argue that traditional book publishing takes too much money from authors, in reality the profits earned by the relatively small percentage of authors whose books make money essentially go to subsidizing less commercially successful writers. The system is inefficient, but it supports a class of professional writers, which might not otherwise exist.
Madeline McIntosh, who is Random House’s president for sales, operations, and digital, has worked for both Amazon and book publishers, and finds the two strikingly different. “I think we, as an industry, do a lot of talking,” she said of publishers. “We expect to have open dialogue. It’s a culture of lunches. Amazon doesn’t play in that culture.” It has “an incredible discipline of answering questions by looking at the math, looking at the numbers, looking at the data. . . . That’s a pretty big culture clash with the word-and-persuasion-driven lunch culture, the author-oriented culture.”

You might almost forget that publishing houses have always been profit-driven enterprises, not charity funds for starving poets. I have no direct experience with the publishing industry, but I have a friend who recently published with Penguin and felt he got absolutely no support in publicizing his book, which went on to be quite successful because of his one-man effort. From what I can tell, he was hardly “cultivated”.

My griping aside, I actually recommend Auletta’s article highly. Look past the nostalgia and you’ll find a great blow-by-blow account of the struggle between Amazon and Apple to lasso the e-books revolution.