I am writing today to suggest that Amazon.com is in violation of competition law, and that its violations of law directly effect the integrity of the free press in the United States. I am writing this to you, the reader of Unlikely 2.0, in the hopes that you are already predisposed to enjoy my writing. I'm relying on this predisposition because if there's one thing that all discussions of competition law have in common it is that they are incredibly boring. Please bear with me. I'll do my best.
We're going to begin by tackling the term "POD." POD stands for two separate ideas, often conflated: Print On Demand and Publish On Demand. The first is a printing technology, the latter is a publishing methodology.
For about 200 years, the majority of books have been printed via a lithographic process. An update of Gutenberg's engraved presses, lithographic printing works chemically. Parts of a printing plate (the parts that correspond to text or printable images) are covered in an oil which repels water and attracts ink, and the remaining parts of the plate (the parts which correspond to the blank areas in a page) are treated with acid and gum arabic (which is water soluble), then water. Lithographic plates are substantially less expensive than plates of previous printing presses, and make complicated color runs easier. Furthermore, they produce the most attractive results of any print method to date. Invented not long after the American and French revolutions, lithographic printing hugely facilitated the popularization of the "free press." Today, the inexpensive techniques and chemicals used in lithographic printing allow a publisher to make a profit on a print run of as low as 1000 books; small publishers with particularly low overhead will sometimes do a run of 500 books with lithographic printing. The inexpensive nature of lithographic printing has greatly increased the diversity of voices and ideas which it is financially possible to publish.
Print On Demand publishing is publishing using a laser printer. Chances are you can do it in your apartment. You might not have the time to make it financially viable, but you can fund it with a job at Wendy's. Lithography remains the cheapest way to print 1,000 books (as well as the most physically beautiful printing technology), but Print on Demand makes it theoretically possible to make a profit on a single copy of a book. If lithography made a less-oligarchic democracy possible, Print On Demand blows the diversity of possible publications and publishers to potentially anarchistic proportions.
Few readers realize how much the publishing industry has been changed by Print On Demand technology. University presses and textbook publishers have used it for several years on their backlist, allowing them to keep a broader selection of teaching materials in print, at a much lower cost. Print On Demand texts can be changed without any equipment costs, enabling publishers to maintain frequently-updated nonfiction texts on rapidly-changing situations. And Print On Demand enables those inclined to start small presses for very specialized audiences—e.g., readers of contemporary poetry—with very little money down. Even the major New York publishing houses have begun to use POD to keep barely-viable titles in print for a bit longer.
Publishers, especially literary publishers, are often reluctant to admit when they are using Print On Demand technology partly because they are terrified of being associated with Publish On Demand techniques. A Publish On Demand company, such as Lulu.com, offers services to self-publishers and micropresses. They help such publishers through the Print On Demand process, set up a Web-based electronic "storefront" for them, and help them with elementary publishing tasks such as ISBN purchasing. The lines between a Publish On Demand company and a vanity press can be very fine. I reserve the term "vanity press" for a company that deceives its customers, such as Poetry.com; Lulu.com seems perfectly honest about what it offers. However, what it offers is of no use to the educated publisher, who will find it far cheaper to go through the Print On Demand process his-or-herself.
Conversely, there are now a huge number of Print On Demand companies who deal strictly or primarily with publishing houses and assume a familiarity with the publishing industry on the part of their customers. (You can purchase Print On Demand equipment and fit it in your apartment, but most publishers would rather not.) These companies act as competition to traditional lithographic printers, seeking to fulfill print orders too small for the lithographic printers to print cheaply. They specialize, offering a variety of different services, and vary in size widely. When New Sins Press published my latest poetry chapbook, they used InstantPublisher.com, which did a fabulous job dirt cheap. InstantPublisher.com can do small runs so cheaply because they assume a high level of computer and Internet competence on the part of their customer and offer limited customer service. At the opposite end of the spectrum you'll find Lightning Source, a massive operation owned by Ingram Book Group, which offers a sales rep and phone contact to every customer, works carefully with each customer to prepare every title, charges setup costs, and assumes an intention to turn a profit on every title. They'll turn a too-disorganized customer away, and will aggressively query self-publishers to ensure themselves that the self-publisher is financially competent. They are not interested in working with the general public, and more than one individual is currently making a living reselling Lightning Source's Print On Demand services in a Publish On Demand package.
Ingram Book Group, for its part, is a distribution company, the biggest in the U.S. They warehouse books and sell them on short notice to bookstores for 40% off the cover price. If a bookstore runs out of a rapidly-selling title, they can get an emergency supply from Ingram much faster than they could from most publishers. If they want to stock only a few books from a smaller publisher, they can get it from Ingram more cheaply than they could direct (publishers charge discounts which encourage bulk sales, and must charge disproportionate shipping costs for small orders). Typically, though, Ingram works with medium-sized or large publishers; smaller publishers often prefer representation through more specialized companies such as Baker & Taylor and Consortium. Ingram will tend to carry fewer books from smaller publishers, with a smaller marketing budget.
That is, unless the publisher has a contract with Lightning Source. Ingram "carries" every Lightning Source book, regardless of the size of the publisher. If a bookseller looks up a title in Ingram's computer, they won't know whether or not it's a Lightning Source title; they'll only know that it is, according to Ingram's computer, "in stock" at the Ingram warehouse. If it is a Lightning Source title, Lightning Source will simply print the book as the order is placed with Ingram, and the bookseller will never know that the book was never in Ingram's warehouse.
Does this relationship with Ingram give Lightning Source an advantage over independent POD companies? Obviously. Would that I could call them the bad guy and move on.
The relationship between Ingram and Lightning Source has created a small sub-industry within all these new industries; a new breed of nonfiction self-publisher has arisen. These new self-publishers apply for a business license and start a publishing company, write a book in their area of expertise, sign up with Lightning Source, and market their book on the Web, focusing on sales through the major electronic bookstores. They are guided through this process primarily by Aiming at Amazon by Aaron Shepard. This brilliant book, which I unreservedly recommend to anyone interested in POD, lays out a strategy for starting a press, gaining acceptance into Lightning Source, and manipulating the software at Amazon.com to increase the notability of one's book. Written in a style that makes you want to slap Shepard's high school teachers, this book gives a nonfiction self-published author a clear plan by which to compete with, even outsell, the books produced by major houses on his or her area of expertise. Shepard supports this book with his blog and a steady presence in the pod_publishers mailing list, where you'll find a number of people using his technique to great profit.
Said self-publishers seem, in many ways, to be the logical opposites of small literary publishers, who historically consider "self-published" synonymous with "crap." That attitude is changing, but slowly, and resentment runs high in the pod_publishers list, where many self-publishers see traditional publishers as the gatekeepers of an irrelevant and malicious intellectual oligarchy, and the independent bookseller as the oligarchy's snooty guardsmen. (Shepard himself, despite his stunning expertise with Internet marketing, bemoans the loss of the independent bookseller.) Some of this resentment is no doubt justified—I think we've all had the experience of a bookstore employee who has yet to sprout facial hair look down his nose at our literary choices, be they Stephen King or Immanuel Kant. The thing is, literary publishers are gatekeepers because they have to be. Few of these new self-publishers have tried to struggle through a bookshelf full of incoherent poorly-rhyming self-published poetry—there are masterful books of self-published literature, but with Lulu encouraging everyone to self-publish, someone's got to be authorized, even if self-authorized and self-educated, to determine what is readable and what is crap.
Pardon my sociological musings. If there's one thing I've learned from Hercule Poirot, it's that one needs a weighty quantity of philosophical segues before screaming j'accuse. The point here is that the publishing industry of today is incredibly fractured, and it was in this chaotic and unfortunately hostile environment that Amazon.com made its latest move.
Amazon, it seems, owns both a Print On Demand and a Publish On Demand company. In 2005, Amazon purchased BookSurge, a competitor to Lightning Source, as well as CustomFlix, a competitor to Lulu which was later renamed CreateSpace. Just as Lightning Source offers distribution through Ingram, BookSurge offers availability through Amazon. Perhaps such alliances aren't what Adam Smith intended, but I've never heard anyone allege antitrust violations until the last week of March, 2008. At that time, Amazon began making telephone calls to individual publishers who use POD services, letting them know that if they did not open an account with BookSurge, their books would no longer be available directly through Amazon.com. There was no public or official statement on that threat; all information was delivered by phone and in private.
The pod_publishers list exploded, with a wide variety of opinions. Many accused Amazon of violations of competition law; others focused on violations of the spirit of the law: the word extortion was used. Amazon began to carry out their threat almost immediately. If you'll click on http://www.amazon.com/Battle-Lords-Lady-Linda-Mooney/dp/1424118344/, you'll see that this book can still be purchased from the Amazon Marketplace, where independent booksellers use Amazon.com as a storefront, but the book is no longer eligible for free shipping or Amazon's discount program Amazon Prime, and looks noticeably different from an average Amazon page (regular seekers of antiquated books will notice that it resembles the listing for an out-of-print book). Publisher's Weekly reported on it almost immediately, as did Publish On Demand company PublishAmerica; as of this writing, Ingram has given a rather content-free statement, and Lulu is stalling (understandably; one doesn't change a business strategy overnight). On Monday, March 31st, 2008, Amazon admitted to their Satanic baby-eating conspiracy. Amazon has stated that their shift in policy is towards the benefit of their customers. Amazon's statement correctly points out that they have made a number of decisions to promote the interest of customers over publishers, such as their deep discounts, and their decision to allow and post negative reviews (though not, as I've found, detailed ones). It alleges that by forcing publishers to use BookSurge, they increase the speed by which they can deliver books to customers, thus implying that their threatening phone calls were all in the interest of the book buyer.
As a book buyer, I believe in the concept of the free press. I believe that the free press must be protected from the government by the citizenry, and that the free press must be protected from financial interests by the government. I believe that it is unacceptable for a company to attempt a monopoly in the field of Print On Demand, and believe that if that company is a subsidiary of a bookstore, that the free press is threatened. When publishers are dependent on the good will of a single bookseller for their printing services, conflict of interest exists at every level of the industry, making the free and unfettered exchange of information impossible.
So, as a book buyer, I am boycotting Amazon.com. As the Editor-in-Chief of Unlikely 2.0 and the sole editor of the now-defunct Unlikely Stories, I am removing all links to Amazon from my sites, and resigning from their Amazon Associates program through which I've been getting a tiny commission. I am returning to them the commission money I've received so far (by money order, since I doubt they have a way to process my check). I'm still pondering how I feel about their Marketplace, but I note that eBay owns a direct competitor, anyway.
Ten years ago, Barnes and Noble tried to purchase Ingram. Barnes and Noble is itself half-owned by the German company Bertelsmann AG, which fully owns Random House, the biggest publishing house in the U.S. Faced with the prospect of the country's largest publisher, bookseller, and distributor becoming one German-controlled entity, the U.S. publishing industry threw a fantastic and beautiful hissy, and Barnes and Noble backed down under pressure from booksellers, publishers, and the FTC. The deterioration of the morale of the citizenry of the United States in the past ten years is beyond description, and I hold few hopes for that level of outcry. Still, I do have the power to control my actions, and I do have the power to take my money elsewhere. I also have the power to draw crude representations of Lady Liberty and Molly Malone playing ping-pong with Jeff Bezos's testicles, but that's neither here nor there.
Jonathan Penton is the Editor-in-chief of Unlikely 2.0. Check out his bio page.
Comments (closed)
Jonathan
2008-05-12 19:05:34
Amazon's policy continues, but is being erratically applied. They probably made a list of Lightning Source customers, but probably aren't updating it constantly. Anyway, my personal buyer's boycott continues. From what I hear, it's spread to El Paso poet Donna Snyder and my father.
A boycott, even a personal one, should have clear goals and vision, if only for an intellectual exercise. I don't think the point is to disable Amazon. First, I don't think it's possible. Second, even though they're predatory, the centralized place for book research and amateur reviews is a good thing. I don't want that to fail; I don't want Amazon to dismantle it. I don't want everyone at Amazon to lose their jobs (and I say that having, some years hence, lost two bookstore jobs to Barnes & Noble). I want Amazon to change this evil fucking policy.
I never intended to suggest a boycott by publishers of Amazon; that would only hurt publishers. This is a buyer's boycott. I think the Amazon Marketplace is a good thing, though I'm baffled by the economics of it; Amazon does seem to make more than the booksellers in many cases. That's also true of Ebay's half.com, though.
The point of all this is that I've decided to go ahead and write those two mini-reviews I promised to post on Amazon.
Jonathan
2008-05-19 22:55:59
Oh! Something happened at http://antitrust.booklocker.com/complaint.pdf ! That is exciting!
Jonathan
2010-01-20 20:38:57
This case is now settled. Amazon has retracted their threats, and paid Booklocker $300k for being the company who bothered to sue them. http://antitrust.booklocker.com/amazon-booklocker-settlement-agreement.pdf
Still can't say I care for them very much, but if the book I want ain't at Half.com, I reckon that Amazon's inappropriate behavior was less evil than Barnes & Noble's inappropriate behavior of 1998-9.