Monday, April 16, 2012

It's the culture, stupid: blindered blather on Amazon, Apple, and the agency model

Everybody who cares a lot about books, or even a little about e-books, has heard about the Department of Justice announcement last week about Apple, book publishers, Amazon, and something called the "agency model" in businessspeak.

Missed it? You can get the high level summary from Nathan Bransford's post of this past Friday, What Will the Book World Look Like After the DOJ Lawsuit? His summary, under the heading "How we got here" weighs in at less than 300 words, and describes the essentials about as succinctly as they can be described.

If you're already following the story you won't miss much by skipping the next section of this post, and picking up at What book people aren't talking about ...

What book people are talking about

For a more detailed look at the DoJ, Apple, Amazon, and this month's threat to literary culture, Nathan Bransford linked to a longer overview on Shelf Awareness, dated Thursday 12 April 2012. It's titled Justice Department Sues; Three Publishers Settle, and I'd recommend it too. Here's the issue everybody close to books is talking about, as Shelf Awareness spun the story:
Already, Amazon has "plans to push down prices on e-books," the New York Times said. "The price of some major titles could fall to $9.99 or less from $14.99, saving voracious readers a bundle."

So, in the name of antitrust, the level playing field of the past two years--agency model e-books were priced the same whether sold by Amazon, Barnes and Noble or independent bookstores--will likely revert to a situation where a near-monopoly power determines pricing and most other retailers see their already-smaller market share shrink. Although Apple and the publishers may have cooperated in ways that violated the nation's sometimes contradictory antitrust laws, for the Justice Department to single this matter out and not address other issues in the book industry or in business in general seems misguided.
More pointedly (starting with the spot-on headline) here's an excerpt from The Justice Department Just Made Jeff Bezos Dictator-for-Life, in The Atlantic on Saturday 14 April:
Readers will pay less. That's the bright side. The settlement gives Amazon carte blanche to discount the eVersions of popular titles, much as it used to. Of course, that also happens to be the dark side. Because that control over price is going to reinforce the monopoly power of the world's largest online retailer. [...]

In other words, Amazon will have two years to consolidate its hold over the fast growing eBook market by offering virtually any sort of discount it pleases -- a marketing strategy it can afford thanks to the volume of business it already does. The question, then, is what happens after that time is up? Will there be any company that can challenge Amazon in the digital market? Maybe not. Thanks to the use of DRM technology, most eBooks can only be read on a propriety device. Amazon's eBooks can only be read on a Kindle, or a Kindle app. Barnes and Noble's books can only be read on a Nook. So the larger a library any one customer builds with a single retailer, the less likely it is they'll ultimately switch.

In my own sound byte: the DoJ is going after big publishers and Apple for colluding to break Amazon's monopoly on e-books.

What book people aren't talking about

I looked -- maybe I've been looking in the wrong places, using the wrong search terms -- but what I can't find in all this kerfuffle is anybody talking about what an Amazon monopoly (or anybody else's dominant proprietary device/format) is going to mean in the long run.

Do you own books? The paper kind? More than a shelf-full? Can you say, off the top of your head, what company published them? Even if you can -- even if you can for ten percent of the printed books you own -- now that you own them, does it really matter what publisher's name is printed on the spine and the title page?

I'll answer that question for myself: no.

Not at all.

And why not? Because whoever published any of the hundreds of printed books making shelves sag all the way around my living room, and my bedroom, and even my kitchen come to think of it -- no publisher, now that I possess my books, can keep me from reading them, re-reading them, lending them, giving them away, or selling them to any of the many used bookstores within or adjacent to the city where I live.

I don't need to worry about a proprietary device breaking or wearing out, rendering it unfit for use in reading my books. Doesn't touch me or my printed books, I can still do what I will with them.

I don't need to care whether the proprietor of any digital device does or does not go out of business, relegating the library of books that proprietor sold me to the graveyard as soon as the grace period expires that corresponds to the working life of that proprietor's proprietary digital device. What graveyard, you ask? Why, the very same graveyard where BetaMax and VHS videotapes and name-your-dimension-and-format floppy disks are interred.

My books are printed in ink, on tree flakes (a.k.a. paper). No electricity is required if I don't mind reading in daylight.

And they'll outlive me.

Come to think of it, there's no reason my printed books can't outlive the corporate deaths of their publishers ... by hundreds of years. Some of my books have already outlived their publishers, that clock's already ticking.

What happens if Amazon becomes a monopoly bookseller, and Kindle a monopoly reading device, and the proprietary Kindle format the only way you and everybody you know is able to possess new books, the ones that nobody will bother to print (or print in quantity) because there's no market or profitable distribution channel for big runs of printed books anymore?

Then what happens when Amazon goes broke?

Can't imagine that'll ever happen?

In an article about corporate longevity, The business of survival (The Economist, 16 Dec 2004), we get some perspective that might fuel imagination:
What is clear is that corporate longevity is highly unusual. One-third of the firms in the Fortune 500 in 1970 no longer existed in 1983, killed by merger, acquisition, bankruptcy or break-up. According to Leslie Hannah, a business historian at the University of Tokyo, the average “half-life” of big companies—that is, the time taken to die by half of the firms in the world's top 100 by market capitalisation in any given year—was 75 years during the 20th century.
For printed books, seventy-five years is not so long. This past September I read and blogged about a book that I found in a used bookstore for six bucks. It was printed in 1926, eighty five years before I found it on a store shelf and brought it home to take its place on mine. Its technology needed no refreshing. I opened. I read. That's the long and short of it.

If you bought a Kindle or a Nook or an iPad this week, would you expect it to be functional in 2097?

If one such device -- oh, let's say the Kindle -- were the only sort of device you could use to read the new books you wanted to read, including the really really good new books that you'd like to re-read and pass along to friends and family, maybe even your grandkids someday ... and if the company that owned the Kindle were to kick the corporate bucket and render your copies of those books not only unreadable (once you can't transfer them to a Kindle XXVII Next Generation Turbo because that product died on the vine along with the company that manufactured it) ... what do you do with your decades-long investment in e-books? See where I'm going with this??

What's in a book?

Are books a set of pages, magnetized digital media, or commodity price points? Or are they vessels of culture? Both? Some are greater vessels than others, I suppose; so does it depend on the book?

There are a couple ways to look at how books as a commodity are being "reset" in the current, digital shuffle.

On the one hand, there's a war on to anchor consumers of book culture into proprietary format/device channels. You pay your chosen proprietor(s), you read your books, and you can continue to use them until the proprietor goes out of business. It may or may not be possible (or easy) to loan your book to a friend or family member, that's up to the proprietor who might well (as Amazon can today) exercise its prerogative to "amend any of the terms of this Agreement in our sole discretion." When your proprietor goes out of business and your device dies, you can buy the book again from another proprietor, or you can just ... let it go.

"Used e-book stores"? I'm guessing not. From the Kindle's current Terms of Service: "you may not sell, rent, lease, distribute, broadcast, sublicense, or otherwise assign any rights to the Digital Content or any portion of it to any third party." If publishers and retailers continue to have their way, e-book buyers will be paying for something that functions more-or-less as a privately-leased, pay-per-views or pay-per-device product.

If it's a book you're not likely to look at once you finish reading it, that's probably about the same as how you bought books like that in print, only you don't need to store them on a shelf or recycle them when you're done. If we're talking about books that are keepers, you may find yourself needing to 'renew' your ownership at some time or other by ponying up the purchase price again, perhaps again and again as reading technology changes -- more like a movie ticket than a printed book.

This is all pretty good for people who produce and sell content. They get paid repeatedly. By you, the reader.

On the other hand (or on the same hand but from a shifted perspective) e-books -- which could include the better part of "all books" as production and distribution channels for print dry up -- are being positioned to be sold like performances rather than as they are currently, as artifacts of material culture. Books that are worth keeping, worth re-reading, worth passing around a circle of friends or family, worth saving for when it's the right time for your kids ... well, you might be able to get the use of your original book purchase over time, and you might not. It's not going to be under your control so much any more, and it may depend on whether the proprietor from whom you bought the book in the first place is still in business, or if you're still sufficiently loyal to that proprietor to keep buying new devices as the old ones burn out.

Books published by a retailer -- a "vertical" market that companies like Apple and Amazon both hope to lock down -- may simply disappear once a proprietor goes out of business. And who will own the legal rights to republish those books? Who knows? Remember, those agreements may change at a publisher/retailer's "sole discretion." Maybe UPS and FedEx and the owners of very large warehouses will assume ownership of failed publisher/retailer assets, including publishing rights. They, after all, will be left holding the unpaid leases, and the overdue invoices for delivery of all those tubes of toothpaste and smart phones and shoes people ordered from the same on-line retailers that published and sold books.

What will the future bring?

Your crystal ball is as good as mine. I don't really know. I didn't write this post to answer that question.

I wrote this post to ask why, when book people worry about an e-book monopoly, are book people only worrying about the survival of bookstores and publishers, or about the recompense paid to editors, agents, and authors in exchange for their time, skill, and effort?

Those are important things to worry about, no doubt. I look forward myself to making more than a few bucks (or a couple copies of a literary magazine) for the hours and weeks and months I spend conceiving and revising and honing and polishing even a short story. I do have skin in that game.

But are the monetized aspects of books as important to society as a whole as the prospect of entrusting human culture to the sole ownership and control of a corporate monopoly that will surely go the way of the woolly mammoth, and probably sooner than later?

When we think about the future of books, I think we'd do well to keep the long-term future in perspective. Ready or not, here it comes.



Related posts on One Finger Typing:
Six things about e-books
Bookstores
Old books, new insights
Rock, Paper, Digital Preservation


Thanks to Evan Bench for the image of a stack of books at Shakespeare and Co. in Paris; to James Duncan Davidson via Wikipedia for the image of Jeff Bezos, Amazon CEO; and to Akbar Simonse for his image of a crystal ball -- with books, even!

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