Amazon vs. Hachette, David vs. Golaith or the reverse?

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David Versus Goliath: Amazon Versus Hachette, Or The Reverse?

Written by: Susan Weinstein

2014/06/09 5:45 AM

Having spent my working life in the publishing industry, I have seen the roles of David and Goliath reverse quite a few times. Everyone likes to root for the underdog. The iconography is gratifyingly familiar. The smart boy with the slingshot aims his pebble at the forehead of the evil giant. His aim is true, the giant crashes to the ground.

In the late 70’s, when I entered publishing, the giant was the old “boys’ club” of New York publishers. It was an aristocracy of literary men, who dedicated themselves to making culture through publishing books, and legendary editors, like Max Perkins, were aspirational icons. John Updike, Philip Roth, Salinger (you know the names) were anointed by The New Yorker.

Editors at big publishing houses were revered and what they sought wasn’t based on numbers. Their's was an erudite nose for excellence in content and form, originality, even social relevance. Whether hailing from the Ivies or City College, writers of vision were exciting, treasures building on Nabokov or later Tom Wolfe. Editors were shamans, who found the rough metal and made the prose shine. The role of marketing and sales people was simply to sell and find creative ways to do it.

Publicity departments translated books into clever hyperbole to seduce media, who actually covered books as news. Yes, books were a product to be sold but did we have to talk about that? To broaden minds and perhaps change society, was the purpose that kept many on the phones. Truth is that young people may start in publishing with such ideals, though few leave with it. When poverty stretches into decades, there’s a limit. And something similar happened to the industry.

In the late 80’s, the tacky business of making money became ascendant and clout shifted to marketing/sales teams. In thundering meetings at big houses, the new Goliaths vetoed books. Editors couldn’t get the go ahead for great “finds” that were unlike successful books previously published. Magical numbers showed why such a book wouldn’t sell. Comparables replaced originality and the “iffy” book was left to smaller independents and university presses.

Imperiously, this Goliath demanded more formulaic commercial novels, along with the mix of cook books, business how-to and genre. Editorial was restricted to a narrowed category of “saleable” books to stay employed. But many were purged, along with staff copy editors and proofreaders. The Davids became literary editors with sufficient backing to form their own imprints within houses. These survivors hunkered down with tiny lists.

In this environment in 1995, Jeff Bezos and Amazon went on line. Wikipedia on Amazon: “an American international electronic commerce company. The world’s largest online retailer, which started as an online bookstore but soon diversified selling DVD’s, VHS’s, CD’s, video and MP3 downloads streaming software, video games, electronics, furniture, food, toys, and jewelry. The company also produces consumer electronics, Kindle ebook readers and is the major provider of cloud computing services." Amazon is a marketing and sales powerhouse of gigantic scope and huge clout. And yet, when it started, Bezos declared it David.

The Goliath he was slinging pebbles at was the traditional publishing industry, who didn’t know how to sell books and deserved to be losing money. Like many booksellers, Bezos seemed to really love books and the challenge of making them profitable. Online selling was nimble and less expensive. Down with the publishing snobs and their high prices! Go, Amazon. Power to the people!

Amazon was ingenious American capitalism, the little guy making publishing profitable again. It was reinventing the way books were sold and, at first people didn’t see Amazon as closing stores. What threat? It wasn’t as if you could go on line and thumb through a book. Amazon brought prices down by giving the big publishers competition. For once the little guy had won.

This narrative, only controversial among publishing people, was so embraced by the general public that Amazon grew into–a giant. Some years ago there was even the odd spectacle of this Goliath declaring itself an idealistic David. It sued a few traditional publishers, who decided to combat Amazon’s price slashing by setting a price for their product. Was this legal?

Back to Wikipedia. "The Sherman Antitrust Act is a landmark federal statute in the history of United States antitrust law or competition law passed by Congress in 1890. It has been used to oppose the combination of entities that could potentially harm competition, such as monopolies or cartels. The law attempts to prevent the artificial raising of prices by restriction of trade or supply. In other words, innocent monopoly, or monopoly achieved solely by merit, is perfectly legal but acts by a monopolist to artificially preserve his status, or nefarious dealings to create a monopoly, are not. Put another way, it has sometimes been said that the purpose of the Sherman Act is not to protect competitors, but rather to protect competition and the competitive landscape."

Amazon was able to legally smash the publishers, who received stiff penalties for “collusion.” Amazon wasn’t yet a publisher, though it was a seller, and its slash and burn policies were not seen as a violation of the “competitive landscape.” Unlike Amazon at this time, traditional publishers had the expense of producing books; with editors and copy editors, freelance proofreaders, printing and paper costs, cover designers, marketing, sales and publicity staff, warehouse, physical stores and the authors’ shares of the profits.

But Amazon retains its popular underdog status. Even now, in 2014, there is no anti-trust suit, though they are punitively restricting the trade of all Hachette books, penalizing the income of authors, and even the convenience of customers. Their purpose is to force publishers to agree to further reduce what they make on their product. According to Sherman, you can’t do such restrictions, that alter the competitive environment without being in violation of antitrust laws.

Amazon is no friend to the consumers. who want to buy these books or the writers. Worse yet, it has swung the sales/marketing pendulum so far in the direction of quantity over quality, that it threatens our very notions of what is of value to publish. In 2014, we are in the gold rush of what used to be called vanity publishing, but is now “self-published.”

These self-publishers, and the often expensive marketing/sales programs they charge authors, are a lucrative new area for the publishing industry. Since anybody with cash can be an author, Amazon makes even more money, if they topple the traditional gatekeeper of quality—mainstream publishers. And there’s a new vested interest, since Create-space is their own self-publishing entity.

The Amazon vs. Hachette stand-off has taken on emotional overtones, not unike the cries to open the Bastille and guillotine all aristocrats. Online there’s a self-righteous glee about a brave new publishing world of no standards by those who feel excluded by the snobs, the tastemakers of the establishment. And this attitude of being the little guy against the traditional Goliath of the diminished publishing houses is fanned by the snake oil merchants of the new self-publishers.

Yet Amazon, the crafty Goliath, has, besides its well-advertised self-publishing operation, a little known traditional publishing company, which only buys books from agents. And with their mastery of print on demand technology, they are well poised to dismantle the competition of traditional publishing companies. While Amazon has stated that gatekeepers are not necessary, it’s obvious they just want to be the only giant in town.

So we exchange an old cultural elite for a single dictator. Egalitarian shouldn’t mean reduction of quality to the lowest common denominator. More is not necessarily better. We have only to see the wasteland of a plentitude of TV channels with only a few worth watching to see what publishing might devolve into. While Americans may sneer, “elitest,” at traditional tastemakers, we envy European culture for the same considerations of quality over quantity.

If Amazon eliminates traditional publishing as gatekeepers now, when there are many quality books from imprints within houses, their vision—often idiosyncratic and not quite profitable—will disappear. Some small press books will fill the gap but literacy and intellectual freedom will suffer. Cheap books, like cheap music, are popular. But when writers and musicians cannot make a living, because their products are devalued, everyone is impoverished.

I think its Amazon’s turn to be slapped with an anti-trust suit for trying to destroy the competitive environment. Stun the giant and give the lillliputans, perhaps purposeful small presses with wholesale antenna and retail vision, a chance. Maybe their electronic eyes will envision a more useful target than a large yellow button that says, “Buy.”