Friday, July 18, 2014

Lost in the Amazon

Discussions surrounding the now-notorious throwdown between French-owned Hachette Book Group and have reached a possibly unprecedented impasse: they’re simultaneously very silly, and almost completely opaque. Everyone assumes it’s somehow related to profit sharing on e-book sales, but both sides are vague and secretive. That hasn’t stopped every mass media figure from having some half-informed opinion, as demonstrated by this abject foolishness:

Malcolm Gladwell
Beyond the fact that this display is simply beneath Malcolm Gladwell’s dignity, it proves the public face of this corporate dispute has devolved into juvenile theatrics. I encountered this video through Gladwell’s New Yorker blog, blurring the lines between individual and communal: did Gladwell share this, or did one of America’s most celebrated mass-market glossy magazines take sides in a conflict so abstruse, informed commentators can’t assure us it’s even happening in English?

Since fully half of Americans never crack another book after leaving school, this debate seems potentially futile. In today’s tough economic climate, many wage earners might answer Gladwell and Cavett by shrugging. Though Amazon currently controls half of America’s book commerce, working Americans’ lives move more broadly over who retails their socks, bananas, and motor oil. If Amazon stalls Hachette book shipment over a month, hell, buy it someplace else.

But this has significant economic implications. Hachette, which owns Hyperion and Little, Brown & Co., is one of only five media conglomerates which dominate two-thirds of American publishing. Other conglomerates include German-owned Bertelsmann, which controls Penguin, Doubleday, and Random House; Simon & Schuster, owned by CBS; and HarperCollins, part of Rupert Murdoch’s empire. Penguin’s 2012 merger with Random House narrowed an already dangerously cramped global information pipeline.

While five corporations create the preponderance of American information content, one company, Amazon, sells fully half that content. This represents another narrowing: in 1999, Naomi Klein complained that three companies—Borders Group, Barnes & Noble, and WalMart—had cornered American book sales. Two mall chains, Waldenbooks and B. Dalton, were owned by Borders and BN, respectively. Both mall chains, and Borders altogether, no longer exist.

Amazon’s market might has become so immense, it’s even ventured into content production. I’ve reviewed several books published by Amazon-owned imprints, from good authors like Tyler Dilts and SG Redling, and mediocre ones like Vincent Zandri and Barbra Annino. Nobody begrudges Amazon’s desire to broaden publishing opportunities. But if they want to monopolize the supply chain, that dances perilously close to BN’s sick-making 1998 attempt to purchase book distributor Ingram.

No company should have such power.

Economists proclaim the 3-30 Rule: when three operators control thirty percent of any market, that market is no longer free. We see that today elsewhere: ConAgra, Smithfield, and Cargill control half of American grocery manufacture. CitiGroup, Goldman, and Wells Fargo control banking. A handful of companies have become so massive that their very presence distorts market forces. Amazon and the Big Five Publishers have joined those “illustrious” ranks.

Amazon's Jeff Bezos
Therefore, turf war between Amazon and Hachette, whatever the proximal justification, isn’t distant. These corporations are struggling to determine who controls access to information. And not just any information. In today’s digital world, “information” is common as dirt; bloggers create content faster than anyone can read it. (Don’t look at me that way.) No, this battle concerns access to information screened for relevance, organized by our generation’s best minds, and presented clearly and conveniently.

Powerful Americans still read books. Business magnates, elected officials, and artists read. Behavioral economists have tracked positive correlation between willingness to read for fun and personal development, and one’s likelihood to advance, economically and socially, in this world. Therefore, when market consolidation allows one vendor to stymie access to one manufacturer, it literally narrows our nation’s overall cultural creation ability. Unchecked, Amazon’s feud with Hachette could partially suffocate economic efficiency.

Prognosticators proclaimed Internet commerce would doom independent booksellers, but indies thrive in urban markets large enough to support them. Some, like Denver’s Tattered Cover, have become legitimate tourist destinations. People who love books seek out indie booksellers, because indies share their love of books. They’re also great places to meet fellow book lovers. Indies sell books as culture; national chains sell books as content. And Internet retailers can sell content cheaper.

I like Amazon. I shop there, and my reviews kick potential buyers to Amazon’s pages. That makes this folderol more frustrating, because it’s beneath two global economic powerhouses. Surely Amazon and Hachette have enough shared dignity to resolve their conflicts without diminishing America’s already-diminished intellectual market. And if not, that’s why America still has McKinley-era Antitrust laws.

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