July 3, 2014

The silence of the publishers


shushAs the war between Amazon and Hachette drags on — and on, and on, until it’s become a non-story — something I said in a Times report about Amazon’s behavior (“How is this not extortion? You know, the thing that’s illegal when the Mafia does it”) keeps getting world-wide attention, in places such as Le Monde, The Guardian, and throughout Europe, as well as papers in Russia, India, China, Romania, Argentina, Poland, and even Qatar.

Bizarrely, though, no one has remarked upon the fact that it’s me, an independent publisher with a staff of 12 operating out of a storefront in Brooklyn, being quoted in the first place, much less being seen as “the unofficial spokesman of American publishing” (as Sweden’s leading newspaper Dagens Nyheter called me) — they’re quoting me instead of someone from, say, Hachette, the world’s third largest publisher and the one, after all, at the heart of the story.

It’s the most telling irony of this story: While almost every report about Amazon has always ended — notoriously — with the phrase, “An Amazon spokesperson declined to comment,” Hachette head Michael Pietsch is likewise, according to a bizarre hagiography in the Times, “refusing to talk to the news media and has told employees to do the same.”

S.O.P. for giant conglomerates and publicly-held companies, perhaps, but still: A book publisher, normally posited as the champion of free speech, is refusing to speak. Hachette’s authors are being screwed, its principles are under siege, its very livelihood is at stake — and it’s got nothing to say. Nor have any of the other Big Five publishers uttered a single public word about the stand-off.

The silence of the publishers only became more deafening — and weird — yesterday when Amazon deftly outplayed them by finally sending forth one of its executives, Russ Grandinettito speak to a favored reporter, Jeffrey Trachtenberg of the Wall Street Journal. Of course, as another MobyLives report details, what Grandinetti had to say was simply a reiteration of the company’s decades-long malarkey about how everything Amazon does — such as, in this instance, pulling the buy buttons of thousands of books its customers want — is about making things better for the customer. It’s far more obviously about market domination, of course, and heaven help the customer then, as no one’s ever taken over a market in order to lower prices. (Brad Stone‘s brilliant book about Amazon, The Everything Store, reports that company CEO Jeff Bezos keeps an empty chair at staff meetings to represent “the customer.” Ever since I read that, I’ve stationed an empty chair at Melville House staff meetings to represent “the customer being fucked by Amazon.”)

The real stand-out sentence in that otherwise remarkably uninformative Journal report? “A Hachette spokeswoman declined to comment.”

That says it all: Amazon has explained itself, albeit dishonestly, while the publishers refuse to say anything at all.

A reasonable person might wonder: Why?

Because they’re all scared stiff of the Justice Department, for one thing. It can’t be understated: The DOJ’s 2012 antitrust suit against the big publishers — charging them with colluding to fix prices and forcing them to accept profoundly damaging settlements — left the entire industry deeply paranoid. Amazon had sure looked like a monopoly, controlling 90% of digital sales at the time, while the publishers saw what they’d done as merely an attempt to stop Amazon from the severe “loss leader” discounting that had led to that very dominance.

Two years on their paranoia is clearly not unjustified: The DOJ has already requested a “clarification” from the settlement publishers about whether they are planning to collude again on their upcoming contracts with Amazon.

And of course, it’s not as if retribution from Amazon itself isn’t company-threatening enough: A recent investor presentation by Hachette revealed that 60 percent of its digital business is with Amazon. While Amazon hasn’t pulled buy buttons for Hachette’s ebooks, the possibility is certainly a sobering one for a publisher to consider. Meanwhile, Amazon has pulled the buy buttons for its print books, meaning Hachette is already losing a very significant amount — the word “whopping” comes to mind — of its print business.  (It’s safe to estimate that around 40 percent of Hachette’s overall sales come from Amazon.)

The fact that Hachette is nonetheless still resisting tells you something of how awful the terms Amazon is now offering the company must be … at the same time that it makes Hachette’s silence utterly baffling. The worst has happened — its buy buttons have been pulled. There’s nothing left that Amazon can do to it. So why not speak out? Why not take advantage of the opportunity to define yourself against a foe who has been publicly thuggish yet for the most part maintains smug silence, no less?

Because make no mistake: it’s a historic moment. Amazon is not going to back down. Quite the opposite. Seemingly driven by signals from Wall Street that it’s tired of being a piggy bank for a company that hasn’t made money since its inception, Amazon has expanded its money grab: In addition to Hachette, it’s also recently pulled buy buttons from giant Swedish publisher Bonnier and Time Warner Video.

And, as the rest of big publishing comes up for contract renewal, Amazon is going to demand from them the same onerous terms it’s demanding from Hachette, perhaps even worse Amazon could grow harsher, as despots often do, in the attempt to stem a growing revolt. And those publishers will have little choice but to make the same decision Hachette made, despite fears that the DOJ will accuse them of colluding. Will Amazon then pull their buy buttons, too? It seems likely.

Thus, it’s entirely possible that in short order Amazon won’t be selling books from any of our major publishers — nor any of the independent, university, or non-profit publishers normally forced to accept the same or worse terms.

Which is to say that soon Amazon may not be selling most of the books published in America.

Of course, one would like to think that the government would intervene before that occurred, but it won’t come to that — the big publishers are likely to cave first.  Which would then mean that the other 50 percent of American publishing — the indies and non-profits and university presses — which has even less negotiating oomph, would have to accept those terms, too, disastrous as they are for smaller presses.

In short, all of publishing will lose this battle if Hachette and the other big publishers don’t seize the moment and speak up — if they don’t define what they do and what they stand for, and how their fight is on behalf of the reading public.

They need, in other words, to say what this battle is really all about: an open and fair marketplace, unconstrained by the chilling effects of monopoly. Without that there can be no marketplace of ideas, which is where publishers conduct their primary business: art-making and political discussion, cultural analysis and the free flow of information — the very stuff, it should finally be observed, of our democracy.

The very stuff of, you know, free speech.


Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.