Amazon v. Hachette: Everyone Is Wrong But Me

Submitted by Christopher Wright on

Update 5:12 PM (CST): Global edit, Hatchette->Hachette. Because apparently I thought the publisher was actually named after an axe.

Updated 5:18 PM (CST), 11 August: Someone popular linked to this and site traffic is crazy. Load times are slow. Apologies. Also, see the addendum at the end.

I hoped I’d be able to stay out of this whole Hachette/Amazon mess. It should be easy: I’m not a recognized authority on publishing, after all, and my soapbox isn’t really pointed in that direction. But as it happens, no one in this argument is saying what I want them to say, so I’m going to have to say it myself, and leaving comments on other people’s blogs just isn’t going to cut it for me.

The Short Version

This is a horrible fight. No matter who wins we’re probably screwed. Hachette isn’t the hero, and Amazon isn’t the hero either.

The Long Version

Looking at this fight all by itself, without any context at all, Amazon probably deserves to win--and honestly, I think it probably will win whether it deserves to or not. There’s no legitimate reason an ebook should cost the same as a paperback. “Well we really want to” is not a legitimate reason. “Because we can get away with it” is only legitimate from a business perspective if you can actually get away with it, and the current fight between Amazon and Hachette suggests that they can’t.

As reader of books I want ebooks to be cheaper than paperbacks because a) they’re obviously cheaper to make and b) when I “buy” an ebook I have fewer rights to do what I want with it than I do when I buy a paperback, so please don’t try to pretend it’s the same thing. If the first sale doctrine doesn’t apply to an ebook purchase, or doesn’t apply as completely, then it better be cheaper. So strictly within the boundaries of the current argument between a publisher that wants to charge stupid prices for their product and a retailer that wants to sell a product at less-stupid prices, regardless of their actual motives, as someone who buys ebooks I gotta hand Amazon the win.

That said: an Amazon win is probably not in anyone’s long-term interests.

Here is the secret to understanding my take on Amazon: they’re not part of the publishing industry, although the things they do certainly affect it. They’re not a service and retail company, though that is the way they make all their money. At its core, Amazon is and always has been part of the computer industry, and if you view them from that perspective their business practices should scare the shit out of you.

Amazon: The Good

I’m not going to describe my opinion of Amazon as “nuanced,” because it really isn’t. At the end of the day I’m a fan.

I remember using them back when all they sold were books. I loved them, because I could find any book I wanted and I didn’t have to drive anywhere to get it. I guess that makes me a horrible person as far as local book stores go, and honestly I can see their point, but I could go to a book store and not find what I wanted, and wait for them to order it for me, which would take a few weeks, or I could go to Amazon and buy the book and even if they didn’t have it in their warehouse they’d get it to me in less time than the book store could.

Then they started selling everything else under the sun, and that made it better. Honestly, the only thing I don’t buy from them is food, because buying food over the internet strikes me as a Really Bad Idea For Various Reasons Which Probably Belong In A Separate Post.

As far as customer experience goes, Amazon has the complete package. Even their customer support is outstanding: I once accidentally shipped a gift to the wrong address and the Amazon representative was able to change the shipping address in mid-route to make sure it got to the right place. That’s incredible. Any time I’ve ever had a problem with Amazon, even as a self-published author (when CreateSpace kept insisting I wasn’t naming the titles of my books correctly) as soon as I was able to communicate with an actual human being the matter was resolved promptly and professionally. While I know that not everyone has had this experience (customer support outcomes depend as much on whether or not the CS Rep is good at their job, or is having a good day overall, as much as it does on the system put in place by the company) this experience has been consistent enough to convince me that Amazon puts a lot of effort into making sure Customer Support is actually focused on supporting the customer.

This is fantastic, and this is one of the reasons so many people are so happy to use them. And this is in direct contrast to my experiences with customer support at Barnes and Noble, which once resulted in me shouting obscenities at the top of my lungs (much to the amusement of my co-workers) after being transferred to yet another subdivision of B&N customer support for the eighth time.

So yeah, as a customer, Amazon is fantastic. And as a customer I’m pretty loyal to them, not because I think Jeff Bezos is my bestest personal friend forever but because I’ve yet to use another service that works as well as they do.

But stepping away from being a customer... let’s talk about self-publishing. I started self-publishing in 2011 when I published Pay Me, Bug!, which may or may not continue to be published under that name, and I continued self-publishing when I started serializing Curveball. Of course, self-publishing existed before Amazon supported it, but I think it’s fair to say it wouldn’t be where it is now without Amazon jumping in the way it did. I tend to believe that self-publishing would still, over time, have become increasingly viable, but Amazon forced the issue, and I for one am grateful for that.

Most of my sales are on Amazon. I sell on other stores, too, but Amazon is by far the most profitable: Amazon, distantly followed by Kobo (most months), followed by Google Play (which may wind up taking the #2 spot soon), followed by B&N, distantly followed by Smashwords, and finally the one guy in Norway who buys my books on iTunes (thanks dude). If you combined all the profits form all the other storefronts together, Amazon would still come out ahead most months.1

Amazon makes it as easy as it can possibly be to get your book up there, and the level of support it provides, while it tends to be restricted to email, is still prompt, responsive, and professional.

CreateSpace, which I also use, is also good. It’s improved dramatically since I first started using it. It’s not quite at the level of Ingram in terms of book quality (and it doesn’t do hardback) but it’s cheaper and easier to use, and the quality is high enough to make it come out ahead.2

It is good enough and aggressive enough that there are self-published authors who have been able to quit their day jobs and self-publish full time, focusing only on the Amazon market. Think about that for a second. They don’t need to sell anywhere else, and they’re supporting themselves.

That’s a success story, and Amazon deserves credit for it. What they did was pretty bold and it changed the market. Kudos.

Amazon: The Bad

So after saying all those glowing things about Amazon I should be firmly in their camp, basking in the reflected glow of my adoration as it bounces off Jeff Bezos’ shining, chrome-silvered armor, right? Well, no. This is where my fellow self-publishers accuse me of having “Amazon Derangement Sydrome,” because despite my enthusiasm for their company, I’m pretty sure they’re going to turn on us all the minute they get their lock on the market.

Which is what they’re trying to do: make no mistake: Amazon wants to be the next monopoly. They want it all. They’re convinced they can do it the best (and so far they can) and the prize of doing it the best is to Get All The Money. If you think monopolies are OK then this entire argument will mean nothing to you. My bias is that monopolies only work when they are heavily regulated, and even then it’s debatable.

This is an argument that is frequently used by companies who are directly competing with Amazon, and many people who defend Amazon’s business practices like to point out that the motives of those companies are suspect. This is a fair observation. My counter-observation is that the argument is still true.

This goes back to my declaration that Amazon is best observed within the context of the computer industry. I make this argument because because Amazon acts like a company in the computer industry. I will go so far as to say that Amazon acts a lot like a scrappy little company called Microsoft, back in its early days.

I don’t make this comparison lightly. When Microsoft first really got momentum under its belt, when it started to become a power in its own right in the market place, what it was doing was, in some ways, heroic. The industry leader at the time was IBM, and it was a very bad IBM. It ruled the market with an iron and fairly uninspiring fist. It could wreck companies. It could destroy emerging ideas it didn’t like. It had so much control that the Department of Justice had to step in and severely restrict the way it did business.

Microsoft represented a refreshing alternative. It recognized a new business line that allowed a lot more people to get involved, start businesses, make money. It decentralized computing to the point that people could start businesses and sell computers and software and services and things without having to play by IBM’s rules.

They also—and I want to be absolutely clear that I am freely and cheerfully giving Microsoft credit for this—recognized that the way to make their business successful was to help make computers look more accessible. If you compared Apple to Microsoft back in the days of DOS, and even the days of Windows 3.0 and 3.1, Apple would win on reliability and usability. But Microsoft did a lot more work on selling the idea that computers were useful for everyone, and people responded to that. And in the very beginning, Microsoft’s technical and customer support was unparalleled. Not to mention they produced some of the finest technical documentation I’ve ever read.

Of course, Microsoft was also ruthless when it came to business, and that ruthlessness was adopted by the computer industry at large as Standard Operating Procedure. I won’t get into that side of it—those of you who read Help Desk already know my opinions on those tactics. Those of you who aren’t familiar with my comic, well, the archives are over there.

For those of you unwilling to go through 18 years of comic archives,3 here’s the short version: every company in the computer industry behaves like a sociopath. They will do good things for you for as long as there’s profit in it, but as soon as it reaches the point where they don’t have to, they immediately flip to abusing you, relentlessly, all the while telling you there’s nothing they can do about it, and it’s probably all your fault.4

Keep in mind that this description applies to every for-profit company in the computer industry. This includes companies I like, like Google. There’s a reason I changed their company motto.

That’s where Amazon comes from. It has adopted all the nasty little tricks every computer company uses to try to lock in its customer base to its chosen platform. Let’s look at those tricks below:


An End User License Agreement is that thing that pops up any time you try to install a piece of software or activate a proprietary piece of hardware. It’s something you probably don’t read, because they put a lot of words in it and use lawyer-speak to describe what you’re agreeing to... so even if you did read it you probably didn’t understand what you’re reading. It is, essentially, a contract without a signature. Clicking “Accept” takes the place of your signature. It is a lot more legally binding than it probably should be.

Amazon is full of EULAs. They don’t call them that specifically, but you “sign” one when you create an account as a customer, and you “sign” another when you create a KDP account as a self-publisher, and you “sign” a third when you create a CreateSpace account, and a fourth when you decide to try to sell things on Audible, and now that they own ComiXology there’s a fifth for using that, and that’s just off the top of my head. And in every single one of these agreements, you will find at least two things that potentially spell trouble:

  • Arbitration Clauses. If you ever decide that Amazon is playing dirty pool and you want to pursue legal action against them, well, you probably can’t, because you’ve agreed that any dissatisfaction will be resolved not through the legal system, but through arbitration. Amazon has already chosen who the arbitrator will be. The deck is stacked against you, and even if you win, that doesn’t mean Amazon has to change their practices: arbitration doesn’t set legal precedent.
  • Terms are not set in stone. Every EULA contains language that says something to the effect of “company reserves the right to update these terms at any time, for any reason, without consulting you first, and it’s up to you to keep up with these changes.” Many (though not all) EULAs also contain language that says “we will assume you agree to these changes unless you uninstall the program/cancel your account/do something drastic to remove yourself from the market and/or community.” In other words, even if you read the entire EULA and decide you’re willing to live with it, there’s nothing, absolutely nothing, that prevents Amazon (or any other company that uses this) from changing it later, and keeping up with those changes is entirely your responsibility. I’d like to note that in this respect, Hachette actually has a much better bargaining position than self-publishers do. They can actually negotiate agreements. And Amazon is trying to weaken that position and put them in a position where Hachette has to play like everyone else.

So there’s that.

Use of patents against competition

This one is a little murky, and lawyers versed in intellectual property and patent law will be able to argue more convincingly in either direction than I will. Amazon gets sued a lot by other companies over patent issues, and Bezos has spoken out over the need for patent reform, but they aren’t innocent of using patents to stop competition. In 2009 (correction: 1999) Amazon sued Barnes and Noble because B&N had set up a feature they called the “Express Lane.” If you were on their website and you only wanted to buy one thing, you clicked on the Express Lane button and you bought it automatically (assuming your purchasing information was already entered into your account.) Amazon claimed this violated their “One-click” patent, and they fought like hell to keep B&N from using a similar technology to provide an equivalent user experience.

In other words: B&N studied something Amazon did that its customers liked, it tried to compete, and Amazon sued them for doing it.

Pursuit of lock-in on all levels

“Lock-in” is where a company introduces proprietary and strictly-controlled tools and environments that give them absolute control over their market. Anything Amazon does in the digital market is done with lock-in in mind. Let’s look at some examples:

  • Use of proprietary file formats—the file formats that Amazon uses to sell ebooks are proprietary. Only Amazon controls them. If you buy an ebook on you are locked into that ecosystem. If you want to build a reader or file converter that can use those file formats independently of Amazon products, the only legal way to do so is recreate it from scratch without actually looking at any of the original code or libraries. This is a slow, agonizing process and can be immediately negated... all Amazon has to do is change the file format, and all your previous work is broken.
  • Use of proprietary hardware—their Kindle e-ink reader is great as long as you only buy Amazon. Their Kindle tablet would be a great general-use tablet, except that it’s not possible to install any other e-readers from any other company (B&N, Kobo, etc.) on it, unless you figure out how to jailbreak it and even then results are mixed. If you buy an Amazon device, you are committing to the Amazon environment, and that environment only.
  • Encouraging exclusivity—Amazon wants to be the only company that sells your ebook. The only one. It doesn’t force you to do it, but if you decide to use KDP Select you get more powerful promotional tools at your disposal, you get a higher percentage of the sales in more Amazon markets, and you get access to some genuinely interesting new tools like Kindle Serials or Kindle Unlimited (“The Netflix for Books.”) The trade off is you can’t make it available anywhere else, even on your own website. In other words, if I were to publish Pay Me, Bug! or Curveball on KDP Select, I would have to remove them from Eviscerati.Org. I would also have to stop distributing them with a Creative Commons License, since the CC license grants you, the reader, distribution rights that KDP Select doesn’t even grant me, the author and publisher.

File format, hardware, and content providers—all three areas that Amazon tries to make exclusive, so that they and only they control it. They aren’t the only company that has ever tried to do this. Apple works this way, in almost exactly the same way, though they aren’t as aggressive about pushing into other markets. Microsoft invented this approach, and they had the same aggressive marketing strategies. The proprietary .doc format is one of the reasons it has been almost impossible for me to use anything other than Microsoft Word for most of my professional career... for the longest time it just wasn’t practical for other companies to try to figure out a way to correctly import and export .doc files—whenever they got something right, Microsoft was tweak the file a little to break whatever they’d figured out. That’s what lock-in allows you to do. If you signed on to be a “Microsoft Preferred Partner” you got access to all kinds of goodies and perks that made it easier for you to create software that ran in the Microsoft environment.

… and then, when they decided they could make more money doing it themselves, they’d create a competing version of your product, change a few APIs, stop talking to you, and within a year you were out of business.

“Lock-in” only benefits monopolists, and companies that want to be monopolists. The only reason you pursue it is to make it harder to lose customers. If you have 500 Amazon ebooks and you stumble across an ereader or tablet that is functionally superior your current one in every way, with the sole exception of not having a Kindle Reader app—you’re probably not going to buy it, because doing so would throw away your current investment of ebooks.

“Lock-in” ultimately screws other people trying to do business because once it’s achieved, there is no way to negotiate terms. Once it hits that point, you need to invent a new market first. All the other markets are gone.

Hachette: The Ugly

OK, so now that I’ve exposed my wild-eyed crazy to the world and accused Amazon of trying to enslave all of humanity with its dastardly, monopolistic schemes, it’s reasonable to assume that ultimately I’ll take Hachette’s side because Monopolies Are Bad. It’s reasonable, but it’s wrong. I do not take Hachette’s side in this. My official position is that neither of these companies deserve to win this fight. But one of them will, because I can’t think of a way to resolve this as a draw, and since one of them will it’s probably going to be Amazon, and as I said above, taking only this fight in context, Amazon probably has the stronger claim.

Here’s why:

Amazon can articulate a solution to a problem, and Hachette can’t articulate anything other than “Amazon is bad.”

Amazon has pointed out that charging huge prices for ebooks—prices that, cost-wise, make them indistinguishable from paperbacks—is stupid. My apologies to all the publishers and writers who will be offended by this, but Amazon is right. They are absolutely making self-serving statements, but those self-serving statements are, from the perspective of a reader who likes buying books, and prefers buying more books with the same amount of money, 100% indisputably true. Their vision advances the market in a way that is better for customers. They have a position that has a solution.

Hachette’s position is “Amazon is trying to control the market.” Well, I actually agree with that position. But they haven’t offered a solution to that argument. They have no vision on how to create a market that effectively competes with Amazon that answers any of the claims Amazon has made about how their vision is better for consumers, or about how their vision is better for other publishers, like me. Sure, Amazon is opening the market wide only until they can sew it back up again, putting a nice little monogramed “Amazon” on the side of the duffel bag that will store the severed heads of all the publishers who dare cross them in the future, but their vision includes a description of how this change will make everything better while Hachette’s vision includes a description of how everything will remain exactly the same.

Siding with Hachette, in other words, doesn’t stop Amazon from being a monopoly. It does exactly nothing to stop Amazon’s growth or its power because Amazon is still the place everyone goes to buy everything because they still have the best game in town. Hachette’s argument in this fight is “we shouldn’t have to have a game, come on guys, I mean what do you expect us to do, things?” They want status quo, and they’re using “ARGH AMAZON IS MONOPOLY COME DEFEND US FROM THEIR EVIL WAYS” in order to justify continuing to use Amazon’s evil ways in exactly the same way they did last year.

In other words, Hachette views Amazon’s power as bad only when it gets in their way.

In Conclusion

I will not sign a letter in support of Hachette. I feel bad for the authors who are suffering financially and I hope they get paid soon, but Hachette’s accusations are manipulative plays to our paranoia, no matter how justified that paranoia might be, because they have exactly zero plans on how to correct all the things they currently think are wrong with the market.

I will not sign a letter in support of Amazon. While as a customer I think they are fabulous and while they have the best deal in town for most self-publishers out there today, that environment is becoming increasingly more dependent on using Amazon and only using Amazon. I’ve seen that market before, and my historical perspective makes me more than suspicious, it makes me alarmed. Too many arguments in support of Amazon run along the basic theme of “Yeah I know they’re not my best friend, but basically they’re my best friend.” Too many other arguments run along the lines of “they would never do that!” which in my experience generally leads to “they,” whoever they are, doing exactly that. The fact that there is a really good thing happening right now doesn’t mean it will remain a good thing, that they intend it to remain a good thing, or that there aren’t better things out there somewhere, but if Amazon continues to succeed at its lock-in strategies then we’ll never get a chance to figure out what those better things might be. Market forces are great for surfing, but man, that undertow is a bitch.

Everyone taking sides in this argument is wrong. Every single one of you. You are taking sides for the wrong reasons, supporting the wrong people, endorsing the wrong philosophies, and choosing either path is ultimately bad for everyone. You are wrong, I am right, and this is why.

...either that, or I’m a paranoid crank. This is also possible.

Addendum, 8/11/14: I wanted to take the opportunity to link to a piece by Dave Bryant who points out that there are other factors beyond the cost of printing a book that affect bottom line costs. It's a fair point -- I don't think that the labor costs in book production would necessitate ebooks being $14 a pop, but it's worth keeping in mind there is a minimum threshold you need to clear in order for a book to be profitable.

  • 1. Note that it’s still not a lot of money. I can’t use it to pay rent or anything. I could by a few pizzas every month, that’s about it.
  • 2. My opinion only. Others will differ.
  • 3. Which is to say “most of you, because you have things to do.”
  • 4. You can make a case that this is the way all companies behave. Sometimes I strongly suspect that’s true. However, the computer industry was the first to do so brazenly, somehow turning it into a virtue.


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D'oh! I think I've been doing

D'oh! I think I've been doing that since forever. Time for a global fix!

Writer, former musician, occasional cartoonist, and noted authority on his own opinions.

Question: is it legal to

Question: is it legal to reverse engineer the kindle format? I thought it included DRM, and reverse engineering that was made illegal by the DMCA. Hachette can't even provide a tool to unlock it on the books they sold through Amazon.

Comment: How can you possibly think a regulated monopoly works? Think of the large monopolies you absolutely hate to deal with, that consistently screw their customers: the cable companies, the phone company, most of your utilities, the post office. Those are monopolies that are so heavily regulated that it's illegal to compete with them!

Final note: I don't care. I'm a huge fan of Amazon, been a prime member pretty much since day one, but I won't buy electronic media from them. I won't buy media that I can't play on the player of my choice, and I won't buy media that has DRM.

is it legal to reverse

is it legal to reverse engineer the kindle format?

It is if you black box it, which I think is what Calibre did.

Comment: How can you possibly think a regulated monopoly works?

What I specifically said was "My bias is that monopolies only work when they are heavily regulated, and even then it’s debatable." I don't think that's a very strong endorsement. I think you can make an argument that monopolies are a necessity in some situations, but in those situations the only chance you have is to regulate it up and down.

Cable companies are not regulated, not to the degree utility companies are, and utility companies are a lot easier to deal with. The post office actually works pretty well. Phone companies are on the same level as cable companies--not heavily regulated.

Writer, former musician, occasional cartoonist, and noted authority on his own opinions.

The solution is to keep your

The solution is to keep your powder dry. Monopolies can only extract monopoly profit to the extent they do not exceed the difference between their prices and practices and the next most efficient possible producer. That difference is both in operating the competing business and setting it up in the first place. Keeping that space small will keep Amazon's future monopoly depredations small. It won't stop them. Nothing will stop them from happening. But they're the least cost route to reducing them to a minimum.

Finally on a machine I can

Finally on a machine I can comment from :)
I find myself in agreement with you on a lot of this. I'm from rural Alaska, so getting any sort of new books at all was generally a pain. When Amazon came along, it was amazing for me -- not only because of the vast selection, but, as things grew, we could still get it shipped to us, and for free at that. If I wanted to buy a twenty-five dollar stick of memory, I could go to website A, and pay $32 for it, and get charged $75 shipping, or I could buy it from Amazon for $28 and get it shipped for free. They've recently raised the threshold to $35 I think, but it's still the most consistent place to be able to order goods from without a massive surcharge.
That all said, I realize that at some point they may well reach critical weight and not be so friendly. I buy physical things from Amazon, and I buy music. I like being able to download my music DRM-free, and they have some things I listen to. I have a tablet -- on which I utilize Aildiko for my e-books, the large majority of which are from Project Gutenberg. My copies of your books, Chris, I picked up from Smashwords partly because how multiple format friendly they appeared. I have no desire to buy into the Kindle eco-system. I bought my tablet precisely because of how free it was of from bloatware or anything except Android basic OS and apps. And while I don't think I've ever read any books by this particular publisher and wouldn't miss not seeing their books on Amazon, I'm also cautious that maybe the next house that Amazon leans on is mine.
My rambling aside, is there a takeaway from all this? The case will likely be decided in court, but are there things that we, as consumers can do to try to keep Amazon on a favorable path? Supporting alternatives? Strongly worded letters sent to Bezos's house? :P

As ex-IT, now self-publisher

As ex-IT, now self-publisher and non-USAian, I agree with everything you said. Oracle is a perfect example of the kind of stranglehold mentality you're talking about. They, too, started off as the "good guys" against the horribly expensive upgrade paths and customer lock-ins of that monster, SAP. (And they were right, fwiw.) But now look at them, the gouging bastards. What started as a reasonable way to do business has morphed into screaming clients operating under onerous license fees with substandard software quality, locked into an ecosystem that will bankrupt them to break out of. Think Ellison cares?

Good luck trying to convince anyone on TPV, however.

Thanks KS. I know it's a

Thanks KS. I know it's a windmill, but I gotta tilt.

Writer, former musician, occasional cartoonist, and noted authority on his own opinions.

"Is is legal to reverse

"Is is legal to reverse engineer the Kindle format?"

I believe it is. I remember reading a piece of legislation on the books that said that any file format that was not openly published could be reverse engineered in any manner that anyone wanted and that the provision superseded any contracts, agreements, or anything else to the contrary. Of course, most companies just publish their formats on their web page and have done. Now, of course, if they have published their format (making it non-proprietary) you can't reverse engineer the kindle because you don't have to.

I didn't realize that. So

I didn't realize that. So under that legislation you wouldn't even have to black-box it? You could just tear it apart directly? That's interesting.

Writer, former musician, occasional cartoonist, and noted authority on his own opinions.

For what it's worth, I once

For what it's worth, I once read/heard about the "safe" way to reverse engineer anything. You need two teams of people. The first team gets down and dirty, studies the original code from the provider, reads the assembler, runs disassemblers, runs test cases thru the code, discovers exactly how the code behaves in each and every possible case -- and then they document it completely, to the last detail, how it behaves, Without saying a word as to how the original code does it.

The second team is strongly skilled, but has absolutely No Connection or Knowledge of anything from the original publisher (they are "Virgins"), never worked for them, or with them, or with the original development platform, or anything at all that could tie any of them to any knowledge of the original provider and their code. They take that detailed specification, and write code that behaves exactly as specified in the design docs. (Perhaps their results run thru the same test cases developed for the original deconstruction, to prove that they behave exactly the same.)

If you do that, and can prove that, then there is no way the original provider can sue you for doing reverse engineering on a basis of theft of proprietary information.

On the other hand, doing it this way takes forever, and again, as you mentioned, if they change the underlying formats and such, you may have to start from scratch. You'll usually be a whole version behind in your efforts. But you can't be sued, although they may try, or try to get you on patent infringement, or some such.

For what it's worth...

. -- Scott

Yeah, that's the black box

Yeah, that's the black box method I think.

Writer, former musician, occasional cartoonist, and noted authority on his own opinions.

Exactly. I completely and

Exactly. I completely and totally agree. This is precisely what I've been thinking personally. You just said it much better than me. is awesome for its customer service. It's ruthless and vicious with its business partners. As a fellow self-published author, I'm as worried about this whole thing as you are, and for the same reasons.

What somebody needs to do is invent an open-source alternative to online shopping . . . ;)

I don't think Pay Me, Bug! is

I don't think Pay Me, Bug! is available on Silk Road. But I haven't actually checked.

LOL. I wouldn't even know how

LOL. I wouldn't even know how to put it on there.

Writer, former musician, occasional cartoonist, and noted authority on his own opinions.

Probably not a good idea to

Probably not a good idea to look into it; remember, only terrorists use TOR.

The black box method (more

The black box method (more commonly called "clean room" development) only works for certain things that are protected by copyright. If Amazon has some software that reads a proprietary file format and you have a team that looks at it to figure out how it works, write up functional specs, and have a separate team that never looked at Amazon's software write their own implementation from the specs, then the new software is an independent production and does not violate Amazon's copyright in the software. However, patents do not have the loophole that copyright does for independent invention. If Amazon has a patent on something that is necessary for reading their file format, even if you come up with the idea all by yourself they still have the right to stop you from using it. The DMCA is another block to that loophole - If Amazon has something in their software that can be considered to be a protection against people copying the content of the books in violation of copyright, then even a clean room implementation that manages to work around the DRM is a violation of the DMCA. If the only way to read the book is to unlock the DRM then clean room practices may still not allow you to write your own reader software.

This is a letter I would

This is a letter I would write to Amazon, since they're asking:


While Amazon is to be commended for variety of products, price and customer service, the present spat with Hachette is a tad surreal.

Hachette has little to stand on, while Amazon purports to lower prices to consumers, increase sales figures... on the basis of lower production/distribution costs. Amazon has even proposed to funnel funds to the creators directly, up to 100%.

But the picture is not complete. On one hand, Amazon pushes services to have writers be able to distribute ONLY through Amazon. The Kindle platform is a closed silo. Terms and conditions of most services are so slanted towards Amazon. Put all items together. There is only one conclusion: the strategy is to replace the oligopoly of printing majors to become a monopoly of e-distribution.

This is confirmed by Amazon's admitted practices of 'bumping down' Hachette products unless they meet your demands. Amazon enticed them into your service, now Amazon wants to modify terms. Way to go!
Market forces state that if publishers maintain high prices, then they will wither away if competition beats them on price. Whatever, if it's too expensive, their sales will drop; it's their management consequences.

I cannot encourage Amazon to pursue such a strategy/tactic. Guess why I don't own a Kindle?

As usual, reality stands somewhere in the middle. If Amazon were truly interested in its clients and its producers it would:
• allow publishers to set their prices
• could refuse access to some publishers (it's fine, you don't have to do business with everyone)
• publish the amount of the price that goes to the author. If it is unknown, state so.
• release Kindle from its silo.
• publish the number of items sold (the author can thus track earnings)

Consumers can make their decisions accordingly. Amazon would, incidentally be much appreciated by the entire marketplace (rather than risk the boomerang it may have launched).


I would point out that you're

I would point out that you're a bit wrong in assuming that the cost of producing an e-book is much less than the cost of producing a paperback. The marginal cost of a paperback will, of course, be higher than the marginal cost of creating an e-book (the latter being, essentially zero), but manufacturing is really the least of the costs of producing most books (putting aside lavish print editions with six-color plates throughout and the like). The cost of that e-book also includes editorial costs, promotional costs, and a whole host of other non-obvious requirements beyond mere manufacturing. It also, for better or for worse, includes the cost of producing books which might not earn back their own costs. If we lose publishers, then books will end up falling into the awful morass of click-bait level production that we see now with apps and websites. I for one would not like to lose Karen Russel or Adam Levin to a flood of buzzfeed-style dinosaur erotica.

I don't see what the marginal

I don't see what the marginal cost of producing books has to do with their pricing except to limit how low the publisher can set the price and still not go bankrupt. Prices in a free market are determined by demand and supply, and publishers are free to charge what they think the market will bear, and there's nothing wrong with that unless you think capitalism is a fundamentally flawed system. As a writer, I'm surprised you think that the marginal cost of producing e-books should dictate the retail price, as there is so much more to publishing than just moving bits.

I'm not saying Hachette is without fault here, but I think you've based your argument on a shaky foundation.

I'm concerned that you, like

I'm concerned that you, like nearly everyone else, are approaching this situation only from the perspective of "who is right about the cost of e-books?" For me, that's a complete non-issue. First, because I don't own a Kindle or care to--I still buy paper books. But second and more imporantly, because I have been an avid Amazon consumer, like you, buying nearly everything but food from them--drugstore-type items, clothes, electronics, household goods, books, DVDs and Blu-Rays, etc.

I don't view this as an argument about e-books. To me, this is a monopolist HURTING ITS CUSTOMERS by punishing its partners during a disagreement about pricing. They're now doing it with Disney DVDs, and they did it with Warner DVDs a few months ago. What makes Amazon WORK for me is the one-stop shopping--that I can find anything there, reliably. This arrogant policy of "punishing" suppliers that they're negotiating with, by making that supplier's items unavailable for pre-order, or backlogged for weeks, or dropping off recommendation lists, is the bigger problem. That HURTS CUSTOMERS. It's a crappy way to do business, too.

I went from making about 25 purchases a year from Amazon to ZERO since May. I have an Amazon credit card accumulating bonus points that I won't spend. I'm gradually shifting my purchases to another card. I've sought out alternate websites to buy my office supplies, household goods, clothes, books and media, etc. I've gone from assuming I'll return to Amazon when this incident is over, to realizing that Amazon will continue to behave this way, and I may have to give it up permanently.

Nothing I've tried to buy has been affected by their throttling their partners' inventories like Hachette and Disney--but I'm vehemently against this as a principle. If your company seems to be headed toward being a monopoly, Microsoft is NOT the company you should use as a model.



The cost of that e-book also includes editorial costs, promotional costs, and a whole host of other non-obvious requirements beyond mere manufacturing.

I'm assuming those editorial costs will be the same as the editorial costs, promotional costs, and the "whole host of other non-obvious requirements beyond mere manufacturing" that a book would get as a paperback, trade paperback, hardback.

And I'd still expect the editorial process of the physical books to be higher because you'd have to print out galleys in order to do it properly.

If we lose publishers, then books will end up falling into the awful morass of click-bait level production that we see now with apps and websites. I for one would not like to lose Karen Russel or Adam Levin to a flood of buzzfeed-style dinosaur erotica.

Since my own books probably fall under that definition ("falling into the awful morass of click-bait level production that we see now with apps and websites") I'm not sure who you're hoping to convince with that argument. Probably not me. Maybe some of my readers. ;-)

Writer, former musician, occasional cartoonist, and noted authority on his own opinions.



I don't see what the marginal cost of producing books has to do with their pricing except to limit how low the publisher can set the price and still not go bankrupt. Prices in a free market are determined by demand and supply, and publishers are free to charge what they think the market will bear, and there's nothing wrong with that unless you think capitalism is a fundamentally flawed system. As a writer, I'm surprised you think that the marginal cost of producing e-books should dictate the retail price, as there is so much more to publishing than just moving bits.

I don't see what that argument has to do with anything either. My point is that Amazon is making a coherent argument the buying public can respond to ("ebook prices should be cheaper") while Hatchette is making an argument that makes no sense ("AMAZON IS A MONOPOLY OH MY GOD AND THE ONLY SOLUTION IS FOR THEM TO GIVE US THE SAME DEAL WE HAD LAST YEAR, WHEN AMAZON WAS STILL A MONOPOLY").

Aside from that, I'm not sure how you're interpreting my argument. My primary argument is that Amazon's business practices are ultimately bad for writers because they're aggressively pursuing a monopoly. My side argument is that Hatchette is making a poor case on its side of this argument, and as a result I'm having a hard time feeling any sympathy for their cause.

Writer, former musician, occasional cartoonist, and noted authority on his own opinions.



I'm really not sure where you're getting the idea I'm on Amazon's side here. In terms of this specific dispute I have to give Amazon the win because their argument is more compelling to consumers than Hatchette's. From that limited perspective I'd say they earn the win, but I'm pretty sure from the "big picture" perspective I was pretty clear on my stance: Amazon's road to monopoly is not even remotely good.

Writer, former musician, occasional cartoonist, and noted authority on his own opinions.

"Hachette can’t articulate

"Hachette can’t articulate anything other than “Amazon is bad.”"

Not quite. What they've said (including in a letter from the CEO a few days ago released in response to Amazon encouraging people to write him) is that they want the flexibility to charge what they think makes market sense instead of agreeing to Amazon's $10-or-bust strategy. Amazon's presentation of the numbers about what ebooks cost, etc., ignores the reality that ebooks decline in price over time. Publishers who produce books across multiple media rely on early hardcover sales as part of the way a given book produces a positive return above production cost, general overhead, and author's advances and royalties.

Most ebooks don't cost $15 to $20. They're mostly $10 plus or minus a couple books. If you see a $12 to $15 ebook, wait a few months or a year, and it's $10 or less most of the time.

What Amazon is fighting for in its negotiations is the right to eviscerate the business model of publishers that still leans on hardcovers. By doing so, this makes it less likely publishers can produce as many books. Most books make little or no money. Most books are a risk. Only the blockbusters and some evergreens produce the bulk of the profit that keeps them moving forward.

Most of the books being sold have zero utility. People purchase them for entertainment. If the pricing were incorrect, people would stop buying them in the same quantities. Amazon's argument is that making all books no more than $10 (apparently in the adult trade fiction/nonfiction category, about $15 billion a year of sales in the US, of which about 27% is currently ebooks by revenue), sales will increase. That is a fiction: even if their analysis is correct, the last several years of book sales, including ebooks, show that there's a fairly close to zero-sum game.

Amazon's $10 ebook pricing shifts sales from bricks and mortar stores of hardcovers, along with shifting them from their heavily discounted, less profitable own sales of hardcovers, to cheaper-to-fulfill, higher-margin ebooks.

I apologize in advance for

I apologize in advance for tripping Godwin's law but you are talking about how to respond to two competing evils and I can't think of a more appropriate and familiar historical reference. So I beg to disagree about not taking sides; if Hitler and Stalin are fighting, you want old Joe to win even though you know full well that you will have to fight him later on. And as far as relative evilness goes, the disparity between Adolf and Josef isn't even as great as Amazon and Hachette. Amazon dominates eBook retailing while Hachette is just one among a gaggle of publishers.

Now I'm not saying that Bezos is anything like Hitler, but if I used some other metaphor such as Khmer Rouge/Viet Cong, say, few people would know what the hell that means. In fact outside of the US, the Viet Cong are thought of as freedom fighting nationalists rather than evil communist scum.

I don't know that the book

I don't know that the book buying public are that dumb. Most people understand what a monopoly is and what that means for prices and quality. Come on, give them more credit. All that is needed is that "Amazon wants to be a monopoly" enter the national conversation, and thanks to articles like yours, it is.

Every Good Boy Deserves Fair Competition.



So I beg to disagree about not taking sides; if Hitler and Stalin are fighting, you want old Joe to win even though you know full well that you will have to fight him later on.

I'd say that depends on whether or not you're Poland. ;-)

Writer, former musician, occasional cartoonist, and noted authority on his own opinions.

The "one-click" patent

The "one-click" patent litigation occurred in 1999, not 20091. After the PR fiasco that occurred, Bezos had a change of heart regarding the patent system23. I can't find a reference for it, but Amazon has not used any patents offensively in over 10 years.

Scott, you're right, it was

Scott, you're right, it was 1999. I have updated it in the article. Thanks for the correction.

Writer, former musician, occasional cartoonist, and noted authority on his own opinions.