Clash of the titans

John Kay’s column in the Financial Times (Authors should back Amazon in dispute with Hachette) today criticises the authors who have written a letter to Amazon siding with Hachette (and potentially other big publishers) in their dispute over e-book terms. The authors wrote: “Without taking sides on the contractual dispute between Hachette and Amazon, we encourage Amazon in the strongest possible terms to stop harming the livelihood of the authors on whom it has built its business. None of us, neither readers nor authors, benefit when books are taken hostage.”

John says in effect that the authors are naive, and that the big publishing conglomerates are not serving writers (or readers) well: “The large conglomerates that have come to dominate publishing are run by people who love money more than they love books. These support activities have been cut back in the interest of maximising the revenue, from control of access to distribution. Today’s bestseller lists are filled with imitations of books that have already been successful; footballer’s memoirs, celebrity chefs, vampires and female-oriented erotic literature.”

He’s forgotten the crossover categories in this list – the chefs’ memoirs, sporting cookbooks, and vampire-oriented erotic literature – but the point is clear. However, although I agree that one should have no sympathy for Mega-Publisher Corp Inc, I am not as sanguine as he appears to be here about Amazon’s market power. The Amazon-Hachette dispute is a good old-fashioned clash of the titans as they fight over the distribution of producer surplus, and it’s hard to see obvious benefit for writers and readers either way.

Actually, I think the publishing business has responded to new technologies in a far nimbler and more innovative way than the music industry did, in contrast to John’s argument. But the innovation is largely coming from outside the Mega-Publishers and is at the mercy of Amazon for distribution. Amazon does not treat small fry benignly, as Brad Stone’s


[amazon_image id=”0316219282″ link=”true” target=”_blank” size=”medium” ]The Everything Store: Jeff Bezos and the Age of Amazon[/amazon_image]

There are some unanswered questions about the Amazon-Hachette dispute. Here are  Amazon’s and Hachette’s own statements, and here are some very good questions from Joshua Gans, who is the go-to economist on this issue.

I should add, as always when writing about Amazon, that the links on here go to Amazon because of the associates programme, which covers for me the marginal cost of the blog. If another retailer would introduce a similar programme, I’d switch.