“Is it cold for Amazon to underprice books to capture market share?” Vee Parker, a ruthless drug lord played by Lorraine Toussaint in “Orange Is The New Black,” asks an inmate working for her who questions her tactics in a recent episode. The women’s prison drama has always had a particular talent for capturing the cultural zeitgeist — its characters read “The Fault In Our Stars” and “The End Of Men” — but its creators could not have anticipated how much Vee’s words would resonate with the headlines.
Amazon (whose CEO, Jeff Bezos, owns The Washington Post) stands accused of, as my colleague Steven Mufson reported in May, “playing hardball in a contract dispute about how big a discount Hachette will give the giant online retailer and how to set prices for e-books.” Hachette says that its titles are being shipped on delayed schedules even though it has provided enough copies to meet demand. Amazon has issued a statement defending its business practices but declined to talk to reporters about the charges.
In the conflict between these two large companies, Hachette wants the public to believe that publishers, authors and readers are all on the same side against the retail giant. That is not necessarily the case.
Author Hugh Howey, who published his “Wool” series through Amazon’s Kindle Direct Publishing program, recently raised sharp questions about Hachette’s interests in its dispute with Amazon. Just because Hachette wants to charge more for the e-books it publishes, he argues, does not mean those prices are pegged to production costs or that authors would share in those higher prices.
“Publishers are waging a war here for higher prices and lower royalties,” Howey wrote. “$14.99 is their ideal price for an e-book that costs nothing to print, warehouse, or ship. That’s twice what mass market paperbacks used to cost, which is what they are replacing. Reminds you of how cheaper-to-produce CDs suddenly cost twice as much as cassettes simply because they were new, doesn’t it?”
Amazon’s tactics in its feud with Hachette and now Time Warner, including delaying shipping on Hachette books and refusing to take pre-orders for “The Lego Movie,” are certainly annoying if you badly want a physical copy of a book or a movie. But they are short-term tools that Amazon is using to drive down prices for consumers.
Hachette and Time Warner may be angry about Amazon’s toughness and power to influence the market. But that does not mean that Amazon is ignoring its customers’ long-term best interests. Hachette, after all, is one of three publishers who settled a price-fixing suit brought by the Justice Department in 2012: Those companies ended up paying $69 million to readers who purchased their e-books over a two-year period.
That Hachette would try to ratchet up prices is understandable. But that does not make the effort admirable or a service to customers or authors.
Of course, just because Hachette is self-interested does not make Amazon a paragon of ethical business either. As Amazon has become a major player in the clothing and shoe retail, how has its market share impacted garment workers who produce the products it sells in such great volume? We might joke about Bezos’s idea for Amazon to do delivery by drone, but Amazon’s commitment to exceptionally fast delivery is a serious business with serious implications: The Labor Department is investigating two deaths in Amazon warehouses. Journalists have been calling attention to the conditions in those facilities for years.
I am all for an ethical conversation about Amazon’s role in the American economy and marketplace. But in that discussion, we should not confuse the interests of big media companies with the interests of the people who work for them and the people who buy their products.