“Amazon is doing the world a favor by crushing book publishers”

I have read many lamentations about the evils of Amazon but have yet to see anyone effectively rebut Matt Yglesias’s points in “Amazon is doing the world a favor by crushing book publishers.” The section about marketing is particularly interesting, since seemingly everyone agrees:

When I was a kid, my father was a novelist as were both of my grandparents. So I heard a lot of stories about how useless publishers are at marketing books. Then I got to know other people who wrote books and they had the same complaints. Then I wrote a book, and their complaints became my complaints. But it’s easy to whine that other people aren’t marketing your product effectively. It took the Amazon/Hachette dispute to conclusively prove that the whiners are correct. [. . .]

The real risk for publishers is that major authors might discover that they do have the ability to market books.

Publishers also appear to be bad at identifying which books readers want to read and which books readers don’t want to read; we’re now going to find that out by writers writing and then releasing their books into the wild.

Incidentally, though, it’s hard for me to find good books that are either self-published or conventionally published; if you have any suggestions please email me.

See also “Tyler Cowen on Paul Krugman on Amazon on the buzz.”

The latest Amazon wrangle, and the challenge of growing new writers

I’m a bit late to this chat—”real work” keeps obnoxiously interfering with blog writing and other activities—but Charlie Stross discusses the latest publishing imbroglio in “Amazon: malignant monopoly, or just plain evil?“, but like George Packer before him he is distinctly anti-Amazon. It’s a somewhat justified point of view, but I think his followup, “A footnote about the publishing industry,” is less vituperative and consequently more interesting. As usual with these kinds of stories Stross ignores an important point: Amazon is great news for readers and writers who don’t have (or, sometimes, want) a big publisher (like yours truly) but not particularly good news for those who already have a publisher.

But there’s a more interesting and often overlooked point embedded:

But [the reading business is] still a more or less global zero sum game (competing for readers eyeball-hours). And because the rate of individual production is relatively low and the product is still produced artisanally by cottage industries, product lead time is measured in years, time to achieve net positive revenue is also measured in years, and it’s important to keep the back list on tap because it can take decades to grow an author’s career. Stephen King was an overnight success with “Carrie” after a decade of learning to write, but Terry Pratchett took about 15 years to finally break big. J. K. Rowling took 3 books to really get rolling, and she grew eye-wateringly rapidly by industry standards. And some authors are slow-burn successes: my big breakthrough book was my tenth novel in print (“Halting State”). J. R. R. Tolkien’s Lord of the Rings was in print for a decade or more before it really took off in the 1960s. If you practice ruthless commercial Darwinism, weeding out any hopeful mutants that aren’t immediately successful, you will miss out on a lot of huge opportunities.

So reforming the publishing industry is a very non-trivial undertaking.

Which is also why Jeff Bezos picked it as his #1 target when he founded Amazon. He set out to disrupt an incumbent mature industry using the internet, and picked publishing because it was obviously the most dysfunctional. After all, if he’d gone after groceries he’d be competing with sharks like Tesco and WalMart.

It takes an incredibly long time for writers to get good, and publishers may have lost interest in that process. The process also seems especially long relative to what’s happening on the Internet, which is still in its Cambrian explosion phase. In ten years everything touched by Moore’s Law gets a thousand times better, but writers still do our thing at about the same pace. Learning the craft is long, and a lot of it still occurs in a very slow, very old-school master-apprentice fashion. It may be that self-publishing or de-factor self-publishing takes the place of the previous publishing model, and that the publishing of novels becomes more like the publishing of poetry, which the big houses haven’t been doing in earnest for at least twenty years and possibly longer.

Not everyone shares Stross’s views about the evilness of Amazon; here is James Fallows posting an anonymous e-mail from a small publisher who likes Amazon for the same reasons similar to mine (“Amazon is the best deal going for a small publisher: a better price and better reach than any other options”). I’m also not real worried about Amazon-as-monopoly; if there’s a book I really want to read, it’s not hard to get it from Barnes & Noble (for now), or the various other sites that have popped up to help authors (Lulu, etc.). Amazon is fighting in a thin-margin business with highly differentiated products in which almost no product is a perfect substitute for another, with the possible exception of some specific genres (romance, thrillers).

EDIT: I forgot to add that most writers are still helped along by editors, and that the self-publishing system doesn’t really help with that. It’s possible to find sympathetic readers, but I’m not sure sympathetic readers can take the place of professional editors for most people. I don’t really foresee a good solution to this problem. MFA programs are one possible measure, but only for some people who do some kinds of writing.

Amazon.com is clever in its use of tracking and follow-up e-mails

I’ve been thinking about selling my camera and buying a smaller one, so I’ve been reading about the various choices and, naturally, looking at prices—including prices on Amazon. This morning I found, unprompted, a random e-mail from Amazon:

Screen shot 2013-03-31 at 8.58.59 AM

Not only has Amazon listed at the top some of the cameras I’ve looked at (like the X100S and RX1), but it recognized the general kind of camera I’m interested in (high-end, fixed lens camera; small mirrorless cameras) and listed a bunch of those too. Some of them are misses—Leica’s cameras look completely silly to me—but the hits are there. I haven’t done more than browse, and browsing alone caused Amazon to kick out an e-mail telling me about their financing credit card. I don’t think I’ve ever seen a retailer do so before.

The Amazon finance card doesn’t interest me and I’m not going to buy a camera today—or one from Amazon, because of they charge sales tax and most online retailers don’t. But I’m simultaneously impressed and creeped out by the company’s nudge e-mails.

This e-mail and post are also useful reminders: virtually everything you do online can be tracked, if someone wants to track you. Amazon does, for reasons that presently seem benign. Nonetheless, next time I move I might delete this account (if that’s possible) and start another one, which won’t have a purchase history going back to 2002.

Complaints about Amazon’s rise ignore how long it has taken the company to rise

The latest raft of articles about Amazon and its power over the publishing industry appeared in the last couple of days (“Amazon, Destroyer of Worlds,” “What Amazon’s ebook strategy means,” “Booksellers Resisting Amazon’s Disruption”), and the first two note what is the most significant thing about Amazon, at least to my mind: how much better an experience Amazon is than the things it replaces (or complements, depending on your perspective).

Like any incumbents, publishers, as far as I can tell, want the status quo, but readers (and consumers of electronic gear) are happy to get something for less than they would’ve otherwise. Stross gets this—”Bookselling in 1994 was a notoriously backward-looking, inefficient, and old-fashioned area of the retail sector. There are structural reasons for this” and so does Yglesias—”But for consumers, it’s great. An Amazon Prime membership is the most outrageously good deal in commerce today. But competitors should be afraid.” Stross is suspicious of Amazon, and so is the New York Times writer. Their suspicions are worth holding, but the basic issue remains: Amazon is successful because it’s good.

Their books are cheap and arrive fast. Their used section is really great, for both buying and selling. Prior to Amazon and its smaller analogues, used bookstores simply wouldn’t buy books with writing in them. Amazon used buyers, however, don’t care, as long as the book is described honestly. I’m getting ready to move, which means that I’m selling or giving away somewhere between a couple hundred and a thousand books. I sold about 15 through Amazon, resulting in about $100 that I wouldn’t have otherwise. That efficiency is great, but it’s great in a way that publishers don’t like, because publishers would rather have everyone buying new books.

Amazon looks particularly good to me because I’ve spent a lot of time trying to wrangle a literary agent and failing. Five or six years ago, that meant my work would’ve spent its life on my hard drive, and that’s about it. But now that I’m done with comprehensive exams, I have time to hire an editor and a book designer and see what happens through self-publishing. The likely answer is “nothing,” but the probability of nothing happening is 1.0 if I leave the novels and other work on my hard drive forever.

Most of this was predictable: in 1997, Philip Greenspun wrote “The book behind the book behind the book…“, in which he observed: “Looking at the way my book was marketed made me realize that amazon.com is going to rule the world.” I’m sure others predicted the same thing. The publishing industry’s collective response was to shrug. I guess no one read The Innovator’s Dilemma. If publishers once were innovators, they’re not anymore.

Stross is averse to profit to the point that I think he’s signaling mood / group affiliation to some extent, but his basic economic analysis is good. Stuff like this: “piracy is a much less immediate threat than a gigantic multinational [. . .] that has expressed its intention to “disrupt” them, and whose chief executive said recently “even well-meaning gatekeepers slow innovation” (where ‘innovation’ is code-speak for ‘opportunities for me to turn a profit’)” could be rephrased; Amazon selling for less means more consumer surplus, and it appears that Amazon’s whole modus operandi is to very low, if any, profit margins; if it had margins as high or higher than what publishers and retailers shoot for, it wouldn’t be such a threat.

Anyhow, I too don’t want an Amazon monopoly or monopsony, but I don’t see a good alternative to Amazon. Barnes and Noble is, at best, second-best; their online prices finally became competitive with Amazon’s a year or two ago, but they still they’re chasing the leader instead of striving to be the leader.

If DRM on ebooks actually dies—as Stross thinks it will—that will make Barnes and Noble and other players more viable, in the same way that killing DRM on music made Amazon a viable purveyor of music (although a lot of people still use the iTunes Music Store).

Amazon.com, Daniel Kahneman, and the future of publishing

Amazon Will Destroy You” says, among other things: “Amazon is going to destroy the Big 6, destroy bookstores, destroy 95% of all agents, destroy distributors (Ingram, Baker & Taylor), and revolutionize the publishing industry by becoming the dominant force. . . . Amazon INNOVATES. That’s the thing you whiners don’t understand.”

My own (very limited) adventures in publishing make me inclined to think this is basically correct; having now dealt a fair amount with agents, I’ve observed enough about their behavior to be suspicious: most appear to simply be judging submissions based on “gut instincts” of dubious predictive value. An increasing body of research shows how horseshit gut instincts are as a guide to most kinds of behavior, and how little we know about the decisions we make. You only have to read Daniel Kahneman and Dan Ariely to understand this. You can see the same principles in Moneyball, book or movie. Virtually every field that has pitted empirical data or tests against the beliefs of supposed “experts” has found that the data win. In the case of Amazon, the company is basically running a massive experiment by letting anyone who wants to publish, publish, and letting readers sort out who’s good.With the gates open, entrants are numerous—and more numerous than conventional publishers could ever hope to match.

Literary agents and publishers are now in the same position as baseball managers were in the pre-Moneyball era: completely missing the data revolution going on around them.

The gatekeepers are just wrong too much. You can tell as much from the innumerable stories about beloved, or at least popular, books that were rejected dozens or hundreds of times before finding a publisher. This isn’t the fault of agents or publishers directly: if I were an agent and saw the manuscripts for Harry Potter, Twilight, or The Da Vinci Code, I’d have rejected them—and I’d have been wrong, at least as measured by revenue. When publishers had a lock on distribution, however, they could afford to be wrong, because it was virtually impossible for writers to use alternate mechanisms to sell their books. A wrongly rejected book went in the drawer. A lucky break just happened to be a lucky break.

Increasingly, though, writers aren’t going to rely on gatekeepers. They’re going to let the market decide; publishers and agents will step in after a writer is popular. The problem is, once a writer is sufficiently successful via Internet metrics, I’m not sure that agents or publishers will be in much of a position to negotiate.

Amazon knows this. Its strategy is simple: let everyone in and let readers sort ’em out. This will shake out many of the false negatives given by agents and publishers. Conventional publishers, who pay for expensive Manhattan office space and distribution warehouses and paper, can’t afford to do this using traditional methods.

Agents and publishers probably know this, but they know it in the same way Blockbuster knew it had to compete with Netflix.

The world is moving away from mystical hand-waving and towards data / experimentation. Businesses on the wrong side of that divide are going to suffer.

EDIT: I’m reading Culture: Leading Scientists Explore Societies, Art, Power, and Technology and, weirdly, came across this contribution, by Cory Doctorow, which discusses a different context that applies to my analysis of the literary marketplace:

We’re bad futurists, we humans. We’re bad at predicting what will be important and useful tomorrow. We think the telephone will be best used to bring opera to America’s living rooms. We set out nobly to make TV into an educational medium. We create functional hypertext to facilitate the sharing of draft physics papers.

If you need to convince a gatekeeper that your contribution is worthy before you’re allowed to make it, you’d better hope the gatekeeper has superhuman prescience. (Gatekeepers don’t have superhuman prescience.) Historically, the best way to keep the important things rolling off the lines is to reduce the barriers to entry. Important things are a fraction of all things, and therefore, the more things you have, the more important things you’ll have.

The worst judges of tomorrow’s important things is today’s incumbents. If you’re about to creatively destroy some incumbent’s business-model, that incumbent will be able to tell you all kinds of reasons why you should cut it out. Travel agents had lots of soothing platitudes about why Expedia would never fly. Remember travel agents? Wonder how that worked out for them.

Mid December Links: Marriage plots and incest, Seattle's tunnels, coffee and economic development, and Amazon.com and independent book stores

* “How Much Is Too Much Incest on TV?” I suspect TV and movie writers want to engage incest plots because there aren’t many taboo sexual relationships of the kind that fuel narrative fiction left. Until recently, it was pretty easy for narrative fiction (mostly novels, but eventually movies and TV) to fuel their plots by taking two people who weren’t supposed to be together and finding out what happens when they get together, especially in the face of families and societies that disapprove of their shocking actions.

When no one was supposed to have sex outside of marriage, this was really easy. Today, most people over 18 can do it with (pretty much) whomever they want, as often as they want. So you have to stretch a lot further for taboo subjects: hence the many novels dealing with student-teacher sex or age-of-consent boundaries. When even adultery isn’t that transgressive any more, you have to look further afield to fuel a plot.

* “It’s not an accident that the age of reason accompanies the rise of caffeinated beverages.” This is a video, but it’s mercifully short. I can’t find an equivalent essay by Steven Berlin Johnson and a cursory flip through Where Good Ideas Comes From doesn’t reveal a section about coffee, though I may have simply missed it.

* [Bill] O’Reilly Gets Ambushed, just like he does to other people. One definition of a bully might be someone who can’t accept what they do to others or say about them.

* Tunnels: Seattle’s boring past filled with thrills:

In a world where most work is done with a keyboard and dispersed into electronic ether, their work is refreshingly real, lasting, utilitarian. Workers seem also to share a frontier can-do spirit. Masters of a subterranean universe, not for nothing is their line of work called heavy civil: a good name for a grunge band, or a workforce that stops at pretty much nothing.

I’m not convinced work “done with a keyboard” isn’t necessarily “refreshingly real,” mostly because I tend to use badass keyboards that are tactiley satisfying.

* Speaking of tactiley satisfying, I got an e-mail about Design.Y notebooks, which are made by a Mr. Hiroshi Yoshino and are also exceedingly, insanely expensive but also look like the Platonic ideal of a notebook. I’m currently using the perfect fountain pen full-time—it’s a Sailor 1911, for those of you wondering—and I’ve lost interest in other pens since finding it.

Sailor and Design.Y are both Japanese companies and both websites linked in the preceding paragraph look straight out of 1998. That might be a kind of inverse marketing: our products are so good we don’t need or want to hire slick website designers. I wonder if both companies also suffer from Baumol’s cost disease, which may explain their prices.

* What Do Low Income Communities Need?:

Public policy can modestly improve the incentives and choice sets that poor people face–and it should do those things. But it cannot remake people into something more to the liking of bourgeois taxpayers. And it would actually be pretty creepy if it could.

* Don’t Support Your Local Bookseller: Buying books on Amazon is better for authors, better for the economy, and better for you. A couple thoughts:

1) Authors like indies because indies are more likely to promote quirky or offbeat books than Barnes and Noble, even if they choose self-consciously quirky and offbeat books that have been marketed as such.

2) In the medium to long term, Amazon’s dominance will backfire on authors if the company becomes in effect a monopoly and/or gatekeeper. Everyone paying attention to these things has seen how shittily Apple treats developers who write software for its “app store;” Amazon will treat writers the same way if it can. Amazon only looks so good right now because the company looks so good compared to conventional/legacy publishers. It is not fun to have no leverage: ask medical residents, PhD candidates, and unpublished or mid-list writers.

3) Current, famous writers like Russo have a vested interest in print books because he and similar writers are already being published by legacy publishers; this means that, the more people choose physical bookstores, the less likely they are to find random writers on the Internet.

4) I like independent bookstores. See also Megan McArdle on bookstores.

* This is a good time of year to read Viktor Frankl’s Man’s Search for Meaning; consider its ideas during mandatory family gatherings.

Links: Nicholson Baker, college students drink, college students wear short skirts (a feminist perspective), risk-taking, the “left,” publishing, and more

* I’ll Have What He’s Having: Breaking bread with Nicholson Baker, America’s foremost writer of literary sex novels, by Katie Roiphe, whose book The Morning After: Sex, Fear, and Feminism I admire.

* News flash: college students like drinking because it alleviates social anxiety and enables hooking up. I’m tempted to post the video someone took from a couple weeks ago when my team lost at flip cup.

* Leading off the link from above, Smart Girls Wear Short Skirts, Too: Stop Complaining About College Students.

* Reaping the Rewards 0f Risk-Taking, which includes this bit about how many nations lack “a social environment that encourages diversity, experimentation, risk-taking, and combining skills from many fields into products that he calls “recombinant mash-ups [. . .]” ” This is the kind of stuff I want to do and promote in both the fiction I write and classes I teach.

* College football as seen by a (British?) person acting as an anthropologist.

* Born, and Evolved, to Run.

* Articles like Why won’t America embrace the left? annoy me because they’re dumb. Michael Kazin wrote a book about the left, leading to his interview, in which he says things like, “Americans want capitalism to work well for everybody, which is somewhat of a contradiction in terms since capitalism is about people competing with each other to get ahead, and everyone’s not going to be able to do well at the same time.” That’s not really true: capitalism is about a) finding something you do that you want to do and b) producing goods and services other people want enough to pay or barter for. If you don’t make something users want, you have to make something else. Maybe users should want different things, but that’s a separate argument. He also says things like, “The ideas are that if you work hard you can get ahead and that it’s better to be self-employed than employed by the people.” But think of how many Americans have immigrant parents or grandparents for whom that is exceptionally true. Mine fall into that category. Kazin mostly sounds like someone who’s never actually run a business.

If the left believes people like Kazin, we shouldn’t be surprised that America won’t embrace it. But there are smart people on the left, like Tony Judt, and maybe they aren’t getting enough airtime.

* There’s a fabulous interview with Mark McGurl in which he discusses The Program Era, I book I would’ve liked to write in detail about but got so involved with that the writing in this space went away. But you should still read the book! Especially if you’re a writer or would-be writer.

* By the Time A Self-Published Author Hits it Big, Do They Really Need a Publisher? Answer: probably not. Yet. Keep an eye on this space: you may yet see me wade into the self-publishing pool. And:

For publishers, here’s the nightmare publishing path for authors of the future: Author signs with traditional publisher for first book, author hits it big, author says thankyouverymuch I got this now and self-publishes from then on out.

* Speaking of publishers, “Amazon.com is so well positioned to sell digital files that one glance at their list of Contemporary Fantasy bestsellers shows one unsurprising fact: It’s not dominated by books put out by New York publishers.” That’s from “The rising ebook wave,” which I might be joining in the next six months to one year.

* When To Ignore Criticism (and How to Get People to Take Your Critique Seriously).

* The “overlearning the game” problem.

* The Tyranny of Silly Expense Control Rules; notice the comment from yours truly.

* The Freelance Surge Is the Industrial Revolution of Our Time. A lot of academics in the humanities appear to be completely missing this.

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