Is Amazon A New Monopoly?

Friday, April 20, 2012

Transcript

Without the ability to work together, industry watchers say the 'Big 6' publishers won’t be able to stop Amazon from pricing books as the company sees fit. Brooks speaks with Barry C. Lynn, a senior fellow at the New America Foundation, who believes that the DOJ decision opens the door to an Amazonian monopoly in the book industry.

Guests:

Barry C. Lynn

Hosted by:

Brooke Gladstone

Comments [4]

ChristopherH from Colorado

Stupid question ... how hard would it be for publishers to bypass Amazon completely and open their own sales platforms via the internet? I assume managing the distribution of hard copies (as well as contractual relationships with distributors) might be problematic--but it seems to me that selling ebooks directly would disrupt Amazon's business model sufficiently that it would be forced to approach its relationships with the publishers more equitably.

Nov. 24 2012 11:34 PM
Julie Christensen

While I too, disagree with a single book seller controlling the market, I hardly think that Amazon doesn’t care about selling books, as Mr. Lynn asserts. They practically give away their Kindles (and if you’ve ever broken your Kindle, you know what I mean. Amazon is quick to replace it, at no charge.) Why does Amazon do this? Because they make more money off the books they sell for Kindle than on the actual Kindle devices.

I’m an Indie author. I sell my books on multiple online booksellers, including Amazon and Apple. Amazon is by far the best promoter of my books. I sell more on their site than any other. And Amazon makes money off me, anywhere from a 30-65% profit off each book sold. Apply those same percentages to the Indie authors that Mr. Lynn mentioned, who literally sell hundreds of thousands of books a year, and you clearly see that Amazon does make money off books.

Apple has somehow been portrayed as the victim in this Department of Justice investigation, but they are a monopoly too. When I buy a show or song on iTunes, I don’t own it. I can only read it on their device. Even that isn’t enough for Apple. It wasn’t long ago that they tried to take a cut of each book sold through Amazon that was read on an Apple device. Isn’t it enough that Apple sold me the device? Now they want to profit off everything I read on it, too? When I’m not even buying it from their store?

Finally, Mr. Lynn’s statement that Amazon is throwing free books at people like candy to lure in TV buyers is, well, frankly it’s laughable. Big screen TV buyers probably do not see books as candy. But wouldn’t it be a better world if they and we did?

Apr. 24 2012 04:05 PM
Shel Horowitz

Since 1995, Amazon has had a history of predatory practices. While they are indy publishers' best friends as far as making titles available and findable (most of the time, unless you cross them), they expect to pay wholesaler prices even though they are not only a retailer, but one that typically orders tiny, labor-intensive quantities. Their centralization of power and market share makes me very nervous, which is one among many reasons I mostly buy books from my local independent booksellers.

Of course, the big publishers were asleep at the switch and their practices are not exactly author-friendly.

--Shel Horowitz, grassrootsmarketingforauthors.com

Apr. 22 2012 05:34 PM
Kathleen from New York

I wish Mr. Lynn had explained what happened in the 1970's instead of the 1770's. Somehow shady left liberals and right libertarians united to bring books to consumers at lower prices and this undid all the good work of the Boston Tea Party. Do I have that right?

And Amazon is no more of a monopoly than Apple is. Both happen to have the dominant product in a particular category -- Amazon has the Kindle and Apple has the iPad. (Apple also has the iPod, which absolutely dominates its category.) Both want to lock consumers into their respective devices and have used vertical integration, DRM, and control over pricing to achieve this. The publishers made a Faustian bargain when they bought into these ecosystems in the first place.

Think Apple doesn't control pricing because it lets publishers set the price? Well, in order to get agency pricing on ebooks sold through the iBookstore, the publishers had to guarantee Apple that they would never sell those ebooks at a lower price anywhere else. If that isn't controlling price to one's advantage, I don't know what is. In a stroke, Apple ensured that competing devices wouldn't be more attractive by virtue of offering content at a more attractive price. Amazon has gone into publishing, but so has Apple -- it's taken a big run at the textbook market with a proprietary format that it controls.

Look, no one wants to see the market for books under the thumb of a single or even a dominant player, but running from Amazon's grip into Apple's embrace isn't going to solve the problem.

Apr. 21 2012 02:42 PM

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