Blog Post

Authors United may not want to admit it, but most books are consumer goods like any other

As my colleague Laura Owen has reported, Authors United — a group of writers who are upset at the tactics Amazon is using to negotiate with the French publisher Hachette — has posted a letter to the company’s board of directors, arguing that the online retailer is being unfair to authors. Among other things, the group says Amazon is making a mistake by treating books like any other consumer product.

In fact, in a somewhat bizarre turn of events for a group that is supposedly protesting Amazon’s methods — the refusal to allow advance orders of Hachette books, the removal of some books from the search index, and so on — Authors United makes an odd admission: it agrees Amazon “has every right to refuse to sell consumer goods in response to a pricing disagreement with a wholesaler.”

But wait — isn’t that exactly what Amazon is doing with Hachette, by using a variety of retailing tactics to send a message to the publisher that it is charging too much for its books and/or not giving Amazon enough of the proceeds? It sure is.

So then how could the authors’ group claim that Amazon shouldn’t be able to do the same thing with Hachette that it does with every other product? Simple: because Authors United argues that books are not a consumer good like any other. Books exist in a special category, and that category of products should not be open to traditional negotiating tactics used by retailers. As the letter says:

Amazon has every right to refuse to sell consumer goods in response to a pricing disagreement with a wholesaler. We all appreciate discounted razor blades and cheaper shoes. But books are not consumer goods. Books cannot be written more cheaply, nor can authors be outsourced to China. Books are not toasters or televisions. Each book is the unique, quirky creation of a lonely, intense, and often expensive struggle on the part of a single individual.

Do books belong in a special category?

So that’s the case in a nutshell — books are not like razor blades or shoes, or toasters or televisions. They can’t be produced more cheaply, and therefore by extension prices for books must not fall but should only rise, because that’s what lonely and intense writers require for their livelihood. And authors are better than people who make toasters or televisions, or who work in China.

Old typewriter

As with most arguments related to Amazon’s behavior, the Authors United letter plays on a host of emotionally-loaded assumptions about the book business (and it is a business, although perhaps not a very good one). It implies that all authors are starving and intense loners, who write because their muse compels them to, and therefore shouldn’t be used as pawns in Amazon’s chess game with Hachette or any other publisher. Or as author JA Konrath puts it:

We’re special snowflakes, unique and quirky, and the lonely, intense struggle we endure for the sake of ART is much more difficult than coal mining or waitressing or mechanical engineering or brain surgery or conservationism or rocket science.

And yet, despite this image of writers as lonely, starving artists in a garret somewhere, huge quantities of books are sold every year that are clearly based on cold, calculated marketing decisions made by either authors or publishers. Most aren’t even remotely unique, quirky or created by intense individuals struggling to follow their inner voice. So maybe it should be okay for Amazon to fiddle with that supply chain, but not with the one that applies to “real” books.

Clearly, some books play a critical role in society — but then so does music, and no one got upset when Apple started dictating prices and terms to the major record labels, just as Amazon is doing to the big publishers. Here’s Konrath again: “I don’t believe I’m owed a living, or that what I do is particularly important. I’m not curing cancer. I’m not even saving whales. In fact, I’m a damn lucky son of a bitch who gets to make a living doing what I love.”

Post and thumbnail images courtesy of Thinkstock / Vasabii and Thinkstock / Worac

24 Responses to “Authors United may not want to admit it, but most books are consumer goods like any other”

  1. Book lover

    “They can’t be produced more cheaply, and therefore by extension prices for books must not fall but should only rise, because that’s what lonely and intense writers require for their livelihood. And authors are better than people who make toasters or televisions, or who work in China.”

    That is a rather cynical, inaccurate, and in my opinion unwarranted, interpretation of the letter. Which makes this article an opinion piece rather than journalism.

  2. Publerati

    The argument one heard in the 1980s when publisher consolidation began in earnest and bookstores and small publishers began going out of business as a result of distribution consolidation around the biggest of the big, was that free speech would be cut off for many authors, and our “culture” would suffer. Fortunately, our culture was saved by Murdoch and Friends with piles of celebrity bios and important political memoirs by every member of Congress. So everything is cool, man!

  3. Ereading Dot Com

    The assumption that JA Konrath makes that this involves a sense of self-importance is ludicrous. Writers are no “better” than anyone who works hard, from a brick layer to a bus driver. But many labor extraordinarily hard for minimal (or no) pay and with no guarantee that their efforts will find an audience, no matter how deserving. And it is hardly self-important to differentiate the emotional toll of creating art from the emotions experienced by those in conventional workplaces who do not create art. They are apples and oranges…and just like those two fruits, there is sometimes quite a difference in perceived value.

  4. stanislavf

    I agree with much of what Irene mentions. This is an overly simplistic argument, meant to appeal to the knee jerk “I love the free market” religion of many people. We don’t have a free market. Paper books are NOT sold wholesale in the same manner as any other consumer product (very few consumer products are sold wholesale where months later you can return them to the wholesaler). Thus, with books the model has been (and Amazon has embraced that) a “consignment” model. This is not the same as a wholesale model.

    Then there is the monopoly issue. I don’t care if the open letter addressed this or not. It is there. In a monopoly situation the controller of the monopoly DOES give up some rights as to what to carry. In this case books ARE different. Amazon is a de facto monopoly OF BOOKS.

    Finally, there is a freedom of speech issue. Since for ebooks Amazon DOES sell on a consignment basis, the blocking of books needs to be viewed very carefully. A niche retailer of books less so.

  5. Publishers are trapped by the cheapness of their product. Book prices in the days before the conglomerate publishers were artificially low, and they’ve remained so despite some people’s belief that they are too expensive.

    Most manufactured goods have an incredible profit margin. Furniture, for example, has a 500% to 1000% profit margin which allows huge discounts with plenty of profit for everyone. Book publishing’s profit margin in 3% to 7% according to recent figures I’ve seen.

    Amazon and all those screaming that books are too expensive should consider this when they demand more profit and cheaper books.

    As we say in the American South, you can’t squeeze blood out of turnip, and book publishing is one seriously mangled turnip these days.

  6. Toby Leith

    Yes, a very simplistic article written by a business journalist who in the same 24 hour stretch turned out copy on the Microsoft acquisition of Minecraft.

    Books are indeed the foundation of curiosity that leads many of us to have the ability to ask the difficult questions of ourselves and others.

  7. Whether artists are rich or poor has nothing to do with this argument. Edith Wharton was rich and she was a far better writer than you. You also have a profound lack of knowledge of the music business. Many artists – as well as record companies – are extremely angry about the fact that Amazon makes the same margins on digital music is it does on physical CDs, even though it has no warehousing or shipping costs. It’s ridiculous of you to infer that the current impoverished state of most musicians is somehow a norm that should be aspired to in all arts. It’s actually a tragedy that will discourage talented people from honing their creativity. In the world you advocate, Shakespeare’s plays would be valued about as much as his shaving equipment. Isn’t that a symptom of a pathetic society?

    • Derek Kerton

      You guys will argue this blue in the face, but it is a nearly impossible dispute to resolve, and any participant needs to understand the following Economics rules, which are the source of the discomfort:

      MC is marginal cost, defined as the cost to produce the next single copy of your product.

      MR is marginal revenue, which is also the price paid for the next copy of your product.

      In functioning competitive markets, MR = MC

      MC of a sandwich, shaver, or toaster > 0
      MC or music, movie, or novel = 0

      So, of course I pay more for a sandwich than an MP3.

      This does not solve the problem, but rather exposes it.

      • Book lover

        Incorrect. The marginal cost of the next copy of a novel is at the very least the cost of printing that copy (assuming it’s hardcover or paperback). As for ebooks, digital copies are clearly costless but Amazon does charge a download or delivery fee that they skim off author royalties. So the formula here is wrong.

  8. Timothy Wilhoit

    You might include the rest of Konrath’s quote about the “special snowflakes” to clarify his stance. He wrote it as a mocking encapsulation of the AU letter and concluded: “If I ever reach this level of self-importance, I want someone to slap the s#!% of me. Seriously. Slap me until I s#!% all over myself. It would be less embarrassing than agreeing with the above Authors United paragraph. When all you have to do to humiliate someone is hold up a mirror, it’s time to stop making public statements.”

  9. I think this article is extremely simplistic. Why is it so shocking to conceive that, in some spheres of cultural production, some aspects may not be subsumed under the logic of late capitalism? Obviously books need to be sold. Does this mean that books are like shoes? Or that shoes are like apples? I honestly don’t see the point of this argument.

    Regarding the relationship with Amazon: Publishers sell their books to Amazon at about 55-70% discount on average. This means that their gross margin needs to cover royalties (usually around 8-12%, higher just for big authors – we’re talking about slightly less than £1 for each copy sold?), overheads, marketing, publicity, editorial professionals, the cost of printing (when applicable). Publishing is a low margin industry in its essence, as demonstrated by the rush to consolidation that has been taking place since the wild deregulation of the market in the ’80s. It has always faced the logic of the market, just as authors have. So why publishers and authors are
    anachronistic snobs, and their attempt to get better conditions from Amazon is negatively compared to that of a powerful lobby?

    The current problem is not that books are not shoes, but that Amazon has artificially created a perception of value according to which books are worth less than the majority of goods that are consumed every day. Very often the sandwich you buy in your lunch break is more expensive than the book you buy on Amazon. Is a certain degree of courage required to state that books and culture in general will have more impact on our future as a globalised community than tuna sandwiches?

    Low prices for books are not somehow ‘wrong’ in themselves; they’re just not sustainable for publishers and authors. And guess what, if careful planning and Marketing were enough to bring home a bestseller, this kind of debate would not even exist. The truth is, sometimes you’re lucky enough and a book just starts to take off, so you have to be prepared to make the most out of it. Most of the time, on the contrary, you build the author, the genre, the audience over years, and then author and publisher might start to see some profit.

    Amazon has gained its market share, has an unmatched bargaining power that makes its position, in facts and not in theory, monopolistic, doesn’t pay taxes and doesn’t care about authors nor readers. Not at all. It will probably become your only publisher in the future and people may be happier, I don’t deny this, I just don’t know.

    What I think would be intellectually fair now is the following: please stop writing that good books and culture in general are part of our core identity as individuals and societies whilst expressing satisfaction for every slap in the face received by authors and publishers. This attitude too, it cannot be sustained anymore.

  10. Fine if you enjoy reading books like ‘Fifty Shades of Grey’, and nothing wrong with that. But authors of books which may be works of genius but have less mass-appeal, like, say, experimental novels or a lot of poetry, will not make a living at the 99c a copy. The Amazon system is fine for EL James, but would James Joyce have made it via Amazon? And would it matter?

  11. Dude. People did get annoyed when Apple dictated prices. But they went along anyway, kicking and screaming. And what happened? Music sales are a small fraction of what they used to be.

  12. Hollis Donisi

    Well said THANK YOU! When I read through the list of “authors” I recognized a few names,but then again maybe the majority were still hanging out in their garret. Yes, books are indeed “consumer” products and since I am one who loves books,but like a majority of people limited income, increasing book prices for some author to refurbish his writing den means I can’t/won’t buy books.

  13. J. R. Tomlin

    It is fairly simple and straightforward. All you need is a dictionary which one would SUPPOSE a group of writers would have. Consumer goods are goods which are (*gasp of surprise*) sold to consumers as opposed to manufacturers. Now one might make an argument that a small number of technical books are sold to manufacturers, but fiction most definitely is not. Books at least the ones these authors are talking about are most definitely, without question, consumer goods. They are consumer goods that I consider extremely important to society but so is food and clothing. We authors are, in fact, not ‘special snowflakes’ and are at the mercy of market conditions just like everyone else in the world.