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Amazon’s Monopsony Is Not O.K.

nytimes.com

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Re: Amazon’s Monopsony Is Not O.K.

#31

Post by icebraining »

spacefight wrote: post #24
icebraining wrote: post #20

Earlier quoted context omitted.

Why wouldn't we? There are hundreds of companies selling books, and you can start a new one with essentially nothing. Book selling is not a natural monopoly which requires heavy investment to enter into. I see no reason to assume Amazon can keep a monopoly with high prices simply because they squeezed the publishers. Low prices is what keeps them in power. (Btw, I'm playing Devil's advocate here. I don't buy at Amazo…

> I don't buy at Amazon for ethical reasons What's the reason in your case? I genuinely wonder - considering dumping them too.

Nothing too specific, I'm afraid; the treatment of workers, the Kindle remote deletion, the one-click patent, cutting off Wikileaks. This combined with my general dislike of very large companies (notwithstanding my pro-Google bias).

Re: Amazon’s Monopsony Is Not O.K.

#32

Post by TorKlingberg »

mironathetin wrote: post #17
raverbashing wrote: post #5

Earlier quoted context omitted.

Yeah, we can buy elsewhere, but they charge more for shipping and oh yeah, your CC is not working here...

Shipping costs dont't matter, do they? Reading a book takes a while. Why do I care whether it comes free of charge or costs a few cents? Books still are great value for the money. I can read 2 or three a month, maximum. Shipping cost for books are really a negligible point in my total budget. Finally, you always pay for shipping. Either with cash or, as we see, by amazon squeezing the price from someone else. It is n…

Shipping costs affect the total price of the books. People certainly care about price, or Amazon wouldn't have become so popular.

Re: Amazon’s Monopsony Is Not O.K.

#33

Post by [deleted] »

ajross wrote: post #12

I normally love Krugman, but it seems like he skipped a step here. Amazon is squeezing publishers to push prices down, which is bad becuase... why? I mean, the apocalyptic end game here is that publishers are forced out of business entirely and Amazon ends up buying content directly from authors, I guess. That doesn't sound so bad to me, nor like something that's going to "hurt America". Maybe then they might squeeze…

[deleted]

Re: Amazon’s Monopsony Is Not O.K.

#34

Post by onthedole »

ajross wrote: post #12

I normally love Krugman, but it seems like he skipped a step here. Amazon is squeezing publishers to push prices down, which is bad becuase... why? I mean, the apocalyptic end game here is that publishers are forced out of business entirely and Amazon ends up buying content directly from authors, I guess. That doesn't sound so bad to me, nor like something that's going to "hurt America". Maybe then they might squeeze…

Forbes has a good response piece to Krugman: http://www.forbes.com/sites/timworstall/2014/10/20/paul-krug...

Re: Amazon’s Monopsony Is Not O.K.

#35

Post by pron »

ajross wrote: post #12

I normally love Krugman, but it seems like he skipped a step here. Amazon is squeezing publishers to push prices down, which is bad becuase... why? I mean, the apocalyptic end game here is that publishers are forced out of business entirely and Amazon ends up buying content directly from authors, I guess. That doesn't sound so bad to me, nor like something that's going to "hurt America". Maybe then they might squeeze…

The main point isn't one action or another but, and Krugman says it clearly, that Amazon has too much power.

Modern democracies usually strive to prevent concentration of power in few hands, especially if those hands aren't elected. The market, however, does often favor concentration of power, and when that happens, democracies should protect themselves.

The US in particular has had a history of businesses gaining too much power and seriously hurting the public. This is Krugman's main point:

[Y]es, I have Amazon Prime and use it a lot. But again, so what? The desirability of new technology, or even Amazon’s effective use of that technology, is not the issue. After all, John D. Rockefeller and his associates were pretty good at the oil business, too — but Standard Oil nonetheless had too much power, and public action to curb that power was essential... The robber baron era ended when we as a nation decided that some business tactics were out of line. And the question is whether we want to go back on that decision.

Personally I think that exploitative practices by big business are making a huge comeback, in Silicon Valley in particular (see Google with privacy, Uber with workers, the SV non-poaching cartel and more). It is interesting to compare and contrast this with the Gilded Age robber barons. It's certainly not the same, but the robber barons are coming back, albeit in a new form.

Re: Amazon’s Monopsony Is Not O.K.

#36

Post by icebraining »

raverbashing wrote: post #29
ajross wrote: post #12

I normally love Krugman, but it seems like he skipped a step here. Amazon is squeezing publishers to push prices down, which is bad becuase... why? I mean, the apocalyptic end game here is that publishers are forced out of business entirely and Amazon ends up buying content directly from authors, I guess. That doesn't sound so bad to me, nor like something that's going to "hurt America". Maybe then they might squeeze…

> What's the critical function provided by publishing houses that Amazon is in danger of disrupting? Editors Having a "everybody can publish anything" model is great. But it doesn't fit all cases. Yes, an editor is really helpful. Revision, pagesetting, etc, as well.

What about freelance editors?

Re: Amazon’s Monopsony Is Not O.K.

#37

Post by lotsofmangos »

icebraining wrote: post #18
lotsofmangos wrote: post #3

Monopoly usually follows monopsony. I do not expect book prices to be kept low by Amazon, if Amazon manage to kill off the major publishing houses. And their willingness to make exceptions for politician's books in their corporate spats is outrageous.

Monopoly usually follows monopsony. Does it? For a business with a low barrier to entry like selling books? I'd like to see some examples. The reason Amazon can have a monopsony is because it keeps prices low. It retains customers and forces publishers to go through them. If they raised prices, they'd lose their advantage, and there are plenty of competitors ready to take the market, including well funded companies (…

Hmm, you have a very good point. Amazon are sitting pretty at the moment, but if something like crowdfunding authors became popular, Amazon could lose market pretty quickly.

That said, if you look at the big 4, they largely consist of mergers of very old companies, and Amazon is really the only successful ebook seller in english at the moment, even Google seems to have problems getting far in that market. So the barriers to entry may be higher than you think.

Re: Amazon’s Monopsony Is Not O.K.

#38

Post by nabla9 »

This years Nobel price in Economics was given to Jean Tirole whose field this is. http://www.nobelprize.org/nobel_prizes/economic-sciences/lau...

Industrial organization is very interesting and important field to follow even if you are a layman interested in game theory, mechanism design and implementation theory. Market structure is big important part of efficiently working free markets.

Re: Amazon’s Monopsony Is Not O.K.

#39

Post by bryanlarsen »

ajross wrote: post #12

I normally love Krugman, but it seems like he skipped a step here. Amazon is squeezing publishers to push prices down, which is bad becuase... why? I mean, the apocalyptic end game here is that publishers are forced out of business entirely and Amazon ends up buying content directly from authors, I guess. That doesn't sound so bad to me, nor like something that's going to "hurt America". Maybe then they might squeeze…

The standard monopsony effect is on quality. Monopsonies push the price below the cost of production, so producers cut production costs to an unreasonable level.

In the case of books, you'd see that by cuts in editing, by authors shortening the amount of time that they spend writing a book, and through authors dropping out and leaving the field to less talented writers with fewer alternative income sources.

The textbook monopsony is government health care. Most visibly, the long wait times for some health care services.

Re: Amazon’s Monopsony Is Not O.K.

#40

Post by JumpCrisscross »

raverbashing wrote: post #29
ajross wrote: post #12

I normally love Krugman, but it seems like he skipped a step here. Amazon is squeezing publishers to push prices down, which is bad becuase... why? I mean, the apocalyptic end game here is that publishers are forced out of business entirely and Amazon ends up buying content directly from authors, I guess. That doesn't sound so bad to me, nor like something that's going to "hurt America". Maybe then they might squeeze…

> What's the critical function provided by publishing houses that Amazon is in danger of disrupting? Editors Having a "everybody can publish anything" model is great. But it doesn't fit all cases. Yes, an editor is really helpful. Revision, pagesetting, etc, as well.

> an editor is really helpful. Revision, pagesetting, etc, as well.

At what point could this function be largely automated? At what point fully?

Algorithmic editing brings up novel possibilities. You could have footnotes added as information is corroborated or countered. Editions could be instantly localised for almost every language and cultures. One may even get to on-the-go re-editing for individual readers (for example, I may prefer a punchier writing style with non-referential footnotes inserted in-line). This changes what a "book" is, but so did paperback publishing and the Kindle.

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