Amazon’s Monopsony Is Not O.K. • Hacker News Board

Re: Amazon’s Monopsony Is Not O.K.

#121

Post by icelancer » Mon, Oct 20, 2014, 4:36 PM UTC

bryanlarsen wrote: post #39

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 textb…

>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.

I just spent $10,000 editing and producing my latest book that's going to be self-published. Comparing the royalties I'll get with self-publish (not using CreateSpace BTW, though I have no problem with them) including those fees - not even half of which would be picked up by a publisher, mind you - with a publisher who absorbs ALL of my editing/producing costs is STILL a joke. Publishers are predatory towards anyone but the somewhat-ready-to-breakout writers. They do nothing for the established writer except salve his ego and they do nothing for the startup writer who begs for help.

Re: Amazon’s Monopsony Is Not O.K.

#122

Post by nkurz » Mon, Oct 20, 2014, 4:36 PM UTC

dingaling wrote: post #62

lotsofmangos wrote: post #11

Earlier quoted context omitted.

Join your local library and make full use of the inter-library lending agreement, or internet 0.1b as I like to think of it.

> Join your local library and make full use of the inter-library lending agreement Soon adds up: 60p (plus £3.40 if an interlibrary loan is necessary) Often cheaper just to find it for £1 plus postage costs on Amazon or Abebooks.

I think this is a regional/cultural/national difference. I've used interlibrary loans at local (non-university) libraries in 5 different US states, and never been charged a fee. The "overdue" fees are usually about $1/day if you exceed the 2-3 week loan period, but if you return on time you pay nothing. In the US, the interlibrary loan system is a fantastic and underutilized resource.

Re: Amazon’s Monopsony Is Not O.K.

#123

Post by Crito » Mon, Oct 20, 2014, 4:37 PM UTC

mikeash wrote: post #85

Tyrannosaurs wrote: post #60

Earlier quoted context omitted.

Are you suggesting that Nobel Prize Winner Paul Krugman is speaking out against Amazon because Hachette have drafted him for some sort of PR campaign?

Why is that so outrageous? Double Nobel winner Linus Pauling became a complete nutcase in later life, for example, strenuously advocating baseless and potentially destructive alternative medicine. Winning a Nobel Prize doesn't make a person immune to misbehavior.

So many Nobel winners have said or endorsed crazy shit, that some people have even created a name specifically for the phenomenon: "The Nobel Disease": http://rationalwiki.org/wiki/Nobel_disease

Re: Amazon’s Monopsony Is Not O.K.

#124

Post by icelancer » Mon, Oct 20, 2014, 4:37 PM UTC

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.

Three publishing houses offered term sheets to me. Not one offered a decent editing package. And even then, paying $10,000 out of pocket was cheaper than absorbing their ludicrous royalty costs, ignoring all the other externalities that come with going with a publisher...

Re: Amazon’s Monopsony Is Not O.K.

#125

Post by fleitz » Mon, Oct 20, 2014, 4:40 PM UTC

jasode wrote: post #119

JackC wrote: post #92

Earlier quoted context omitted.

Krugman's point is summed up in another quote from the comment you linked to: "Hachette failed to come to mutually agreeable terms with [Amazon]. That's their most important job as a publisher, and they blew it, to the tune of permanently costing their authors 50-60%+ of sales they'll never recover." When one buyer represents 50-60% of sales, the "most important job" of any seller is to come to "mutually agreeable te…

>When one buyer represents 50-60% of sales, ... One party to the negotiation can walk away; the other cannot. I don't follow the logic here. Your fatalistic assessment assumes Hachette (and other publishers) are paralyzed and cannot adapt . However, the business world isn't static therefore Hachette can walk away. (If not this particular contract renewal because of timing pressure then at least the next one -- if the…

Excellent points, whenever I read Krugman I always get the feeling that he wants everyone to be a victim so they'll support whatever government intervention he wants this week.

Hachette is a major company that has no problem fighting back, problem is in the internet age they are incompetent, for that they deserve whatever the market is dishing out to their outdated business model.

Re: Amazon’s Monopsony Is Not O.K.

#126

Post by k-mcgrady » Mon, Oct 20, 2014, 4:43 PM UTC

Kalium wrote: post #106

k-mcgrady wrote: post #44

Earlier quoted context omitted.

Because they could squeeze publishers out and publish directly (which they are already doing to some extent). When they control the market they can then raise prices as high as they want because they are publisher and distributor. In the end consumers get screwed.

I, for one, am quite happy to be "screwed" by lower prices. Recall that Amazon publishes directly right now. They haven't raised prices unreasonably.

Let me explain further. Take this scenario:

- Amazon continues to drops prices. Great for consumers.

- They drop prices so low that either publishers reduce how much they pay writers or they go out of business.

- Writers then start shifting publishing to Amazon who can give them a bigger piece of the pie.

- Publishers die out leaving Amazon as sole publisher + distributor.

- NOW they can exploit their power. They can raise prices and we can do nothing as they are the sole publisher and distributor.

- Things are good now for consumers but long term Amazon can increase and exploit their power.

Maybe they are a nice company and won't screw us but that's not a risk we should be willing to take.

Re: Amazon’s Monopsony Is Not O.K.

#127

Post by dublinben » Mon, Oct 20, 2014, 4:44 PM UTC

fluidcruft wrote: post #70

raverbashing wrote: post #21

Earlier quoted context omitted.

This, but also iBooks, Google Play, etc And of course, just provide DRM-Free books on their website for a discounted price.

Slightly off topic, are there any e-ink Google Play readers? It seems like Amazon, Apple and Google all like to silo their devices and there isn't really any independent path.

It's trivial to remove the DRM from Google Play EPUBs, and load them onto a Kobo or other eReader.

https://apprenticealf.wordpress.com/

Re: Amazon’s Monopsony Is Not O.K.

#128

Post by EliRivers » Mon, Oct 20, 2014, 4:44 PM UTC

[deleted] wrote: post #120

cstross wrote: post #72

Earlier quoted context omitted.

Point of information: back before I got the opportunity to write novels for a living, it took me 3-4 years to write one on a part-time/hobbyist/learning-the-art basis. That's because I had a day job, which came first. As someone who is earning a living by writing, I typically produce a book a year, plus change (sometimes up to two books per year). If downward pressure on production costs results in me having to seek…

[deleted]

To quote cstross himself, "No, it's not a fucking lifestyle — it's a job."

http://www.antipope.org/charlie/blog-static/2010/04/cmap-8-l...

Re: Amazon’s Monopsony Is Not O.K.

#129

Post by HelloMcFly » Mon, Oct 20, 2014, 4:48 PM UTC

nikbackm wrote: post #108

Perdition wrote: post #99

Earlier quoted context omitted.

The problem is that nobody has come up with a good way to filter through the self-published dross to find the gold. Without the publishers filtering you can't just pick a book at random and be ensured it probably won't make you want to claw your eyes out (at least publishers would clean up the major spelling mistakes, grammatical errors, and incoherent plots). So what is left is popularity, and as already established…

Wouldn't a system like Goodreads be a good start for that?

As a regular Goodreads user, I've found that it definitely hasn't been a good start thus far.

Re: Amazon’s Monopsony Is Not O.K.

#130

Post by fleitz » Mon, Oct 20, 2014, 4:49 PM UTC

JumpCrisscross wrote: post #27

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 textbook answer to why monopsony is unhealthy is monopsony suppresses investment in production. In this case, the risk is dissuading authors from writing by suppressing their earnings. Imagine a simplified supply chain: authors distribute through Amazon to reach readers. Amazon exerting pricing pressure on authors benefits readers in the short term by reducing their reading costs. But by reducing authors' profits…

> dissuading authors from writing by suppressing their earnings.

I take it you do not know what the median author makes from writing a book. Lets just say if an author was also a rational economic agent they would flip burgers rather than write books.