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He began to build an online portal that would allow readers to connect and evaluate the textbooks they were reading and also to include textbooks they wanted to have. It was coined around 2010, when the big bookselling group Borders began its definitive demise after 40 years.
How valuable were these bookshops to the publishing houses? Not only did they sell the goods and divide the cash. If the bookshops left the shop as they were, and the reader moved online as they were, how could editors show their products? He recalled that he was profoundly moved when a publishing director told him in 2006 that the way to become a bestseller was to put a copy of the books on the front desk of every bookshop in the state.
There was no front door online. Goodreads' new proprietary book recommendation system is built on a wide range of important drivers. Goodread' gave goodreads hopes that they could resolve the finding; it could also have given them hopes that they could resolve a more immediate problem: Amazon.
When Borders went into bankruptcy in 2011 and shut down all its shops, Amazon sold more printed literature than anyone else, sold more e-books than anyone else, started to succeed with unfamiliar writers who published directly in digital formats, and was above all the place to go for research and advice on purchasing them.
Amazons largest client was the publishing houses, but it was also becoming an increasing rival and more and more a too good one. The editors realized that they were too dependent on Amazon. A number of publishing houses in 2011 advertised a collaborative partnership named Bookish, which was to be a recommender-an online bookshop, perhaps even a rival of Amazon.
The publishing houses were not very good at building technical start-ups, but fortunately Godreads had already done so. Then in March 2013, Amazon purchased goodwill for an unnamed amount. Last year there were animosities between Amazon and the publishing houses, which had been bubbling for years and filled many columns in the New York Times and the Wall Street Journal, not to speak of the many online-fora.
At the heart of the controversy was a fierce trial between Amazon and Hachette, during which the managers of the company (who otherwise were not in the spotlight) were in the open. Hachette, one has to say, is not a wimp: she belongs to the large Lagardère Group.
Other major publishing houses have similar security. Nevertheless, all Amazon editors are feeling harassed, and Amazon, on the other hand, is feeling wrong. In the mid-1990s, when Amazon first shipped book from the Seattle garages of its creator Jeff Bezos, it was enthusiastically received. Now, a single individual on an abandoned New York hinterland motorway could get hold of all those newbooks.
Large chain stores were good for publishing houses because they were selling so many titles, but they were evil for publishing houses because they used their marketing powers to impose hard conditions, and also because they sometimes gave back a great deal of shares. They were also concerned about the chain's powers to see if a good or not.
Hensley Sessalee, Barnes & Noble's only purchaser of fictional literature, could make (or break) a volume with a large order (or a disappointing small one). In the early 2000', if you spoke to a publishing company, they would probably be complaining to you about the bullying of Sessalee. Nobody used her last name, the most powerful lady in the bookshop didn't need one.
Amazon's popularity has transformed all this. It' s been said that Amazon entered the bookshop by mistake - that it might as well have sold a widget. It was an early e-commerce solution because, when they wanted certain types of literature, they already knew what they were getting involved in.
A wide selection of textbooks also enabled an adventurous online merchant to take advantage of the fact that there was no real storage in a permanent place to restrict its population. When a big Barnes & Noble had 150,000 titles in storage, Amazon had a million! If Barnes & Noble had taken his book to secluded motorways where there were no book shops before, Amazon would take it to places where there were no motorways.
Amazons were growing fast. By selling more accounts, the firm sent more cash to the publishing houses. Some of the interesting things about Amazon in his early years was the number of poor thoughts he had. This was a poor concept of selling hard do-it-yourself gear on the Amazon and charging a starvation wage for shipment, and it was a poor concept to consider warehousing goods in the homes of Manhattan residents so that they could make supplies in their neighborhood.
In fact, some folks thought it was a terrible way to sell them. In 2006, when Amazon began to meet editors about the Kindle, its upcoming e-book scanner, the machine may have seemed like another silly Amazon notion. Nevertheless, by 2007 the publishing houses have reached an agreement to digitise a rewarding choice of their work.
But, as the Amazon magazine editor Brad Stone was given for his Amazon The Everything Store novel, none of the publishing houses spend much thought on how much e-books should be. When Kindle, Bezo eventually declared at the Kindle news motorboat that new merchandise and bestsellers would be assessed at $9. 99, the business had a room.
They then reviewed their newly colored Amazon agreements and found that they had left something behind. At the core of the story was that it was so much less than $28, the mean cost of a new hardback album. The editors thought that Amazon would end up going even deeper, which would put unbearable pricing pressures on the printed titles and the places where they were selling them.
If the pressure is off, what exactly would the publisher have to do? While they could still choose, process and sell the book, their main job of bringing it to shops across the country would disappear. The Kindle was started by Amazon in autumn 2007. This was neither a groundbreaking design (it was just "the iPod for books") nor a breakthrough product (Sony had already used E-Ink in several readers) nor a particularly appealing product (with its thick synthetic case and the series of keypad keys it looked like a PC of the early 1980s).
Nevertheless, by bringing together several technology and practice in one article (including a free 3G connectivity that enabled people to buy e-books anywhere, there was a mobile call ) and placing true marketeer muscles behind the Kindle, Amazon started the e-book evolution. By 2013, e-books represented around 27 per cent of all sales of adults' literature.
Amazons control about two third of this population. They also control about two third of all printed publications published online. During the early years of Kindle, the thing that made the publishing houses most jittery was Amazon's persistence in the sale of many e-books at production costs or even at a forfeit. First, editors discontinued their e-book listing awards at a few bucks off the printing rate and then gave Amazon a 50 per cent rebate, signifying that Amazon received new titles at an average wholesaling rate of about $12 - and were selling them for $9. 99 and below.
As the publishing houses increased their wholesaling rates to put Amazon under duress to increase its reselling rate, Amazon did not averse. As publishing houses began "windowing" some new magazines, i.e. delayed publishing them as e-books for several month after the hardback was released, Amazon showed no tendency to alter its publishing practice and publishing houses were losing their e-book sell.
They wanted to buy e-books when they were most likely to be sold - when a new one. Editors saw a crimson chevalier on the skyline, in a stylish dark turtle-neck sweater, with technology expertise as powerful as that of Amazon, a tried-and-tested success story in digital sales of art and endless resources:
As publishing houses became more and more distressed by Amazon's increasing domination of the e-book industry in January 2010, Apple announces its intention to bring the iPad to date and provide entry to an iBooks store. The publishing houses wanted to make e-books right this year. Rather than having Apple price them, they would fix their own price and make Apple pay a 30 per cent comission.
It' d mean less cash than they'd get from Amazon, but it would be well-worthy. At the beginning of 2010, five of the then Big Six publishing houses (Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster, but not Random House) concluded contracts with Apple for the iBooks Store.
Someone had to tell Amazon that the publishing houses wanted to change to the same style at Amazon. That is, Amazon has unchecked the "Buy" box on all Macmillan game. Comentators, clients and, above all, other publishing houses were outraged. In testimony to this fact, the Ministry of Justice found e-mails from the (unidentified) managing director of one of the parents of the major publishing houses.
After a few workdays after Amazon had taken the "buy" button off, the business gave in and put it back up again. The iPad made its successful launch in April 2010, signing agreements with all five of them. Apple soon asserted a 20 per cent stake in the e-book industry, and publishing houses were able to fix their rates - usually from $12.99 to $14.99.
Then in April 2012, the US Department of Justice lodged a lawsuit against Apple and the major publishing houses. It was a shocking and embarrassing state of affairs for the publishing world. In the name of Amazon, a winged supremacist, why did a government of democracy file a lawsuit against a group of publishing houses that tried to fight this regime?
However, the editors thought they couldn't pay for it and set up shop. Paying million in compensation to get out of the collective redress (Berman said he got $143 in the estate, one of the biggest amounts in the group because of his hard reading), they accepted to stick to a system that Michael Cader, creator of the business newsletters Publisher Lunch, known as the "Agency Lite", kept the commissions system in place, but Amazon and other merchants kept the right to a discount.
However, the complaints were perceived by the publishing houses as a disaster and could have quenched Apple's enthusiasm for the iBooks projec. Editors had at last joined forces and done something to decelerate Amazon. Publishing houses were doing well. Sales remained unchanged on a US dollar base because e-books were less expensive than printed products.
"I' ve been in this shop for a long time," a recent editor said to me, "and it's always been that one home went up one year and the next down, while another went down one year and the next up. The main one is the Kindle. "The Kindle did what Amazon had always said: he earned the publishing houses for it.
Early in 2014, Hachette, the editor of Malcolm Gladwell, David Foster Wallace, Donna Tartt and many others came to a dead end in the negotiation of a new deal with Amazon. In similar talks with other publishing houses, Amazon chose to take a tough line to stifle this type of behaviour.
The delivery of some Hachette magazines to clients began to be delayed. This was not true for all Hachette books: The Goldfink is still called "In Stock", as is Hachette's backlit The Catcher in the Rye. Congresswoman Paul Ryan's The Way Forward, also released by Hachette, was dispatched immediately after Ryan made a complaint on CNBC.
However, the pocket book issue of Wallace's Infinite Jest is behind schedule, as are many other dignified works. For many Hachette magazines, Amazon also offered a discount. This in itself hardly seems reprehensible, but Amazon aggravated the storyline by proposing lower-priced alternate textbooks to folks who were looking for Hachette titles-it referred user to similar items at a lower cost.
" The possibility of pre-ordering has been deleted from the Hachette series. Amazon has essentially built a stalemate against Hachette. In 2014, the Amazon Wars had started. There is no idea of the precise type of negotiation between Amazon and Hachette. Hachette generally said that the argument was about cash, while Amazon said it was about e-book prices.
It is likely that they are both at the same avenue. Amazons says that the battle is actually about prices. She thinks that publishing houses will make more profit if e-book prices are lower. Amazons want $9.99 or less for a book. "It is also important to understand," the Amazon Booking team said in an online mail, "that e-books are very price-elastic.
It is a commercial disagreement, but it has become a very important one. There are some who have a very strong interest in literature, especially its writers, and that is why the writers have interfered in the struggle. Composer Douglas Preston, a Hachette novelist, organised a group named Autorhors United and distributed a petition with more than 900 petitions.
She urged Amazon to "put an end to the sanctions on books". "James Patterson, a very succesful Hachette novelist, has been very open about the scene, as has Malcolm Gladwell, a Hachette novelist. The moderator and another Hachette playwright, Stephen Colbert, created an inspiring talk about the argument that culminated in him giving Amazon the thumbs up and then proposing that "customers who purchased this also purchased it," whereupon Colbert made his other arm and gave Amazon the thumbs up.
That was not a welcome advertisement, but Amazon was stuck and even pursued some counter-attacks. During May, the firm proposed to finance a group of authors (50-50 with Hachette) to reimburse authors whose work was affected by the disturbance. As Hachette replied, they would debate this option when the talks were over.
Amazon in July suggested a full restoration of normality on all front lines, provided the Hachette writers were awarded the full sales prize of the work. It was a sneaky suggestion - under such a situation Amazon would give up its 30 per cent provision, while Hachette would give up at least 45 per cent (its 70 per cent of the sales value minus the 25 per cent author's licence), but would in fact normally give up the full 70 per cent, since most Hachette writers would have gotten an advanced payment against licence fees and many would not have "earned" this upfront.
Hachette predicably refused. Later Amazon announced a report that compares the e-book to the pocket guide and suggested that the same animosity and snobbery that had welcomed the pocket guide were now behind the anti- e-books. One disputed paragraph in the Amazon embassy cited " the renowned writer George Orwell ", who spoke of how it would be prudent for publishing houses to work together to annihilate pocketbooks.
The New York Times tech journalist David Streitfeld (whose reports of the dispute seemed more and more antagonistic to Amazon to some readers) immediately made an article questioning the characterisation of Orwell's character. Amazons didn't have to defeat the war. Authors who had published themselves at Amazon, some of whom had earned their livelihood with it, now stood up in defence of their charr.
At the beginning of July, a group of pro-Amazon writers, headed by sci-fi author Hugh Howey and mystical adventure novelist J. A. Konrath, posted a puition on the Change.org website. "According to the writers, New York Publishing once dominated the publishing world. "It was they who determined what tales you could tell. It was up to them to decide which writers could be featured.
As little as possible they were paying the writers. "As a lover of books," the writers continue, "you may have noted a great deal of the recent press reports about this controversy. So why is Douglas Preston writing a note to persuade you that Amazon is bad? There are many who attribute Amazon the responsibility for the unavoidable and unavoidable shift to online bookselling.
Instead of innovating and serving their clients, the publishing houses have opposed the use of the new technologies. org petition, which has received more than 8,000 signs so far, asked Hachette's CEO Michael Pietsch to write an email to ask him to end the controversial talks and make a peaceful deal with Amazon. Amazons self-publishing had made it really unbelievably simple and in some cases extraordinarily profitable.
It had made literature really more accessible. Amazon's self-published author's textbooks were particularly cheap, and something else: they were a special kind of work. They were known as "genre" books: thriller, mystery, horror tales, romantic. On both sides of the argument there were playwrights, but on the publishing side the bibliographers, city historians, mid-listists - that is, all the folks who were able to make a livelihood because the editors were still paying advance payments by operating as a kind of sort of domestic lit....
A number of pro-Amazon writers bragged about the monies they had made from self-publication, but the writers of novels that sometimes took a ten-year to publish knew it wasn't for them - that in an Amazon they would be even more reliant on academia and endowments than they already were. In turn, when pro-Amazon writers appeared in conventional publishing, they often talked with the expropriated people's passions.
Publishers made a great deal of dough with their own best-selling genres, but Amazon supporters were not mistaken in thinking that some of the US publishing related organizations - such as the New York Times, which covered the Hachette Amazon bankruptcy in great detail - did not take all this seriously and would probably never do so.
Perhaps the pro-Amazon authors also favored the Amazon leaders - Grandinetti, who speaks about the defense of patrons of the big "media corporations" (although he went to Princeton and worked for Morgan Stanley), and Bezos, who seems an exciting crazy creator (although he also went to Princeton) - the toggled proponents of the "legacy publishers", like the quiet and flawlessly articulated Michael Pietsch, who had gone to Harvard.
The Amazon-Hachette controversy thus reflects the broader cultural conflicts that have been taking place in America since at least the sixties. Wylie acquired the publishing houses via e-book licenses in 2010. Of course, e-books were not covered by agreements for titles released in the pre-digital era, and some publishing houses suggested paying the default fee of 15 per cent.
" He took the matter into his own hand and contracted Amazon to release the e-books of some of his best-known backlists - among them Invisible Man, Midnight's Children and Lolita - without having to consult their conventional printed publishing houses. Ebook licenses, most of which were invoiced at 25 per cent, are still a controversial area.
In the autumn, when I ran into Wylie in his 21 st storey offices in a Westmar-M57th Street edifice (I was sitting in the lobby with Picasso's grandchild - it's such a place), he was angry about Amazon and fully committed on the publisher part. Returning from Buenos Aires, where he had talked about the Amazon conflict, he was ready to turn to the PEN Executive Committee in Manhattan, after which he flew to Turin and then to Toronto to talk about it.
Sure we'll figure something out, I said to Wylie, if Amazon wins? However, doesn't Amazon make something to build the unit to make it work? A passionate Wylie called on all his writers to endorse the author's United Pitition, organised by Douglas Preston. The New York Times reported in an editorial a few day later that Philip Roth, the Saul Bellow legacy, and Milan Kundera, among other Wylie customers, had signed up to the Author United advertising initiative.
During an unusually warm end-of-September afternoon, I went to a latest-generation storehouse in San Bernardino, California, in the deserts an hours and a half south of Los Angeles. Amazon's storage facility contained the equivalents of 28 soccer pitches. There are two types of Amazon warehouses: those that carry small items (toys, children, cork screws, books) and those that carry large items (refrigerators, flat-screen televisions, kayaks).
Goods are placed on a rack wherever they are convenient, not necessarily tidy and in any particular order, so that a compartment on the rack can be full of a books, a few cardboard trays, a few glasses of jam and a game of checkers. Amazon’ Amazon’s load management experts have computed that it is more effective to distribute the articles at random, because when the next pick-in man in the load management process is walking around to place an order, the scanners in her hands will tell her where the next article is and then the quickest way to the next article afterwards.
Amazon had to develop the critical hardware for everything from the ground up. When I met the designer and engineer, I went to the Kindle Strestlab, where various machinery turned and fell the Kindle and rummaged it around like in a tumble-drier.
We had a special purpose device that would knock the Kindle and press the on/off buttons a thousandfold until the Kindle could no longer stand it. The Kindle was covered with a saline fog because the equipment was often brought to the shore. These tests were all supervised by calm, serious folks in pale blued laboratory gowns who appeared to have worked for Dr. No. So much imagination was used to resolve the issue of "reading" - in their different ways by the Kindle geniuses, by the storage softwares experts, by Otis Chandler at Goodreads.
I was reminded of something a journalist, one of the best I know, had told me about the Amazonas. "Publication is ineffective, publishing is ineffective. "The Kindle is truly an exceptional machine - the fulfilment centres are miracles of indisputable effectiveness. This controversy between Amazon and the publishing houses is a controversy between an e-commerce giants and businesses that have been producing text on hardcopy for generation after generation.
It is also in some ways a conflict between the East Coast and the West Coast. It' definitely a conflict between hypercapitalism and culture preservation. But, in the end, it is a quarrel that leads to different vision of the writing word's forthcoming. Different businesses and individuals have competed for this tomorrow together with Amazon and the publishing houses.
You' re paying about $10 per week and then reading all the textbooks you want on the electronic media of your choosing; for each textbook you are reading, the publisher will be charged as if you were buying the e-book. As I asked Trip Adler, the 30-year-old CEO and co-founder of Scribd, how such an operations could make financial sense, especially if readers are reading a large number of volumes, he said: "There are many different ways to do this.
" Eagle was sure that his successful film and musical subscriptions were also the book's way forward. HarperCollins and Simon & Schuster have registered so far from the large publishing houses. There is disagreement within and outside the publishing industry about how the deal will develop.
"The publishing houses had the longest timeframe to get ready for digitization," the attorney said to me, "and they were the least clueless. "From Amazon's point of view, demography is destiny: those who are reading newspapers die while digitally native prints are being made. Wylie may have been right about the publishing houses at last taking care of themselves.
"We will not go beyond that line," the analysts argument. For publishing houses, the answer is: "How long can we say yes and have a deal? At the end of October, Simon & Schuster announces the signing of a multi-year contract with Amazon.
This was too early to say whether Amazon had become more responsive, or whether Simon & Schuster had really grown stronger, or whether the publishing house had agreed to conditions that he could later repent of. Autorhors United has declared that one of its members, Barry Lynn, writer of Cornered:
New monopoly capitalism and the economy of destruction wrote a note to convince the Justice Department that Amazon is breaking antitrust law, including a delay in the distribution of Hachette paper. There may have been enough exclaim in the general press about Amazon's tactic that this kind of effort will gain some clout.