Having gained a dominant share of the market through deep price cutting, Amazon has begun reducing the amount it discounts some scholarly and small press titles, upsetting publishers and authors who worry the increased prices will hurt sales, David Streitfeld wrote in the New York Times on July 4th.
The piece pointed out that with Borders gone, Barnes & Noble shrinking and many independents shuttered, consumers often have no choice but to buy from Amazon. Stephen Blake Mettee, chairman of the board of the Independent Book Publishers Association, was quoted as saying that Amazon is following a tried and true strategy.
“You lower your prices until the competition is out of the picture, and then you raise your prices and get your money back,” he said.
An Amazon spokesperson said the company is actually lowering prices, but declined to comment on specific examples of titles for which the discounts have been reduced. The evidence of Amazon's price increases, the article acknowledges, is "anecdotal and fragmentary," but it cites several examples and a marketer for university and independent presses to make the case.
Streitfeld followed his article with a blog post about the subject in which he looked back to the days when "bookselling was a local activity" and major cities would have multiple independents. He also reminded us what's a stake when we talk about a diverse literary marketplace.
The hippie, black and women’s movements of the 1960s would not have been so successful in challenging authority without the bookstores, which made their ideas widely available and sympathetic in a way that television, for instance, did not.
Noting that most publishers were reluctant to speak with him for the story, Streitfeld quoted Melville House's Dennis Loy Johnson at length.“I don’t like the fact that there’s one retailer able to so massively underprice other retailers, especially in a business that so desperately needs more retailers,” Mr. Johnson said. “And I don’t like the inconsistency of the pricing, either — the raising, the lowering — because it sends a confusing message that good books are worth less, and because it encourages buying based on something other than the quality of the book. It’s just an unhealthy business if people are buying a thing mostly because of its price, not its quality. That’s how you sell widgets, not books.”
As Streitfeld's reporting makes clear, smaller publishers and their authors are among those most directly affected by Amazon's market dominance. Larger publishers, of course, have greater negotiating leverage with the retailing giant, but even the largest publishers fear Amazon's growing ability to dictate sales terms. This is one of the reasons industry observers expect further consolidation in the book industry, such as the merger of Penguin and Random House that was finalized last week.