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Balderdash: "How Amazon Could Change Publishing"

101 Reasons is proud to welcome a new contributor to our ranks; one with impeccable credentials and decades of experience, both as a journalist and in the publishing industry. Sir Thomas de Kay’s column "Balderdash" has appeared for many years in the Guardian newspaper (South Gloucestershire edition). This is the first time he has written for a Web-based publication.
In an industry besieged by variables, there is but one reliable constant in publishing — everyone thinks they know how to make the business better (more profitable, more reliable, more efficient, or "fairer", whatever that means in their perspective), and they are all wrong.
To further understand their wrongness, the set of everyone must be divided into three groups:

  • People outside the publishing business, who look at a few public statistics and performance indicators and shake their heads in wonder at how anyone in the industry makes any money at all;
  • People with a professional stake in the business, who look at their own performance indicators and wonder if they could be making more money if they had control over the other segments of the industry; and
  • Whiners.

It’s this third group that provides the most fun — mostly because they think they’re in the first group.
In my Guardian column, I frequently lampooned the half-baked, self-centred, hopelessly flawed and often counter-productively idiotic theories of journalists, authors and social commentators who pointed their rose-tinted telescopes at a segment of the publishing industry and pronounced it any number of unflattering adjectives — usually without explicitly stating their central complaint, that no-one was buying their book. Begging your indulgence, it’s a tradition I wish to continue.
Sramana Mitra’s column at Forbes.com
In this instalment, we will examine the argument presented by one Sramana Mitra, in a recent column for Forbes.com called "How Amazon Could Change Publishing". Now, I know little about Ms Mitra beyond her biography, which says she’s an entrepreneur and strategy consultant. Please remember this fact.
If you haven’t read the article, fear not: I’m told that you can click on the words in blue in the previous paragraph. However, the thrust of her argument is that Amazon (the web retailer, not the river) could — nay, should — dominate the publishing industry, removing the "middle-man", and the entire concept of publishing as it is known today, by printing and retailing every book directly.
I’m going to leave that elephant in the room for a few minutes, and deconstruct some points in her argument. Mitra states that:

  • the publishing industry is "archaic beyond belief" — without providing any archaeological evidence. Yes, books are essentially the same medium of dark ink printed on light paper that they’ve been since Gutenberg, a system almost as archaic as the outmoded practice of growing food in the ground.
  • the industry "treats its most important asset–the author–badly" — though the only suggestion of bad treatment is that authors don’t get a big enough piece of the pie.
  • Amazon is "the largest bookseller in the world" — which may be true, but it still only accounts for around 15% of the book market.
  • Vanity publisher iUniverse’s biggest seller to date is Amy Fisher’s memoir, a "NYT bestseller" that sold 34,000 copies. I’m sure there’s a more interesting story in why that book wasn’t published by a traditional publisher, involving the words "market disinterest" and "shitness", but 34,000 copies of a "celebrity" memoir is pretty unremarkable, and really only serves to demonstrate how ineffective the vanity press approach is.
  • "The agent takes 15% to 20%" of the gross proceeds from book sales. This is flat-out wrong, and its inclusion demonstrates a fundamental flaw in Mitra’s limited understanding of how publishing works. Agents take 15% of the author’s contracted payment for a book, not the gross (on a typical 10% royalty-after-advance contract, this amounts to no more than 1.5% of the gross). Even if this ridiculous number was true, the other figures she gives — 50% to retailers, and 20% to publishers — leaves 10-15% completely unaccounted for.
  • "On a book that costs $24.95, the author gets at most $1 to $1.50" — or so says the CEO of a print-on-demand publisher, always the first choice for accurate statistics on revenues from traditional book publishing.

This is a blinkered, seriously inaccurate summation of the economics of traditional book publishing. But it’s the necessary foundation for Mitra’s absurd theory:
[Amazon] could directly engage with authors and cut out the middlemen: the agent and the publisher. That would free up 30% to 40% of the pie, which can easily be split between Amazon and the author.
It gets better:
Let’s say, in the new world, Amazon becomes the retailer, marketer, publisher and agent combined and takes 65% of the revenues, offering 35% to the author–we end up with a much better, fairer world.
And the result of this:
Amazon likely will use its power to build direct relationships with authors and gradually phase out publishers and agents. It will first go after the independent print-on-demand self-publishers and get the best authors from that world [like Amy Fisher]. Amazon will then take on the large publishers.
It’s difficult for a man of my years to be sure he grasps all the implications of such outstanding wrongheadedness. But let me try to elaborate how I interpret this:

  • Mitra’s main issue with the publishing industry is that it doesn’t pay authors enough.
  • The solution to this is to let one company completely dominate the publishing industry, essentially becoming the publishing industry.
  • Once Amazon has established its monopoly on the printed word, it will freely decide to give authors more money, and authors will all be delighted.
  • Every existing "middle-man" in the industry — agents, publishers, and all other retailers — can just fuck off, and die.

Let me just reiterate that this plan is coming from an entrepreneur and strategy consultant — someone to whom those "middle-men" would usually turn, to consult on a strategy to avoid this exact scenario. Nowhere in the article does Mitra hint at how other companies could combat this, or even survive in such a market. (The article is clearly written for Forbes’ ambitious-but-uninformed-writer demographic.)
There are any number of minor concerns you might have about such a "change" — such as, the death of free speech and independent thought — but my chief concern is the staggering hubris and myopia demonstrated by one of Mitra’s remarks in the commentary after the article:
As for authors choosing to work with Amazon – well, if Amazon can guarantee that using their recommendation / co-branding / merchandising system, they can sell a million copies of my book, why wouldn’t I work with them exclusively? I don’t know about you, but I certainly would.

Not only is this a blunt statement of Mitra’s prejudice — she’s only thinking as a (possible) author, not at all as a rational economist — but it’s also prima facie stupidity. Amazon is not going to guarantee to any author, save maybe Dan Brown, that they’ll sell a million copies. Given their 15% share of the book market, only the uber-bestsellers like James Patterson are even likely to sell over a million copies of a title through Amazon alone (Amy Fisher is certainly out of the race). Based on Mitra’s figures of 35% royalties on a book selling for $24.95, that’s an advance of $8.7 million dollars. (There’s the solution, then. Authors should agree to work with Amazon exclusively if they guarantee payment of $8.7 million dollars per book.)
There are problems in the publishing industry, certainly — but the solution to this, and indeed any economic problem, has never been "Let the big guy own everything". The publishing industry will survive, as long as it continues to refrain from taking advice from unpublished authors.
Sir Thomas Evelyn de Kay’s long-running Guardian column "Balderdash" won an unprecedented five straight Jonathan Swift Awards ("the Swifty") between 1983-88, for Best Use of Metaphor or Allegory In Social or Artistic Criticism.
If you would like to recommend an article about books or publishing for the Balderdash treatment, please send the URL to balderdash@101reasonstostopwriting.com.

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