The first thing to remember about the Amazon/Hachette Book Group dispute is that this sort of thing happens all the time in business. When two big companies negotiate, it’s like Mothra and Godzilla: Each party can throw around a lot of weight, which means some collateral damage. It’s not exactly unheard of for a company that doesn’t like a supplier’s price to stop carrying the product, or to deny the supplier valuable end-cap space, or otherwise deprioritize the sales of the contested items.
The second thing to remember about the Amazon/Hachette dispute is that writers are categorically unable to see what they do as in any way akin to, say, selling potato chips. Writing is special and sacred! The sight of our product being treated like Chef Boyardee spaghetti is more than our tender souls can bear. And unlike grocery suppliers, writers have access to column space in which to pour out our anguish. That’s why so much ink has been spilled over this contretemps.
The third thing to remember is that publisher interests are not the same as author interests. Neither are Amazon’s. Amazon would like to sell books as cheaply as possible because this enhances the market value of their economies of scale. Publishers would like to keep prices high not just to enhance their profits, but also to keep multiple channels open for their books; it is not in their interest for Amazon to succeed in killing off the competition.
Megan McArdle, “Does Amazon’s Monopoly Really Matter?”, Bloomberg View, 2014-10-24.
November 17, 2014
October 6, 2014
William Shughart refutes the “dark side of Amazon” meme by pointing out what it was like before Amazon and Wal-Mart:
Before the advent of Wal-Mart, rural America was a retail desert. Small shops, limited product availability and, yes, “hometown service”. But the prices of most items were high because the only alternative to shopping locally was to drive to the nearest city or order through the Sears or JC Penney catalog and depend on timely delivery by the US mail in, it was to be hoped, an undamaged package. The downside of local retail shops (limited options and high prices) fell most heavily on low-income households, which may not have had an automobile or could not afford to take time off work to shop at larger urban retailers or even at local merchants, which typically closed at 5 p.m. Wal-Mart solved both problems in one fell swoop.
Sure, local retailers suffered losses of business and some were forced into bankruptcy, but consumers (the only group whose welfare matters in a free market economy) won big-time. Amazon has generated benefits for consumers many times larger than Sam Walton ever dreamt of.
But what about the jobs that disappeared in local retail outlets as Amazon and Wal-Mart drove costs (and prices) down by inventing markedly more efficient distribution networks and negotiating lower prices with manufacturers and other suppliers on behalf of millions of consumers with little bargaining power of their own? An economic system’s chief purpose is to create prosperity (wealth), not jobs. Creating jobs — at the point of a gun, as Josef Stalin proved, or as FDR did by drafting millions of men to shoulder arms against the Axis powers — is easy; creating wealth is not. Prosperity materializes only if existing resources (land, labor and capital) can be utilized more efficiently, squeezing out “waste” and redundancy so that resources can be released from current employments and redirected by alert entrepreneurs to the production of new products that consumers may not even know they want (an iPhone ten years ago, for example) until they become available.
Hightower bemoans the working conditions in Amazon’s warehouses, a few of which literally become sweatshops during hot summer months. I am willing to bet, however, that if the people employed in one of Amazon’s “dehumanizing hives” (his phrase) were asked whether they wanted to quit their jobs, not one hand would be raised, especially so in an economy with an unemployment rate still hovering around six percent and a rate of underemployment twice that figure.
September 7, 2014
Tim Worstall discusses how Amazon structures its business to meet various efficiency targets, a major one being the need to be as tax-efficient as possible. This upsets many political commentators, who all seem to believe that businesses should structure their activities to pay as much tax as possible:
… it’s exactly the tax laws that create one of those synergies that keeps Amazon as the one single company (even if with many different divisions and P&L centres). Because if it were a series of separate companies then those mature businesses, the ones making profits, could not simply switch their profits over to the subsidisation of those newer businesses. Instead, they would have to declare those profits, 35% would float off towards Uncle Sam and thus there would be less of that free cash flow to invest in those newer businesses.
The way the tax laws work are what keeps Amazon from splitting out those profitable businesses from those ones not yet mature enough to be making a profit.
Which brings me to the second point, one more about British political economy. We have a prolific commentator over here who insists on two separate points. I’ll not name him in order to spare his blushes but he’s often referred to as the UK’s leading tax expert. The first thing he insists upon is that Amazon doesn’t pay very much corporation tax (entirely true) but also that it ought to. The second is that many companies have vast amounts of cash, profits they have made in the past, which they don’t know what to do with. Those cash reserves should therefore be taxed away so that they can be spent on what our tax expert thinks are good uses for other peoples’ money. What I enjoy so much about this is that he manages to believe both things together. A company like Amazon, which obviously does know what to do with its free cash flow, should be taxed more. And companies that don’t know what to do with their free cash flow should also be taxed more.
It’s as if the only answer to anything ever is higher tax rates. Rather like if all you’ve got is a hammer then everything gets treated as a nail. I can’t help thinking that the views of a leading expert in anything, let alone tax, ought to be a little more subtle than that.
July 14, 2014
Janet Daley talks about two recently arrested “jihadis” in Britain:
In the midst of the deeply unfunny news coverage of the two young British jihadi volunteers who were arrested on terror charges when they arrived back from Syria, there was one moment of comic absurdity. It seems that before setting off on their mission, Mohammed Ahmed and Yusuf Sarwar found it necessary to place orders with Amazon for those invaluable scholarly treatises, Islam for Dummies, The Koran for Dummies and Arabic for Dummies. Hilarity aside, there is something important to be noted here.
First, these 22-year-olds were obviously not the products of some extreme mosque which had drilled them in Islamist fundamentalism. In fact, they were so untutored in the religion to which they were nominally affiliated that they had to equip themselves with a crash course in its basic principles. Nor had they come from families which were inclined to endorse their terrorist fantasies. Indeed, their own parents were so horrified when they learned of the men’s activities that they turned them in to the police. So we need to ask, as a matter of urgency, where it came from, this bizarre determination to be inducted into a campaign of seditious murder that (we can assume from their decision to plead guilty to the terror charges) they fully intended to bring home with them. What causes young men to risk their own lives, and those of who knows how many others, for a cause about which they know so little that they have to mug it up before they catch the plane?
There has come to be something of a consensus that this is a problem that only the moderate Muslim community can deal with through its own moral authority. But parents as courageous and civically responsible as these two would-be jihadis had are not going to be ten-a-penny. And it is unfair for the society at large to wash its hands and leave it all to the families and the neighbours, most of whom are as new to all this as we are. If too many young Britons are drawn to a hateful, barely understood dogma because it seems to bring some magical sense of belonging, then something is clearly wrong with their lives in this country. There is apparently nothing on offer here that can compete with the promise of exaltation that is available for the price of a plane ticket.
Contrary to all the educational shibboleths of our time, young men are motivated by aggression and power: their dreams are of glorious triumph over rivals. If they are denied these things — even in the ritualised forms that used to be provided by an education system that understood how dangerous male adolescence was — then they will seek them wherever they can be found. Gang violence, with its criminal initiation rites, or Muslim fanaticism can fill a void, offering not just a licence for brutality but for banding together into hostile tribes. There was a time — before characteristically male behaviour was devalued in favour of the female virtues of empathy and conciliation — when these proclivities were dealt with quite effectively by combative team sports and military cadet corps. Institutionalised aggression was supervised by adult authority until the young men grew up and became responsible for their own impulses.
H/T to Mark Collins for the link.
June 2, 2014
A quite contrarian take on the upheavals in the publishing world by Hugh Howey:
A similar game is being played in the book industry today, as it has been played in many other industries. Here at BEA, I’m hearing a lot about monopolies. (And monopsonies, for those who prefer to quibble semantically rather than understand what is meant and forge ahead in productive conversation.) Practically everyone here at the book expo believes that Amazon has gotten too big, that they wield a disproportionate amount of power, and that they must be reigned in or defeated.
I am told, without exaggeration and in all seriousness, that Amazon wants to “crush their competition.” I hear that they want to “put everyone else out of business.” Two things are true, both of which make these statements ridiculous: The first is that Amazon most certainly doesn’t want all of their competitors to go out of business, because then they’d be the only game in town and the government would have no choice but to break them up. The second is that of course they are acting as if they want to put their competitors out of business. That’s how you improve your business practices. You try to out-do your competition.
Unless … you don’t understand at all what it means to compete. Which I think explains the righteous indignation. But I’ll get to that in a minute.
Ironically, the biggest losers in this shift have been yesterday’s villains. The massive brick and mortar discounters — who once were blamed for literature’s downfall, who sold “loss leaders,” who roughed up publishers in negotiations — have become the bulwark behind which all legacy hopes now hunker. Little explored is the possibility that Amazon is helping independent bookstores by clearing out these former predators.
When it comes to discounting and selection, B&N can’t compete with Amazon. When it comes to book browsing, Amazon can’t compete with curated independent bookstores. If you line the three sales models up from small indie stores to big discounters to Amazon, you’ll see that neighbors compete with and harm one another. Concurrent with the shuttering of Borders and the shrinking of B&N, we are also seeing a rise of indie shops. Coincidence? Or are we heading toward a future where Amazon and indie bookstores coexist because they provide two very different shopping experiences and fulfill quite separate needs?
Best estimates give Amazon roughly half of the book market. With the shutter of Borders, B&N now has a more disproportionate control of brick and mortar shelfspace than Amazon does of online book sales. This is especially powerful as the rest of the smaller bookstores have less leverage for bargaining with publishers. Who is the monopoly?
May 12, 2014
Stephen Shankland provides another exhibit in the patent-system-is-broken case:
Photographers are hooting derisively at a patent Amazon won in 2014 for a photography lighting technique that’s been in use for decades, a patent that’s helped undermine the credibility of the patent system.
Amazon’s patent 8,676,045, granted in March and titled “Studio Arrangement,” describes a particular configuration of the photography subject in the foreground and a brightly lit white screen behind, an approach that “blows out” the background to cleanly isolate the subject.
It’s a fine idea, but not a novel invention, argued David Hobby, a professional photographer since 1988 who runs the Strobist site that for years has been a popular source of advice on flash photography. He used the approach himself as a staff photographer on his first job decades ago for a business publication.
January 12, 2014
Adolf Hitler’s Mein Kampf has quietly become an e-book bestseller, climbing high on the charts of political books on Apple’s iTunes and Amazon’s Kindle, even as print sales of the 1925 anti-Semitic screed continue to languish.
“Mein Kampf hasn’t made the New York Times‘ nonfiction chart since its U.S. release in 1939, the same year Germany invaded Poland, and its print sales have fallen steadily ever since,” Chris Faraone wrote for the website Vocativ. “But with a flood of new e-book editions, Hitler’s notorious memoir just clocked a banner digital year.”
Two different digital versions of Mein Kampf currently rank third and fourth on the Politics & Current Events on iBooks, outpacing books by modern-day conservative pundits and celebrities such as Sarah Palin, Charles Krauthammer and Glenn Beck. The books sell for 99 cents and $2.99 respectively.
On Amazon, the Kindle version of Mein Kampf ranks No. 1 in the category of Propaganda and Political Philosophy.
Odd how the LA Times‘ instinct is to compare the sales of Mein Kampf with books by American conservatives, rather than works by, say, Marx, Mao, or Mussolini. You know, comparable theorists of totalitarian power (oh, wait…that is how the Times views Palin, Krauthammer, and Beck).
In a post from 2010, Reason TV looks at the power of Nazi Propaganda:
From radio and film to newspapers and publishing, the Nazi regime controlled every aspect of German culture from 1933-1945. Through Josef Goebbels’ Ministry of Public Enlightenment and Propaganda, the German state tightly controlled political messaging, promoting deification of the leader—the Führerprinzip—and the demonization of the ubiquitous and duplicitious “racial enemy.” A new exhibit at the United States Holocaust Memorial Museum in Washington, D.C., examines “how the Nazi Party used modern techniques as well as new technologies and carefully crafted messages to sway millions with its vision for a new Germany.” Reason.tv’s Michael C. Moynihan visited with museum historian and curator Steve Luckert to discuss the role and effectiveness of propaganda in the rise of fascism and what lessons can be drawn from the Nazi experiment in mass manipulation.
July 3, 2013
The days of the peace officer are long gone, replaced by the militarized police warrior wearing uniforms making them indistinguishable from military personnel. Once something is defined as a “war” everyone becomes a “warrior.” Balko offers solutions ranging from ending the war on drugs, to halting mission creep so agencies such as the Department of Education and the FDA don’t have their own SWAT teams, to enacting transparency requirements so that all raids are reported and statistics kept, to community policing, and finally to one of the toughest solutions: changing police culture.
Police culture has gone from knocking on someone’s door to ask him to come to the station house, to knocking on a door to drag him to the station house, to a full SWAT raid on a home.
Two quotes from the HBO television series The Wire apply quite appropriately to this situation:
“This drug thing, this ain’t police work. Soldiering and police, they ain’t the same thing.”
“You call something a war and pretty soon everyone’s gonna’ be running around acting like warriors. They’re gonna’ be running around on a damn crusade, storming corners, slapping on cuffs and racking up body counts. And when you’re at war you need an enemy. And pretty soon damn near everybody on every corner’s your enemy. And soon the neighborhood you’re supposed to be policing, that’s just occupied territory.”
Detective John J. Baeza, NYPD (ret.), posted review of Radley Balko’s Rise of the Warrior Cop at Amazon.com, 2013-07-01
May 22, 2013
People tend to have strong opinions on fan fiction (well, people who know it exists, anyway). This development will polarize fan ficcers very quickly:
The Twitters are abuzz today about Amazon’s new “Kindle Worlds” program, in which people are allowed to write and then sell through Amazon their fan fiction for certain properties owned by Alloy Entertainment, including Vampire Diaries and Pretty Little Liars, with more licenses expected soon. I’ve had a quick look at the program on Amazon’s site, and I have a couple of immediate thoughts on it. Be aware that these thoughts are very preliminary, i.e., I reserve the right to have possibly contradictory thoughts about the program later, when I think (and read) about it more. Also note that these are my personal thoughts and do not reflect the positions or policies of SFWA, of which I am (still but not for much longer) president.
1. The main knock on fan fiction from the rights-holders point of view — i.e., people are using their characters and situations in ways that probably violate copyright — is apparently not at all a problem here, since Alloy Entertainment is on board for allowing people to write what they want (within specific guidelines — more on that in a bit). Since that’s the case, there’s probably a technical argument here about whether this is precisely “fan fiction” or if it’s actually media tie-in writing done with intentionally low bars to participation (the true answer, I suspect, is that it’s both). Either way, if Alloy Entertainment’s on board, everything’s on the level, so why not.
2. So, on one hand it offers people who write fan fiction a chance to get paid for their writing in a way that doesn’t make the rightsholders angry, which is nice for the fan ficcers. On the other hand, as a writer, there are a number of things about the deal Amazon/Alloy are offering that raise red flags for me.
[. . .]
4. This won’t spell the end of unauthorized fan fic, and I’m very sure of that. For one thing, the Kindle Worlds program says it won’t accept “pornography” which means all that slash out there will still be on the outside of the program; likewise crossover fan fic, so those “Vampire Diaries meet Dr Who” stories will be left out in the cold. And besides that, there will be people who a) have no interest in making money and/or b) don’t write well enough to be accepted into the Kindle Worlds program (there does seem that there will be some attempt at quality control, or at least, someone has to go through the stuff to make sure there’s nothing that’s contractually forbidden). So if this was an attempt to squash fan fic through other means, it’s doomed to failure. But I don’t suspect that’s the point.
This Amazon FanFic announcement means I can finally realize my dream – a vampire version of “50 Shades of Gray,” without the sex!
— John Kovalic (@muskrat_john) May 22, 2013
— Alyssa Harad (@alyssaharad) May 22, 2013
May 4, 2013
As you probably guessed, he’s against it:
David French, Senior Vice President of the National Retail Federation, the major industry group lobbying for the so-called “Marketplace Fairness Act,” (more aptly named the “National Internet Tax Mandate”) recently commented that “…the law [governing Internet sales] today is a 20th-century interpretation of an 18th-century document…” Mr. French’s comments are typical of those wishing to expand government power beyond the limits established by the United States Constitution.
[. . .]
The National Internet Tax Mandate overturns the Supreme Court’s 1992 Quill v. North Dakota decision that states can only force businesses to collect sales tax if the business has a “physical presence” in the state. Quill represented a rare instance where the Supreme Court properly interpreted the Commerce Clause. Thanks to the Quill decision, the Internet has remained a tax-free zone, though some states require consumers to later pay taxes on products they purchased online. This freedom has helped turn the Internet into a thriving and dynamic sector of the economy, to the benefit of entrepreneurs and consumers.
Now that status is threatened by an alliance of big business and tax-hungry state governments seeking new powers to force out-of-state business to collect state sales taxes. Far from updating the Constitution to fit the needs of the 21st century, the National Internet Tax Mandate is a throwback to 18th century mercantilism.
The National Internet Tax Mandate will raise the costs of doing business over the Internet. Large, established Internet companies, such as Amazon, can absorb these costs, whereas their smaller competitors cannot. More importantly, the Mandate’s increased costs and regulations could prevent the creation and growth of the next Amazon.
April 27, 2013
Tim Worstall explains that the current efforts by various campaigners including Stephen Fry are not only a waste of time and effort, but betray a fundamental misunderstanding of how the EU is set up:
There are several points that could be made. One being that selling to Brits from Luxembourg is not tax dodging, it’s exactly what the EU intends the Single Market should be. A, umm, single market across 27 countries. A second might be that even if we start to whine about UK warehouses, tax is still not due here. Our double taxation treaty with Luxembourg means that such warehouses do not lead to tax being due. And that’s from 1968 or so when Wilson ruled: it’s also a standard part of all double taxation treaties and for good reason.
(For example, the metals trade uses warehouses in Rotterdam as the point at which a contract is concluded. The cut flowers business warehouses in a small village near Schipol. Should Holland get all the tax from the world’s metals and flower businesses? Or should everyone be taxed where they really are, not the warehouses?)
But there’s much worse than this. We’ve had the Margaret Hodges screeching that we’re talking about immoral, not illegal. The TJN and other fools similarly scream about how awful it is that people can do business without paying tax. And it is precisely all of this activism that leads these gentle booksellers to spend their year collecting signatures. To absolutely no avail whatsoever.
For in the year they are complaining about, last year, 2012, Amazon did not make a profit. A $39 million loss in fact according to their accounts. It’s simply not true that “tax dodging” by Amazon is leading to the crucifixtion of the independent book shop. That’s a lie that’s been foisted upon people by the obfuscations of the campaigners.
March 4, 2013
Pete Ashton explains how such an item appears on the Amazon.com website:
Nobody made, or approved, the design. This is the headfuck moment that most people can’t comprehend. There’s a completely understandable assumption that someone decided it would be a great idea to sell Keep Calm t-shirts with the word Rape on them and, because they exist (which they don’t, but let’s assume they do) that there’s a reasonable demand for them. This is because we’re used to there being a cost in producing a product like a t-shirt and an economic requirement to mass-produce them in huge numbers. If there’s a significant cost then a decision has to be made whether to spend it or not. We’re looking to blame whoever made that decision, or lament that it was even an option.
But, as we see above, there’s no cost involved. The shirts don’t exist. All that exists is a graphics file on a computer ready to be printed onto a shirt if an order comes through. Still, you might say, someone had to make that file, to type those words and click save. Not necessarily.
The t-shirts are created by an algorithm. The word “algorithm” is a little scary to some people because they don’t know what it means. It’s basically a process automated by a computer programme, sometimes simple, sometimes complex as hell. Amazon’s recommendations are powered by an algorithm. They look at what you’ve been browsing and buying, find patterns in that behaviour and show you things the algorithm thinks you might like to buy. Amazon’s algorithms are very complex and powerful, which is why they work. The algorithm that creates these t-shirts is not complex or powerful. This is how I expect it works.
1) Start a sentence with the words KEEP CALM AND.
2) Pick a word from this long list of verbs. Any word will do. Don’t worry, I’m sure they’re all fine.
3) Finish the sentence with one of the following: OFF, THEM, IT, A LOT or US.
4) Lay these words out in the classic Keep Calm style.
5) Create a mockup jpeg of a t-shirt.
6) Submit the design to Amazon using our boilerplate t-shirt description.
7) Go back to 1 and start again.
H/T to Cory Doctorow for the link.
February 6, 2013
Apparently Games Workshop owns the trademarked term “Space Marines”, so nobody else is supposed to use it:
For years, there have been stories about Games Workshop being trademark bullies and sending threats to people who use the term “space marine” in connection with games. But now that they’ve started publishing ebooks, Games Workshop has begun to assert a trademark on the generic, widely used, very old term “space marine” in connection with science fiction literature.
[. . .]
A few important notes:
* Amazon didn’t have to honor the takedown notice. Takedown notices are a copyright thing, a creature of the Digital Millennium Copyright Act. They don’t apply to trademark claims. This is Amazon taking voluntary steps that are in no way required in law.
* Games Workshop’s strategy is to make “space marine” less generic by launching high profile, bullying attacks on everyone who uses it, so that there will come a day when people hearing the phrase immediately conclude that it must be related to Games Workshop, because everyone know what colossal dicks they are whenever anyone else uses the phrase
* Trademarks only apply to commercial works. You can and should use “space marine” in your everyday speech, fanfic, tweets and so on. For one thing, it will undermine Games Workshop’s attempts to homestead our common language.
Update: John Scalzi clearly feels the claim lacks merit:
I am not a lawyer, so factor that in here. That said: Games Workshop, really? You know, a simple search on the term “space marines” over at Google Books shows a crapload of prior art for “space marines” in science fiction literature, from the 1936 Amazing Tales novelette “The Space Marines and the Slavers” by Bob Olsen, to Robert Heinlein’s novel Space Cadet, to the very recent use of the term in The Sheriff of Yrnameer by Michael Reubens and So You Created a Wormhole: The Time Traveler’s Guide to Time Travel by Phil Hornshaw and Nick Hurwitch. There is no lack of evidence that the phrase “space marines” has been used rather promiscuously in science fiction literature up to this point.
To argue, as Games Workshop must, that the phrase “space marines” has a distinctive character in science fiction literature relating only to their product involves, shall we say, a certain studied ignorance of the field. Table top games? Possibly; I’m not an expert. Science fiction literature? You have got to be kidding. It’s pretty damn generic in this field, and was long before 1987, when Warhammer 40,000 was created in game form . Nor does it seem, as far as I know, that Games Workshop attempted to claim trademark on the phrase “space marine” before, despite a veritable plethora of Warhammer 40K tie-in literature using the phrase.
August 30, 2012
July 7, 2012
In Forbes, Tim Worstall explains the odd situation of Amazon trying to obtain patents to use defensively when (not if) they get sued for entering the smartphone market:
… Amazon isn’t searching out patents which would allow it to build phones to, say, the GSM or CDMA standards. For those patents, by virtue of being included in those standards, must be made available to all comers on reasonable and non-discriminatory terms (RAND, or Europeans add “Fair” to the beginning to give FRAND). So any patent that is actually necessary to make a phone that interacts with the network is already available to them on exactly the same terms that Samsung, Apple, Nokia or anyone else pays for them.
No, what Amazon is looking for is just some bundle of patents, somewhere, that have something to do with mobile telephony. So that when (and sadly, it really is when, not if) they get sued by someone or other for breaching a patent then they’ve got some great big bundle of documents that they can wave back at them. Such patents can range from the possibly valid (slide to unlock perhaps) through to two that really irk me: Apple claiming a patent on a wedge shaped notebook and, unbelievably to me, on the layout of icons on the Galaxy Tablet in Europe.
I take this to be evidence that the technology patent system has simply got out of hand: that the system is entirely Fubar in fact. We need to recall what a patent is supposed to do: it is not that intellectual property is some God given right. Rather, we realise that given that ideas and technologies are public goods it is very difficult to make money out of having invented them. Thus we artificially create intellectual property in the form of patents and trademarks. But we are always walking a narrow line between encouraging invention by awarding such rights and discouraging derivative inventions by awarding rights that are too strong.