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In a long, fascinating piece in the current New Yorker called "Cheap Words: Amazon is good for customers. But is it good for books?," George Packer outlines the tortured history of Amazon and books, which began 20 years ago when Amazon started as a company that sold only printed books. (Packer describes that time this way: in a conversation with Roger Doeren, co-owner of Rainy Day Books, Fairway, Kan., Amazon founder Jeff Bezos "said that Amazon intended to sell books as a way of gathering data on affluent, educated shoppers. The books would be priced close to cost, in order to increase sales volume. After collecting data on millions of customers, Amazon could figure out how to sell everything else dirt cheap on the Internet. (Amazon says that its original business plan 'contemplated only books.')" Packer adds: "A New York literary agent told me that books were Amazon's version of 'a gateway drug' for consumers.")
Packer quotes a range of people in the business, some anonymously, many by name, including Macmillan CEO John Sargent; literary agent Andrew Wylie; Dennis Johnson, co-publisher of Melville House; James Marcus, executive editor of Harper's and a former Amazon editor; and Amazon's own Russell Grandinetti, v-p of Kindle.
Some of the Amazon story has been noted before, from such details as the company's use of a rather ugly non-word--verbage--to refer to editorial content to the Gazelle program for going after smaller publishers "the way a cheetah would after sickly gazelles." But much is new or provides greater detail, particularly in how Amazon pounds publishers for better terms so that the largest publishers now effectively give Amazon a 55% discount while smaller publishers give even more than that.
On and off the record, publishers aren't happy with Amazon, which remains the single-largest customer for most of them, but seem at a loss of how to deal with a company that looks at book and the world at large in such a different way. Packer says James Marcus described the cultural gap this way: "Amazon executives considered publishing people 'antediluvian losers with rotary phones and inventory systems designed in 1968 and warehouses full of crap.' Publishers kept no data on customers, making their bets on books a matter of instinct rather than metrics. They were full of inefficiencies, starting with overpriced Manhattan offices. There was 'a general feeling that the New York publishing business was just this cloistered, Gilded Age antique just barely getting by in a sort of Colonial Williamsburg of commerce, but when Amazon waded into this they would show publishing how it was done.' "
Another "former Amazon employee" who worked in the Kindle division said, Packer writes, "that few of his colleagues in Seattle had a real interest in books: 'You never heard people say, 'Hey, what are you reading?' Everyone there is so engineering-oriented. They don't know how to talk to novelists.' "
Packer doesn't talk much about alternatives to Amazon, including independent booksellers, Barnes & Noble or nonbook retailers who sell books, saying that publishers' "long-term outlook is discouraging. This is partly because Americans don't read as many books as they used to--they are too busy doing other things with their devices--but also because of the relentless downward pressure on prices that Amazon enforces. The digital market is awash with millions of barely edited titles, most of it dreck, while readers are being conditioned to think that books are worth as little as a sandwich. 'Amazon has successfully fostered the idea that a book is a thing of minimal value,' [Dennis] Johnson said. 'It's a widget.' "
Packer quotes a literary agent saying that book world trends are leading to " 'the rich getting richer, the poor getting poorer.' A few brand names at the top, a mass of unwashed titles down below, the middle hollowed out: the book business in the age of Amazon mirrors the widening inequality of the broader economy."
Packer concludes: "Bezos is right: gatekeepers are inherently élitist, and some of them have been weakened, in no small part, because of their complacency and short-term thinking. But gatekeepers are also barriers against the complete commercialization of ideas, allowing new talent the time to develop and learn to tell difficult truths. When the last gatekeeper but one is gone, will Amazon care whether a book is any good?"