Amazon and the US book trade

David Bollier recently recommended this article, written by George Packer and originally published in the New Yorker. It is a long and detailed narrative about Amazon’s history thought the nineties, aughts and up to the present.

Amazon’s influence has been so disruptive that it also doubles as a history of publishing in the last 15 years or so. Here’s an extract on Amazon’s rise to prominence in the mid to late nineties:

Construction by Ian Wright

“In the nineteen-nineties, a different leviathan held publishers and independent bookstores in its grasp: chain stores, led by Barnes & Noble. When Amazon emerged, publishers in New York suddenly had a new buyer that paid quickly, sold their backlist as well as new titles, and, unlike traditional bookstores, made very few returns. Publishers must buy back unsold inventory from retailers, an archaic and costly practice that one ex-Amazon employee called “an absurdly inefficient model, worse than my uncle sending his laundry home from college.”

John Sargent, who is the chief executive of Macmillan, first met Bezos in the mid-nineties, at a hotel in Washington, D.C. “He was this incredibly energetic guy,” Sargent said. “I thought it was a really good idea.” Jane Friedman, who was then an associate publisher at Knopf, and subsequently ran HarperCollins, said of Bezos, “I was completely taken with him. He was a skinny kid, he was young, he was excitable, and he was completely serious about what he was doing. I drank the Kool-Aid.”

Amazon’s revenue multiplied every year. In the late nineties, an Amazon vice-president named Mary Morouse e-mailed her colleagues after a trip to visit publishers in New York. “We are certainly popular with them,” she wrote. “They rave about—both as a store/service and a great way to market books. There were several examples cited where ‘made’ titles. And they love our sales numbers.”

Publishers weren’t troubled that Amazon sold their books at dramatic discounts. They all wanted to collaborate with the Seattle upstart, and they used Amazon as an information resource; it was a vast improvement over the old green-bound copies of “Books in Print.” A New York marketing executive told me, “When Amazon came into the picture, metadata”—code numbers, Library of Congress categories, search keywords—“became an integral part of books.” A few farsighted publishers wondered if Amazon would eventually control so much of the market that it would stop selling books at cost and raise prices to become more profitable.

By 1997, when the company went public, Amazon’s book inventory could have filled six football fields. But someone who read Bezos’s year-end letter to shareholders might well have thought that Amazon’s eight-hundred-and-thirty-eight-per-cent sales growth had been in shoes, since he barely mentioned books. In the letter, Bezos noted tersely, “We are planning to add music to our product offering.” (Unlike Jobs, Bezos wasn’t a passionate listener: he once agreed to be interviewed for a program about the Beatles, and when employees, prepping the boss, asked him to name a favorite Beatles tune, Bezos chose “America,” by Simon & Garfunkel.) Soon after music came DVDs and consumer electronics. A New York literary agent told me that books were Amazon’s version of “a gateway drug.”

Sargent said that Bezos’s ambition was apparent to him from the beginning—“My God, he drives hard.” But he couldn’t see Bezos’s master plan “for shit.” “He was already going to be the Everything Store,” Sargent said when we met in his trapezoidal office, in the narrow wedge of the Flatiron Building. “I thought he was just a bookstore, stupid me. Books were going to be the way to get the names and the data. Books were his customer-acquisition strategy.” As long as Amazon kept growing like mad, investors would pour in money and Wall Street wouldn’t pay much attention to profits. (The company didn’t have a profitable quarter until 2001, and still struggles to stay in the black.)

In the mid- to late nineties, Bezos hired two dozen writers and editors to produce copy for the Web site. One of them—Amazon employee No. 55—was a cultural critic from New York named James Marcus, who, in turn, brought in his friend Kerry Fried, who edited his pieces at the Village Voice. (She had also worked at several New York publishers and at The New York Review of Books.) For these refugees from New York, where jobs in publishing and journalism were already beginning to thin out, Amazon offered the thrill of working at a rising power, with stock options and an enormous audience.

Marcus edited the home page, which was visited by at least thirty million people a day. Under the rubric “Books Favorites,” he and his staff often promoted novels that needed a push to claim an audience, such as Myla Goldberg’s “Bee Season.” Marcus wrote hundreds of short book reviews and thousands of descriptive blurbs; Fried, who edited the Literature and Fiction section with Marcus, posted interviews with authors, including Penelope Fitzgerald and Stanley Kunitz. In 2004, Marcus, now the executive editor of Harper’s, published a wry, bittersweet

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memoir of his experience, “Amazonia.” He told me, “It was useful to Amazon, as a business strategy, to convey the feeling of your beloved indie bookstore, full of hip, book-loving people.”

Readers, especially isolated ones, adored Amazon. “We heard from people all the time,” Marcus said. “ ‘I live in some Podunk town, the nearest bookstore is a hundred miles from my house, and now I can get the most obscure book.’ ” Marcus asked Toni Morrison to do an interview. “I’m happy to talk,” she told him. “I hear you’re selling more books than anyone in the history of the world.”

In “Amazonia,” Marcus describes Bezos’s “anticharismatic charisma, which would have mortified a Great Man of a century ago but seemed just right for our nerd-driven meritocracy.” In those years, Bezos joined his staff for the round-the-clock work of “picking” and shipping books at warehouses during the holiday season. One day in 1997, Fried went into the company kitchen and found him absorbed in assembling an ant farm. “He had a lot of curiosity,” she said. “I keep hearing about Jeff’s temper, but I have to say I never witnessed it. He was really pleasant and fun.” His ambition sometimes had an idealistic cast: he wanted Amazon to warehouse two copies of every book ever printed, an unrealized dream grandly called the Alexandria Project.

At Amazon, original writing wasn’t even called “content.” It was known as “verbiage,” simplified to “verbage.” Amazon’s writers and editors formed a counterculture that never fit easily in a company ruled by computer engineers and M.B.A.s, who valued data most and believed only in measurable truths. “The key to understanding Amazon is the hiring process,” one former employee said. “You’re not hired to do a particular job—you’re hired to be an Amazonian. Lots of managers had to take the Myers-Briggs personality tests. Eighty per cent of them came in two or three similar categories, and Bezos is the same: introverted, detail-oriented, engineer-type personality. Not musicians, designers, salesmen. The vast majority fall within the same personality type—people who graduate at the top of their class at M.I.T. and have no idea what to say to a woman in a bar.”

The humanists at Amazon brought a strain of intellectual irony that set them apart from the company’s cult of relentlessness. Bezos closed annual reports to shareholders with an exhortation to experiment and to fight complacency: “This is still Day 1.” Marcus and Fried joked about writing a novel that would begin, “It was Day 1. Again.” (Amazon recently began publishing a literary magazine for its Kindle device: Day One.)

One important way that Bezos’s writers and editors differed from the tech and business people was in their gentler attitude toward book publishers. Even when Amazon’s entire business was in books, and its relations with publishers were fairly good, it nurtured a certain impatience with New York houses that supplied the products it sold. Mary Morouse’s account of her trip east in 1999 reported, “I had one S.V.P. of sales tell me, ‘We like any account who is growing faster than we are, but we don’t really forecast that way.’ When I asked him how much they are growing, he said ‘I don’t know. I think we were flat last year.’ That gives you some idea of the level of business focus.” According to Marcus, 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 inefficiences, 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.”

During the 1999 holiday season, Amazon tried publishing books, leasing the rights to a defunct imprint called Weathervane and putting out a few titles. “These were not incipient best-sellers,” Marcus writes. “They were creatures from the black lagoon of the remainder table”—Christmas recipes and the like, selected with no apparent thought. Employees with publishing experience, like Fried, were not consulted. Weathervane fell into an oblivion so complete that there’s no trace of it on the Internet. (Representatives at the company today claim never to have heard of it.) Nobody at Amazon seemed to absorb any lessons from the failure. A decade later, the company would try again.”

Read the whole article here

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