Amazon v. MacMillan: The End of the Affair

February 6, 2010 by andyrossagency

Well, it looks like as of yesterday, Amazon has restored the “buy” buttons for books published by Macmillan.  During the past week, Macmillan has been negotiating terms with Amazon. Apparently they have reached an agreement. We don’t know the details. Two days ago, Macmillan CEO John Sargeant said: “Amazon has been working very, very hard and always in good faith to find a way forward with us.” Good faith, huh!  I’m not sure that pulling a publisher’s books from the digital book shelf  during negotiations is indicative of bargaining in good faith. It certainly showed no good faith to the Macmillan authors whose books were unavailable for a week and to the readers seeking those books.  As more major publishers revise their terms for e-books, it will be interesting to see whether Amazon will stop selling those titles while negotiating in “good faith”.

This entire affair has highlighted some very important issues that go well beyond the squabbling over crumbs by  two large corporations.  You can read some of the comments on this blog and others. What are the dangers of  monopolistic concentration  in the distribution of ideas? How important are e-books in the literary future? How do commercial values conflict with literary values? What is the role  of the community book store as books turn to digital? How will authors be fairly compensated for their work under the new e-book business model? What provides the better reading experience: e-books or paper books? Are the major publishers dinosaurs? How much is a book worth?

And then there is this  notion that “information wants to be free”. We have discussed this in a previous blog entry about the book, Free by Chris Anderson.

 Amazon was playing to the house throughout this affair by implying that they were trying to protect consumers by offering e-books at a good (i.e. loss leader) price. Amazon fans made their opinions known with numerous comments that books weren’t even worth $9.95.

Humorist Roy Blount Junior, who is president of the Authors Guild,

 made a brilliant and witty statement about this curious notion in the Authors Guild winter newsletter. I’ll quote it here:

“Then of course there is the school of thought that books shouldn’t cost anything, because “information wants to be free.” One thing wrong with that notion is that just as a pie is more than its ingredients (and does anyone other than a child living at home expect pie, or even pie ingredients, to be free?), a book is more than information. It’s someone’s –several people’s—work.

“Another thing wrong with “information wants to be free” is that it is espoused, it’s my impression, by three categories of people:

“One: People who are paid by universities to teach occasional seminars and write books that not many people would want to buy anyway if they could help it. To send one’s child to one of these universities costs (say) an author maybe $50,000 a year. How about College wants to be free?

“Two: People who have invented a high-tech gimmick that has enabled them not to need any more money the rest of their lives. How about High-tech gimmicks want to be free?

“Three: People who live at home with their parents.”

Good for you, Roy Blount! Once again the best weapon against bombast is ridicule.

Amazon v. Authors: Let the Punishment fit the Crime

February 4, 2010 by andyrossagency

 The “buy” buttons on Amazon.com for Macmillan authors have still not been restored. It has been 7 days. In 1989, Barnes and Noble pulled all the books by Salman Rushdie from their shelves nationwide. People were not happy. Authors set up picket lines at BN stores. At least then Barnes & Noble was motivated by a concern for the safety of their employees. This week Amazon has effectively taken the same action. Their motivation is somewhat less humane . They are using authors as pawns in a strategy to maintain a monopoly.

I offer a modest proposal. With apologies to Gilbert and Sullivan, I ask authors to consider doing for Amazon what Amazon has done for them. Remove the Amazon link from your author website. Don’t restore their “button” until they restore your “button”. There are lots of other on-line booksellers who will be happy to sell your books on-line. Let me know what you think of this idea.

Amazon vs. Publishing 3: Authors Guild Weighs in

February 2, 2010 by andyrossagency

 

The Authors Guild, the largest advocacy organization for authors in America, weighed in on the Amazon-MacMillan affair yesterday. Their position is, I believe, a fair and balanced position on the interests of authors as it relates to the controversy. In a rare show of solidarity, Author’s Guild has given unqualified support to the position of large publishing.   Authors Guild linked to another article by Fast Company that is a little less nuanced but probably a little more articulate of what this fight really means.

Their statement addressed a point that is worth considering relating to the long-term interests of authors on this issue. Amazon pulled the plug on Macmillan Books without notifying Macmillan or its authors. This was done on Thursday, January 28. On Sunday, January 31, Amazon made a smarmy statement characterizing Macmillan as having a “monopoly” on their books and insinuating that they were going to lose the battle. We all assumed they were conceding. As of this morning at 8:30 PST, the buttons have not been replaced on Macmillan titles. This is becoming a real problem for Macmillan authors who rely on Amazon to sell 75% of all sales on their book on-line.

Clearly Amazon is throwing its weight around and continuing to send the message to publishers that they, like the Wall Street banks, are “too big to fail”; or, at least, too big to cross. Their position is arrogant and points out eloquently the correctness of the concerns of publishers, authors, and agents that Amazon has  asymmetric market power that has become a danger to our industry. It is Amazon, not the commercial publishers, who are seeking to establish a monopoly.

 This is not the first time Amazon has removed buttons from titles, but it is the first time they have done it with all titles of a publisher.

This affair is not a tiff between quarrelling parties. It is really a struggle for the future of book publishing. Stay tuned.

Battle of the E-book models (a follow up)

February 1, 2010 by andyrossagency

Yesterday we posted a blog on the week-end brouhaha of Amazon pulling the “buy button” plug on all titles from Macmillan Publishing.

Things are beginning to sort themselves out. Amazon pretty much admitted that they were capitulating because Macmillan had a “monopoly” on their books. Although this is technically true, the use of the loaded term, “monopoly” was artful and paradoxical; since Amazon’s strategy all along has been to establish a monopoly on the distribution of the e-book to the consumer.

I have gotten some questions about some of the technical issues , specifically the economics of the conflicting models, who gains and who loses and what will be the competitive impact on  the physical book and the community bookstore. I would refer you to Mike Shatzkin’s blog, “Ideological” which offers some very detailed answers to some of the questions. Mike’s language is pretty technical and seems to speak to industry insiders, but it is also pretty incisive.

Mike just emailed me and made a significant point, an error in my observations. He said that the Amazon model is “sustainable”. They are only selling about 25% of their e-book titles as loss leaders. E-books are actually profitable for them. The reason that publishers are fighting on this (and will probably prevail) is that they are concerned that Amazon will be the only retail channel for sales. They do not want this to happen.

One other issue to consider is that under both plans, the price of e-books will be heavily discounted off the price of physical books, at least in hardcover. Ideally publishers would like there to be parity in price so as not to discourage the consumer’s choice. This does not appear to be happening. On the other hand, there is no indication at the moment that the e-book price will be reduced at the time that a paperback will come out. The e-book price will be much closer to the price of the paperbacks.

We’ll be bringing you updates on this important issue. Stay tuned.

Book Banning at Amazon.com

January 31, 2010 by andyrossagency

I woke up this morning to the astonishing news that Amazon.com has stopped selling all titles from Macmillan , the sixth largest publisher in America.  I learned  about this first on Frances Dinkelspiel’s blog, Ghost Word.   Frances is a Macmillan author.

According to an article in The New York Times Amazon’s action was related to Macmillan’s decision to adopt new terms  for the sale of e-books to retailers based on the structure that is being implemented by Apple for its i-pad.  Under the new Apple model, publishers will have the ability to set the final retail price of an e-book  at  $12.99 to $14.99 for new titles. Amazon has been selling them at a loss for $9.99.  Macmillan CEO, John Sargent today wrote a letter to Macmillan authors explaining the dispute.

One can only hope and one must assume that Amazon’s decision is temporary and an act of saber-rattling. But the episode should be a clarion call for us to consider some very large issues about the dangers of monopoly power and how it can compromise the free dissemination of ideas.

A specter is haunting the world of books. From Amazon’s beginnings in the late 1990’s, the company has pursued a strategy of monopoly power. American consumers have embraced Amazon because of its outstanding “customer-centric” technology, its breathtaking selection, and its pricing. But this has not come without a cost. Amazon has gained a stranglehold on  the sale of books online and has attenuated the ability  of community-based bookstores, chains and independents, to survive at all.  With the interdiction of the Macmillan titles, they are now reaping the grapes of wrath.

There are a lot of legal subtleties associated with this issue. Whether a manufacturer (the publisher) can dictate the final selling price of a product to a retailer is an important anti-trust question that won’t be resolved by blogging. But the manifest power of Amazon to effectively cut off  a book publisher’s access into the largest channel of book sales,  the Internet, should give us  pause.

What is this dispute all about?  What’s at stake here?  We have made several recent blog entries on the implications of the e-book revolution. E-books are currently a small niche market for trade books, still less than 4%. But their market share is growing exponentially. Currently electronic book readers are the hottest products in consumer electronics.  It is altogether likely that the book business, not unlike the music business, will reach a kind of tipping point in which e-books will become the standard and paper-based books will become the niche.

Not surprisingly, Amazon jumped on board early. It developed  and marketed the Kindle, an excellent product. Very quickly Kindle became the shorthand word for “book reader”, just as Amazon became the shorthand word for “Internet retailer”. Also, not surprisingly, Amazon has designed the entire system to give it effective monopoly power over the distribution of e-books.

Kindle technology only allows downloading from Amazon and requires that any book purchase will be made through Amazon only.  Amazon has priced the books aggressively. Most new e-books are being sold as Kindle downloads for $9.99. This is a considerable discount from the costs of new hardbacks. Their retail price is typically $25-30. Hardback  discounted prices on Amazon are $15-18. Amazon purchases e-books for about $12.50, a price similar to the  cost for non-e-books. Amazon sells them as loss leaders. This strategy has sought and has succeeded in allowing Amazon to dominate the e-book market.

Publishers have problems with this.  They feel, and I agree with them, that by pricing  books so low, it will inevitably cause the book buyer to devalue books as a commodity. They will come to feel that a book is only “worth” $9.99. With customer pressure to make this price the de facto “list” price and with Amazon’s market power, the  publishers will have to change their business model to accommodate the new reality and begin selling books to Amazon for  something closer to $5 per book instead of $12.50. Good for the consumer, right? Wrong.

We have spoken in an earlier blog entry about the unfortunate tendency of Internet Culture to devalue the worth of intellectual work.  But there are costs to producing books, just as there are costs to producing any product. E books have no manufacturing costs, but there continues to be marketing, publicity, editing, and…yes…sometimes this seems like an afterthought….creating.

And so it all comes down to the irreducible and irrefutable fact that books cost money. And publishers will not be able to produce books or pay the writers a decent royalty  in return for revenue of  $5 per book. Certainly the literary “tea-partiers” will tell you that publishers are dinosaurs, that the essence of the Internet is “disintermediation” and that the future is with authors selling direct to the reader. That most of these books are being “mediated” through Amazon is a detail often overlooked. But let’s leave that for now.

Self publishing is a worthy endeavor and has brought many fine books to the market that would have otherwise died. But it is a bit of a quagmire of unfiltered material. It is a little hard to separate the dross from the gold.  This  fits in quite well with the Internet Culture of  Wikipedia (see previous blog entry)  in which everyone is an expert.

The emerging business models for the e-book, Apple and Amazon alike, are bad news for authors. Any way you calculate it, author’s are going to suffer reduced royalties. The publishers will realize huge cost savings with the e-book if the price of the book is comparable to  paper-based books. With e-books, there are no manufacturing costs, warehousing costs, shipping costs, packaging costs, and, crucially, no returns. Since the e-book is non-transferable, publishers will not lose sales from book borrowing or from the used book business. How this will all affect libraries is still unclear to me.

But authors are being asked to reduce their  percentage royalties for e-books. And the reduced retail price, both under the Amazon and the Apple model, will drive consumers away from physical books very rapidly and will force authors to take a smaller percentage of a dramatically smaller pie.

I am very worried.

UPDATE: AMAZON RESPONDS.

At 2 PM today, Amazon posted an announcement on their website addressing the issue of Macmillan. It is as follows:

“Dear Customers:

Macmillan, one of the “big six” publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.

We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books. Amazon customers will at that point decide for themselves whether they believe it’s reasonable to pay $14.99 for a bestselling e-book. We don’t believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced e-books as an alternative.

Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!

Thank you for being a customer.”

This is typical and predictable public relations strategy of Amazon. It has all the elements of  a Zen-like, or more accurately, a  Hegelian position wherein Amazon seeks to weave contradictory forces into a new and higher synthesis. Coincidentally, it sends some less than Zen-like messages. 1)Amazon can’t stop  selling Macmillan books indefinitely, but we can surely display our power to intimidate.  2) Other publishers, take note. and 3) Publishers have monopolies. Amazon just has customers. 4)We just want to help our customers buy books cheaper.

This is a cynical, manipulative, deceptive, and self-serving response.

A Schnookie Book Deal

January 28, 2010 by andyrossagency

What I like most about being a literary agent is the serendipitous way in which my projects seem to find me. Take, for instance, The Schnookie Deal by Ted Sherman and Josh Margolin.  North American rights were acquired last December  by Saint Martin’s Press.

On  July 23 of last year, I read a front page article in The New York Times about a New Jersey corruption scandal.  Stories about New Jersey corruption don’t usually warrant front page NYT. They are a little like stories about the price of corn in The Des Moines Register. What grabbed my attention was a remarkable photograph of two Hasidic rabbis in handcuffs, a photograph that, it seems, drew the attention of everyone – at least everyone I know.

  It was a bizarre story about the largest corruption scandal in New Jersey history, the state whose largest industry is corruption. It is unbelievable but the story contains: sleazy pols, corrupt high rolling Orthodox Rabbis, code words out from the Talmud for money, FBI wires, real estate Ponzi schemes, kited checks, laundered cash in paper bags and cereal boxes and in trunks of cars, even the brokering of human kidneys for $160,000.

After a nearly three-year investigation, the authorities swooped down on July 23 and arrested 44 men and women.  The list was impressive, even by New Jersey standards: three mayors including the 32 year old reform mayor of Hoboken; the 74 year old deputy mayor of Jersey City who was once a stripper going under the stage name of “Hope Diamond”; five Orthodox rabbis; two legislators; and various political operatives, real estate moguls and Hasidic businessmen. The website, Gawker, said it all in their headline: “EVERYONE IN NEW JERSEY WAS ARRESTED TODAY.”

 I loved this story from the moment that I read it. I kept telling everyone I knew what an amazing book this would be. I kept thinking of it as a sort of true version of a Carl Hiaasen novel, filled with colorful scoundrels. Only instead of Good Ole Boys in South Florida, it would be about Orthodox rabbis and sleaze bags in New Jersey and Brooklyn. I really, really wished I had a project like this to work on.

On September 15, I received an email from Bill Gannon, an executive at Lucas Films, referring me to Ted Sherman and Josh Margolin, reporters for The Star Ledger, New Jersey’s largest daily newspaper. Bill was a friend of theirs. He told me that they had been covering a great corruption story, and would I please, maybe, as a personal favor, if I wasn’t too busy, and if I found it in my heart to work on a true crime story — talk to the guys and see if I could help.  I really flipped…  These were the guys on the ground who had been covering the story that had been preoccupying me for weeks.

After doing a little  web surfing, I found out  that Sherman and Margolin were journalistic super-stars. Both were on the team that won the 2005 Pulitzer Prize for breaking news, following the resignation of Gov. James E. McGreevey (another titillating and salacious story). The two also received the National Journalism Award from the Scripps Howard Foundation this year for their work uncovering secret deals, hidden spending and other abuses within the Rutgers University football program.

Ted called me up and asked if I might possibly be interested in helping them get a book published. I told him I had been sitting by the phone for two months waiting for him to call. I gave him my usual pitch about the importance of making a good book proposal and that I would help them out if they sent me a rough draft. I also gave Ted a lot of advice about how he needed to put humor into the book in order to make it commercial.

 As it turned out, I didn’t need to give him much advice at all. A week later they delivered a book proposal in almost perfect condition. And a sample chapter that was laugh-out-loud funny.

The one thing they sent me that I didn’t think was so good was a suggested title: “Rogues and Cronies of Thieves.” I told them that it just lacked je ne sais quoi. So they came up with a title that none of us were very sure about. But in hindsight, it was a masterpiece: “The Schnookie Deal.”  (For the few readers unfamiliar with Yiddish,  “schnookie” means adorable, sweet, cuddly, and endearing. As in: “You’re my little schnookie.”) Apparently the  word in the context of this story came from the wiretaps. Soloman Dwek, the  inept crook and FBI informer, kept calling his illegal transactions “schnookie deals.”

I started doing some research on which imprints and which editors to send it to. Usually I try to figure out the genre of the story. Then I go to the Deal section of Publisher’s Marketplace and start looking at what kinds of deals various editors are making. The obvious genre on this book was true crime. But that wasn’t exactly it. True crime tended to be about grizzly murders. This had a more political angle. And a lot more pizzazz.

Anyway, I amassed about 20 possible submissions. I emailed it out and waited for the multiple offers that were sure to be coming in  48 hours. Disappointingly, I got a number of rejections. This shouldn’t have been much of a surprise. It has long been my operating principle that publishers don’t really want anything. Most of the rejections were not particularly thoughtful. A number of them felt that it was a “local story.” (As if sleazy behavior was unique to New Jersey. Hmm….Now that I think about it, …Nah!) For more thoughts about publisher rejection letters, I refer you to a previous blog entry entitled: “Deconstructing Publisher Rejection Letters.”

One of the editors I sent it to was at St. Martin’s Press. He got back to me very quickly and said that it was a great story, but I needed to send it to another editor, Phil Revzin. It turns out that Phil was the editor of a book about New Jersey corruption called, Soprano State.  It was a best seller. He was familiar with Ted and Josh, because a lot of the material from that book came from news stories written by my clients. Their names heavily populated the footnotes.  I could tell the first time I spoke with him that he was really excited about the project. I told him if he made us an offer, I’d buy him a kidney pie for lunch.

Phil wanted to have a meeting with Ted and Josh. So they went over  to the St. Martin’s offices. They walked into a meeting with three or four big machers, another indicator that the publisher was serious. Phil kept asking me if we were going to have an auction. It would have been nice, but at that time I had no other offers. So I told him, “we were thinking about it.”

By the end of the week, Phil had sent us an offer of deal points. This usually includes the advance, royalty rate, and territory rights (see previous blog entry entitled: “The Book Deal“). We dickered around a little. Nudged up the numbers which made the boys happy. Then Phil sent us the St. Martin’s  boiler plate contract. We did a little more wrangling. I did some table thumping over some (how shall we say?) not extremely author-friendly language. And then the deal was done.

I posted the deal in the deal data base at Publishers Marketplace. The next day I got an email from a guy at Twentieth Century Fox who wanted to look at the book proposal. This really impressed the guys. I could see that the siren song of Hollywood had started playing in their heads. I’m sure they are still dreaming about which big-time star is going to play Ted, and which will play Josh.

And a schnookie deal it was! The book is scheduled to be published spring 2011. It will be a lead title.

The Slush Pile

January 20, 2010 by andyrossagency

Let us consider the slush pile.

David Patterson, a senior editor at Henry Holt, whose taste in books I admire greatly, sent me an article from The Wall Street Journal online entitled: “The Death of the Slushpile.”

Way back when, the slush pile was an uncomplimentary term used by publishers for the  unsolicited manuscripts they received by the bucket load from aspiring writers. As the above article will tell you, “slush is dead.” At least it is with commercial publishers. Apparently they  were finding that it exposed them to copyright infringement lawsuits. Every time a book was published with even the most remote parallels to an unsolicited submission, the publisher was accused of using the slush pile as a flower garden of ideas to pluck. Copyright infringement suits are to publishers what medical malpractice suits are to doctors. Publishers have attempted to reduce their exposure by inserting an “indemnity clause” in the book contract. This provision, hateful to all writers and their agents, puts the onus of defending against copyright infringement claims, no matter how frivolous, on the shoulders of the author.

 But I digress. Publishers were also finding that the payoff  from  sorting through slush didn’t justify the time and expense of a 22 year old entry level editorial assistant plowing through unpublishable manuscripts. And, in truth, finding  something good out of the slush pile was a little like winning the lottery.

So now if you push the “acquisitions” button on a publisher’s website, you will see that they will  accept only agented submissions. The slush pile is no more. On  one level, I find this puzzling. The legendary publisher, Alfred Knopf, once said, “Agents are to publishers as a knife is to a throat.” Now they have bestowed upon us at no cost the exclusive license to act as the toll gates of the literary superhighway.  

Well, ok. There is a cost. And that cost is – slush. Agents have replaced the editorial assistants in sorting through the unsolicited manuscripts. I don’t call it slush. It’s a demeaning term. I have spoken in a previous blog posting (Ann Lamott and Albert Camus on Writing ) that writing is a courageous act. And the activity deserves to be treated with dignity and respect. I  prefer to use the term: “queries received over the transom.”

A lot of the big-time agencies don’t have much truck with slush either. And I am told that finding an agent for a number of genres is about as hard as finding a publisher. But, look. I hear about agents who get 100 queries a day. What are they to do? I’m a smaller and newer agency. I get about 40 queries a week. It seems to be growing though.  Most of the queries I get are for fiction or personal memoir. My website and my listings on agent directories clearly state that I don’t accept fiction and personal memoir. But I try to respond in a timely manner. Mostly I politely copy and paste a “thank you, but it is not for me.”

I have taken on a few projects from the slush pile. Excuse me. From over the transom. And I got one published by an author who was living in his brother’s under heated attic in Maine. On the day of publication, he wrote the op-ed piece in The New York Times.  I’m pretty proud of that. And other agents whom I respect all have stories of great projects that they fished out of the slush. So I urge aspiring writers to send their projects out. Hope for the best…. But expect the worst.

People in publishing always like to talk about the great projects by unknown authors that rose above the slush. The Diary of Anne Frank was originally rejected by the Paris office of Doubleday.  Stephanie Meyer’s Twilight was discovered by a young assistant agent. Philip Roth got his first story picked up by The Paris Review.  And J. K. Rowling had her Harry Potter rejected by 20 publishers before it was sold to  Bloomsbury UK.. John Toole’s Confederacy of Dunces was rejected by just about everyone in publishing until it found a home after the author’s death. It went on to sell several million copies and win the Pulitzer Prize for fiction.

When I first became an agent, I went around New York for a few days talking to editors. I asked all of them what was their biggest mistake in book acquisition. (This would be a good blog posting. We’ll do it another time.) My favorite response was from a very prominent editor who rejected The Name of the Rose by Umberto Eco. But she said it wasn’t really a mistake. She thought it was lousy and boring. Because of her judgment on the book, it would never have succeeded with her as editor.

 And so, gentle reader,  if you will excuse me, I need to go back to reading my slush. I  will set aside my world-weary cynicism and approach the task with eagerness and hope. Because I know that, amidst the dross and the folly, lies the novel of the next Jane Austin – waiting to be born.

Fighting Against History Part 2

January 11, 2010 by andyrossagency

I used to do a lot of public speaking, and in some pretty big venues, too. I  also seemed to be on a lot of  media people’s rolodexes (yes, that is what they had back then). When they needed a quote about the virtue of local business or “bricks and mortar” stores, they could always get a good sound bite out of me. By the way, I  hated that term: “bricks and mortar”. I could spend a lot of time boring you by deconstructing the sub-texts associated with that expression. Not to put too fine a point on it, the term was condescending and cast us as historical curiosities.  I preferred to call   these stores  ”community-based businesses.”  But “brick and mortar” seemed to catch on even with those of us who were  the object of this patronizing metaphor.

 I  spoke about how local bookstores, all local businesses in fact,  made for interesting public spaces. I was influenced then (and now) by Jane Jacobs’ The Death and Life of Great American Cities. It is a remarkable book, published in 1961,  and even more prophetic now than then. Jacobs was reacting against the then fashionable  theories of public planning  that emphasized urban renewal and public open spaces. Contrary to conventional wisdom,  Jacobs didn’t like “green spaces”.  She argued that the neighborhoods that work best were neighborhoods with interesting and diverse uses, neighborhoods with vibrant street life, neighborhoods designed for pedestrians. This meant then, and still means today, main streets and business districts dominated by independent businesses. There were no big box stores back then. Shopping malls were a novelty. Imagine what she would have said about the big box centers of  today with the mega-stores that are designed to overwhelm and exhaust the human spirit and that are oriented around vast parking lots. Imagine what she would say about internet retailers, that are oriented around the cubicle.

Maybe I became seduced by my own bombast, but I used to say that the marketplace had been the center of communal life since the time of the Greek Agora. And it was under threat by the internet. This was always a good point to make in  debates with  internet gurus who  thought of history as something that reached its apotheosis   with them. Cultural literacy was not their long suit. Most of them thought that the “Greek Agora” was the place down the street for Spanakopita and ouzo.

I got a call in 1999 from a Japanese journalist. He wanted to feature me in a book with writers and social commentators from all over the world addressing the meaning of internet commerce.  My article was  the only thing I ever wrote that appeared first in Japanese. But it was published in a number of languages and was read by quite a few people worldwide.  I was just looking over this article. It was called: “Warning: E-commerce May be Dangerous to the Health of Your Community.” Some of it sounds hysterical and hasn’t survived the test of time. But I think it is still worth reading. You can probably find it on-line somewhere. Here is how I summed it all up:

The Internet industry likes to talk about “revolution” and uses the traditional language of the political left to describe the changes it is making to the way America does business.   The images which it employs are invariably hip and filled with iconoclastic visual references to the youth culture.

In fact the reality of electronic commerce is quite different.  Its growth is driven by values which are more associated with the political right, or perhaps the corporate ethos of Wal-Mart:  the fetish of commodities, the primacy of Wall Street, the desire for monopoly power  and the indifference to diversity and community values.

There, internet churl. I throw down my gauntlet!.

In 2000, one of the big news stories was whether internet commerce should be taxed or, to be more precise, required to collect sales taxes payable by consumers. If you delved into the issue  too deeply, it could get pretty arcane.   It tended to turn on some badly written US Supreme Court decisions and terms of art like “nexus”. But the real issue was pretty simple. Local businesses were forced to collect sales tax. Out of state internet businesses weren’t. This gave a significant competitive advantage to these internet companies.  It all came down to this: Shouldn’t tax policy be based on a level playing field? Should the government be picking winners and losers through discriminatory tax policies?  Shouldn’t internet customers do their part in paying taxes to support the local services that they benefit from? By the way, the issue is still very much alive. Amazon.com is the largest sales tax evader in the United States.

A lot of people who didn’t like each other very much got together to try to see that internet commerce wasn’t given favored tax treatment. The group included big box stores, commercial real estate interests, and little booksellers like me. I developed a pretty high profile as a spokesperson. I suppose I had better symbolic value as a talking head than the Vice President  for Tax Administration of Wal-Mart. I got flown around the country a lot. And my reimbursement checks seemed to be coming from  Bentonville, Arkansas. Well, I guess tax policy makes strange bedfellows.

I had a really good time going around giving speeches. I debated Grover Norquist, the satanic anti-tax nut and Washington kingmaker, twice. Once was at the ultra-right wing Federal society.  I think I got the better of him. I also made it onto Crossfire and had to stand up to a withering attack by Mary Matalin.

Internet companies strenuously opposed collecting these taxes for their own reasons that had more to do with competitive advantage than tax fairness. The most errant nonsense was coming from Amazon.com. They seemed to be making two points: 1)Internet commerce is in its infancy and is a frail bird that needs to be protected from burdensome taxes. 2) Internet commerce is the juggernaut that is driving the new economy, and it shouldn’t be throttled by unpleasant things like taxes. I liked to point out at every opportunity how puzzled I was that the internet could be both a frail bird and an economic juggernaut  at the same time.

Well, of course we were right. But we still lost the war. Since the 1980’s, independent bookstores have faced a perfect storm of problems. Competition from chain stores and big box stores, competition from internet booksellers, competition from free information available on line, and now competition from e-books. I suppose we could talk about the decline of  cultural literacy as well. We’ll rail about that on another blog post.

All this brings us back to the point where we started. That is the sad thought that bookstores are not going to be around much longer.  The market share of independent stores has really tanked since the 80’s. Indies now account for about 5% of all book sales. This is a  sad statistic. Pretty much everyone in publishing who remembers will tell you that independents represented the heart and soul of bookselling. They still do, but there aren’t that many left.

Someday soon there will be a sort of “tipping point”. The world will turn to e-books with breathtaking speed.  Community bookstores, even chain bookstores, have always excelled in offering customer service or just a place with a warm feeling to hang out.  When books become simply downloadable “digital content,” then the  bookstore will go the way of the blacksmith’s shop. The game will be over.

Sure, e-books and e-book readers will offer remarkable advances in convenience of delivery and options for display. But the romance of the bookstore will be a thing of the past. It is a little like the convenience of getting to Europe in a few hours by getting sardined into the main cabin—instead of getting there on Queen Mary. Yep. It’s convenient.  But, God,  what has been lost? It’s a pity.

Fighting Against History Part 1

January 2, 2010 by andyrossagency

Nobody is going to want to hear this, but we might as well face up. One of these days, not too far off, bookstores will be a thing of the past. Books are going digital just like music has gone digital. Right now e-book purchases constitute less than 2% of  all book sales. But while  sales of trade books are down this year, sales of e-books are up almost 300%. You don’t need to be a statistician or an industry sage  to see which way the wind is blowing.

I don’t feel  very comfortable about this. I don’t even feel comfortable  writing about this. Certainly when I was in retail, I didn’t even feel comfortable thinking about this.  And most of the time I didn’t. But reality is beginning to impinge even  on my own immeasurable capacity for avoidance.  

About 12 years ago, I was on a panel at the Commonwealth Club in San Francisco  with a bunch of high tech gurus. To give you an idea of how much the world has changed, one of the gurus was talking about this new internet company that he had just discovered. He called it “one of my favorite new bookstores.” The company was Amazon.com. I’d never heard of it.

The subject of the panel was the future of the book in the internet age. The gurus all said that the book was going digital. It was just a question of how long it would take for the technology to develop enough to create a good medium for reading text. They predicted it would be in about five years. They were wrong on the timing but right on everything else. I became argumentative and even slightly insulting. I also shamelessly played to the house, which was mostly made up of little old ladies. I said  that the other members of the panel were technology obsessed and that the world of literature and culture was much too important to be left in the hands of engineers (I believe I raised my upper lip with just a hint of a sneer when I said this). The audience applauded.

 The gurus treated me with contempt, or maybe with benign condescension. They knew that they were masters of the universe. They knew that that this arrogant little shopkeeper would be swept up in the dustbin of history. I decided to go epistemological on them. I spoke of the overweening arrogance of believing that they owned the future. I might have mentioned David Hume’s critique of the concept of causality.  But my skills were merely rhetorical. That day I won the battle. But today it is manifest that I lost the war.

One of the mistakes I made that day was to confuse two  different issues. Was technology going to bring about the death of the book or would it bring about the death of the paper book? I attempted to formulate  the question as one of  technology vs. culture. I think I understood the distinction all along. But I kept treating the two issues interchangeably, probably for opportunistic and rhetorical reasons.

Clearly the book isn’t dead. E-book sales are growing exponentially. People still want to read a good novel. A three hundred page non-fiction book on a subject that has been well thought out and  well edited is a lot different from a blog. The people who are designing e-book readers talk about the necessity of sustaining the “trance-like” state of reading when using the electronic medium. That is the right question to ask. And they are coming very close to succeeding.

I have never read a book on an e-book reader. But I’ve seen them, and they are pretty good. And  they are getting better fast. They have wireless delivery systems, so you can get any of 1,000,000 titles in seconds. And, of course, the books are cheap. The internet seems to have an unfortunate tendency of devaluing intellectual work as reflected in the price of the product. Amazon and BN.com are in price wars. Amazon is selling best seller e-books for $9.95. That is below cost, by the way. And classics and public domain titles are usually free.

When I say that the internet hasn’t destroyed the book, it doesn’t mean that it hasn’t had an incalculable impact. And it has eliminated entire categories of books. During the heyday of Cody’s in the 1980’s, dictionaries, almanacs, and encyclopedias were huge sellers at the store. We could expect to sell 20 copies of the Webster’s Third International Dictionary during the holiday season. Even the $300 Complete Oxford English Dictionary in two volumes with magnifying reader included sold fifty copies a year. And that is when $300 was real money. Similarly, a new edition of The Columbia Desk Encyclopedia was a major publishing event. – And a major scholarly achievement. During the Eighties, our largest section in the store was computers, mostly books telling us how to use software. Those sales disappeared after 2000.

These books are all gone. These activities have moved on-line. It is just too convenient. But something is missing. We have already spoken of the tyranny of Wikipedia (see blog entry: “Wikipedia and Me.”) There was something else that has been lost, though. The serendipitous pleasure of thumbing through these books and discovering a new word or a new piece of information. That just doesn’t happen now.

The same is true of browsing in a bookstore. A bookstore gives you the pleasure of wandering around and maybe finding something unexpected. Amazon and BN.com have tried to duplicate this with clever software solutions. But they all seem pretty artificial. It doesn’t replace the joy of browsing a bookstore. A number of people have come up to me to tell me how important Cody’s was in their lives. Some of them said they met their spouses for the first time at Cody’s. You can’t do that at Amazon.com.

Next week I’ll talk some more about some of my quixotic struggles  against the Brave New World of the internet.

Remembering Bill Clinton at Cody’s

December 19, 2009 by andyrossagency

Bill Clinton’s book signing at Cody’s on June 29, 2004  was the biggest event that we ever had, both in attendance and in the number of books sold.

Cody’s had been doing events for a long time. I bought the store in 1977. Even then, events were a fixture at  Cody’s.  During the time I owned the store, we had 6000-8000  author events. Here are just a few  authors in no particular order: Norman Mailer, Barbara Kingsolver, Susan Sontag, Muhammad Ali, Mickey Mantle, Peter O’Toole, Allen Ginsberg, Michael Moore,  Gary Snyder, Steven Pinker, Joseph Brodsky, Buckminster Fuller, Ken Kesey, Margaret Atwood, Judy Collins, Richard Avedon, Salman Rushdie, George McGovern, Jimmy Carter, Ralph Nader, Hank Aaron,  Joseph Heller, Ray Bradbury, Garrison Keiller, Gilda Radner, Ann Rice, and Michael Chabon.  We even had Buffalo Bob and Beaver Cleaver.  Impressive.

But as I said, the biggest event we had was Clinton. We knew from the start that this was going to be different, but nothing prepared us for  what finally transpired.

We received a visit from the secret service about a month before the event. They scoped out the store. They were happy to see that there were alternative exits  in the event of unpleasantness by  homicidal lunatics or other crackpots, always a possibility in Berkeley. (As an aside, my wife, Leslie, once foiled a cream pie attack on Madeleine Albright, former Secretary of State.)  

But I digress.  The Secret Service informed us that customers couldn’t bring bags and other personal belongings into the store. We had experience with this when Jimmy Carter did a signing. We rented a truck, parked it outside and had a team of  people acting as hat check girls.

The Clinton team were good guys but weren’t very helpful with logistics. We were faced with the largest organizational challenge in the store’s history and were not informed how long the president would stay at the store and how many books he would sign. Part of this was probably due to some security concerns. They didn’t want to give too many details regarding  their schedule. Part of it was simply due to flakiness. All they told us was that he would stay at least two hours.   We spent a lot of time speculating on how many books Clinton could and would sign in this period  and trying to parse what “at least two hours” really meant. No matter how you cut it, it was clear that most people weren’t going to get their book signed or even see the president.

So now it’s about 14 days before the big event. I’m up in my office with a sales rep. I remember it well. I was buying Simon and Schuster new titles from Beverly Langer. The phone rang. Normally I’d ignore it and let the guys at the information desk field the calls. But the phone didn’t stop ringing. I started picking it up. Everyone wanted to know about Clinton. Finally I sent Beverly home and decided to go downstairs and help answer the phone. I ended up staying down there on the phone ten hours a day  for two weeks. I tried to estimate how many calls we took during that time. I came up with about 10,000. But most people never reached us. The line was always busy.

Of course, all the questions were the same. And because of the vague and fuzzy information coming from the Clinton team, we were not able to answer those questions. What were they? “Will Clinton have time to sign everyone’s book?”(answer: we don’t know). “How soon should we come to get in line?” (answer: we don’t know.). “How long will Clinton be signing?” (answer: We don’t know. At least 2 hours, maybe, we think).

We also had to deal with logistical puzzles for which there were only bad solutions. The big one that ultimately defeated us (and every other bookseller who hosted Clinton) was how do you set rules for who can enter.  The obvious seat-of-the-pants plan was  only people with books can get in line. This is easy. We give an admission ticket for everyone who buys a book. But what if  the customer buys a book and wants to come in accompanied by his child?  Would we be so heartless as to say: “Only one person per book. Your six-year-old will have to buy his own book in order to get in.” No.  We feel our customers’ pain (even if Clinton did not), and  they would make us feel ours as well if we didn’t allow their kid to come in.  We had enough problems without having to deal with a Donnybrook of angry Clinton fans. So we gave everyone 2 tickets for every book purchased. I had a bad feeling about that, but we will get to that later.

As the big day approached, we sought information from the bookstores throughout the country who were staging similar events. Always we asked, how long did he stay? Did he stay longer than he promised? How many books did he sign? How many books per hour did he sign? Was he a fast signer (Jimmy Carter was the fastest signer on record. He signed 1200 books in 90 minutes.) Sadly, Clinton was a bit of a schmoozer. He liked everyone to feel that they had his undivided attention for 30 seconds or thereabouts. What we heard from our bookselling friends in Denver, Milwaukee, Chicago, and all points east was that the event was a perfect storm. The best they could say was: “We survived”. (Well, actually they also said that they sold a bunch of books).

Melissa Mytinger, who was masterminding the event, had the whole thing planned and mapped out on charts with little arrows running this way and that. A couple of days before the event, we all got together for a meeting. Everyone was given their tasks and stations. As was to be expected, there was a considerable amount of jockeying for “face time.” And the winner was: ta da!…..no, not me. I’m far too worldly  to be seduced by the cult of  celebrity.  It was…my son…Robert Cole. He got to stand next to Clinton for 4 hours holding the books as the president was signing.  Clinton was impressed by his energy and wide-ranging knowledge of foreign affairs. Maybe Robert’s next job will be Secretary of State. Let’s hope he doesn’t get a pie in his face.

I was happy to leave the logistics in the capable hands of Melissa.  I’m more of an idea man, a “big picture” kind of guy.  I’m really into the “vision thing”.  So I focused on  more strategic concerns like how much money we were going to make. The problem was that we became the victim of our own business acumen. For years we had been discounting best-sellers 30% to stay competitive with the competition (aka Border’s and Barnes and Noble). My staff was much more hard- nosed than me and came up with ideas to make an exception this one time and sell the book at retail. We knew that other stores were implementing  jury-rigged  schemes. Sticking a 20% coupon  in with the book  that expired before anyone would have an opportunity to use it. But I was trapped by my own foolish consistency and insisted on selling the book at 30% off. As a result, we lost money on the event. That still didn’t stop particularly shameless customers from arguing with us that it  they could get the book 10% cheaper at Wal-Mart. (Great. Do it, Bub. And go on down to Wal-Mart and wait for Clinton to sign your book.)

A few days before the event, I got a call from the Chief of the Berkeley Police Department. He was pissed off about the whole thing. By law, the local police must do what needs to be done to provide security for public officials. Of course, this was going to cost a bundle of overtime for an agency that was always strapped. He told me as much and suggested that Cody’s pay for the City’s  extra costs. I told him I’d think about it. I didn’t.

About 36 hours before liftoff, people started lining up outside. This was  pretty amazing to me. I spoke to the people on the sidewalk to try to understand why this was so important. Most of these early comers were women. I had an impression that a lot of this had to do with sexual attraction. And they remained cheerful throughout. When the person who was first in line got her 30 seconds with Clinton, I asked her if it was worth it. She said it was and then some.

And then the morning came on the great day. We were still getting phone calls. My favorite was from a person who was scheduled to give birth that day. She asked if she could go to the front of the line as a “disabled” person. I told her she probably should go to the hospital instead.

We had organized a signing station downstairs for disabled people. Clinton would go there first. Then come upstairs and sign everyone else’s books. The line snaked through the neighborhood for about 5 blocks.  

Clinton arrived through the back door. I was standing there waiting to greet him. I had  been rehearsing this moment for weeks. Of course, it would be  one of the great experiences of my life that I would tell my grandchildren about.. As he walked in the door, the security guard that we had hired elbowed me out-of-the-way and asked Clinton if he could sign two books. Clinton graciously did so and swept by me into the store. Boy, was I pissed.

Clinton went straight to the disabled signing station. The next thing that happened will always go down in bookstore history. But the adjective, “apocryphal” would probably precede the story. I’m serious. This really happened. The first person in the line was an old African-American woman in a wheel chair. When Clinton arrived, she said: “I think will stand up for my president.” Clinton was  always  able to fathom a dramatic moment. He spread his arms and said: ” You can do it. Stand up! Stand up!”  She responded, “Yes. I WILL stand up for my president”. She began pulling herself up slowly and shakily and fell into Clinton’s arms. Hallelujah!.  That episode, alone, made it all worthwhile.

After finishing with the disabled customers, Clinton finally came upstairs and began the real work of the day. It was about noon.  We were still trying to figure out how long he intended to stay, and the Clinton team were still no help.  We were still going up and down the line telling people we didn’t know anything about how long he would sign. At last the team gave us some advice on where to cut off the line.  But it still  wasn’t clear that people who didn’t make the cut-off   might yet have a chance to get in.

I was standing about six feet away from the signing station, so I had a pretty good view of how things were going. Unfortunately    reports  from the other stores throughout the country were correct that Clinton liked to schmooze and was keen in making sure that the people had quality face time. I also had a chance to observe the famous Clinton charisma. It was impressive, to be sure. But it also became very clear that it was artful and well-polished. Nothing natural about it. He did have an uncanny ability to appear calm in the face of all the chaos. It must have taken huge discipline. I’ve tried to use the same techniques in my own public speaking experiences. It works. The women tear me apart.

After 4 hours we cut off the line. Remember that we gave everybody 2 entry passes for every book signed. At a certain point, people were selling and bartering  their  extra passes. When others  saw this going on, there was a lot of yelling and screaming. I think it even turned to fisticuffs.

My wife, Leslie, agreed to go outside to inform people that Clinton was no longer signing. Fifteen minutes later she ran back into the building, rattled,  her eyes turned to stone from the trauma. She said nobody could ever make her go back out there.  She feared bodily harm. The people in the line had gone crazy.

At the end of the event, we tallied up the box scores. Clinton had  signed about 1400 books in 4 hours. We actually sold about 2800 copies leading up to the event, and surprisingly we got very few returns.

Clinton  graciously stayed around after the line was cut off  and surrounded himself with the staff for photographs. I got to sit on the floor next to him. As the camera was being set up, he looked down at me and said, “nice tie”. This was the only comment made to me by the leader of the free world.

At this point, his handlers were getting antsy. He was due for an event at the Barnes and Noble in San Jose in 2 hours. Clinton looked out the window and saw that there was still a huge crowd outside the door waiting for him to come out.  Probably 5000 people. Clinton told the handlers, “I can’t leave yet. I have to go out there. They’re waiting for me.” And he did. What a mensch!

He walked out the front door with that remarkable practiced composure. The crowd surged forward. I was pretty sure that I was going to get trampled. But the police threw up a blockade just in time. For the next 45 minutes, Clinton worked the line shaking thousands of hands and making sure that all those other people who couldn’t get in got their own moment of face time. They left happy.

Leslie and I took Melissa to Café Rouge after the event. We ordered up 2 dozen oysters and some 18-year-old scotch. We thanked Melissa. She deserved it. We all did.