Amazon executive Russ Grandinetti, the head of its Kindle division, has admitted that the company is using underhanded tactics to negotiate with publishing companies, even as he tries to convince consumers that it’s for their own benefit.
Grandinetti said in an interview with the Wall Street Journal that the company was willing to risk damaging its reputation to negotiate better terms for its ebooks, and that it was “in the long-term interest of our customers.” He also added that “the terms under which we trade will determine how good the prices are that we can offer customers.” Amazon’s not evil after all!
Yet other reports indicate that Amazon’s negotiations have little to do with the price of ebooks and more to do with extorting additional fees from publishers in exchange for allowing people to pre-order their products or adding their books to users’ personalized recommendations. It’s also trying to get a bigger cut of the revenues generated every time its customers buy an ebook. That has little to do with the price of ebooks; it’s just a way for Amazon to make more money.
It makes sense for Amazon to portray its actions — which range from increasing the shipping times associated with certain titles to removing pre-order buttons from other titles and hiding popular movies at the bottom of its all-powerful lists — as benefiting consumers. That’s been its rallying cry for the last few years, and it has helped the company escape criticism in the past.
But in reality, Amazon is the only one benefitting from these negotiations. That’s true for its attempts to negotiate with Hachette and for its desire to print books when publishers are unable to meet demand, as I wrote when the BBC first reported on the company’s efforts to receive permission to do just that whenever publishers are unable to meet consumer demand:
The BBC reports that the company would print the titles with print-on-demand equipment which can “print books more quickly than a traditional press” but are “generally thought to offer an inferior product.” Publishers are rightly worried that they will be blamed for the poor quality of these quickly-printed books even though they had nothing to do with the products.
It’s clear, then, that publishers won’t benefit from granting Amazon print-on-demand rights to their books. Consumers will also lose out because they are being given an inferior product — perhaps without discount or notification — instead of whichever book they thought they were buying. Amazon is the only party that would stand to benefit from being granted these rights.
At least Grandinetti is willing to admit that Amazon is risking damage to the facade of altruism it built to attract customers and deflect critics. It shows that someone at Amazon understands that its actions can come back to haunt it, even if he is still unwilling to admit that what’s good for Amazon isn’t necessarily good for either consumers or publishers.