Amazon is doing the world a favor by crushing book publishers

Here's a little real talk about the book publishing industry — it adds almost no value, it is going to be wiped off the face of the earth soon, and writers and readers will be better off for it.

The fundamental uselessness of book publishers is why I thought it was dumb of the Department of Justice to even bother prosecuting them for their flagrantly illegal cartel behavior a couple of years back, and it's why I'm deaf to the argument that Amazon's ongoing efforts to crush Hachette are evidence of a public policy problem that needs remedy. Franklin Foer's recent efforts to label Amazon a monopolist are unconvincing, and Paul Krugman's narrower argument that they have some form of monopsony power in the book industry is equally wrongheaded.

What is indisputably true is that Amazon is on track to destroy the businesses of incumbent book publishers. But the many authors and intellectuals who've been convinced that their interests — or the interests of literary culture writ large — are identical with those of the publishers are simply mistaken.

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Matt Yglesias has a little “real talk” for us at Vox. Amazon is doing us all a favor, he says, by crushing the fundamentally useless middleman between author and reader: the book publisher.

Yglesias’s piece is mostly a rehash of familiar arguments that often come from people who occupy a similar position to Yglesias’s: They are, broadly speaking, outsiders to the publishing world and more closely associated with the broader fields of business, economics, and technology. They appear to believe their outsider status allows them to see more clearly how broken publishing is; they’re not captive minds. The insiders tend to respond that the outsiders could stand to be less ignorant of the industry they’re criticizing. This fight tends to devolve quickly.

Perhaps it would help to reframe what a book publisher really is in terms that might resonate with Yglesias and his teammates in this debate, such as Josh Barro and Marc Andreessen and a long line of book-industry critics that precede them.

A publisher’s list of books is in essence a risk pool, a term most often associated with health insurance. In the insurance business, the profits from the healthy people outweigh the big losses from the sick ones because the healthy outnumber the sick. In publishing, it’s the opposite, yet the underlying concept is the same. Most books lose money, but the ones that make money earn enough to cover all those novels that didn’t sell.

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The battle between Amazon and the Big Five publishers is complicated by the fact that neither “side” is exactly easy for authors and readers to be on. No one who cares about a diverse and healthy literary marketplace, where new ideas and writers can reach a wide audience — and even non-blockbuster authors are paid enough for their work so that they can continue doing it — can reasonably side with Amazon.

But the publishers have botched so many opportunities in recent years, and have been so maddeningly slow to adapt to the digital marketplace, that it’s hard not to feel that they deserve some kind of comeuppance. So when Matt Yglesias writes a Vox explainer about how we shouldn’t feel sorry for publishers, who are “superfluous” and “terrible at marketing” and deserve to go out of business, it’s excruciating to read not because it’s so off-base — which, for the most part, it is – but because it’s not entirely wrong.

Publishers’ interests aren’t always aligned with those of authors, or readers, and a lot of their business practices don’t make, and have never made, much sense. In spite of that, though, there are a few great reasons why writers and readers need to stay on their side.

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