
Malcolm Gladwell ‘Surprised’ to Become an Amazon Bargaining Chip - denismars
http://bits.blogs.nytimes.com/2014/05/30/gladwell-on-amazon-its-sort-of-heartbreaking-when-your-partner-turns-on-you/?ref=technology
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freshhawk
I might not be Gladwell's biggest fan but there is no way he is as confused
about this situation as he is pretending to be. Not surprising he wants to
stay out of this fight, but I am surprised he took on a naive bumpkin
caricature to do so.

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FlailFast
Agreed. I've always gotten a distinctly "I'm just a simple caveman lawyer"
vibe from him, and this response only exacerbates it.*

* Great SNL character, btw: [http://en.wikipedia.org/wiki/Unfrozen_Caveman_Lawyer](http://en.wikipedia.org/wiki/Unfrozen_Caveman_Lawyer)

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ebspelman
For those interested in a longer analysis of what Amazon's relationship with
publishers looks like, I'd recommend George Packer's article from the New
Yorker earlier this year:

[http://www.newyorker.com/reporting/2014/02/17/140217fa_fact_...](http://www.newyorker.com/reporting/2014/02/17/140217fa_fact_packer?currentPage=all)

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ghshephard
One of the pleasant takeaways from this is this entirely expected economic
reaction to Amazon's behavior

 _" Amazon’s competitors are trying to seize the advantage. Walmart.com, for
instance, is promoting Hachette titles at 40 percent off, and said Friday that
its online book sales had jumped as a result."_

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dsymonds
If anything this seems like the customer is the one that is being used as a
bargaining chip, not Malcolm Gladwell. There are two companies trying to get
their way, refusing to budge, and using whatever tools are at their disposal
to try to get the other to acquiesce.

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IBM
The good thing about authors speaking up is that it cuts through the common
techie meme that authors and publishers don't have aligned interests. The same
is true for other "dinosaur industries" like record labels and artists.

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6cxs2hd6
If I correctly understand you to be saying that record labels and artists have
aligned interests? I don't think most artists would agree. Not due to any
techie meme. It's a musician "meme", or rather ~50 years of history of labels
screwing the vast preponderance of musicians. (Short version: Paying tiny
advances, followed by no royalties due to creative accounting of supposed
expenses.)

It _might_ be the case that a few platinum artists have more in common with
their labels. As might a bestselling author like Gladwell with his publisher.

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res0nat0r
Why then do artists continue to sign deals with labels?

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Crito
Because they are young and naive, or short-sighted, or believe that they will
become one of those few platinum artists.

The last probably accounts for most of it. I forget the exact saying at the
moment, but it is something about everyone in America believing that they are
destined to be a rich person, and make decisions/vote in a way that would only
be in their best interests if they were rich.

~~~
IBM
If you actually believe that this is what has sustained the business model of
record labels for all this time then I don't know what to tell you, you
certainly don't understand their business and what they do.

Why did Trent Reznor sign with Columbia afer releasing music independently for
many years? It's because they provide value to him.

[http://www.spin.com/articles/trent-reznor-david-byrne-
major-...](http://www.spin.com/articles/trent-reznor-david-byrne-major-labels-
destroy-angels-radiohead/)

~~~
SoftwareMaven
Because Trent Reznor is a big enough name, he can control the conditions of
the contract. He also has proven he is willing to go without the studios if
need be, which, for a known artist, is a _huge_ bargaining chip.

Using him as a shining example is to be incredibly naive about how contract
negotiation works. Nobody is saying that recording studios do nothing (just
handling distribution is big), just that they suck out far more value than
they provide for the average artist.

~~~
IBM
Whether you are small or well known will impact your terms with the label, but
that's a private business negotiation and not related to my point. The premise
of my original comment is that they have aligned interests and that's because
they provide value to the artist that signs with them. There are plenty of
artists that are with indie labels or who are independent and the artist is
free to choose whatever arrangement they want.

Trent Reznor went back to record labels because he's going to make more money
with a record label, even if he's going to keep less share of the profit.

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pooper
> [y]our terms with the label [is] a private business negotiation and not
> related to my point

> Trent Reznor went back to record labels because he's going to make more
> money with a record label, even if he's going to keep less share of the
> profit.

I'm sorry but you seem a little confused. You can't hand wave that the terms
of the contract are irrelevant but also assert that he is making a smaller cut
of the pie with the label.

~~~
IBM
His share of the pie is smaller but the pie is much bigger. What terms he
negotiated with his label has nothing to do with the fact that labels serve a
purpose and are aligned with the interests of the artist.

~~~
pooper
How do we know that he isn't getting a bigger piece of the pie without knowing
the details of his contract? You guys are idiots.

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sixQuarks
Amazon is not doing a good job when it comes to PR in this case. Jeff Bezos
should issue a statement arguing their case

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ryanhuff
What is he going to say? Amazon is letting a business dispute worsen the
customer experience. Bezos has said that their job is to make the best
customer experience possible, and if they did, that everything else would work
itself out. Apparently, this dispute is worth dismissing that vision.

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euank
Amazon did issue a statement:
[http://www.amazon.com/forum/kindle/?cdForum=Fx1D7SY3BVSESG&c...](http://www.amazon.com/forum/kindle/?cdForum=Fx1D7SY3BVSESG&cdThread=Tx1UO5T446WM5YY)

"When we negotiate with suppliers, we are doing so on behalf of customers.
Negotiating for acceptable terms is an essential business practice that is
critical to keeping service and value high for customers in the medium and
long term." is the relevant quote for how it's not killing customer
experience.

The short term customer experience is indeed impacted, but in the long run,
I'd rather have more reasonably priced ebooks.

Of course, this is Amazon so they're not going to just say "yup, we're doing
this out of greed, screw the customer". It's up to you if you believe what
they did say or not.

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sheetjs
For some reason, I just see a blank NYT page:
[http://i.imgur.com/kX37bFR.png](http://i.imgur.com/kX37bFR.png)

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rosser
I did too initially. Reloading the page got me to the article.

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electromagnetic
I've been seeing a lot of news on this, and most people are crying out against
Amazon for hurting authors. However it's their _publisher_ who had the federal
government on their back for price fixing.

It was _their publisher_ who instigated this. Amazon is a retailer and when
5/6ths of the big publishers conspire to price fix, you can bet every one of
them is going to have their necks on the cutting block.

Amazon does not need these publishers, they are no longer an online book
company they're one of the worlds biggest retailers. These publishers need
Amazon, they're a massive retailer known for books.

Don't shit where you eat folks.

~~~
gress
The publishers had the federal government on their back _because_ of lobbying
from Amazon.

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SoftwareMaven
If your suppliers were in collusion with a major competitor, wouldn't you be
asking for support from the authorities?

~~~
gress
A monopolist facing competition from a competent new entrant will use whatever
methods are available to keep their position.

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YokoZar
It's more correct to describe the collusion of the publishers as a cartel than
as a monopolist here. They work together in collusive price-fixing
arrangements.

Amazon may have just enough market power as a customer of theirs to break this
arrangement, however it would be quite a stretch to call Amazon a monopsony.

