After a month of few angry words over the Amazon-Hachette contract dispute from either party or key observers, author and technology thinker Clay Shirky and industry consultant and Digital Book World conference chairman Mike Shatzkin traded pieces on the subject.
In an essay on the blogging platform Medium titled “Amazon, Publishers, and Readers,” Shirky writes:
Back in 2007, when publishers began selling large numbers of books in digital format, they used digital rights management (DRM) to lock their books to a particular piece of hardware, Amazon’s new Kindle. DRM is designed to transfer pricing power from content owners to hardware vendors. The publishers clearly assumed they could hand Amazon consolidated control without ever having to conspire with one another, and that Amazon would reward them by passing cost-savings back as inflated profits. When Amazon instead decided to side with the customer, passing the savings on as reduced price, they panicked, and started looking around for an alternative conspirator.
Starting in 2009, five of the six biggest publishers colluded with Apple to re-inflate ebook prices. The model they worked out netted them less revenue per digital sale, because of Apple’s cut, but ebooks were not their immediate worry. They wanted (and want) to protect first editions; as long as ebook prices remained high, hardback sales could be protected. No one had any trouble seeing the big record companies as unscrupulous rentiers when they tried to keep prices for digital downloads as high as they had been for CDs; the book industry went further, violating anti-trust law as they attempted to protect their more profitable product.
In a response this weekend, Shatzkin contends, “Almost every sentence of this is subtly or blatantly wrong.”
In a post on on the topic titled “Big publisher bashing again with fictional facts,” Shatzkin goes on to dispute many of Shirky’s points, including his characterization of ebook history, the economics of book publishing, the effects of digital rights management software and more.