Amazon’s $1 million secret

By quietly supporting small presses and literary nonprofits, is Amazon backing book culture or buying off critics?

Topics: Amazon.com, Books,

Amazon's $1 million secret (Credit: iStockphoto/stokato)

The Brooklyn Book Festival’s website debuts a new feature this year called OnePage. Every week from March through September, OnePage will post part of a previously unpublished work — chunks of correspondence, scenes from books in progress — by authors such as Darcey Steinke, Martha Southgate, Paula Fox and Stefan Merrill Block.  There will also be mini-profiles of participating small presses, including indie mainstays McSweeney’s and Akashic.

That a Brooklyn book festival would promote small presses and their authors isn’t surprising. But the sponsor of OnePage has raised a few eyebrows. As the festival’s press release noted, “The project is made possible with a grant from Amazon.com.”

Yes, much of the literary world is in full-throated revolt against Amazon’s dominance — bookstores fear Amazon will push them out of business, authors worry about deep discounting, and the Department of Justice is considering the major publishers’ challenge over the price of e-books. But amid the public and private rancor, the massive e-retailer is very quietly trying to make friends in the book world. Its strategy is simple and employs a weapon Amazon has in overwhelming supply: Money.



The Brooklyn Book Festival is just one of many recent beneficiaries of Amazon’s largess. According to a list on Amazon’s site, prestigious groups such as the PEN American Center, journals like the Los Angeles Review of Books, One Story, Poets & Writers and Kenyon Review, mentorship programs such as 826 Seattle and Girls Write Now, and associations including the Lambda Literary Foundation, Voice of Witness and Words Without Borders have all received grants.

While the dollar figures are not always announced, according to interviews and press reports, many recipients said they have received between $20,000 and $25,000. With the more than 40 current grants listed on Amazon’s site, this suggests the company distributes approximately $1 million annually to small presses and other literary-minded nonprofits. (Publishing sources confirmed that number, but Amazon would not.)

At a time when independent publishing is struggling to survive, in part due to the influence of Amazon, recipients say that these grants offer crucial — if ironic — life support. Sometimes the grants pad out thin margins of survival, and make it possible for worthy programs to maintain their tiny staffs. And there’s no question the grants support legitimately important work: Literature in translation, international poetry, smart criticism, youth literacy efforts.

If few Amazon customers know anything about the company’s growing charity presence in the world of literary nonprofits, this is by design. Since launching its grant program in 2009, Amazon has kept its efforts low-key. Indeed, Salon’s repeated requests to discuss the grant program with Amazon — or to interview Jon Fine, Amazon’s director of author and publisher relations and the man who distributes the money — were all declined.

That silence cuts both ways. A gift from Amazon is considered the devil’s kiss in many corners of the publishing world, and many grantees are in no rush to blow a ram’s horn announcing their acceptance of money, either. (Many grant recipients interviewed for this story didn’t want to say anything negative or positive about Amazon, concerned either with offending Amazon on one hand, or betraying the anti-Amazon indie ethos on the other.)

Because both sides understand the delicate nature of the dance, the only stipulations attached to Amazon’s grants are a brief acknowledgment tucked away on a back page, and a short press release sent to supporters and members of the project. Those receiving these news releases generally consist of fellow authors, editors and members of America’s indie-publishing ecosystem. In other words, some of the only people left in the world who not only never learned to love Amazon, but actively hate its grinning yellow guts.

So what’s the point of contributions that get little publicity? Does Amazon genuinely want to be a white knight, unconcerned about the credit? Or do the grants represent a kind of blood money? Is the real goal of the grant program to keep friends close and enemies closer, by showering influential, articulate and potentially critical voices in the publishing community with sacks of no-strings cash?

“It’s the bully on the playground handing you a lollipop,” says Shirin Yim Bridges, publisher of Goosebottom Books in San Francisco, which has not received a grant from Amazon. “I mean, what do you do?”

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The pillars of Amazon hatred — recently recapped by the Authors Guild’s Scott Turow on Salon — are arranged like this. Critics allege that the Seattle-based company, led by Jeff Bezos, its ex-Wall Street CEO, engages in predatory pricing. They claim that Amazon bullies small publishers into signing price and promotional contracts that threaten their already slim margins, and doesn’t hesitate to unplug the “Buy” buttons of those who resist. While the company claims a foundational book-loving ethos, some suggest it wages total war against other institutions that sell books and embody book culture.

Amazon is picking up its literary largess during an especially charged season in the company’s relationships with the rest of the book world. For the first time, the “Big Six” publishers — HarperCollins, Random House, Hachette, Simon & Schuster, Penguin and Macmillan — have refused to sign Amazon’s latest annual contract. The main sticking point is exorbitant increases in “co-op promotional fees” for e-books that the publishers see as an illegal gouge by another name. One person familiar with the details of the proposed 2012 contracts that Amazon has submitted to major New York publishers described them as “stupifyingly draconian.” In some cases, he said, Amazon has raised promotional fees by 30 times their 2011 cost. In saying no, the big publishers are following in the footsteps of the Independent Publishing Group, a major indie distributor representing dozens of small presses that refused Amazon’s increases earlier this winter and soon saw the “Buy” buttons on more than 4,000 of their titles promptly delinked.

This standoff comes as the Department of Justice considers the antitrust implications of the Big Six and Apple’s refusal to let Amazon set the price of Kindle titles at $9.99. Then there is Amazon’s bold, long-term gambit to take on publishing houses altogether with them with its in-house Amazon Publishing project.

That adds extra movement to the philanthropic knuckleball of the company’s recent patronage of small publishers. Is the program simply a calculated corporate response to past accusations of stinginess? Is it part of a long-term strategy to divide and conquer the last bastions of Amazon’s critics, while winning over some of the very people Amazon may find useful as it develops its print-on-demand and e-book business?

It depends whom you ask. Of more than a dozen grantees Salon interviewed, some completely disassociated Amazon’s charity from its business practices. Others were more conflicted, but saw nothing to gain by dwelling on the source of the funds or turning their cash-strapped offices into an Ethics 101 seminar. Others saw Amazon’s grant giving as something to be feared: An evolutionary skill developed by a natural and intelligent predator growing ever stronger off the blood of its prey.

“The grants are a blatant attempt to buy goodwill from an industry that they’ve ravaged,” said one veteran indie publisher who asked not to be identified because he’s involved in an Amazon-funded project. “They are a rapacious, horrible company from top to bottom. But they have all this excess capital, so $25,000 here and there is nothing to them. And it’s working. People say, ‘Oh, look, they’re funding a translation prize, what could be wrong with that?’ Yet everything about them is still evil.”

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But the devil’s checks never bounce. The above Amazon hater still took the money. The truth is, there probably aren’t any underfunded indie lit institutions that haven’t, or many that wouldn’t, given the chance. Nor are there many people willing to argue they shouldn’t.

They’re funding excellent things focused on emerging writers that create new work,” says Jeffrey Lependorf, president of the Council of Literary Magazines and Presses, an Amazon grantee. “Amazon operates a dangerously large part of the marketplace, and many of us are trepidatious about the power they wield. But they’re not pulling a fast one here. They’re a giant corporation doing what large corporations do, which is sponsorship [with the goal] of gaining the imprimatur of that to which the money is given.

The tension is plain enough: The same people most familiar with and bitter about the bully’s methods are often the same people most in need of lollipops. Amazon’s grantees tend to be small and broke. They do not receive the kind of government support they would get in many European countries. A sponsored project can keep the lights on, put out the next title or series, and provide financial cushions to educated professionals who have mastered the art of flirting with, and occasionally bedding, the poverty line.

This is especially true of literary translators. Along with its own translated feature series, AmazonCrossing, the company funds several original translation projects, including the PEN Translation Fund and Open Letter’s Best New Translation Award, to the tune of $20,000 annually. The result has been some new friends for the Yellow Giant. “Translators love Amazon,” says Chad Post of Open Letter, an Amazon grantee and publisher of translated fiction at the University of Rochester. “They’re working for maybe $500 a book, books no one wants to touch. Then Amazon comes along and suddenly they’re benefiting from an industry that doesn’t help them, ever. Five thousand dollars is enormous to them. I can understand people are concerned with Amazon’s power in the marketplace, but I have a hard time chastising them when they directly benefit people who struggle their whole lives to do what they think is important.”

Many of Amazon’s grants have a broad trickle-down effect that puts hundreds of dollars in a lot of pockets. Amazon’s $25,000 grant to the Brooklyn Book Festival, for example, is spread out among numerous writers with small presses and associations, including Coffee House Press, Hanging Loose Press, Coach House Books, PM Press, McPherson and Co., Archipelago Books and Poets Wear Prada. Grants targeting writing programs reach the next generation of writers whom Amazon might one day sign up to Amazon Publishing. Recipients include the Association of Writers & Writing Programs, Girls Write Now, Asian American Writers Workshop, New York Writers Coalition and the Alliance for Young Artists & Writers. Smart new journals have also received money, such as the recently launched Los Angeles Review of Books, an online book review site. As newspapers have cut back on books coverage, paid outlets for critics have dwindled over the last decade.

We are thrilled with the grant from Amazon.com, which is going to allow us to pay more writers and editors,” says Los Angeles Review of Books editor Tom Lutz. “These days, if you find money for writers, you take it. It is a drop in the bucket, given all the out-of-work journalists and incredibly shrinking book advances, but it is real money. Yes, Amazon is a controversial company, but this is not a controversial program — no one, as far as I have heard, has said, ‘No, thank you.’”

Nor has anyone yet heard from a Big Six publisher eager to fund a translation award of their own.

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The man who controls Amazon’s purse strings, and is tasked with outreach to the literary community, is a 40-something lawyer named Jon Fine. Fine’s previous positions, listed in biographies and his LinkedIn page, show he’s comfortable with a range of people across the political spectrum, from liberal tastemakers to boardroom insiders. He was a media counsel for King World when they syndicated “Inside Edition” (coinciding with part of Bill O’Reilly’s tenure as anchor) and several reality shows. He moved to NBC as senior media counsel in November 1996, where he worked with late-night shows including “Saturday Night Live” and several news divisions. Before joining Amazon in 2006 as an associate general counsel for media and copyright issues, he spent five years as the vice president and associate general counsel for Random House, where he led the legal affairs division for Alfred A. Knopf and Random House of Canada.

In November 2008, Fine became Amazon’s first director of author and publisher relations and was put in charge of a “community fund” worth, by many estimates, $1 million annually. He has since become a fixture at book fairs and publishing events around the country, where he leads seminars, joins panels and generally hams it up with friends in the business, often seeking tips on grant candidates. (Again, Fine did not return multiple written and phone requests for an interview.)

Most everyone agrees that Fine is a laid-back, likable fellow, especially by Fortune 500 standards. Although he doesn’t pretend to be anything but a company man, he cuts checks with just enough sly and endearing self-awareness. “My job is to make an 800-pound gorilla seem like only a 200-pound gorilla,” he’s known to say. Combined with his background in publishing, the result is an effective go-between for repping Amazon to indie artists, publishers and writing program directors. “He’s a book lover and genuinely cares about books,” says the CLMP’s Lependorf. “Fine has a great eye for great indie causes that don’t get funded otherwise.”

Fine may be a book lover, but he still works for a CEO who famously said, “I get grumpy when I’m forced to read a physical book.” And he himself is no stranger to what some call Amazon’s darker side. Among his specialties is antitrust law, and he is said to remain part of the company’s notoriously demanding legal brain trust. “Jon Fine embodies the two faces of Amazon,” says one of his grantees who asked not to be identified. “I like him a lot and think his heart is in the right place, but he comes from the legal side.”

Even while working a room in indie-press savior mode, Fine can bare his fangs. Dennis Johnson of Melville House Books, who has become something of a legend as a fearless and relentless on-record Amazon critic, remembers Fine approaching him at the 2011 Associated Writing Programs conference. In fall 2010, Johnson had withdrawn Melville House from the Open Letter Translation Award, rather than be associated with an Amazon-funded project. “The first morning of the conference, everybody kept telling me that some guy from Amazon was looking for me,” says Johnson. “Eventually, Jon Fine walks up to me and says, ‘I just wanted to thank you for giving us a world of publicity.’ In other words, ‘We won.’” Johnson says the company has also sent reps to intimidate him into accepting contracts. “These young guys in suits come up and stick their fingers in my chest with a message that amounts to ‘Get with the program or [perish].’ This is the class of Amazon,” he says.

After Johnson pulled Melville House from the Open Letter award, he heard from translators and small publishers around the country. Some were livid. How could he deprive his translators of an all-too-rare chance to make some coin? Others expressed a whispered respect, but said they were in no position to follow suit. As if in confession, some admitted to have recently taken money from Amazon. “One of the reasons they’re finding people so eager to accept their money is they have created a desolate landscape where that money is more necessary than it used to be,” says Johnson. “People are more willing to co-opt their ethics as a result. Not everyone is proud of it. I think a lot of the giving is not known for that reason.”

Johnson’s long crusade against Amazon has for the most part been a lonely one. “I admire Dennis’ rebel spirit,” said one small publisher who declined to go on the record. “It’s very brave. You can’t really speak out publicly against them. They’ll hear. It’s amazing. You say something in a short blog interview, and they know.”

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The fact overshadowing every Amazon debate is the company’s position as the world’s largest seller of books. It is so large that those now teamed up against Amazon in the fight over agency pricing — the right for publishers to set their own prices — is a new alliance of former enemies. In 1994, an association of independent bookstores sued the major publishing companies for discount rates they said favored the chains. The publishers in turn saw chains like Borders and Barnes & Noble as the enemy for putting a squeeze on their margins. “Discussion of terms goes back before Amazon,” says Jim Milliot, a longtime observer of the industry at Publishers Weekly. “What makes this [standoff] with Amazon stark is that they take the ‘Buy’ buttons off the website. To a lot of people, that seems unfair, and it catches a lot of attention. At least the chains always sold the books.”

Publishers large and small are on the same side as Barnes & Noble and Apple in challenging Amazon’s attempt to gain a death grip on the exploding e-book market. Amazon’s success, say its critics, will lower price expectations for physical books to the point where they become untenable for the Big Six’s business model.

The current standoff between the Big Six and Amazon is a game of chicken that will end in some sort of compromise. Amazon is the biggest customer for publishers, and it is entirely possible that Amazon will succeed in making them increasingly irrelevant with Amazon Publishing — signing authors and distributing their books directly to Amazon’s massive customer base. The company has already proven with Kindle singles and other digital exclusives that they can profit by creating content and selling it directly to readers on an Amazon-created device — and without any of the legacy infrastructure costs hobbling big publishers and bookstores.

In the future, publishers large and small may be forced to live in an Amazon world in which the company produces most books and sets whatever prices it wants. Everyone else, meanwhile, will fight for crumbs from one of Amazon’s $25,000 grants. These grants may continue to buy bits of gratitude and goodwill expressed in tight smiles, but it is unlikely to result in genuine affection for its corporate soul.

“The grants give Amazon something to point to, but people don’t see Amazon’s business practices any differently,” says Chad Post. “It’s the same as with any corporation. Money is money. I take money from Citibank, and I fucking hate Citibank.”

Alexander Zaitchik is a journalist living in New Orleans.

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