Friday, July 25, 2014

The House Of Cards Wobbles

Why is Amazon so absolutely determined to wring further concessions out of Hachette Book Group?

The answer has arrived, as investors knew it would, as soon as Amazon released its quarterly reports. The figures tell the whole story, and for those who grumbled long ago about the irrational exuberance that drove up the behemoth's stock price, they are having their day.

Jeff Bezos has earned enough out of his brainchild to buy up the Washington Post, but overall the company is losing money. You could go into business for yourself and sell goods at a low cost, but if that low cost doesn't cover expenses, you aren't turning a profit. Not that you want to turn much of a profit anyway, because that is what gets taxed and if you are lucky enough to have a clever accountant you'll draw a nice salary for yourself but never pay any sort of share to the government.

At any rate, Amazon has posted a net loss in the second quarter, despite an increase in sales. Investors were expecting a loss, given the costs to expand offices and distribution centers that are actually investments in future growth. The loss, however, was much more than anticipated.

There is a limit to how low you can price goods. A time will come when investors won't want to take a chance on you because you aren't turning things around as you should. People who invest in your company, the stockholders, start to thinking that they might lose their investment if you run the company into the ground and go into receivership or if the debt has to be restructured or if the company itself has to be broken up into bits and sold off to appease the creditors.

If you sell low, you have to buy low, or the system collapses.

There are economies of scale, of course, and Mr. Bezos has structured Amazon to take advantage. Hence, the notion of an "everything" store where the consumer enters and leaves with everything. Maybe you only came for the deep discount on the e-book, but there are so many other items there and you won't have to get out of your pajamas to make the purchase and that free shipping, well, it's a bargain. For Amazon, there are plenty of goods to be sold at a higher profit margin and that higher profit margin can make up the difference on the loss leaders. Because Amazon buys in such large quantities, they can pocket a portion of the discount they receive from the supplier and pass along a much smaller discount to the consumer.

Amazon needs to pay less for books so it can maintain its level of discounting to the end consumer while increasing its profits on every book sold. If it does not, that loss per share figure is going to stay stubbornly high, and investors are not enamored of corporations in which the loss per share does not decline over time.

The investors start questioning corporate decisions, like adding a line of smartphones to compete with Apple when Apple has such an enormous head start. And when investors ask too many questions at annual meetings, the board of directors gets nervous because their jobs depend on the votes of the stockholders and it's just as easy to tick 'no' on the ballot as it is to vote 'yes' on the retention question.

Besides the unexpectedly high quarterly loss is the advice for the third quarter. The operating loss is predicted to be far, far higher than it was for the same quarter last year.

A boycott of Amazon, if it takes hold, could very well tumble the house of cards that is already wobbling. Yet to give in to Hachette's demands would lead to a decline in discounts granted by the other publishers, and then the cost of doing business would go up instead of down.

Where will Jeff Bezos find the glue to hold his cards together?

Thursday, July 24, 2014

Please Shut Up

Jeff Bezos as a Hindu deity.
Wouldn't it be grand to go back to the day when Amazon was just trying to become the world's largest bookstore instead of these modern times when it has morphed into an unwieldy, oversized monstrosity? Before it turned into Godzilla...or perhaps Lord Shiva, the destroyer of worlds.

Companies must grow to survive. Not unlike rats that must continuously gnaw lest their teeth grow to fatal lengths.

So Amazon grew itself, bigger and bigger, but as it grew it also developed greater power over the book industry. The bookstore that Jeff Bezos started has grown to such an extent that it is able to dictate terms to its suppliers, who know that Amazon is their primary market and to lose that market would be to seriously damage the bottom line.

The conflict between Amazon and Hachette Book Group is part of that growth strategy, in which Amazon can squeeze a little more profit out of its dealings with publishers. The publishers are pushing back, however, and the authors published by those publishers are very vocal about their personal displeasure with Amazon's tactics.

To which Amazon says, Authors, please shut up.

Those unhappy authors have formed a group called Authors United to provide a unified front intended to protect the authors whose books are not being pre-sold or quickly shipped by Amazon in Amazon's bid to bring Hachette Book Group, and then all the rest, to heel.

To make those united authors nervous about their future sales, there are some solid statistics to show them how very powerful Amazon really is. The numbers are something to think over when considering the influence that best seller lists have on book buyers and how many copies an author might sell.

Amazon introduced a book-borrowing service called Kindle Unlimited which allows subscribers (paying Amazon for the privilege) to download an unlimited number of books to their Kindles. The author gets paid after 10% of the book gets read, but they don't get their $9.99 or $2.99 list price. They get some portion of a pot of money that Amazon controls. The pot is as big or small as Amazon makes it, and all the authors who participate in the program get a share. Which, again, is as much as Amazon wishes to give.

Not a great deal for authors, but what of the best seller list that drives more eyeballs to your book? It is clear that Amazon is merrily manipulating the figures so that the books available via the Kindle Unlimited scheme are suddenly shooting to the top of the league tables. Not only are those who sell their souls to Amazon made to look good, but those who do not are getting left behind. In a way, Amazon is promoting those who stand to benefit the corporation the most, while those titles from publishers large and small who do not participate in Kindle Unlimited will be left behind.

Still the authors are barking about Amazon's tactics that smell just a little like censorship and book banning. Not cowed by the Kindle Unlimited maneuver, the authors have not gone quietly and now Amazon has taken yet another stab at quieting the masses.

Douglas Preston, who started the Authors United project, has reported recent contact with one of Amazon's executives.

What if, the suit from the corner office posits, what if Amazon went back to stocking Hachette books just like before, and Amazon would go back to paying the e-book royalties like before? But, and it's a big but, the profits that Amazon would normally turn over to Hachette as e-book royalties would not go to Hachette. No, all that money would go to a literacy charity. Grand, so? Charity? Literacy? Isn't it a beautiful thing altogether?

That way, the authors get theirs and Hachette gets nothing, and it won't survive long without money coming in to pay the editors and the assistants and the publicists and the people who clean the offices. Then they'll have to do what Amazon wants them to do, and isn't that all to everyone's benefit.

Everyone being only Amazon, however, and the authors aren't quite so stupid that they don't see that.

Please shut up, authors, Amazon says, and we'll turn these stones into bread for you.

And the authors response? Begone, Amazon. For it is written, you shall worship your publisher who took a chance on you and got your book out there to be read, and the publisher only shall you serve."

Wednesday, July 23, 2014

Choose An Ending

Love many ways to begin. So many ways to end. Which ending would you choose for this one?

A rugby player heads out to a dance after a match. He's in a large group with his fellow players, battered and bruised, talking over a play or bemoaning a lost opportunity to score, when he sees a pretty girl without a partner. The dance hall is crowded on this lovely night in Dublin, yet this one girl stands out from all the rest.

He's feeling bold, our lad, and he dares to approach. He finds a few words to speak, something relatively coherent. Will she turn away? Will she mock him? Is he too muscular and large, too British?

None of it. She returns his opening remarks with words of her own, and before long they are having a real conversation. He learns her name. They dance, but not too close, this being Dublin in the 1950s when too much of that sort of thing could get a girl incarcerated in a Magdalene laundry for immoral conduct.

He must return to his home in London, but they exchange addresses and they write to each other. After a couple of years of that, he invites her to visit him in his home town, and she accepts. She buys a pair of tickets to the theatre, a treat to thank him for the invitation, and he plans to take her to dinner at some posh restaurant. He's working now, with the Metropolitan Police, and that's something a man can boast of when he's trying to win a girl's heart. A steady job, one that comes with a pension for the golden years, and he can afford some small luxuries for the woman he's courting.

Police business calls him away and there is no theatre date, no meal, no evening out on the town. That was the end of it, as abrupt as that. She never spoke to him again. Maybe he felt that she should have been more understanding, given his profession. Work comes first when a man has a position of authority and there is a heater case to be solved. What was she thinking, he wondered. Where did it go so wrong?

Michael Freer lost the love of his life and now, fifty years on, he is trying to find her.

He is searching Ireland for Bridie Fortune, with a hope of rekindling the old flame. He's a widower now, and maybe she's alone as well.

How does this story end? Will they be reunited, or will we see her chatting with her friends after Mass on a Sunday, rolling her eyes as she decries the cheek of the man, to think she'd ever want to see him again after the way he treated her, and she spent all that money for the ferry across and the tickets and then to go home with nothing? The humiliation, the shame, and now after fifty years he thinks it can all be forgotten? Not likely.

Or will this become a romance, with the couple reuniting at the same dance hall where they first met, but now the dance hall is a bingo parlor filled with geriatrics like themselves.

Maybe the story will become a tearjerker as Mr. Freet discovers that his lost love died years and years ago, a spinster perhaps. Or she's a nun, dedicating her life to God when she thought she was soundly rejected by man.

You write the story. You have the prompt. Take it where you want it to go.

Reality won't be anywhere near as entertaining as what you can concoct in your imagination.

Tuesday, July 22, 2014

Will This Generation's Steinbeck Please Stand Up

Sales are slumping at McDonald's. Those who were regular patrons of the fast food joint find themselves so stretched financially that even the items on the dollar menu are beyond their reach.

Those who are doing well in this current economic climate tend to have nice little stock portfolios, and they also tend to eat higher quality food than that which is to be found at McDonald's. The ones left behind on the lowest rung of the ladder are surviving on local food pantry offerings and food stamps, which McDonald's does not accept.

During the Great Depression of the 1930s, the poor were readily apparent. They stood in lines at soup kitchens. They crowded freight trains that crossed the country, searching for work of some kind. They fled from Dust Bowl farms in Oklahoma, their caravans visible to any photographer seeking an image of hardship and hard times.

They are not so visible these days, except in the coldness of a statistic. The so-called "long-term unemployed" are just the unemployed of the 1930s, but you won't find a body of literature being produced that documents their struggles. Where is this generation's John Steinbeck?

The blue collar demographic was hit the hardest in the 1930s, and their experiences instilled a near mania for education. It was the uneducated laborer that featured prominently in Steinbeck's works, but who is writing about these people now?

Scan the New York Times bestseller list and you'll find plenty of mysteries and thrillers. A novel about two children during the Second World War. A female protagonist dealing with substance abuse. Not a single novel about children whose parents can't find work and must subsist on wits and government handouts. No stories about a carpenter living in his car with his family, chasing across the country in search of any kind of work.

In this age of beancounters, an acquisitions editor at a major publishing house would turn down such books because there is no perceived appeal. Those who buy books can't relate to those who need every penny they can scrape together to put gas in the car to drive to another state in the hope that a job is at the end of the road. Hence, no sales. No sales, no profit. No thanks.

New York's literary agents are college educated and no doubt studied Steinbeck extensively as English majors, but they only want what sells and literary fiction just isn't moving.

Steinbeck documented a subset of Americana that continues to fascinate. Why else is an adaptation of his novel OF MICE AND MEN currently drawing a crowd on Broadway?

But the modern day Lennys and Georges? Not so much. There's unemployement benefits, aren't there? Government programs to help those sort of people get by?

Monday, July 21, 2014

History Lost In The Loss Of Letters

A letter written to a family member is a personal document, a record of events that are framed within the context of the family's collective memory. Such anecdotes are not to be found in online archives among newspaper articles or old photos scanned to a website.

People don't write letters to each other any more. So one hundred years from now, where will we go to uncover the stories that remind us of our humanity?

Jeremiah Hennessey Sr. was a British naval officer posted to Ireland during a very troubling time. Trade unionism was roiling the island, with the Dublin Lockout of 1913 still very fresh in the nervous minds of the colonial rulers. The natives were restless and forming their own small militias with an intent to topple to the government and break away from the British Empire. Mr. Hennessey was hard at work training sailors for the Royal Navy at the start of the First World War. Tensions at the time were high.

His son Jeremiah Junior was a member of the Irish Volunteers, the very group that was preparing to do battle against British might to win Ireland's freedom.

The Hennessey offspring were aware that their ancestors had a rift and stopped speaking to each other, but if not for a series of handwritten letters between father and son, the reason behind the split would have been lost to history. The letters are a lasting testament of a family divided by politics, far more than a scattering of e-mails that require a password to access and after the writer is gone, so too is the password and so the mail is lost as well.

The case of the Hennessey family is a small part of the history surrounding Ireland's Easter Rising of 1916, but history is told through a gathering of such stories. Historians will describe the actions of the leaders, but what do we know of the mindset of the followers without their words, which were once put down on paper.

The father sat at a table and took up a pen and stated in no uncertain terms to his son that the lad was not to return home after participating in a gun-running operation that was intended to level the field between the Irish Volunteers and the British-supplied loyalists who were determined to maintain their hold on Ireland. Father and son were unquestionably on opposite sides in the conflict, and in this case there was no reconciliation or an attempt by a father to understand his son or a son to ask forgiveness of his father.

The family has donated the items for a display that is part of a lead-up to the centennial of the Easter Rising. A part of history will be available for the public to read and perhaps gain a better understanding of who did the fighting that won them their freedom. It gives the citizens of Ireland a hint at the sacrifice involved, with young lads who tend to feel invincible doing something a bit mad as they chaffed at the restrictions of the Edwardian Era.

Without those letters, however, how would we know now what was actually happening then, and what the ordinary people thought about the tumult around them?

One hundred years from now, will our descendants have a way to be educated about the past so that they do not repeat our mistakes?

Saturday, July 19, 2014

Chopped: The Post-Natal Version

Sometimes you have an employee that you want to let go but it isn't in you to give someone the sack. So you hope they leave of their own accord. Maybe decide to become a stay-at-home parent.

What can you do when that person comes back to work after having a baby, despite your most fervent prayers?

The best you can do is build a case for the action you will soon take. Prepare documentary evidence and then announce, "You've been chopped!"

Sheree Young is accused of putting ketchup on a hamburger, in clear violation of the customer's order. For that, she was let go from her job at a takeaway in Letterkenny. It wasn't just that, of course. One small complaint isn't enough to warrant such an extreme reaction. The owner of the restaurant where she worked as a cook also claims that she was on the verge of poisoning half of Letterkenny. The owner, it would appear, has watched numerous episodes of Gordon Ramsay's "Kitchen Nightmares", where you'll hear that very expression repeatedly.

Ms. Young had just returned from maternity leave when Giles McGee began to document her ineptitude. If only she had stayed home to mind the baby, he never would have had to go to such lengths to get her out of his kitchen.

The sad affair began soon after Mr. McGee took over the restaurant. Ms. Young sauced an order that was to be served without the red stuff. The customer assured Mr. McGee that it wasn't the first time, and as the owner, Mr. McGee had to be concerned. If someone doesn't want ketchup, and they keep getting it even though they don't want it, they will simply take their business elsewhere.

So he wrote the complaint down and gave it to the cook, to put her on notice.

Ms. Young went off on maternity leave, had her baby and wanted to come back to work, a most unhappy occasion for Mr. McGee. He didn't want her back, and as far as he was concerned, he didn't have a place for her. But the law is the law, and he had to take her back. It didn't mean, however, that he had to keep her.

The log of errors began in earnest.

There was the case of the undercooked taco mince, with all its raw meatiness threatening disease to the consumer. There was the time Ms. Young heated garlic mayo in the microwave, thereby creating a delightfully warm environment for the various bacteria that are so fond of egg products. The chicken was cooked beyond recognition. All in all, she was proving herself more than incompetent. Indeed, she was a danger to the health and well-being of the greater Letterkenny area.

After two weeks of gathering evidence, Mr. McGee gave his cook the sack. He was ready for the Employment Appeals Tribunal.

The case of unfair dismissal has begun, and Ms. Young's solicitor has duly noted that half of Letterkenny did not fall ill during the previous four years of Ms. Young's employment when she worked for the previous owner of Charley's Cafe. Hence, the claim of Mr. McGee is false. It could also mean that the previous owner of the cafe had lax standards which is why they got out of the restaurant business, but that may all come up later.  Or it could be that Ms. Young was angry at Mr. McGee for not wanting her back, and so she decided to get even by acting the part of incompetent cook. We may never know the truth in a case of he said, she said.

The initial phase of the hearing has concluded and the matter has been continued until later in the year. Perhaps that will give both sides time to find further evidence to prove their case, although it is clear that Mr. McGee has a leg up on that task. He has already written down all the things that his former employee did wrong, and about all she can do is say she didn't do what he says she did.

So what next? Do they have to bring in witnesses to affirm the charges and counter-charges? Or will the tribunal just fine Mr. McGee and let him go without forcing him to take back a cook he doesn't trust with the health and safety of his clients? A little something for everyone, so.

Friday, July 18, 2014

Inclusive But Exclusive

Ireland may not be as Catholic as it once was, but old habits don't disappear as people move away from the traditions of their youth. A person may not go to church every Sunday, or any Sunday for that matter, but they could still feel that the ethos of their nation is Catholic because that's just how it's always been.

For Irish schoolchildren, that has come to be a problem in the eyes of the United Nations.

Most of the schools are under the control of various religious organizations. The Christian Brothers still operate under the guidelines established by Edmund Rice. The Sisters of Mercy are instructing children just as they were instructing children one hundred years ago. Parishes have their schools that are tied to the parish and so heavily influenced by the local priest. Parents send their offspring to the same schools that they attended, and never consider the religious angle.

Not so the United Nations.

Immigration and the influx of foreign workers in the employ of the large multinational corporations that call Ireland home are using the schools for their children as well, and all it takes is one disgruntled parent to complain and the UN is on it. Not all these newcomers are Catholic, of course, and they didn't attend Catholic schools and they can't send their children to the same sort of school that they attended because those are not easily found in Ireland.

To begin with, the average Irish classroom has a crucifix displayed on the wall, and in a prominent location. If your child isn't Catholic, you might fear that the symbol would be enough to instill an urge to convert, to be like all the other kids in the room. Or maybe you just don't like the sense that your precious baby is made to feel different because the cross isn't part of your personal faith, or lack thereof.

Then there is the time alloted for religious instruction. Part of attending Catholic school is learning how to be a Catholic, but if you are a follower of Islam or any Protestant faith, that won't sit well.

So the UN has heard the complaints and is strongly urging Ireland to be more "inclusive" of others in their schools. And the Minister for Education has compiled a report with numerous suggestions on how best to achieve that.

Let those who wish to opt out of religion classes do so. That way, the child can be stared at as he or she leaves the room while everyone else gets to stay. Single out the non-Catholics by making them stand out from the crowd, and won't your child thank you. Grant them a bit of exclusivity in the name of inclusivity, and don't wonder why your son or daughter hates you for it.

And about those religion classes. Instead of daily instruction, make it once or twice a week. And then say that the kids being pulled out of the classroom are heading off for special education. You know, make it look like they need extra help. Learning disabled, that's always a safe label that won't harm the child's psyche when friends ask why the kid is getting hauled out while everyone else stays for lessons.

The crucifix will stay. Minister Ruairi Quinn wouldn't dare suggest otherwise. Practicing Catholic or not, the average Irish voter doesn't want outsiders coming in and changing things that have always been there because the newcomers want to inject their customs into Irish culture. But if some other religion has some symbol that is used for festivals or such, let the school set aside a little exhibit area so the non-Catholics can fee included. As long as other children don't make fun of the items, in which case a new set of instructions will have to be issued by the bureacracy.

We can't have this new inclusivity lead to further alienation. Just because children long to fit in doesn't mean that adults can allow that to happen.