Yesterday’s New York Times article, “Amazon Signs Up Authors, Writing Publishers Out of Deal,” is about how Amazon is getting into the business of publishing rather than just selling—which is something it’s been doing for a while already. It’s just doing it more—and more overtly. Certainly there’s precedent for this among booksellers. Barnes & Noble, for instance, has had its own publishing division since 2003.

So Amazon will publish 122 books this fall, in both physical and e-book form, which is a rapid acceleration in its publishing program.

Not a huge surprise.

The purpose of the article seems to be to draw attention to the continuing demise of the industry, but it has a few things wrong. The industry is changing, and has been changing for some time. Publishers are struggling. Lots are going out of business or have been eaten up by bigger companies. Many companies, the one I work for included, have had to lay people off and are operating with very lean staffs. But not all publishers are, as Dennis Loy Johnson of Melville House says in the article, “terrified and don’t know what to do” about Amazon playing the game at a higher level. I’m sure some publishers are terrified. The smaller the publishing house, the more terrified they are likely to be. But Amazon does not have the prestige of well-established houses, and it’s going to take a while for Amazon to prove itself. Sales will tell.

Publishing has already been consolidating for years, and Amazon getting into the publishing game is not the tipping point. The article notes that Amazon signed its first deal with Tim Ferriss and that it paid Penny Marshall $800,000 for her memoir. As much as the article talks about cutting out the middle man, Penny Marshall is represented by Dan Strone at Trident Media Group, so in this case Ms. Marshall clearly benefitted from having representation by an agent. I doubt she could have or would have brokered that deal on her own.

The next case study—meant to drive home the point about how scared traditional publishers must really be—is Kiana Davenport, who, the article states:

“signed with Riverhead Books, a division of Penguin, for ‘The Chinese Soldier’s Daughter,’ a Civil War love story. She received a $20,000 advance for the book, which was supposed to come out next summer.”

But Ms. Davenport took it upon herself to package a handful of old stories she’d written two decades ago and sell them as an e-book, through Amazon.

The article states:

“When Penguin found out, it went ‘ballistic,’ Ms. Davenport wrote on her blog, accusing her of breaking her contractual promise to avoid competing with it. It wanted ‘Cannibal Nights’ removed from sale and all mentions of it deleted from the Internet.

Ms. Davenport refused, so Penguin canceled her novel and is suing her to recover the advance.”

The article fails to note that what Ms. Davenport did was a breach of contract. Publishers explicitly state time limits in their contracts so that authors don’t publish competing works. These are standard non-compete clauses. When Ms. Davenport packaged and made for sale a book of short stories, her publisher undoubtedly felt that these stories being for sale constituted a breach. “Suing” is also the wrong term here. A publisher has the right to try to recoup its advance if an author does in fact breach his or her contract. It happens fairly often, and the route the publisher takes is to send a letter to the agent, or directly to the author, with language that may sound legal, but is not, in fact, a lawsuit. Believe me, Penguin would not be suing to recoup $10,000 (which is what they would have paid Ms. Davenport upfront—half of her $20,000 advance). To Penguin, $10,000 is a drop in the bucket, but publishers always make an effort to recoup advances.

The final author showcased in this article is Laurel Saville. Hers is a typical story. She was “locked out by the old system,” the article says. (Important note: It’s not an old system. It’s the system that’s still very much in place.) She experienced what so many authors experience. It’s tough to get published if you don’t have a platform or name recognition. So she did a really smart thing: she self-published! And she got noticed for it. I have been telling authors for some time now that self-publishing is in fact a platform-builder, and Ms. Saville is a perfect example of what can happen. She invested $2,000 of her own money, self-published, and got picked up by a publisher. That publisher is Amazon.

They did not offer her an advance, but she still comes to the conclusion, “I assume they want to make a lot of money off the book, which is encouraging to me.” This is a sweet but naïve assumption. If Amazon is in the business of publishing, they need to have books on their list. Some of those books will be the big-ticket books, like Ms. Marshall’s memoir, and others will be books they can pick up because they’re available.

Some authors take advances to be indicators of a publisher’s commitment to their book. I take issue with this only because different houses have different amounts of money that they can actually put toward advances, and being a big fish is a small pond definitely benefits certain authors. Getting a $20,000 advance on a small press, for instance, can mean that you are the cat’s meow and lead title. The same advance on Simon & Schuster could very well mean you’re at the bottom of the barrel.

So I don’t think it’s encouraging that Amazon is taking on authors and not paying them any advance. I haven’t seen their contract, but what happened here is that Ms. Davenport did all the work and Amazon repackaged her book and now they’re going to take most of her profits. Unless they have a nontraditional royalty model in which they’re paying her better terms than the industry standard, I’m not sure it’s going to be worth it for Ms. Davenport.

I don’t take issue with Amazon. I think what they’ve done for the publishing industry at large is rather miraculous. Kindle and other e-readers have more people reading. I order books off of Amazon all the time. I own a Kindle. So hello, Amazon, welcome to the publishing industry. It’s a hard game, and they don’t have any better recipe for creating bestsellers than any other publisher who’s playing at their level. And from the sound of it, they’re going to try to shoot high and acquire some really big books, and scoop really low and try to round out their list with whatever they can get. It’s a model, but is it a model for success?

I guess we’ll find out.