The extended dispute between Amazon and publisher Hachette finally came to an end earlier this month. Amazon had wanted Hachette to price its e-books lower while giving Amazon a bigger cut; and when Hachette didn’t comply, Amazon slowed delivery of Hachette books and removed the pre-order option for them.

During the contract disputes, we learned that publishers have become relatively sympathetic in the public eye now that a behemoth like Amazon is bigger than they are. Yet it seems not so long ago that many exulted that the web would allow authors to circumvent publishers and go to readers directly. In this scenario, publishers were often painted as monopolistic gatekeepers. This image is still embraced by writers such as Matthew Yglesias, but during the dispute most observers voiced a concern that Amazon has simply become too powerful, and that it would be bad for readers and worse for authors. I think this whole incident was overblown, on all sides; Amazon has made things drastically better for readers and writers, and while publishers will have to adapt to new technological realities, they are still likely to have an important role.

Home Publishing in the Internet Age

In the beginning, there was the personal website. The many iterations of Bob’s Home Page that proliferated in the ’90s embodied the promise of the early web—a little corner of the network you could call your own, where you were free to put anything you wanted. Often hand-coded by people with only a passing knowledge of HTML and even less skill as designers, the sheer enthusiasm for being able to put something out that anyone could see from anywhere in the world was infectious.

The Internet’s potential for aspiring writers was straightforward—you didn’t have to ask anyone’s permission.

The potential for aspiring writers, from that angle, was straightforward—you didn’t have to ask anyone’s permission. You could just go ahead and put your writing out in public. As a 14-year-old, I did so myself—Adam Gurri’s Home Page, hosted on Angelfire, was my own contribution to this movement. The only thing worse than the ugly (lack of) design was the quality of the poetry and prose. But it was mine, and it was out there.

We have come a long ways since the Home Page era, and it happened with a speed that is as awe-inspiring as it is dizzying. The career of horror novelist Scott Sigler is a good benchmark for this. In 2001, Sigler had a deal with iPublish, an early AOL foray attempting to combine the enthusiasm of early web community-based writing with the resources of professional publishing. However, in the wake of the dot-com bust, iPublish was terminated. Left with a book but no deal, Sigler started a podcast and put out the book in weekly installments, like an old radio show. He became one of a few pioneers of podcast novels, a form that grew and continues to this day alongside short story podcasts and other forms of fiction.

Before the Kindle, podcast novelists focused on building an audience, but once they achieved that goal they struggled to turn that into income. They formed communities, such as Podiobooks.com, and helped promote one another in summary snippets at the beginning or end of their episodes. Podiobooks.com provided mechanisms for donating to authors, and authors would also often get sponsorship deals if their audience grew near the size of Sigler’s. Sigler himself experimented with these and other ways of making money such as offering paid iTunes downloads in addition to his free material. Still, the most reliable way to make money at this time was to get popular enough for a publisher to notice you, and get a book deal. Sigler did, first with a small publisher, and then with Crown.

What the Kindle Store Did for Authors

Even while putting out books with a publisher, Sigler continued to put out books independently. Using an online service, he and his partner put out a high-end hardcover a year for around $30 a copy. In the middle of beginning to tinker with this, however, something hit the independent writing scene like a bombshell: the Kindle store arrived, and eventually opened to anyone who wanted to publish there directly.

For aspiring writers, especially those who did not already have book deals, the Kindle ecosystem provided a number of substantial improvements.

For aspiring writers, especially those who did not already have book deals, the Kindle ecosystem provided a number of substantial improvements. First, it provided a place where most readers could purchase a copy of a work by clicking one button. The transaction cost savings of this cannot be overstated. Services like Paypal and its rivals lowered transaction costs to donating, but you usually have to log into your account each time you want to send money through them. It’s clear now that there are big nonlinearities in consumer behavior—one-click purchasing is not that great a transaction cost reduction over Paypal in the scheme of things, but it clearly moved a ton of people beyond a threshold. Sigler, who had been building a substantial audience for some time, was finally able to make a substantial amount from his independent work due primarily to the rise of the Kindle and competitors.

The Kindle also got dedicated reading devices in the hands of a large base of consumers. Prior to the Kindle, the only method available to most people for reading an e-book was to do it on their computer screen, which was not nearly as pleasant an experience as reading regular books. Now, even if an author chooses not to go through Amazon, he can send readers a copy of his book that is compatible with the Kindle (or, these days, with tablets). Currently, for instance, Sigler offers a complimentary e-book copy with every purchase you make of his independently published hardcovers.

Authors Own Their Relationships with Audiences, Not Amazon

Amazon is not in a position to take any of this back, and the direct relationship authors can now establish with readers does not imply that publishers will go the way of the dinosaurs. As webcomic writer Jerry Holkins observed, although the revolution in the relationship between creators and publishers is significant, in many ways the revolution in the relationship between creators and audience is even more so. The web has made it possible for authors to connect with their audiences, talk to many of them personally, get feedback, and give updates on their work.

It’s not clear why it would ever be in Amazon’s interest to exclude authors.

Just as the ability to directly publish clearly empowered authors, the ability to own your relationship with your audience is important leverage. If Amazon singled out or banned an author like Sigler, he could direct his audience to other methods of supporting him. There are rival like iBooks and the Nook, of course, but payment services continue to innovate and lower transaction costs there, as well. Never mind crowd-funding services like Kickstarter, which can fund a book in advance of writing it, or Patreon, which provide an ongoing revenue stream for creators. And, again, the fact that people have Kindles means Amazon cannot exclude the e-book files Sigler sells directly. Moreover, it’s not clear why it would ever be in Amazon’s interest to exclude authors. They run a business on razor-thin profits that frequently tips into the red. Their hyper-competitive model makes it a necessity for Amazon to take what it can get.

Amazon and the web have provided authors with valuable leverage in negotiating with publishers, as well. But that does not mean that publishers have no part to play. Not long ago, novelist Amanda Hocking drew a lot of attention for being one of the first indie writers to make more than $1 million on Amazon. Shortly afterwards, she signed a book deal with a publisher. Her reasons? Better editors, and the deal allowed her to let someone else take over the non-writing work involved in publishing and promoting a book. Essentially, it let her specialize in writing, which was her priority beyond the total dollar amount per book she could take home.

Of course, the fact that Hocking was already doing so well on her own meant her publisher offered much better terms than the typical writer signing his first book deal. We’re at an important stage in the evolution of the relationship between publishers, book retailers, and writers: publishers are increasingly in a position to treat the open web as a farm system from which they can sign authors who have already built a fan base. The relationship between all parties has become more euvoluntary, as Mike Munger has put it, because the most vulnerable group—authors—can often simply walk away and do their own thing.

The drama that surrounds situations like the Amazon-Hachette dispute indicates many people have lost perspective. This is a healthy and evolving ecosystem, where authors and readers are drastically better off than they were a few short years ago.