Opinion

Felix Salmon

Is Amazon bad for publishers?

By Felix Salmon
November 3, 2013

Duff McDonald has a wonderful review of Brad Stone’s new book on Amazon in the NYT; he’s a fantastic nonfiction book reviewer. There is one part of the review, however, which could do with a bit more explanation:

Bezos does appear to revel in outwitting even his best partners. The publishing industry, for example, still doesn’t quite know how it willingly gave him the sword with which he would slice off its head…

Publishers were shocked when he sandbagged them with $9.99 e-book pricing in 2007. Where had they been?*

It’s something of an article of faith, in book-publishing circles, that Amazon has been a Bad Thing for the book publishing industry. And certainly it is an article of faith in this review. (Authors, by contrast seem to have gotten more upset at Google than at Amazon.)

What I can’t ever recall seeing, however, is a clear and concise encapsulation of the publishing industry’s beef with Amazon. How is Bezos supposed to have sliced off their head?

I come at this from what might be an overly naive position. Firstly, and most obviously, Amazon has made it vastly easier to buy and to read books. Anybody with a smartphone, anybody with an internet connection, can now order any book in print, and get it delivered straight to their door, in any moment of enthusiasm. If they’re even more impatient, or prefer e-books to physical books, they can even buy the book and start reading it in seconds. I can’t see how that can possibly be anything but great news for the publishing industry.

McDonald makes it seem — and I think he’s right about this — that the industry’s main problem with Amazon is the fact that it discounts aggressively, and sometimes sells books (both physical and electronic) for less than the amount that it’s charged by the publishers. In other words, it subsidizes book purchases, something any industry ought to embrace with open arms. And this industry thinks it some kind of mortal threat?

When e-books started being a real mass-market phenomenon, I do recall a reasonably recondite debate about consumer expectations. Amazon was selling those books at $9.99 apiece, which meant that it took a loss on every purchase, but which also meant that more people were buying them — and, of course, were buying the devices on which to read them. This might have been nefarious if Amazon were making money on selling kindles, but it wasn’t, it was selling those, too, at a loss. It just wanted to bring e-books to as many people as possible — and was willing to make a substantial investment to do so.

The nay-sayers argued that once the public was conditioned into expecting e-books to be priced at $9.99, they would never pay more than that. The publishers didn’t particularly want the first e-books to be sold at such a low price, but Amazon went ahead and implemented its loss-making policy anyway. Remember that Amazon’s ultimate goal was to sell the maximum number of e-books, and, eventually, make lots of money by doing so. So this was just a dispute about short-term tactics: over the long term, the interests of Amazon and the publishers were aligned. (And frankly, Amazon is likely to always get the benefit of the doubt when it comes to “which company has the better sales tactics” questions.)

So here’s my question: what’s the argument which says that Amazon has proved itself to be a mortal, existential threat to the publishing industry? It’s not like Amazon has disintermediated publishers, allowing readers to buy millions of books directly from authors. There’s a very small business along those lines, but I don’t think that’s what publishers are worried about.

The only argument I can think of is the one surrounding physical bookstores. The small, friendly, neighborhood bookstore lives on, romantically, in the minds of most authors, and indeed publishers as well. But customers didn’t love them as much as book types did: that’s why they ended up going to Barnes & Noble instead. And as a result, the number of booksellers declined significantly. Then, just as B&N stomped on the small booksellers, Amazon ended up stomping on B&N. Customers value convenience more than they do any real-world book-buying experience — and while B&N was more convenient than the small stores, Amazon was more convenient than B&N.

The result is that there are fewer real-world triggers which remind us about how wonderful books can be. In a world with lots of small bookshops, you pass such things regularly, and even if you don’t go in and buy something most of those times, at least you’re reminded of their existence, and you nearly always have a good feeling about the store and its ambience. Just about every book reader thinks that bookstores are wonderful, magical places — and, of course, that their contents are wonderful, magical things. As such, small booksellers were the best marketing devices that the publishing industry had. Not through anything they particularly did, so much as just by dint of their simple existence.

It’s a bit like the secret to the continued success of The Economist: it puts a lot of effort into its covers, and those covers are featured prominently on pretty much every newsstand in the world. Even if you’re a subscriber and never buy the magazine at a newsstand, seeing it so regularly in the real world is a great way of reminding you how much you like it. As a result, the next time you pick up your iPad, you’re more likely to read The Economist, and therefore more likely to renew your subscription, when that time comes around. If the number of newsstands in the world fell substantially, that would hurt The Economist much more than its newsstand sales alone might suggest.

Similarly, a world where you’d see a Barnes & Noble in every shopping mall, where you’d see these monster bookstores by the side of every urban highway, was a world which was constantly reminding you of how many books there are, and of how popular those books are. After all, those bookstores were kept in business by a steady stream of book lovers coming in to buy books. In their own way, B&N stores were just as good an advertisement for books in general as were the small booksellers they replaced.

So while there are just as many media-based book discussions as there always were — book reviews, book excerpts, talk shows, radio interviews, that kind of thing — the real-world reminders of the book industry as a whole have definitely shrunk. There are still lots of ways we can find out about individual books that we might want to read — and, thanks to Amazon, it has never been easier to order and read those books. But Amazon’s size and reach isn’t nearly as obvious as the networks of physical stores were — especially since Amazon sells so many different types of things, the sight of an empty Amazon box doesn’t make you think “books” any more. (Although, for historical reasons, the Amazon bookmark in my web browser still says “Amazon.com Books! Earth’s Biggest Bookstore.”)

Still, I don’t think it’s really fair for publishers to blame Amazon for the fact that people like to do their shopping online, and that easily-digitizable content is going to exist mainly in a virtual world rather than the real world. Indeed, there’s an argument that Amazon has saved the publishing industry from going the way of the record labels — that it’s made buying e-books so easy that the number of free pirated versions out there is still tiny. (Amazon has made it easier to find second-hand books, which publishers don’t directly benefit from, but at the same time it’s at the forefront of pushing e-books, which can’t be resold after you’ve bought them. Net-net, let’s call that one a wash.)

Publishers have always been conservative, and Amazon represents a massive change in their industry. What’s more, the move from small booksellers to B&N to Amazon has been a move where the booksellers have ever-increasing amounts of leverage over the publishers; it’s understandable that the publishers don’t like that. But I just can’t believe that Amazon is, or would ever want to be, an existential threat to the publishing industry.

*Update: The blockquote from McDonald’s review was originally longer, and included a section about Amazon matching the prices of “mysterious third-party sellers” in order to justify its price cuts. But McDonald emails to tell me that that section was not about publishers or booksellers, so I’ve taken it out.

Comments
23 comments so far | RSS Comments RSS

One more thing. The *one* thing that publishers offer that you cannot obtain any other way, is the ability to put the books in bookstores (i.e. put your book in front of hundreds of thousands of customers who are looking to buy a book).

For that (huge) privilege, you get an 8% royalty and the publisher keeps the rest.

If bookstores mostly disappear, why would any author who has already made their name (is making say $20K/book) trade a 70% royalty (what Amazon pays for self-published works) for an 8% or even 25% royalty? After all, editing, typesetting and a cover is just not that expensive.

Bookstores are pretty much the only reason for publishers to exist.

Of course, once publishers disappear, I’d expect Amazon to drop their royalty rates to 20-30% and start charging huge amounts for on-site advertising. Amazon might start making a lot more from would-be writers than it currently makes from readers.

Posted by TomWest | Report as abusive
 

This is not just a distribution war, but a platform war. Kindle is a closed proprietary platform, more closed than Microsoft Windows, and more dominant in its industry than Apple’s App Store.

Amazon sells readers the non-transferable right to use books from its huge library, only on its own closed platform. You cannot read or use any Amazon digital product except through an Amazon digital reader app. Those apps are currently free, but need not always be so.

As with the App Store, you can only use what you buy within Amazon’s ecosystem. Unlike the App store, you have no alternative platform, such as Android, to hold prices down.

The owner of a dominant closed platform eventually collects essentially all profit for that industry. Suppliers get none. Bezos knows this. It’s why he’s doing it.

Still, Amazon’s ecosystem is not impregnable, because they are not dominant in hardware. Eventually, publishers will become so weak that they may cooperate en masse with an “open” alternative to Kindle. At that point, book publishing may change in highly unpredictable ways.

Posted by zipflash | Report as abusive
 

This is not just a distribution war, but a platform war. Kindle is a closed proprietary platform, more closed than Microsoft Windows, and more dominant in its industry than Apple’s App Store.

Amazon sells readers the non-transferable right to use books from its huge library, only on its own closed platform. You cannot read or use any Amazon digital product except through an Amazon digital reader app. Those apps are currently free, but need not always be so.

As with the App Store, you can only use what you buy within Amazon’s ecosystem. Unlike the App store, you have no alternative platform, such as Android, to hold prices down.

The owner of a dominant closed platform eventually collects essentially all profit for that industry. Suppliers get none. Bezos knows this. It’s why he’s doing it.

Still, Amazon’s ecosystem is not impregnable, because they are not dominant in hardware. Eventually, publishers will become so weak that they may cooperate en masse with an “open” alternative to Kindle. At that point, book publishing may change in highly unpredictable ways.

Posted by zipflash | Report as abusive
 

“It’s not like Amazon has disintermediated publishers, allowing readers to buy millions of books directly from authors. There’s a very small business along those lines, but I don’t think that’s what publishers are worried about.”

Well, I wonder how we will view that statement in 2-5 years time?

I think there is plenty of evidence that one of the reasons authors love Amazon (especially the more entrepreneurial ones = the more vocal ones) is because Amazon has put in place the foundations for exactly that to happen and hence authors have a choice or at the very least a better negotiation position vis a vis publishers.

Who is to say that the future will not look like this:

• $10 is what consumer pays to Amazon (easier for illustration purposes than $9.99)
• $3 is retained my Amazon(30% retail margin, ditto Apple, Google, Kobo, Sony, etc)
• $2.00 (20%) goes to publisher or independent service providers (editors, copy editors, cover designer, marketing assistant etc – a mixture of software tools and humans)
• $5.00 goes to author (the “magical” 50% – 70% if self-published but then I assume 20% has to be spent on “professional” help as many successful self-published authors already do)
• Of which author may or may not be sharing 15% (£0.75) with agent, tough many big publishers will increasingly try to offer a “global service” and indie publishers may team up in “global alliances” by genre weakening the value proposition of agents

And will there be a distinction between agents and publishers in 5-10 years time or will the business models overlap to such an extent that it will be more of a historical moniker?

Posted by Jellybooks | Report as abusive
 

one the value propositions publishers, especially the big ones have is the “cachet” of being published by a well-known house, which has a very tangible value

If you are Eric Schmidt, you don’t need more money, but being published by a top name, still has meaning

However, the value of that cachet is declining, not rapidly, but steadily, in 10 years time it’s intangible value might be only 1/2 or 1/10 of what it is today

So yes, Amazon *is* a long-term threat to the *current* business model of publishers (though they are enjoying peak profitability right *now*, as record labels did at the peak of vinyl to CD transition) and the question is what will be the core value proposition of a publisher in 10 years time?

Posted by Jellybooks | Report as abusive
 

specifically why publishers are “afraid” of Amazon:

Amazon now accounst for 50-60% of total revenue sat some publishing houses across print books, audio books and ebooks; that gives Amazon enormous leverage

there has always been the fear that the Amazon subsidy will make Amazon so powerful, that they can extract much, much larger discounts thus passing the subsidy form Amazon to publishers in the long run (right now publishers are enjoying record profitability)

this is why the BIG 5 publishers moved with joy to agency (now ruled illegal) and in the UK created Anobii (sold for £1 to supermarket chain Sainsbury) and in the US created Bookish (not much traction so far). They fear what SciFi author Charles Stross has called the potential for an Amazon “monopsony”

However, for readers (customers) Amazon has been a huge blessing in terms of price, convenience and range of catalogue and there is no sign that this will change (i.e. price increases). Amazon’s power is it its ability to delight customers

Posted by Jellybooks | Report as abusive
 

Publishers only have themselves to blame. They gave Amazon power in the ebook world by agreeing to, in fact, insisting on, DRM. Publishers and authors are so worried about pirated content that many *still* insist on DRM, despite the fact that the music business has moved on from that limitation. Then there’s the fact that most publishers haven’t bothered to create a robust direct channel with their readers. They’re perfectly content to let retailers do this for them. That made sense in the physical book era, but is crazy in the ebook world.

Any publisher who complains about Amazon’s dominance needs to look in the mirror and ask themselves if they’re still requiring DRM and if they’ve built a strong direct channel. If the answer to the first question is yes and the second is no, they need to acknowledge they’ve contributed significantly to Amazon’s position.

Posted by jwikert | Report as abusive
 

IF you believe that e-books will comprise most book sales at some point in the future, then Amazon is bad for publishers, because they are an unnecessary middle man for e-books. Amazon can sign deals directly with authors, and eliminate the cut that publishers get. Authors will need to hire specialists to edit and publicize their work, but those third parties won’t get anywhere near as big of a cut as the publishers do. Writers will no longer need to subsidize executive staffs of publishers, their expense accounts, fancy offices and perks, shareholder’s profits, and all the other things that come with publishers. Publishers are necessary when you want to print books and sell them in stores, but when that’s no longer the case they are grossly inefficient at the remaining functions they perform for writers and readers.

As for whether or not Amazon will be bad for writers and readers, that depends on whether they can extract exclusive electronic distribution deals with writers. If they can’t get exclusivity, they won’t be able to gouge writers or readers – the barriers to competition are way too low, and there are alternative platforms available.

If you are a publisher of coffee table books, Amazon could be good for you, though. Until they convince their customers to leaf through the big books on their large screen TV screens.

Posted by KenG_CA | Report as abusive
 

You ask a great question, but I think you missed some key factors/issues. Here’s how I would break down your question into pieces:

1. What is Amazon doing for publishers’ top line?

As you point out, it’s increasing their gross sales, by reducing purchase friction.

2. What is Amazon doing for publishers’ net revenue?

a. Because publishers have been able to force authors (agents) to accept morally & intellectually indefensible ebook royalties for the moment, publishers are making much more on ebooks than they do on HB/PB books, even though their incremental COGS is literally zero, the per-project cost of production is negligible, and their capex is modest compared to overall enterprise size.
b. But as Amazon has grown to be such a large part of publishers’ retail channel, their pricing power grows (just like Wal-Mart, with whom they are often compared), and every year they are successfully demanding harsher and harsher terms: wholesale discounts, marketing allowances, JIT stock delivery for physical books, etc. They are working hard to eat up the higher margin they have been partly responsible for delivering to publishers for the past few years.

3. What is Amazon doing to publishers’ relationships elsewhere in the supply chain, i.e. consumer at one end and authors at the other?

a. Re: consumers, Amazon is just the new B&N – publishers have always sold the vast majority of their books through retailers, so I’d count this as mostly a wash.
b. With authors, though, I think you incorrectly discount the importance of their direct- and own-publishing operations. Just within the past few weeks, for example, I have used Amazon’s offered royalties for direct publishing as a negotiating lever to win a substantially higher advance for a client than I might have gotten if Amazon wasn’t around. Here’s a simple spreadsheet that encapsulates the difference: http://bit.ly/royaltyscenarios. Lots of *quality* authors (especially in genre publishing) are already going with Amazon Direct rather than seeking major publisher deal, and trend lines are clear.

4. What effects is Amazon creating that wouldn’t happen without them?

Interesting open question. The Internet is dissolving industries left and right, especially content industries, and rereading Clay Christensen’s INNOVATOR’S DILEMMA is like reading a Broadway Playbill for the show we’re watching now in publishing. If it weren’t Amazon it’d be someone else taking advantage of the Internet. As I mentioned on Twitter, the best parallel is not Wal-Mart but iTunes and the effect it has had (as part of the larger digital transformation) on the record industry, which is maybe 10 years ahead: ~40% smaller than at its peak. Which leads to…

5. What are likely long-term changes in any of these answers?

Can’t look at this situation as static. I laugh derisively at publishing folks who say “Amazon will just kill everyone and then jack up prices to readers/cut royalties to direct-publishing authors.” But I also laugh at anyone who thinks that publishers aren’t at least as deeply threatened by Amazon as major record labels have been beat up by iTunes (and other factors, of course).

Posted by tedweinstein | Report as abusive
 

You ask a great question, but I think you missed some key factors/issues. Here’s how I would break down your question into pieces:

1. What is Amazon doing for publishers’ top line?

As you point out, it’s increasing their gross sales, by reducing purchase friction.

2. What is Amazon doing for publishers’ net revenue?

a. Because publishers have been able to force authors (agents) to accept morally & intellectually indefensible ebook royalties for the moment, publishers are making much more on ebooks than they do on HB/PB books, even though their incremental COGS is literally zero, the per-project cost of production is negligible, and their capex is modest compared to overall enterprise size.

b. But as Amazon has grown to be such a large part of publishers’ retail channel, their pricing power grows (just like Wal-Mart, with whom they are often compared), and every year they are successfully demanding harsher and harsher terms: wholesale discounts, marketing allowances, JIT stock delivery for physical books, etc. They are working hard to eat up the higher margin they have been partly responsible for delivering to publishers for the past few years.

3. What is Amazon doing to publishers’ relationships elsewhere in the supply chain, i.e. consumer at one end and authors at the other?

a. Re: consumers, Amazon is just the new B&N – publishers have always sold the vast majority of their books through retailers, so I’d count this as mostly a wash.

b. With authors, though, I think you incorrectly discount the importance of their direct- and own-publishing operations. Just within the past few weeks, for example, I have used Amazon’s offered royalties for direct publishing as a negotiating lever to win a substantially higher advance for a client than I might have gotten if Amazon wasn’t around. Here’s a simple spreadsheet that encapsulates the difference: http://bit.ly/royaltyscenarios. Lots of *quality* authors (especially in genre publishing) are already going with Amazon Direct rather than seeking major publisher deal, and trend lines are clear.

4. What effects is Amazon creating that wouldn’t happen without them?

Interesting open question. The Internet is dissolving industries left and right, especially content industries, and rereading Clay Christensen’s INNOVATOR’S DILEMMA is like reading a Broadway Playbill for the show we’re watching now in publishing. If it weren’t Amazon it’d be someone else taking advantage of the Internet. As I mentioned on Twitter, the best parallel is not Wal-Mart but iTunes and the effect it has had (as part of the larger digital transformation) on the record industry, which is maybe 10 years ahead: ~40% smaller than at its peak. Which leads to…

5. What are likely long-term changes in any of these answers?

Can’t look at this situation as static. I laugh derisively at publishing folks who say “Amazon will just kill everyone and then jack up prices to readers/cut royalties to direct-publishing authors.” But I also laugh at anyone who thinks that publishers aren’t at least as deeply threatened by Amazon as major record labels have been beat up by iTunes (and other forces, of course).

Posted by tedweinstein | Report as abusive
 

In my 25 years in publishing, I’ve never had a particularly “fancy” office–my first desk was two filing cabinets topped by a door. The previous occupant of my current one was a photocopier. It’s not like what you see in the movies. But I still get amused when people spout opinions about how publishing works, when they clearly have no clue how it works.

A typical trade book–the usual sorts of novels and oridinary nonfiction that you see in bookstores–might cost 5-10,000 dollars in “fixed” costs such as copyediting, proofreading, typesetting, cover art and design, and so on. The stuff you pay for once regardless of how many copies you print. That doesn’t include operational overhead (staff costs and so on). It’s mostly done be freelancers and vendors. It’s possible those people will work for less for authors, but typically they don’t, because dealing with individual authors is a PITA. I freelanced for years, and at least I know that Big New York House is going to pay in two weeks. Is Joe Schmoe? If rates drop, expect to see more work done by amateurs.

Printing costs roughly $2-3 per copy. Warehousing is expensive. Publishers are happy to save on that. Distribution is expensive. Remember that bookstores buy get 40-50% discounts from cover price. Shipping is expensive. These physical costs are the main costs that publishers save with ebooks. There’s some file conversion and hosting cost. Of course, if there was no print edition, ebooks would have to carry all the fixed costs.

Average royalties for a print book is 10-15% of cover price. Sure, Amazon will give you a higher percentage, but it will be of the smallest price they can get away with.

Publicity and promotion–well, this varies a lot–could be very little, could be a few bucks per copy for a big seller. There was always “co-op”–the bribe publishers pay to booksellers to sell books. The more you pay, the better placement and in-store promotion you get. Amazon takes it, too.

Amazon, by taking on the role of publisher, will be willing to absorb some of these costs for books that it finds worth the effort. I guess what publishers are really afraid of is that Amazon will attempt to poach the top-tier authors who generate actual profit, and leave them only with the mid-list authors that don’t. I don’t see Amazon making a habit of any commitments to first-time literary novelists. And everyone below that will be left to the self-publishing bin. Good luck with that! I’ve read slush; I wouldn’t have high expectations of someone self-publishing on Amazon.

Currently I’m involved in ebook production, and I have to say, I have come to kind of hate the Kindle. I encourage people who want ebooks to get them in epub format instead. If you get your books in an open format, you can read them on any device. If you get them in kindle format, you are dependent on Amazon to maintain your library.

Posted by Moopheus | Report as abusive
 

I wouldn’t have high expectations of someone self-publishing on Amazon.

If you already have a pre-existing audience (from having been conventionally published) you can manage the self-published e-book route fairly successfully. There are a number of genre authors whose sales weren’t high enough to warrant continued paper publishing who’ve gone on to earn decent money going self-published e-book.

You have perhaps 1/3 the sales (not everyone likes e-books), but at 10 times the royalties (minus expenses), it can be a pretty good living.

Posted by TomWest | Report as abusive
 

> I wouldn’t have high expectations of someone self-publishing on Amazon.

Another point. If anything is going to kill the entire book industry, it’s going to be the near impossibility of separating gold from dross in the post-bookstore, post-publisher, everyone-is-self-published world.

Pick up a new author from the part of the bookstore that you favor, and you’ve got a decent chance of finding a likeable book, though it will cost you $10. Contrast this with a 1 in 1,000 (if that) chance of finding a likeable book among the self-published on Amazon (although it’ll probably be free).

As a reader, publishers earn their keep by pre-filtering the flood of books. Once they’re gone, who will pay someone to read 1,000 books to find the one worth promoting?

My apocalypse is million books being ‘published’ each month and no-one reading them because it’s just too hard to find the good authors. (And Amazon making healthy profits on books for promotion, etc.)

The killer is that while books remain culturally significant, you can’t count on the the desire to make money to keep people rational. People will pay a lot of money to promote their books regardless of chance of success. After all, if you’ve spent $80K on the two year Masters of Creative Writing, what’s another $20K to promote your first book?

Posted by TomWest | Report as abusive
 

Amazon is not only bad for publisher but is killing booksellers.In France government imposed some rules how to save booksellers from malpractice of Amazon.In Germany all leading booksellers closed their shops.In India most big bookshop are shut down their shutter.How can small booksellers can compete with Amazon?I think outline business is killing our cultural heritage.Tomorrow this devil may swallow our mental life and maybe make us buffoon to dance on tune of his whim

Posted by Raghuvanshi1 | Report as abusive
 

To me the question is: Is Amazon encouraging self-publishing to the extent it is significantly harmful to publishers? What are the data?

Posted by bob5525 | Report as abusive
 

Moopheus, I don’t know how far you rose up in the ranks, or whether you worked for publicly owned publishers, but the executive offices of most publicly traded companies are usually pretty lavish, as are their perks. Smaller, or privately owned, companies, not as much or as often. There’s no reason why readers or writers need to be subsidizing them now, especially not for e-books.

As for the functions that need to be performed whether the book is distributed on paper or bits, they comprise a small fraction of the overall cost of publishing. They have traditionally been a subset of the publishers, but now they don’t need to be part of a the publisher, as those functions can be distributed to persons or entities with lower overhead and without a profit requirement for the shareholders who employ them. This will make the entire process of getting the author’s words to readers more efficient and less expensive.

And while Amazon may sell e-books for half or even a third of the list price of the paper versions, 70% of that is still more than 10-15% of the obsolete format’s list price.

Posted by KenG_CA | Report as abusive
 

I echo others that my fear, if I were a publisher, would be that Amazon eventually uses its customer relationships and market power to either dis-intermediate publishers (self-publishing model) or beat up publishers on price.

As a publisher, this phenomenon would scare me:

“Amazon was selling those books at $9.99 apiece, which meant that it took a loss on every purchase, but which also meant that more people were buying them — and, of course, were buying the devices on which to read them. This might have been nefarious if Amazon were making money on selling kindles, but it wasn’t, it was selling those, too, at a loss. It just wanted to bring e-books to as many people as possible — and was willing to make a substantial investment to do so.”

So what’s Amazon’s endgame to make money eventually? It has to be higher prices to customers, lower payments to publishers, or both.

Posted by realist50 | Report as abusive
 

“My apocalypse is million books being ‘published’ each month and no-one reading them because it’s just too hard to find the good authors. (And Amazon making healthy profits on books for promotion, etc.)”

Well we can all fantasize about our personal apocalypses, but the fact is that TODAY Amazon is successful not because of “convenience” but because it operates a far better discovery engine than anyone else. This starts with helping you find a book (based on whatever criteria you might have, from misspelled author’s name to vague recollection of the title, to a subject of interest), and extends to providing a variety of reviews and comments (often very scathing).
It is AMAZON, not anyone else, that has the wit to provide such basic features as a histogram of the star rankings of a book, so that one can see whether a 3★ review corresponds to a mediocre tract or a highly polarizing screed.
It is AMAZON that allows people to rank and comment on reviews, and so make them even more useful.

Your argument seems to be that on the way to this apocalypse the world is going to turn upside down, that Amazon is going to stop providing the very search/discovery features that today make it so valuable, even as its competitors are going to step up to do properly something they’ve had fifteen years to get right, and have conspicuously avoided. It could happen, I guess, but it doesn’t seem to be the smart way to bet.

Posted by handleym99 | Report as abusive
 

Amazon does pursue a fairly aggressive most favored nation clause in its dealings with publishers, so there certainly is that. Amazon’s self publishing platform is a threat to publishers, but they also have an actual publishing arm, New Harvest, pursuing established talent. And publishers have not vigorously pursed selling d2c because they do not want to upset their largest account.

I would say over-dependence on one ecosystem is almost always bad, all the more so when powerless to control any aspects of that ecosystem whatsoever.

Posted by thispaceforsale | Report as abusive
 

“Indeed, there’s an argument that Amazon has saved the publishing industry from going the way of the record labels…”

Not a very good argument. The fundamental turning point in the fortunes of the recording industry was in the early 1980s, when CDs were first marketed. CDs can be reproduced without limit, and a CD owner can convert one, using a very simple process, into MP3s and send it over a network. A book simply can’t be copied in this way, and most ebooks can’t either, as many ebooks have been marketed from day 1 with DRM, and are produced by publishers. Unlike CDs, a mere owner of a hard copy book simply doesn’t have the resources necessary to make an ebook from it, and the owner of an ebook generally won’t bother jumping through the hoops.

The music industry had the misfortune of switching to a digital format, and lacking the foresight to see what would happen if hard drives got large enough, or this “Internet” thing ever took off.

Posted by sigaba | Report as abusive
 

As a reader, I don’t really give a damn about publishers…to me, they’re just another middleman that drives up prices, and the world of books will survive just fine once they’re gone.

Probably 80% of the books I read I’m never going to look at again once I finish them. Therefore most books I read I check out from the library, since there is no benefit to me to owning them.

The bigger issue for me with e-books is the fact that I when I “buy” a e-book I don’t get ownership rights and I can’t re-sell or loan the book like I can with a print copy. Therefore, I don’t buy e-books unless it’s something I can’t check out from the library, or the e-book cost is substantially cheaper than buying a used print copy.

Posted by mfw13 | Report as abusive
 

people still read…?

Posted by rikfre | Report as abusive
 

handleym99, Amazon’s system of discovery works well for mainstream published books, which is a few thousand titles a year for most people (in their field of interest).

What happens when there are no mainstream publishers, and now there are a 100,000 to 1,000,000 titles to choose among, none of which have any reviews (I’m talking about discovering new authors – old authors will do just fine until book reading slowly becomes irrelevant).

Use advertising? Not correlated to quality. Use reviews? Ha. Think about the quality of reviews when a book by an unknown gets 0.01 reviews on average. You can be almost certain that any review you read is a sympathetic/paid for/faked review at those levels.

Imagine looking for SF novels published this month and getting 50,000 hits. Now, Amazon may well show you some top 50, quantified by how much they pay Amazon. But how many of them will be readable when willingness to promote doesn’t correlate with need to make money?

There’s simply nothing we have to filter the tsunami of the not-publishable-quality material that finds its way on to Amazon. Amazon’s current response is to essentially hide the self-published stuff by unknown authors most of the time, so you don’t get swamped (and on occasion when they don’t, Amazon is useless for finding anything useful, as I found to my sorrow).

We have no tools and no discovery mechanism for finding good books among millions instead of thousands that doesn’t involve a gatekeeper who only cares about promoting what customers will buy, and that’s not nearly a profitable enough industry for Amazon. Far more profitable to sell to the would-be writers.

I’m hoping my apocalypse scenario doesn’t come to pass in the next 10-20 years. But neither anything that Amazon is doing now, nor has incentive to do in future, is likely to prevent it.

Posted by TomWest | Report as abusive
 

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