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Striking Back Against the Amazon Empire

“We know the location of the Death Star!”

Editorial by Lisa Buchan, Sparkabook

WELLINGTON, NZ: The Amazon Empire may swallow the entire publishing ecosystem in a series of gulps. It started by squeezing distributors (IPG is the most recent in a string over the last few

Lisa Buchan

years), and it has created a large and rapidly growing publishing business that is wooing writers away from their existing publisher. Publishing is a $60 billion business globally, it is highly visible, and Amazon has to show growth prospects for its hungry investors — so why not?

The self-publishing companies that sprang up during the early Internet era are still making money from frustrated writers, but they too will be swallowed by Amazon as the e-book revolution progresses — because why pay thousands to self-publish when you can publish an e-book directly onto Amazon for almost nothing and get access to the world’s largest consumer base?

Apple is focusing on ease of e-book creation, but until Apple improves their search capability, they cannot compete with Amazon for consumer preference. They will remain a convenient buying mechanism. Google and Kobo are fighting valiant rearguard actions and working to create open ecosystems but their market share is still tiny.

Before you rush out and seek refuge on a remote planet, I have some news from the headquarters of the publishing rebellion…we know the location of the Deathstar!

Because Amazon is now a big lumbering beast. As the future rolls out greater numbers of e-books and better print-on-demand capability, Amazon with its huge warehouses will have fewer advantages. The existing ecosystem of publishers will do a better job of selecting titles in which to invest their marketing dollars. Any publishers still in existence have survived the cull of a ruthless market because they are extremely good at picking winners within their target community.

In the short term, it is not hard for Amazon to pick off bestselling writers and offer them a bigger share of proceeds. It recently made more than 50 publicly reported rights deals (more than many of the multinational publishing houses). To put that in context, well over a million new titles are published every year around the world. Longer term, Amazon is likely to look at its hastily assembled publishing arm and question whether it is delivering the return on investment that its other divisions are providing.

Amazon is a mass retailer, not a participant in the diversity of social discussion going on in reader communities all over the world. As a book retailer, it is relying on its recommendation algorithms and the “foot traffic” of consumers. Online “foot traffic” is changing rapidly. Much more consumer time is being spent on Facebook. And the “recommendation algorithm” on Facebook is far more powerful because they offer “real friend” recommendations, which are the number one way people find their next book to read, according to research by Goodreads. Facebook has been slow to capitalize on this, however the commercial potential is there. With its own currency and mobile development platform, not to mention knowledge of every topic under discussion, Facebook could eat Amazon, Google and Apple’s lunch.

So is the rebellion seeing the slow decline of one Empire and the growth of a new one? Probably. But small- to medium-sized publishers have much less to fear than large publishers who are reliant on a few bestselling authors. May the force be with us.

Lisa Buchan is the CEO of Sparkabook, the Wellington-based online book rights trading community. 

DISCUSS: Is there a Right Way to Feel about Amazon?

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10 Comments

  1. Posted April 5, 2012 at 9:54 am | Permalink

    I have been a great admirer of Amazon and actually wrote a case study on them in 1998 for a Financial Times Management Report I authored on supply chain challenges of e-tailing as they were starting out but I think they are now beginning to abuse their very dominant market position in many areas – and I don’t say that just because I have founded Books4Spain, an online specialist independent bookshop – I knew they were there but probably didn’t realise quite how powerful they have/would become over the last 2 years.

    I am all for competition and they do provide consumers with a great, if soulless, experience BUT since launching Books4Spain in late November, three of our independent reviewers have received targeted emails from Amazon offering them very specific books about Spain – in fact 2 of them were offered books they had reviewed or were about to review (one of which had not even been released) as well as some other books related to their areas of expertise.

    All 3 have accounts with Amazon BUT 2 of them have not bought books for months/years and have not signed up for any email newsletter offers. Both assure me that they have not searched Amazon for any of the titles (or similar) that they have received special offers for. None of them have their email addresses on our site and only one has his real name.

    So the question is – how can Amazon be so smart to specifically target these people with offers for books which they have reviewed and/or are about to review and other books which are closely related to reviews they have done when two of them have not used Amazon to either search for, or buy, books related to Spain??  Granted they live in Spain and their account will reflect that but its a big jump from not using the service for months and not being signed up for email notifications to receiving targeted emails. The 3rd one lives in UK and does use Amazon but NOT for books about Spain.

    Are Amazon being very clever and using cookies to monitor peoples browsing behaviour OFF the Amazon website and then using that information? The EU has recently passed laws governing use of cookies, e.g. type allowed without permission, types that require permissions etc. and I suspect Amazon may be using “old” and deep cookies to track peoples non-Amazon browsing behaviour and then use that information to target them. If that is the case then this is a total invasion of privacy and I think Amazon (probably by law now in the EU at least) has to ask users to opt in to the use of such cookies.

    It very much smacks of 1984 and Big Brother and I´d like to know if anyone else has had the same experience or if they know how Amazon carries out this very targeted type of campaign?

  2. Posted April 5, 2012 at 10:58 am | Permalink

    Amazon will hopefully not eat the entire publishing industry, but I doubt very much Facebook is in any position to challenge it. Remember the study Goodreads conducted to find out how readers actually discover new books? Social media is a very small factor:

    http://publishingperspectives.com/2012/03/goodreads-ceo-on-winning-the-battle-of-book-discovery/

    Besides, who wants to trade one giant evil company for another? I’d rather see a healthy competition between publishers who try to woo authors with the best contracts and woo readers with the best books.

  3. veronica
    Posted April 5, 2012 at 11:23 am | Permalink

    I read most of this article thinking you were complimenting Amazon on saving writers from a dismal existence with the established big NY publishers, then it occurred to me that you consider all the benefits you mentioned for writers a bad thing because it’s hurting the big publishers. As if writers should take terrible royalties and accept being treated like an inconvenient necessity (unless the sell big), and all readers should gladly pay ridiculous amounts of money for horrible, unoriginal books that only follow bestselling trends rather than new and original work.

    Why in the world should big publishing be allowed to live in it’s current state? It’s become a crass, corporate bestseller mill. You don’t sell big, you are dropped, period. They are already in a state of crisis because of this trend. As it stands now, all the bestselling writers came into publishing back when publishers would grow authors. They were allowed to flounder with low sales until they wormed their way into the culture. As a result, they became the cornerstone on which the publishing industry makes the bulk of it’s money. But now, Stephen King, Grisham, Connelly, and all the rest are getting old. In 20 years, they will all be dead, and the publishing industry has no one to take their place. Amazon isn’t destroying publishing. They are cutting away the rot of the traditional publishers, and creating a new publishing environment that isn’t slave to the corporate bottom line.

    No one in the last 20 years has done more to bring reading back to our culture than Amazon.

    I’ve published several books with the big 6 NY publishers, been successful, and I can honestly say that I’ve adored everyone I’ve worked with. But I also see how the industry functions, and believe me, they are the real enemy, and if it wasn’t for Amazon stepping in and changing the rules, they would destroy the reading culture in this country.

  4. Posted April 5, 2012 at 12:47 pm | Permalink

    Interesting post…

    You write:

    The self-publishing companies that sprang up during the early Internet era are still making money from frustrated writers, but they too will be swallowed by Amazon as the e-book revolution progresses — because why pay thousands to self-publish when you can publish an e-book directly onto Amazon for almost nothing and get access to the world’s largest consumer base?

    Well, for my money, it’s completely worth it to produce a professional book outside of Amazon’s “cookie cutter” framework. Maybe I’m in the minority, but to me this is money well spent. A book produced for $400 or so looks like it.

    Like anything else, you get what you pay for.

  5. Posted April 5, 2012 at 2:44 pm | Permalink

    A writer, any writer, has enough B.S. to deal with, he needs to spend more time writing and not promoting. A writer wishes to be read and if he is relatively unknown he will not spend a great deal of time and money looking for readers. Everyone knows there is no such thing as: “a level playing field” but if Amazon at this point in time has the closest thing to it then why would a writer not go there?

  6. Posted April 6, 2012 at 7:31 am | Permalink

    Thanks to everyone for the comments. My view is that everyone in publishing is passionate about what they do, otherwise they would not be doing it. The terrible situation that publishers and writers (and therefore agents too) are in, is that readership is declining because of competition from other entertainment, at the same time as the volume of books published is exploding. The worst thing that could happen to the industry would be for one or two retailers to gain a monopoly over supply and demand. The only way to prevent this happening is to work together. As long as writers and publishers are blaming each other for the intense squeezing going on in the industry, there can be no rebel alliance.

  7. Posted April 7, 2012 at 5:03 am | Permalink
  8. John
    Posted April 7, 2012 at 2:27 pm | Permalink

    I had finished writing two nonfiction books: one on religion and the other on physics. Since I am not an expert in those fields, I tried to get some help from people who are authorities in those fields to review my work and use it to find an agent. What did I got? No response. I was ignored. I also queried literary agents and nobody wants to take it. While Amazon Kindle had been around for quite some time, it never occured to me to go through it until I mentioned it to somebody I just emailed who had been kind enough to respond and offer a suggestion.

    The ability to self-publish a book gives the power back to the creative writers who will be directly judged by the readers and not the literary agents who had not seen the complete work (who would rather judge the work from a short query) and are acting as the gatekeepers for the publishers.

    Moneywise, a writer could get more royalty through e-publishing. The drawback of course is the level of editing. But if the work is that good, it will eventually find a traditional publisher. That is the time when the writer will decide whether he/she will spit on the eyes of the agents or publisher or deal with them–but this time with more personal empowerment.

    I want to share my story when I mistakenly submitted in person my query since the agent was practically close by (this was not in NY). I wanted to see how the agent look like since I googled her and found no pictures of her. I thought I don’t want to go through something like an “arranged marriage.” I meet her assistant when I went in her office. When I ask if I could meet the agent, she asked me, “Why, who are you?” Anyway, I stammered something. The question actually doesn’t mean you have to give your name. I extended my hand and she just look at me. Needless to say, I backpedaled on my way out. Never got any reply from their agency. I could have been warned since they had been leaning towards fiction books on romance although their website showed their interests on nonfiction. I should say that I was annoyed at their reception. And since I know my work, I was more amused thinking about what she asked me, “Why, who are you?” Well, I hope they would remember my query when the time comes.

    To an unpublished author, e-publishing is a godsend and a good friend. It is a way to circumvent the imposed blocks of the agents and the publishers. How many books have the bragging rights of having been rejected but then became successful? How many were lost in the process looking to get published?

    Bottom line is: A writer will find any means to publish his/her work.

    I don’t view Amazon as being bad. In fact it is beneficial to me. So is Google and Wikipedia and the Internet as a whole. I got all the books that I used on my research from the Amazon and its retailers on used books. It is virtually acting as my own library although I also borrowed books in the library. I practically stopped going to brick and mortal bookstores. I replaced it with the library and Amazon.

    I intend to e-publish my first book and use my “newly” acquired credential to find an agent and then publish my other complicated books with images and lots of permissions. And you know what? Those publishers will also sell their books in Amazon.

  9. Eric Welch
    Posted April 8, 2012 at 6:52 pm | Permalink

    I can understand your antagonism to Amazon since it represents a threat to your livelihood. Those in the middle of this battle over distribution (and that’s exactly what it is) have the most to lose and will be the most tenacious trying to retain the status quo. (Why in the world would anyone need IPG to distribute ebooks?) The boogey-man has become a moving target: first, it was paperbacks which would destroy quality; then it was chains who demanded substantial discounts; now it’s Amazon, which, amazingly has proven to be a very effective retailer for the mid- and back-list. And, of course, ebooks. Publishers are now stuck with a huge infrastructure that requires a certain distribution paradigm to continue. Not gonna happen. Buggy manufacturers learned the hard way it was all about transportation. Publishers need to learn it’s all about reading not shipping and warehouses.

  10. Posted April 9, 2012 at 6:25 pm | Permalink

    Eric – thanks for your comments. I am not supporting retention of the old ways of doing things – I am pointing out that with a monopoly retailer, and a huge increase in the supply of books, that writers and the publishers who fund and promote them are at risk economically.

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