From writer and Wings Press owner Bryce Milligan via TeleRead:
There is an undeclared war going on in the United States that threatens the linchpins of American intellectual freedom. In a statement worthy of Cassandra, Noah Davis wrote in a Business Insider post last October, “Amazon is coming for the book publishing industry. And not just the e-book world, either.” When titans battle, it is tempting to think that there will be no local impact. In this case, that’s dead wrong. Amazon’s recent actions have already cut the sales of the small press I run by 40 percent. Jeff Bezos could not care less.
One recent battle in Amazon’s larger war has pitted it against a diverse group of writers, small publishers, university presses, and independent distributors. It is a classic David-and-Goliath encounter. As in that story, however, this is more than just pitting the powerful against the powerless. In this case, the underdogs have the ideas, and ideas are always where the ultimate power lies.
Wings Press (San Antonio, Texas) is one of the several hundred independent publishers and university presses distributed by the Independent Publishers Group (IPG), the second largest book distributor in the country, but still only a medium-sized dolphin in a sea of killer whales. In late February, IPG’s contract with Amazon.com was due to be renegotiated. Terms that had been generally accepted across the industry were suddenly not good enough for Amazon, which demanded discounts and practices that IPG—and all of its client publishers—could only have accepted at a loss. Yes, that does mean what it sounds like: To do business with Amazon would mean reducing the profit margin to the point of often losing money on every book or ebook sold.
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Ebook sales have been a highly addictive drug to many smaller publishers. For one thing, there are no “returns.” Traditionally, profit margins for publishers are so low because books that remain on shelves too long can be returned for credit—too often in unsalable condition. No one returns an ebook. Further, ebook sales allowed smaller presses to get a taste of the kind of money that online impulse buying can produce. Already ebook sales were underwriting the publication of paper-and-ink books at Wings Press.
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Having created numerous (seven or more) imprints of its own, Amazon has begun courting authors directly by offering exorbitant royalties if the authors will publish directly with Amazon. Among the financial upper echelon of authors, Amazon is paying huge advances. Among rank-and-file authors, not so. Here they are offering what amounts to glorified self-publication. The effect is to lure authors away from the editors who would have helped them perfect their work, away from the publishers and designers and publicists and booksellers who have dedicated their lives to building the careers of authors, while themselves making a living from the books they love. Even the lowly book reviewer has been replaced by semi-anonymous reader-reviewers. All these are the people who sustain literary culture.
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Amazon could have been a bright and shining star, lighting the way to increased literacy and improved access to alternative literatures. Alas, it looks more likely to be a large and deadly asteroid. We, the literary dinosaurs, are watching closely to see if this is a near miss or the beginning of extinction.
Link to the rest at TeleRead
Change can be hard. Stories and storytellers never go away, but the infrastructure for connecting storytellers with those who want stories is transient.
20th century publishing was essentially an industrial-age construct focused on mass-production and mass-distribution of physical goods in a complex system awash with middlemen. Internet-age publishing operates differently. Publishing “factories” are obsolete. Middlemen are falling like flies.
PG is never happy seeing anyone lose a livelihood, but capitalism is about creative destruction. There are other economic systems, but most of them seem to end up like Greece or Zimbabwe.
If you want to sell ebooks, you need lots of consumers with ereaders. Absent ereaders and a sophisticated online bookstore that makes it simple for customers to get the ebooks they purchase to their reader, the publishing business is back to the seemingly irreversible decline it was experiencing prior to widespread adoption of Kindles and Nooks. Remember that bookstores were closing and publishers were disappearing before Kindle ebooks.
PG doesn’t understand the small press business but wonders why any small publisher would use a distributor to deal with Amazon. If IPG mandates that publishers allow it to distribute ebooks if they want IPG to distribute printed books, it would seem that IPG’s contract terms are more the source of the problem than Amazon is.
It appears IPG imposes an extra cost for publishers to access Amazon’s ebook sales channel without providing any real value in that channel. Small publishers dealing directly with Amazon for ebooks seem to be generally pleased with the experience. For one thing they can get their books on the e-shelves of Amazon more easily than they can get them on the physical shelves of Barnes & Noble.