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Is Amazon Good or Bad for the Publishing Business?

17 April 2013

From The London Book Fair via Publishers Weekly:

In planning the third annual London Book Fair’s Great Debate, co-organizer, Susan Danziger, organizer of The Publishing Point and founder of Ziggeo, said it occurred to her there was one topic in particular that people are thinking and talking about in private, but rarely in public: the role and influence of Amazon on the publishing industry. Is Amazon a friend or foe? That was the question at the heart of this year’s debate, which put forth the following resolution: Amazon is a positive influence on the publishing industry.

. . . .

Purcell began his defense of Amazon by taking on the negative perceptions of Amazon, calling it the “most unfairly maligned company” operating in the book trade at the moment. “Amazon is simply taking advantage of the natural properties of the Internet and digital change,” he argued, such as lower costs of distribution, and the lesser needs for a physical location. But while it is a “prime mover” the opportunity it has seized was created not by Amazon, but by the Internet. “So to fear Amazon is to fear the Internet and to fear change.”

Lee later noted the positives Amazon’s innovation has brought to industry. “They are the ones who created a critical mass for digital reading,” she said. “They made digital reading mainstream in a way that other Sony and other players before that did not.” The company also opened distribution for writers via self-publishing, which has also unleashed a new stream of creativity. And while a lot of self-published material is cringe-worthy, Lee conceded, over time there will be a “a flight to quality,” she believes.

. . . .

In arguing against Amazon, Godfray agreed there was a lesson to be had about competition. But, he stressed, only to a point. “My contention is that Amazon has got so big, they are not competing, but destroying the competition. Do we really want an environment is which there are virtually no bookstores and far fewer publishers and agents? Because that is really where we”re heading.”

Godfray backed up his assertion with numbers. In the U.K., he noted, 95 % of e-book purchases were from Amazon, and of the 1.3 million e-readers purchased before last Christmas 92% were Kindles. And, Amazon’s sales, he said, are bigger than the big six American publishers combined.

. . . .

“Amazon is able to use their market strength to offer low e-book prices to consumers,” Godfray said, “and then lock those customers in with their own own proprietary systems.”

Levine built on Godfray’s argument, noting that Amazon was bent on creating an entirely new future for publishing. “The issue is, and it’s the same issue with Apple, Google and all these other companies,” he said. “Amazon’s interests do not align with yours. If you’re a writer, you usually want to sell books for money, to you know, like live on. With Amazon, like Apple, it’s a very different negotiation: you want to sell books for money, Amazon wants to propagate a platform.”

Levine also stressed the importance of being able to control one’s pricing, calling Amazon a “hyper-efficient machine for dragging down prices.”

Link to the rest at Publishers Weekly and thanks to Eric for the tip.

Amazon, Big Publishing, Non-US

49 Comments to “Is Amazon Good or Bad for the Publishing Business?”

  1. Me the reader: Who cares? They’re AWESOME for me!

  2. Amazon is very good for publishing and they may one day be the Publishing Business, given the level of competition they face.

  3. Once again, bad for publishers doesn’t mean bad for publishing.

  4. “Is Amazon Good or Bad for the Publishing Business?”
    “Is Amazon Good or Bad for the Publishing Industry?”

    Dan

  5. They’re a great company for consumers, and as a consumer I love them. However, Bezos can burn in hell for his patent shenanigans — the one-click fiasco is something I doubt I’ll ever forget, or forgive. And I’ve seen what proprietary technology lock-in can do to another market, driven forward by another scrappy little company called Microsoft. Those bastards started out as heroes, liberating the computer industry from IBM, then set back the industry about ten, fifteen years. It’s hard not to be suspicious of Amazon after living in Microsoft’s shadow.

  6. Quote: In arguing against Amazon, Godfray agreed there was a lesson to be had about competition. But, he stressed, only to a point. “My contention is that Amazon has got so big, they are not competing, but destroying the competition. Do we really want an environment is which there are virtually no bookstores and far fewer publishers and agents? Because that is really where we”re heading.”

    Amazon IS competing. The rest are destroying the very act of competition by NOT competing. Amazon has been a trailblazing force not only in commerce but in publishing, and BPH has continually responded to Amazon’s innovative model by trenching deeper into their corporate mummification by offering fewer and fewer midlist books, shoring up increasingly odious contracts for authors, colluding to fix ebook prices, and countless other stupid things that prove to me that they are not interested in competing but in maintaining their old status-quo; all the while the world spins away from such business models.

    • And, most importantly, readers voting with their dollars is how Amazon obtained and retains its power.

  7. Amazon is destroying the competition by helping writers, filmmakers and developers have a more democratized marketplace. They are giving the above access to that marketplace and giving consumers ultimately more choices. That the big six and other gatekeeper companies have willfully chosen to ignore this democratization and adjusted accordingly should not, therefore, become Amazon’s problem.

    However, there are always a few people out there with very limited vision who like to think that too many choices are a bad thing.

    I believe the moral of the story is: Adapt and innovate to your market or die. Speaking only for myself, I cannot imagine that I will shed too many tears over their passing.

  8. Good. Next question?

  9. I understand some of the opposition toward Amazon:
    1. Indie Bookstore- Amazon has every advantage (price, convenience, discovery, and selection), except for sentimentality and face-to-face interaction
    2. Best Selling Authors- The “way it has always been” is being unsettled and Amazon is the most obvious target, as they confuse cause-and-effect
    3. Agents- Amazon is providing freedom to authors, letting them escape the “agent-required” trap

    But Big Publishing? I understand the private griping about tight margins, but do they really want life without Amazon? How would they make up the 40-70% of sales that would disappear?

    I cannot think of any other major supplier who is so critical about its main customer. I can just picture the BPH delivery guy holding his nose at he drops off another truckload of books at Amazon.

    • I don’t feel for indie bookstores anymore. I went into my local one (which recently changed ownership) and asked for a recommendation for a “new science fiction” book. When I got a blank look, I asked for “or new fantasy”. More blank stare–so I added “or old, maybe I haven’t read it before”.

      I did get a recommendation. Of a thriller. An old thriller. It did look interesting, and it was new to me, so I bought it because I felt terrible for the guy. I was the only customer in there.. But, really, the main reason for me to go into a bookstore is for the recommendations. This isn’t going to cut it. I’d have done as well aksing the staff for a recommendation at the local Books-A-Million.

      • I never did feel for indie bookstores. At most of the ones around here, back in the day, if you asked for science fiction or fantasy, you didn’t get a blank stare; you got a dirty look. If you were lucky, you got a lecture from the proprietor about how he didn’t carry That Subliterate Trash, and you ought to be reading real literature instead.

        For a while in the nineties, we had one or two small bookshops that actually specialized in SF & fantasy. They didn’t last. But even then, the established indie stores didn’t carry the stuff at all, and tended to pique themselves on the fact.

    • THIS, Eric! Publishers treat Amazon like a competitor rather than the one place they sell the most books and make the most money. Non-sense.

    • I agree with Marimba on lack of sympathy for indie bookstores. I understood the struggle many years ago but rather than adapt or innovate, they chose to simply whine. The selection at my two nearest indie stores is of course what the Big 6 houses are pushing this month or obscure local authors.

      I may visit a brick and mortar store 6 times a year. I’m on Amazon at least once a day.

  10. “If you’re a writer, you usually want to sell books for money, to you know, like live on.”

    From what I’ve heard, mid-list writers are making more by self-pubbing at Amazon (or being published through an Amazon imprint) than they are at the Big Six. Have I been misinformed?

    “Levine also stressed the importance of being able to control one’s pricing, calling Amazon a ‘hyper-efficient machine for dragging down prices.’”

    Has Mr. Levine ever shopped for ebooks on Amazon? If he has, he might have noticed that traditionally published ebooks are often priced higher than the paperback editions. That is caused by the BPHs controlling their own pricing. And using that control to shoot themselves (and their authors) in the foot.

  11. Wouldn’t Hitler, Stalin and Mao have loved this scenario: No more publishing industry, only nice and easy to control downloadable ebooks, which can be stopped or punished if necessary…

    #godwinned.

    • Hah! *eyeroll*

      It’s inevitable, I guess. It was either that or “do you know who else wrote a book? Hitler. HITLER wrote a book.”

      I’m pretty sure Amazon would view both socialism and fascism as a threat to its basic business model.

    • did somebody really say that? I can’t imagine it.

      • It’s right there in a comment on that article. There’s also this one:

        Anyone looking for my books will only find them in print, and so far I have had few sales through Amazon in the 5 years I had worked with them. So I side with the majority in this case. Digital content is used as a loss leader to sell Kindles, and KDP’s lending program has netted zero for most of the participating authors. In that hostile environment I don’t see how anyone would continue to deal with Amazon. I sell from my own site, which is what any self-respecting author should do.

  12. “Do we really want an environment is which there are virtually no bookstores-”

    Depending on where you live there already are “virtually no bookstores.” Sure, I’d love to keep them around but it’s up to the free market to decide that.

    “-and far fewer publishers and agents? Because that is really where we”re heading.”

    Um…ah?

  13. In a previous post, it was noted that Amazon has a hefty 10% share of the internet commerce market.

    It seems extreme to kick up such a fuss over 10%.

    I don’t see why their 10% is more important that the remaining 90%. So all this debate is moot as far as I’m concerned.

    • 10% of the market concentrated in one place? Yes, it can have a *very* strong influence over everything else, depending on how dispersed the other 90% is. Especially if there are laws in place that limit the amount companies can cooperate to counter what they see as a threat in the marketplace. Which, as the DOJ has very recently reminded the publishing industry, there are.

  14. “Amazon has even said the only things we need are a reader, and a writer. So if you’re not a reader and not a writer and you’re here in this room today, Amazon feels you have no place in the publishing business. That’s not evil. But I think you should be aware and act accordingly.”

    What Amazon thinks doesn’t matter. What consumers think does matter. Consumers are demonstrating they don’t give a hoot who is in the publishing business. Amazon simply recognizes that and exploits it.

    • ‘Amazon has even said the only things we need are a reader, and a writer.’

      Hmm, now what does that remind me of? Oh, yes: a quote that PG himself posted here a while back—

      ‘All that is necessary in the production of a book is an author and a bookseller, without the intermediate parasite.’ —George Bernard Shaw

  15. Another “Amazon is EEEEvil” article. Time to go shopping. Oooo, Highlander the Series is out on Blu-ray!

    If publishers and retailers would worry this much about the other 90% of their business, Amazon wouldn’t even be an issue.

  16. I can’t see the logic when people say that Amazon will result in fewer publishing houses.Rather than there being fewer publishers, it seems to me there are thousands more because of Amazon.
    Doctor Johnson went to a publisher who operated out of one room in a private house, and who covered the physical costs of typesetting and binding. Johnson felt obliged to attempt to promote the effort which was something of a joint venture.
    This was the model of the day; Hundreds of one man band publishers catering to niche audiences taking a chance on their judgement of what was likely to sell. Which seems a lot closer to today’s model than the situation even six years ago.
    I make a few hundred pounds a month from Amazon, in a very small category, whereas my traditionally published works (Random House) pay an e-royalty of 15% which gave me the grand total of £13 pounds for six months sales. In my view, RH rip me off, whereas Amazon pay me on time and at a rate that is largely set by myself, (i.e.They take a percentage of what I decide to charge for my works), and I can distribute with anyone else I care to at the same time. The people who like, and buy, my comics would never have had the opportunity, had it not been for the digital publishing revolution, and the kindle fire. Amazon is my distributor, not my publisher, and whether I stay with them in the future or not, I will always give them the credit for getting me started on my own adventure.
    The future is very exciting, to me at least.

    • George from Toronto

      “I can’t see the logic when people say that Amazon will result in fewer publishing houses.Rather than there being fewer publishers, it seems to me there are thousands more because of Amazon.”

      Stephen that’s so true, it’s why I started my own federal corporation level publishing company here in Canada. Its better come tax time and comes with perks because its an official business.

      • I think it is a good move on your part as well, George, because you can easily publish in different genres/as different authors when you fancy telling a different story, or want to explore niche audience response to your work.
        The tax angle is beyond my skillset to comment on, as I live in the UK, but it is something I am exploring myself.
        Good luck in your adventure, and greetings from this side of the pond.
        Sincerely,
        Steve G.

        • George from Toronto

          Thank you friend!
          BTW I love the UK! I plan on completing my MA in Byzantine Studies over there soon (best byzantine programs in the world are located in England).

          About the different genres: yes that’s so true whereas trad publishers always tell you (at least historically) that they want you to stick to one genre and ‘make it synonymous with your name for the customer’. They also frown on you using too many pen names. Like you said being your own publisher you can explore other areas.

          Over here the tax rate for publishers is 16% plus ISBNS are free. I am almost certain the UK has some perks as well.

          I’m still very new to this (just building the website right now, which is why I don’t have a link or my full name on here yet).

          All the best in your own endeavors,
          George K

  17. Get ready, then, Industry, for the day when we writers ARE the industry. The routes we choose to get our product to readers may vary, but over time, the business will boil down to us, and the ways we want to use.

  18. Okay, I was actually at this debate and it was ten times worse than it sounds. The anti-Amazon crew might be more persuasive in their arguments if they did the tiniest bit of research. An example: Robert Levine said that once someone purchases a Kindle, Amazon have a monopoly on selling that user e-books.

    When the debate was finally opened up to questions, I told Robert Levine that was factually incorrect. I explained that there were no restrictions whatsoever on anyone selling Kindle-compatible e-books, that retailers like Smashwords had been doing it for years and that many authors sell mobi files from their own sites. I explained that there was nothing stopping even Barnes & Noble or Penguin from doing the same thing.

    I said that Evan Schnittman (then) of Bloomsbury had stood in the same spot two years ago and made many of the same doom-mongering comments about Amazon’s dominance and how they would abuse that position… any second now.
    I pointed out that aside from the sky *not* falling as universally predicted, I had checked out Bloomsbury’s website at the time. They were selling epub files direct to readers. And then they had links to Amazon to purchase Kindle e-books.

    Jeez guys. If you want competition, you have to compete!

    That was only one of many factual inaccuracies underpinning much of the anti-Amazon guff. Another was quoted above regarding Amazon’s recommendation algorithms. Levine said that within two years all books recommended by Amazon would be exclusively from their own imprints.

    This is nonsensical, of course. Amazon’s imprints are already two years old and we have seen zero juicing of the recommendation algorithms. In fact, the last major changes to the algos (May 2012) were actually disfavorable to Amazon imprint books in many ways.

    I would have raised that too, but I was only allowed one question.

    • One would think by now you’d rate at least two. A follow-up, anyway. ;)

    • George from Toronto

      Hi David

      Would you tell us what Levine’s reaction/response (or the others there) was to your very well put statement? I’m very curious, did he hem and haw? Did he accept the facts graciously?

      • No, he just tried to pivot to something else. I attempted a follow-up but was ignored.

        I was gonna say something like this. Amazon sells books from anyone who wants to list there. Anyone. They also sell competing devices: iPads, Kobo, etc. They even sell books published by Barnes & Noble (who own Sterling).

        Barnes & Noble refuse to stock Amazon-published books (even ones where Amazon isn’t demanding digital exclusivity). They also don’t stock the Kindle (or the iPad or Kobo devices).

        Who’s against competition again?

        • George from Toronto

          Indeed! Thanks David,

          Ah pivot and ignore, that’s like bait and switch in my book.

          Like you said Amazon sells from anyone who wants to list. That simple fact is like a sunrise to a vampire for Mr Levine.

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