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?
. . . .
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?
. . . .
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.
. . . .
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.
Link to the rest at Reuters and thanks to Bridget for the tip.
Nobody in publishing ever publicly admits this, but Amazon has substantially diminished the power of publishers to be gatekeepers.
PG disagrees with the author over publishers’ concerns about Amazon’s disintermediation of publishers via Kindle Direct Publishing. In addition to accessing the world’s largest bookstore without the need for a publisher, KDP authors almost invariably price their books below the level that publishers do.
From Amazon’s standpoint, KDP authors are doing the same thing that Amazon is doing when it sells ebooks for less than its cost – building the market for ebooks with low prices. In the case of KDP authors, however, Amazon makes money instead of losing money on low-cost ebooks.
And significant numbers of authors are turning down bad publishing contracts in favor of indie publishing their own books. Even worse, when publishers think about it, significant numbers of authors are not even trying to get a publishing contract, so publishers never get a chance at their books (unless it’s after the books have become bestsellers and the author has a huge negotiating advantage à la Hugh Howey).