From agent Rachelle Gardner:
I’ve just finished reading Brad Stone’s The Everything Store: Jeff Bezos and the Age of Amazon. I’m still processing what I learned, and checking other sources for differing perspectives, but my initial reaction is that this is an eye-opening, clarifying, sobering yet illuminating resource for anyone interested in publishing or business in general.
I approached this book the same way I’ve always approached Amazon: (1) as an Amazon customer, and (2) as a person employed by traditional publishing. The two perspectives leave me feeling a little whiplashed at times, since they induce two opposing views of Amazon.
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As a publishing professional, it hasn’t been quite so easy. In the beginning Amazon was a terrific customer for publishers and authors. Over the years the company has evolved into a ruthless competitor—while still being our primary customer.
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The “customer” side of me loves being wooed and treated well. The “publishing” side of me has to deal with the fact that our biggest customer is also our fiercest rival.This rival has unparalleled leverage over other businesses including publishers, and is not shy about using it to compel cooperation.
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When it comes to publishers, Amazon has used the formidable power of its technology to remove all of a certain publishers’ books from Kindle sales; and at another time, to remove publishers’ books from their powerful book-recommendation engine, causing those publishers’ sales to drop significantly. Amazon is willing to use hardball tactics rather than negotiation when it suits their purpose.
Everyone knows the publishing business is struggling. But it’s not just because of technology and the changing environment. There was a tipping point that changed everything for publishers: the $9.99 e-book introduced by Amazon.
While publishers had been in talks with Amazon for months, providing Amazon with files and metadata to start translating books into Kindle e-books, Amazon never spoke a word about a plan to sell the e-books for such a low cost. It was sprung on publishers at a moment when it was far too late to back away. As one publishing executive put it, “It was one more nail in the coffin that no one realized was being closed over us, even while we were engaged every single day in a conversation about it.”
At $9.99 for an e-book, publishers could no longer make their margins. All of the economics of publishing began to change. Readers became accustomed to e-books at low prices (which, of course, has been greatly intensified by the massive influx of self-published books at rock-bottom prices). Lawsuits were filed, the “agency model” was born, and Amazon has continued to use their leverage to convince publishers to toe the line.
Link to the rest at Rachelle Gardner and thanks to William for the tip.