Home » Amazon, Ebooks, Smashwords » 2017 Book Industry Predictions: Intrigue and Angst amid Boundless Opportunity

2017 Book Industry Predictions: Intrigue and Angst amid Boundless Opportunity

8 January 2017

From Mark Coker via Smashwords Blog:

If you could see into the future, what would you do to change it?

Each year I polish off my imaginary crystal ball and attempt to divine how the boiling crosscurrents of technology, competitive intrigue, author aspirations, and reader tastes will shape the opportunities facing authors, publishers and retailers for the year ahead.

. . . .

2017 will mark a special milestone for the ebook industry.  It marks the ten year anniversary of the Kindle.  It’s also the ten year anniversary of Smashwords’ incorporation.  In early 2007, after three years of crafting our business plan, I hired our first programmer and began active development on the Smashwords platform which we launched in early 2008.

Although my prediction track record has been pretty good over the years (see the end of this post for a complete list of my past predictions), my overarching objective is not to be correct.  Instead, these predictions are meant to spark conversation and contemplation.

. . . .

Before we get into my ten predictions for 2017, let’s take a moment to review the amazing transformational change over the last decade, and celebrate how far the indie author movement has come in such a short period of time.

Ten years ago traditional publishers controlled the means of book production, distribution and sales.  It was a print-centric world where print books accounted for 99.8% of book sales, and where publishers were the bouncers at the pearly gates of authordom.

Publishers controlled which writers graduated to become published authors, which books readers could read, which authors remained in print, and which authors would be allowed to publish another book.

. . . .

In the last ten years ebooks took off.  Ebooks today account for maybe 25% of book sales, up from essentially nothing a decade ago.  In genres like romance, the percentage is much higher.

When I look back at the rise of the indie author movement the last ten years, romance authors and their readers have always led at the tip of the spear.  They were first to embrace the indie ebook publishing, the first to achieve significant commercial success as indies, and the first to pioneer many of today’s best practices for ebook publishing and promotion.

Romance authors – predominantly women – are the some of the smartest players in this business, and their readers are the most coveted and voracious.  These are the readers who often read a book a day.

Romance authors are the canaries in the coal mine.  Romance authors were first to benefit from the rise of ebooks and the first to experience the deleterious effects when the market became saturated.  They’ve also been the first to fall prey to some of the more troubling developments in the industry now affecting writers and publishers in every category.

In the last decade, hundreds of thousands of writers have joined the indie author movement, drawn by the advantages of self-publishing ebooks.  What are these advantages?  In a nutshell, indie authors enjoy faster time to market, greater global distribution, complete creative control, greater pricing and promotion flexibility, greater opportunity to serve their readers with high-quality low-cost ebooks, and the opportunity to earn royalty rates up to five times higher than what the traditional publishers pay.

. . . .

1.  Indie authors will continue to capture greater ebook market share in 2017 

Indies will capture a greater share of digital reading in 2017.  Factors driving this include:

  • Each year the indie author community raises its game to become more sophisticated and more professional.  Indies are learning to implement – and in many cases pioneering – the best practices that motivate readers to choose one ebook over another.
  • Indie ebook authors combine quality with lower prices, providing readers tremendous reading value.
  • Even though indie ebooks are already low-priced, indie authors have greater flexibility to lower prices further than do the large publishers.  This is a mixed blessing.  This also means indies are vulnerable to some of the greatest devaluation pressures because indies don’t wield the collective bargaining power of large publishers.

2.  The glut will grow more pronounced

Over the last few years here at the Smashwords blog I’ve talked a lot about how there’s a glut of high-quality low-cost ebooks.  These ebooks are immortal and will never go out of print.  Thanks to low-cost virtual shelf space, retailers can stock these ebooks forever – even if the books don’t sell.  Although it’s great that your book will forever occupy the shelf, and forever be discoverable and purchasable by new readers, it also means that the virtual shelves are becoming more overcrowded every day.   The major ebook retailers each stock millions of ebook titles in their online stores, with Amazon fast approaching five million titles.  Every day from yesterday forward it will become more challenging to stand out, which leads me to my third prediction.

. . . .

10.   Amazon to face anti-trust scrutiny for unfair business practices

This is a long shot, but in the spirit of prediction folly I’m going to go out on a limb here.  In anti-trust law, there’s nothing illegal about operating a monopoly (where you have exclusive control over a commodity and can manipulate prices) or a monopsony (when there’s only one major buyer).  What’s illegal however, is when a company exploits their monopoly or monopsony for unfair business advantage that makes it impossible for other competitors to compete on a level playing field.

Amazon defenders will argue that Amazon is a brilliant competitor and innovator, and that those who think Amazon plays unfair should stop whining and start innovating.  But this argument rings hollow.  The other retailers have innovated, and continue to innovate.  I work with them.  I see it.  This specious argument by Amazon defenders confuses market share for commitment.  If Kobo earns authors 1/10th of what they earn at Amazon, it’s not necessarily a failing of Kobo, it’s a function of market share.  If you decide to open an indie ebook store specializing in personalized recommendations for cookbooks, the fact that you can’t grow sales to billions of dollars overnight is not a failure to innovate.

One industry watcher explained Amazon’s anti-competitive business practices to me with an analogy about trains, which I’ll paraphrase and expand upon:

Let’s say you own the railroad network that connects farms to the largest marketplace (which your railroad also owns) 1,000 miles away where 70% of corn is bought and sold; and your railroad also owns some corn fields along the rail lines.  If the railroad operator decides to give its own corn first priority on shipments, then their corn will reach the market first while the corn of other producers spoils or is late to market.  If the railroad also gives its own corn preferential display in the marketplace, or if it denies other producers the option to sell under favorable terms in their marketplace, or gives them poor placement within the marketplace, then what are the other farmers to do?  Shame on the other farmers for not buying their own railroad or operating their own marketplace!

Bringing this back to Amazon, Amazon operates the world’s largest ebook retailer providing access to 70% of the world’s ebook readers.  They operate their own publishing imprints.  This means Amazon has the ability to give its exclusive titles first class priority on the train and in the marketplace, and they do.  They operate the Kindle store where all books are allowed but exclusive KDP Select books and Amazon-imprint books are given preferential store placement.  They operate marketplaces such as Kindle Unlimited where only exclusive books are available and non-exclusive books are shut out.  Shame on you Mr. Retailer or Ms. Author for failing to innovate.

This is anti-competitive and unfair, and these facts have led some anti-trust experts to conclude that the only way to solve this problem is for Amazon to be broken up into smaller, independent companies that operate at arms length.

Amazon has so far been able to skirt anti-trust scrutiny by arguing that the network they operate benefits consumers because of Amazon’s track record of lowering consumer prices for ebooks, and this is very true.

But what about the producers?  Do they have any rights?  You’re a producer, you tell me.

Link to the rest at Smashwords

Amazon, Ebooks, Smashwords

78 Comments to “2017 Book Industry Predictions: Intrigue and Angst amid Boundless Opportunity”

  1. Oh look, it’s the evergreen “books are produce” argument. Because lord knows every time I go to the library I just grab a random volume because they are all the same.

    Then we get a helping of confusing cause and effect, followed by thinking there is an innovation fairy that brings presents just for having a new idea vs. implementing a new idea that customers want and will pay for. Don’t they teach economics in the schools any more?

    • “Don’t they teach economics in the schools any more?”

      No, faith healing …

      And they think if you say it enough times dreams come true.

    • Same old same old from Mark Coker. He’s been predicting that all books would be free for years despite no evidence to back it up and many, many decades of evidence that free books (like in libraries, and soap box give aways) only create more readers and sell more books.

      New this year, is his argument that people who provide indy writers services like covers, formatting and proofreading will also go out of business due to oversupply making those services cheaper. He seems to have absolutely no faith in market forces. Prices and quality of services to indy writers are indeed improving, but from what I hear, the best cover designers are doing very well and the rising tide of indy publishing helps everyone.

      Why does he keep writing this garbage, other than his hatred of Amazon for not playing ball with Smashwords? All the doom and gloom doesn’t seem very consistent with someone who wants to make a living catering to self-publishers.

      So here is my best guess. Coker’s end game is to sell out Smashwords to one of the big five publishers. So he’s carrying water on issues they find attractive, like threatening Amazon with anti-trust action and complaining they provide discovery tools like Kindle Unlimited and paid advertising. (Not to mention those darn cheap cover designers who are making indy books look too professional!) It’s also why he keeps talking about inevitable industry consolidation. (Buy my company, please!).

      If that is the case, he’s trying to turn indy writers into stooges who will work against their own interests complaining about Amazon to help out huge publishing concerns while hopefully get Coker a big payday when Smashwords gets bought out.

      If that’s his plan it’s pretty slimy.

  2. 2017 Book Industry Prediction: More authors move their books from Smashwords to Draft2Digital.

    • D2D has it’s own problems, or it did three years ago when I tried them. I try to go direct wherever I can.

      • Was that during its beta phase? I did have a formatting issue back then, but they figured it out in about a week or so. Wasn’t seeing any sales through there, so ended up pulling my books down.

        But I went back the following year (mid-2014), after it was out of beta, and I’m quite happy with D2D’s results since.

        • I had a formatting issue with a book on D2D in June of 2013. I put a ‘Do Not Release’ hold on it because we were in the middle of packing up the house to move, and I didn’t have time to deal with it.

          In October of 2013, the Kernel Pornocalypse hit, and everything was yanked off of every site. (BTW, I do not blame D2D for what happened.) Unfortunately, when D2D released books once the issues were cleared up, they also apparently released the book I had on hold.

          I found out when I received an e-mail from D2D in December, saying Apple had rejected the book. But when I entered my D2D dashboard, I couldn’t put that book back on hold; the entry field was locked.

          I sent an e-mail to D2D explaining the situation, along with the June confirmation e-mail from them saying that particular book was on hold. My exchange with a woman named Tara was…disturbing to say the least. It ended with her implying that I was lying about putting the book on hold.

          I was already majorly stressed out about the move and getting the house on the market, and I didn’t have time to deal with this kind of s***. I called D2D, spoke with Kris Austin directly, and had him delete my account.

          If Smashwords crashes and burns, I have a plan to go direct with Kobo and Apple.

  3. I might be missing something in Coker’s argument as he lashes out at amazon, but is he saying that if Walmart pushes it’s store brand cola over Pepsi, gives it better placement in the store and better deals in it’s adverts it is somehow unfairly screwing Pepsi?

    Or is he saying he likes Pepsi better so someone should punish Walmart?

    • Ed,

      What Coker’s saying is that if Walmart had monopoly power as a retailer, then pushing its store brand over Pepsi would violate anti-trust law. This is so, because Walmart would be using monopoly power in one business to gain market share in another business. This isn’t true in reality because Walmart is nowhere near being classified as a monopoly in retail of cola.

      Amazon probably should not be acting as a publisher, because they have something approaching monopoly power in ebook sales in the US. They very clearly are putting their own imprint books ahead of all of the others. If they are a monopoly in ebook retail, then they are using that monopoly power to improve their market share in publishing. This puts them in violation of antitrust laws in the US.

      Indies should be concerned because there is a very good chance that a good portion of the market share loss this past quarter has been due to actions like this on Amazon’s part. Mark Coker definitely has an ax to grind with Amazon, but bias doesn’t mean he’s automatically wrong.

      • A monopoly has to damage consumers to be found in violation of anti-trust law. Competitors are not entitled to government protection in the US. If Amazon’s prices for the same product (eBooks) are comparable to Smashword’s price range it would be difficult to prove that Amazon’s market share is harming consumers.

        • MKS,

          Using monopoly power in one market and using it to gain market share in another is considered to be an anti-competitive behavior that harms consumers. The precedent already exists. This was the argument used against Microsoft regarding browsers that nearly led to the company being broken up. It is a very easy way to lose an anti-trust case.

          • That particular case was very poorly handled by the judge. Plus history has proven Microsoft right on all technical counts. Like, who would buy a computer without a browser today? Even at the time MacOS, OS/2 and linux all shipped with browsers.
            Not an example to pin hopes on.

            (The case was politically motivated because MS execs only made campaign contributions in their own names, not on the company’s behalf and only had one lawyer lobbying in DC. By the time the case was over, they had the biggest lobbying team in town. They are still one of the largest.)

      • “… because they have something approaching monopoly power …”

        Ever stop to wonder ‘where’ they got that ‘approaching monopoly power’? It couldn’t possibly be because the customers/buyers ‘like’ shopping there rather than other websites or B&M stores could it? And writers ‘want’ their books where the buyers might see/buy their e/p/a/book?

        Funny you used Walmart for your example. I can’t buy a Snapper mower there. You’d love ‘why’ I can’t buy a Snapper mower at Walmart. You see Walmart didn’t want Snapper unless they’d come under a certain price-point. Snapper said that would require making the mower using cheaper parts which would cause it not to last like a Snapper mower does. Walmart was okay with that — Snapper wasn’t.

        I love that you and Coker think Amazon has a ‘monopoly’ on anything. They’re just a re-seller — one that just happens to be good at making their customers happy.

        I see you also don’t like them doing their own publishing, shouldn’t you and Coker be having the DoJ get after Walmart for selling their own name brand in their stores?

        Since Walmart is still standing despite their actions, I don’t see Amazon having to worry about the DoJ bothering them about their ‘approaching monopoly’ powers.

        As has been said here before, you can adapt or die, no one ‘owes’ you a working business or a profit.

        If you don’t like how Amazon does things stop buying/selling there. If enough people agree with you they’ll be out of business by Easter.

        I ‘am’ tempted to ask if you or Coker bought or sold anything through Amazon in 2016 …

      • Amazon probably should not be acting as a publisher, because they have something approaching monopoly power in ebook sales in the US.

        Something approaching a monopoly means nothing.

        Can anyone cite a retail monopoly? A retail monopolist has to control supply. He also has to be a monopsonist.

        Amazon does not control supply, and publishers are free to sell to other outlets.

        Control of supply is what allows a monopolist to deny other firms entry into the market. Without supply control, there is no monopolist.

        A monopolist harms consumers by increasing prices and limiting supply in order to maximize his own profits. Amazon increases supply rather than limiting it. Amazon lowers prices rather than increase them.

        Amazon fails all the tests for a monopolist who harms consumers.

        • Terrence,

          I say approaching, because I’m not certain they would be found to be a monopoly in ebook retail. 80% market share is the baseline standard for being found to have monopoly power, but lower could suffice or higher could be necessary.

          The point is that Amazon should be concerned ahead of time rather than stumble their way into having the courts remedy their behavior after the fact.

          • Since Amazon does not control supply, it is not a monopolist.

            Since Amazon is not the only buyer, it is not a monopsonist.

            A retail monopolist must be a monopsonist in order to control supply.

            • Terrence,

              The lawful standard is not 100% market share. Intel is a monopoly without ever having anywhere near 100% of the computer processor market. They’ve been ruled against and have settled out of court for far less obvious activity than what Amazon has engaged in. Monopoly or monopsony, Amazon is near the tipping point of controlling the ebook retail market.

              • There is no lawful standard.

                There is no control of any market without control of supply.

                Supply comes from lots of publishers. The huge influx of independent authors made it far more difficult to even think of controlling supply.

                And market share doesn’t matter unless the market share is being used in a way that harms consumers.

                And controlling the market?

                When Amazon controls supply, nobody can enter the market, producers can sell to nobody else, Amazon raises prices, Amazon curtails availability of goods, and producers cannot sell their own wares, we might have a problem.

                But that has to be based on much more than speculation. Each of these factors has to be examined. None of them hold up.

                This is not 1910, and Justice Brandeis is no longer on the court.

      • Indies should be concerned because there is a very good chance that a good portion of the market share loss this past quarter has been due to actions like this on Amazon’s part.

        Amazon is perfectly free to throw all independent authors off its site. It owes them nothing. They deserve nothing from any retailer.

        • Terrence,

          If Amazon is deemed to have monopoly power in the ebook retail market and they have a competing publishing arm, then they actually don’t have the right to not offer all publishers equal terms that their publishing arm has. Monopolists have limited rights with regard to how they can compete in the market where they have monopoly power and in adjacent markets. It isn’t about what they owe anyone. It’s about how monopolists are required to act by law.

          If Amazon wants to treat suppliers competitively while holding monopoly power (which is not certain), then they can do so. They just can’t do so while operating as a publisher.

          Amazon has somewhere near a 74% market share. They are most certainly close to being deemed a monopoly. Maybe they will maintain a reprieve due to the print market, but suggesting that they might have monopoly power is not crazy.

          • If Amazon is deemed to have monopoly power in the ebook retail market and they have a competing publishing arm, then they actually don’t have the right to not offer all publishers equal terms that their publishing arm has.

            Monopolies are not deemed. They are demonstrated to be acting in way that harms consumers. As long as Amazon is not raising prices and curtailing supply, they are not in violation of anything.

            Supply comes from zillions of publishers and independent authors, not retailers.

            No retailer is deemed to be a common carrier.

            Maybe they will maintain a reprieve due to the print market, but suggesting that they might have monopoly power is not crazy.

            Suggesting it is certainly not crazy, but it does invite a critique of the suggestion.

      • They very clearly are putting their own imprint books ahead of all of the others.

        No, they aren’t.

        I wouldn’t doubt if Amazon has more anti-trust lawyers than any other company on the planet.

        Amazon treats its imprints as separate companies, and makes them monetarily compete for ad and marketing space with other publishers.

  4. [Amazon] operate their own publishing imprints. This means Amazon has the ability to give its exclusive titles first class priority on the train and in the marketplace, and they do. They operate the Kindle store where all books are allowed but exclusive KDP Select books and Amazon-imprint books are given preferential store placement. They operate marketplaces such as Kindle Unlimited where only exclusive books are available and non-exclusive books are shut out. Shame on you Mr. Retailer or Ms. Author for failing to innovate.

    This is anti-competitive and unfair, […]

    What about end cap displays at bookstores? What about bookstores refusing to stock or even special order books that don’t come from a select list of publishers? As long as Amazon Imprint A pays Amazon Storefront a fee for placement, and as long as that pay-to-play option is available to other producers, then the practice is not anti-competitive. Both conditions seem to be true.

    If the complaint is that Amazon-imprint books dominate top seller lists, that could be explained by Amazon being very good at selling books. Amazon imprints select titles and authors that sell very, very well. They are a proven quantity. They price books at prices proven to move lots of copies. Amazon observes bookselling more closely than any other player and they use the information gathered to play the game very well. Perhaps an anti-trust case could be built around Amazon Storefront sharing that information with Amazon Imprints and allowing them to snipe top sellers and price optimally. Except, as Data Guy and his spiders demonstrated, a lot of that information is available to anyone willing to devote the resources to digging it out.

    […]and these facts have led some anti-trust experts to conclude that the only way to solve this problem is for Amazon to be broken up into smaller, independent companies that operate at arms length.

    Who are these experts? There have been many, many complaints about Amazon. The people charged with investigating and policing anti-trust, who presumably are experts in anti-trust, have several times looked into the complaints and so far have concluded there is no case to answer.

    Amazon has so far been able to skirt anti-trust scrutiny by arguing that the network they operate benefits consumers because of Amazon’s track record of lowering consumer prices for ebooks, and this is very true.

    But what about the producers? Do they have any rights? You’re a producer, you tell me.

    Producers have the right to not sell their product on Amazon, to sell only on one or more of the several competitors. Sure they are smaller, but they exist, and some are robust. Or producers could sell their product on Amazon but not go exclusive.

    • Same crap, new year. If there was any ‘anti-trust’ to be found the publishers and AU/AG/ect would be FedExing the DoJ. As they’re not (because they’ve looked like fools every time they’ve bad-mouthed Amazon) there’s no ‘anti-trust’ issues they can use.

      This is just a little guy whining because Amazon does it better than he does.

      ETA

      “But what about the producers? Do they have any rights? You’re a producer, you tell me.”

      You have the same rights as everyone else, you can play the game or take your ball and go home (and the odds are no one will notice either way.)

    • Also, Amazon Imprint titles sell a lot at Amazon because they can’t sell anywhere else because of the boycott. So the coop money (and the mindshare) that would otherwise be spread all over gets concentrated at Amazon.com.

      These people really need to consult with lawyers before shooting off their mouths.

      • “These people really need to consult with lawyers before shooting off their mouths.”

        If they did they’d have nothing to say …

      • Good point. Bookstores are free to refuse to stock Amazon imprints. And Amazon is free to refuse to promote independents or romances.

  5. Sigh. Another 40,000 words (or did it just seem that way) from Mark Coker about how evil Amazon is.

    You know one thing Amazon has done, Mark? They’ve updated their site so it doesn’t have that 1996 retro feel.

  6. If you decide to open an indie ebook store specializing in personalized recommendations for cookbooks, the fact that you can’t grow sales to billions of dollars overnight is not a failure to innovate.

    Nor is it Amazon’s fault.

    Market share isn’t the cause of a company’s problems. It’s the result.

  7. But what about the producers? Do they have any rights? You’re a producer, you tell me.

    They have the right to enter the market and compete. They have no right to any specific outcome. They have no right to any specific market share.

    More important, they have no right to inflict harm on consumers so they can make more money for themselves.

    In the early 1900s when the Progressives launched, they favored government control of suppliers to ensure suppliers thrived. They believed university trained experts were needed to make sure there was a healthy mix of suppliers.

    However, experience since that time has demonstrated the market doesn’t need the stewardship of Progressive experts. The whole idea was junked long ago, and the welfare of consumers replaced it. For example, monopolies are accepted as long as they do not use that monopoly power to harm consumers.

    But, there are some holdouts for the early 1900 notions. Franklin Foer wrote an article a few years back advocating for it in the book market. Scott Turrow and the Author’s Guild supported it. Coker routinely brings it up. And Douglas Preston and his Authors United also support it.

    The reason Amazon has not been prosecuted under ideas from 100 years ago is because we have 100 years experience that says they are wrong.

  8. Anniversary, yeah, but not because Kindle and Smashwords. Instead for me, it’s a 15-year anniversary for me, because in ’02 I saw my first e-book published. I guess we weren’t supposed to exist then because small and flying under the radar, but beginnings are often small. Small does not mean insignificant.

    • Y’all existed, and I bought a lot of e-book to take on the road with me during business travel.

    • I have commercial ebooks that go back to the last century from BAEN and Fictionwise. Anybody who got in the biz in 2007 was merely fashionably late, not a trailblazer or innovator. And that includes Amazon.

      (Now, whispersync was innovative in execution but the idea itself was old. Rocketbook did it via dialup instead of wireless.)

  9. “When Amazon opened up sales to India, Mexico and Brazil, Amazon required authors to enroll in KDP Select if they wanted to earn 70% for their single-copy ebook sales in those small markets. Otherwise, KDP authors only earn 35% list.”

    I know I’m not the only person who seldom sees any sales from those countries. The currency exchange rate is horrible for them, and figuring out a fair price is about impossible. Even the lowest prices can still be a huge chunk of a single day’s wages for those countries.

    I’d hazard the guess that perhaps, ebooks don’t sell well in those countries because of the depressed currency (I’m not sure that’s the correct term). Amazon requiring Select participation to receive 70% is then, to me, an effort to build sales/readers in those countries.

    I’m probably wrong, but that’s the sense I make of it.

  10. I’m a huge fan of Amazon (obvs!), but I’ve been reading all the stuff about their imprints and the store. I wonder if that might be a step too far, particularly since they do clearly push them hard. I have a hard time believing that every algo they’re running for books customers might also like somehow all point to their imprints all the time. It’s a bit of stretch.

    Then again, the solution is super easy. Spin off the imprints. Done. Easy peasy.

    • It is a concern that Amazon might be favoring it’s own imprints over other books. But it’s also possible that their success is because Amazon often snatches up successful indies when they prove themselves to be popular. And they have the best ways of discovering new talent thanks to their control of Kindle.

      As I understand it, Amazon offers writers fairer profit sharing terms than big publishers. And less restrictive control of their rights. If that allows them to capture the hottest new writers and help them with improved promotion, then that isn’t a bad thing. That’s how the market should work: publishers find the best writers and make good deals with them. Win/win.

      If, over time, Amazon is simply favoring it’s own books, rather than the “best” books (best as judged by readers) then Amazon will be leaving money on the table. And eventually they could turn off readers or force talented indies to look elsewhere. Long term it would be very unwise for Amazon to favor it’s own stuff too much. It would be bad business and I think Amazon is too smart for that.

      • Where APub titles get a big boost is Kindle First.

        But, that is six titles a month and if reports are true and APub is up to 2000 titles a year they can’t boost all of them that way or even a majority. Less than 5%, actually. The rest get the same kinds of support that are (apparently) available to everybody.”, even their sworn enemies.

        What APub does that helps their titles the most is they support them about as well as a good tradpub but price them at Indie levels.

      • “If, over time, Amazon is simply favoring it’s own books, rather than the “best” books (best as judged by readers) then Amazon will be leaving money on the table. And eventually they could turn off readers or force talented indies to look elsewhere. Long term it would be very unwise for Amazon to favor it’s own stuff too much. It would be bad business…”

        This. As I said on another thread, at least 90% of the recs I get from Amazon now are A-pub. The only problem is, I”m not interested in most of what they’re pushing. And when I do read one, I haven’t liked it.

        I haven’t downloaded a Kindle First book in months. I don’t like reading doom-and-gloom and unlikable characters. Of all the A-pub books I’ve read, there was only one– *one*– I really enjoyed. That’s a pretty bad track record. My reading tastes might be different from a lot of people’s, but this strategy is definitely not serving THIS reader well.

    • Then again, the solution is super easy. Spin off the imprints. Done. Easy peasy.

      Solution? What’s the problem? For whom?

      • “What’s the problem? For whom?”

        For those that can’t figure out a way to game the system so they come out on top.

        .

        If the facts are against you, bang on the law. If the law is against you, bang on the facts. If both are against you, bang on the table.

        • Whoa…I’m not complaining, just showing that there’s a super easy solution if they are ever deemed to have a problem. I’m not banging on any legal slip in order to get ahead. I’m quite happy to go the low, slow route I’m on.

          Just remarking on the article here. I didn’t write it.

  11. Maybe a quick re-read of the Sherman Act is helpful:

    Every contract, combination in form of trust or otherwise, or conspiracy, in restraint of trade or commerce in any Territory of the United States or of the District of Columbia, or in restraint of trade or commerce between any such Territory and another, or between any such Territory or Territories and any State or States or the District of Columbia, or with foreign nations, or between the District of Columbia and any State or States or foreign nations, is declared illegal.

    If company A says to manufacturer M, yes, you can put your products for sale in our store but if you do, you cannot put your products in store B.

    Does this seem to you to fall under the Sherman Act’s Restraint of Trade law, as above? At its very simplest, does this seem like M is being restrained from trading with B? Food for thought, eh?

    • The Sherman Act is simple. It may be read at https://definitions.uslegal.com/r/restraint-of-trade/

      The complexity comes, of course, in the lawyers’ interpretation of these simple rules.

    • If company A says to manufacturer M, yes, you can put your products for sale in our store but if you do, you cannot put your products in store B.

      Sounds like what Random House tells authors. Does the law require publishers to eliminate the requirement that an author cannot have his book published by multiple publishers at the same time?

      At its very simplest, does this seem like M is being restrained from trading with B? Food for thought, eh?

      No. Since M is free to trade with B, C, D, E… and not trade with A.

      • Is that really true, the freedom of choice, when A controls 70% of the market?

        I’m just asking here because I’m curious what people think.

        • If the point is exclusivity as a constraint on trade, then the principle would apply to any retailer.

          The simplest readings of law are mostly useless. Does a retailer constrain trade by closing at 8PM?, preventing a subset of consumers from trading?

          The simplest reading of the law would say “yes.”

          And with Amazon, note nobody is forced into exclusivity. Lots of people sell on Amazin, go wide, and are very happy doing so.

  12. “Does this seem to you to fall under the Sherman Act’s Restraint of Trade law, as above? At its very simplest, does this seem like M is being restrained from trading with B?”

    Ah …. no?

    As you can sell your ebook on Amazon and elsewhere.

    Now, you want to join a little subset that requires you be exclusive? You have a choice to play or not.

    Tell you what, let’s move this over to the qig5, shall we?

    If you want to play with them, they force you to sign a contract granting them ‘exclusive’ rights to do whatever they want to your story. And lately they’ve been overpricing their ebooks and hurting their authors’ sales — why aren’t you up in arms about them?

    “The complexity comes, of course, in the lawyers’ interpretation of these simple rules.”

    And I’m guessing you aren’t a lawyer (my first hint was the not so little fact that the qig5 and everyone else hasn’t FedExed the DoJ about it.)

    • Uh, guess again.

      The reason I’m not up in arms is that I’m not up in arms. I’m just curious what others think.

      • John, just know I’m smiling at your restraint. 🙂

        • Intellectual curiosity is an endangered species on the Net.

          • Indeed.

            • Wow…why are people jumping down folks throat for asking questions? I mean, is it not okay to be curious now? To discuss?

              • Mr. Ellsworth’s ‘question’ does not really read as a question, but rather as a thinly veiled accusation:

                ‘Does this seem to you to fall under the Sherman Act’s Restraint of Trade Law?’

                As who should say:

                ‘Does it seem to you that Jeff Bezos hasn’t stopped beating his wife?’

                This probably accounts for the hostility with which it is being received.

              • I usually preface queries, just to be safe. I’m not that good with words and it helps dustinguish between pure curiosity and sly digs.
                On the internet you get a lot more of the latter and fewer of the former.

                It’s a touchy world out there.

                Some sites I’ve stopped commenting because they jump all over you just for citing factual, verified reality that runs counter to their politics.

  13. Amazon does not have a monopoly when it comes to ebooks. If you like, you can go buy a Nook and get your ebooks from BN.com.

  14. Marks predictions are just that, we seem to have lost that somewhere in the debate here. He’s voicing his own views on what MIGHT happen.

    That said, the question of Amazon being a monopoly at 70% is a “No” for most here. I agree. But what if its 80% by the end of 2017, or even more? 85%? 90%? At what point do they cross the line?

    I’d also say that fitting the definition of a monopoly and having monopolistic power are two separate things. From a purely business point of view Amazon will avoid becoming a monopoly. Its not in their best interest to become one and if they do it would most-likely be due to the bad decisions of others.

    Now, having the power of a monopoly…why would they NOT want that?

    • Now, having the power of a monopoly…why would they NOT want that?

      Amazon doesn’t have power of a monopoly. They cannot keep others out of the market because they do not control supply.

      When a monopolist exercises his monopoly power, he sets prices and output at the points where he maximizes profit. This typically means increasing prices and lowering output.

      If Amazon tried to raise prices, they would lose market share because they do not control supply. Consumers can buy elsewhere with a click of a mouse.

      If they tried to curtail output (supply to consumers), they would lose market share because consumers could buy elsewhere.

      Consumers could buy elsewhere because Amazon does not control supply.

      (It’s also interesting to note how agency pricing strengthens Amazon’s hand in any pricing discussion.)

      • Terrance, I understand what you’re trying to say, but you’re speaking in absolutes, and the law on this is not that black and white.

        A smart businessman (and if anything, JB has proven to be that) knows when and where and how much leverage he can apply without crossing the line. My guess is that Amazon will get as close to that line without going over as it can.

        If a business, any business, had the power and ability to do so I would fully expect them to. Its the best of both worlds. I don’t care if you’re selling books or buggy whips.

        I know the knee-jerk reaction here is to proclaim Mark wrong, but what if he isn’t?

    • I’m not sure those are actual predictions (prefaced as they are) but more of an editorial wishlist.
      —–
      “This is a long shot, but in the spirit of prediction folly I’m going to go out on a limb here. In anti-trust law, there’s nothing illegal about operating a monopoly (where you have exclusive control over a commodity and can manipulate prices) or a monopsony (when there’s only one major buyer). What’s illegal however, is when a company exploits their monopoly or monopsony for unfair business advantage that makes it impossible for other competitors to compete on a level playing field.”

      That is of course factually incorrect.
      Antitrust law in the US is not about level playing fields at all. It is about consumer harm. That theory *might* fly somewhere is the EU but not on this side of the pond.

      Here, if you have an advantage you are expected to leverage it to the hilt. As long as you don’t harm consumers. Raise prices or constrain supply? A ton of bricks headed your way. But as long as suppliers and consumers are free to play or not play…

      What mr Coker seems to want is an Anti-dog-eat-dog law.
      Not going to happen just yet. He’ll have to wait for a Warren Presidency.

  15. If a business, any business, had the power and ability to do so I would fully expect them to.

    I would expect the same if the business thought it could be successful.

    As a smart businessman, JB knows it won’t work with books.

    DeBeers is the closest example to Amazon. They didn’t produce, but bought up mine production with help from producing governments. The governments did control production and supply.

    They did well until they lost control of supply when the Russians began to produce and wouldn’t sell to DeBeers. After a period of market confusion, they managed an uneasy alliance to bring supply under control again.

    That’s when we began to hear about Blood Diamonds. Those were the guys who didn’t do business with DeBeers or the Russians.

    Monopolies are tough, and most exist on blackboards of econ classes.

  16. The publishing industry never fails to surprise with the depth of its willful legal and economic ignorance. It’s like they think legal and economic evolution ended at turn of the 20th century and things like marketting, loss leaders, basket pricing, and timed-exclusives, to name a few, are new and unheard of.

    Amazon is doing nothing on ebooks that gaming consoles haven’t been doing for 30 years, music for 20, online video for 10. At the height of the iPod, Apple had more control over digital music than Amazon has over ebooks. Apple literally dictated prices! You could only get into the iPod through Apple. No sideloading.
    No antitrust issues there.

    Platform holders being publishers? Feh! Nintendo, Sony, Microsoft do it in games. Before that Atari, Intellivision, Coleco and Sega did it. Apple, Google and Microsoft do it on phones and computers. Always have.
    It is *necessary*.

    Full exclusives and timed exclusives? Why not? Consenting adults and all that. It’s not as if exclusivity is the *only* way to get on the platform. (And even that isn’t illegal. It is stupid and has always failed. But it’s not illegal.)

    Every time those folks open up and whine they reveal more of their self-serving near-sighted ignorance and why they keep fighting fruitless campaigns. They just don’t live in the real world of the 21st century. They are whining about things that are routine reality and if they needed litigating were litigated decades ago.

    If they devoted even half the time they spend trying to get somebody else to destroy Amazon for them on improving their own business maybe they wouldn’t need to whine.

    • Good Point Felix. I fully expect the DOJ, right after it goes after Amazon, to sue Nintendo for not making Super Mario games for Playstation 🙂

      • The key issue these people keep glossing over is the ebooks is a *platform* business.

        In platform businesses, competition plays out at two levels:

        1- platform to platform (Sony vs Nintendo vs Microsoft, Linux vs MacOS vs Windows, iOS vs Android vs Blackberry vs Windows)

        2- supplier to supplier within a given platform; say, Tor vs Baen.

        In ebooks, the major platforms are known: there is Kindle, iBooks, and Adept. Each is a walled garden. Controlled by its owner. The owner of the platform can be as arbitrary as they choose to in the name of serving their customers. This has been litigated, against Nintendo and against Apple. Both prevailed. The Apple suit is the more telling because it was about Apple locking down iPods to prevent other businesses selling into their platform, even by reverse-engineering.

        http://www.nytimes.com/2014/12/17/technology/apple-antitrust-suit-ipod-music.html

        This is a known business model.
        And perfectly legal.
        Platform holders do not have to open their platforms to anybody regardless of the market share of their platform. On the flip side, nobody can force a supplier to support a given platform.

        At one time PS2 had over 90% market share and many developers didn’t bother supporting GameCube or XBOX. Neither whined. Instead, they brought out the Wii and XBOX360 and ate Sony’s lunch for the better part of a decade.

        *That* is what competition is about.

        Now, the other whine is about Amazon Imprints.
        The only people who have any right to complain here are other suppliers, authors and publishers; Mr Coker is neither. In legal terms, he has no standing. Less politely, it is none of his business.

        As for the people that do have standing, it is up to them to decide how much they resent (if at all) that Amazon Imprints account for 12-14% of Kindle unit sales.

        Obviously, tradpubs object, but then… They get sales everywhere else and their books aren’t boycotted by retailers.

        Just consumers or agrieved literary critics. 😉

  17. Thank you for your predictions, Passive Voice, but you have not been in the Indie game long enough. I have been at it for 27 years, have published 19 books, sold about 200,000 copies of books, mostly but not all in print, and have seen the “evolution” of Amazon from a decent operation that hugely helped indie authors to a monster that now eats you alive. They have more than doubled their fees for their Advantage Program, the oldest Amazon program for small publishers, and are trying to destroy publishers with huge promotion fees, as well as suppressing any book cover or title that their back office staff in India (now making most decisions) finds objectionable. Amazon is now getting into audio books (Audible.com) and translations (BabelCube). Between åmazon and Facebook, authors will have a dickens of a time trying to keep alive, because both corporations really are after the money that does not translate into book sales.
    Perry Brass, author of The Manly Art of Seduction, Amazon bestseller, and many other books.

    • Hey Perry,

      This post is excerpts from a blog entry by Mark Coker over at Smashwords. You can visit the original post by clicking on the link at the bottom of the excerpts above.

      They are not Passive Voice’s predictions.

    • …have seen the “evolution” of Amazon from a decent operation that hugely helped indie authors to a monster that now eats you alive.

      Could be.

      Amazon has no obligation to help independent authors. It has no obligation to sell their books.

    • Goodness, what indie author these days uses the Advantage program? And Audible has been around for a while now, as has Babelcube (which may recently be part of Amazon, I don’t know).

      There’s a vast difference in how one used to self publish and how it can be done now. A savvy person keeps up to date and chooses the way that is best for them, and allows others to do the same.

      I’ll eat my tin foil hat the day Amazon has to face a real anti-trust action. Predicting it for ten years with no result makes one look like a fool.

  18. No data, just me spitballing regarding Coker’s prediction/wish for antitrust action against Amazon, it’s clear that the Washington Post (owned by Bezos) strongly opposes Trump, and a Trump has a reputation for seeking revenge against those who wrong him. A trump DOJ anititrust investigation of Amazon would fit with his reputation.

    • ErrMaybe.
      And maybe all the politicians receiving political contributions from Bezos and with tens of thousands of Amazon employees and millions of satisfied customers in their states might have something to say about it.

      As for the “vengeful” side of you-know-who… His two fiercest critics were Nicki Haley (headed to the UN to burnish her foreign policy credentials and fill out her resume for 2020-24) and Romney, who almost got the State Dept to run.

      There’s tricky folks in that White House.

      Amazon antitrust? Low Probability.
      Amazon antitrust over *ebooks*? Wishful thinking.

    • Trump met with Jack Ma today.

  19. Waiting for the coming fisking by you-know-who. 😉

  20. So Mark Coker, despite his train analogy, doesn’t understand antitrust law. You can’t just say that an action is “anticompetitive and unfair” and leave it at that. It isn’t that simple. I wrote some articles about the whole “Amazon is a monopoly” claim that AU and the Author’s Guild kept pushing. They were featured here on TPV. Here they are again if anyone wants to look into this a little further:

    http://randyjmorris.blogspot.com/2015/08/the-authors-united-letter-from.html
    http://randyjmorris.blogspot.com/2015/12/the-authors-united-amicus-brief-from.html
    http://randyjmorris.blogspot.com/2015/12/amazon-books-and-robinson-patman-act.html

    So unless Mark Coker has some different argument from the arguments already thrown out there by AU and the Author’s Guild… the courts have ruled in Amazon’s favor so far. What facts have changed?

    • Don’t let John and Randall see those, they think Coker has something. (Too bad what he has can be applied more to the qig5 than it can to Amazon.)

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