Home » Amazon, Apple, Big Publishing, Google, Mike Shatzkin, PG's Thoughts (such as they are) » Are the tech giants too big to be good partners for book publishing?

Are the tech giants too big to be good partners for book publishing?

22 August 2017

From veteran publishing consultant Mike Shatzkin:

An online discussion forum that includes publishers and librarians and tech people usually sends me several emails a day. About 10 days ago, a conversation evolved about Google Book Search and the Google Library Project, two initiatives by the search giant that were initiated in the early part of the last decade.

Because both programs essentially gave Google a trove of book-published content for full text search, there was a wariness among the publishing community about them when they started. In time, publishers (through the AAP) sued Google and the course of the lawsuit ultimately led to a sharp curtailment of Google’s ability to just do the scanning. After a while, it appears the reservoir of interest at Google for the project, which started as more of a “service to humanity” idea than a profitable one, just evaporated. The scans that Google had already done became part of the HathiTrust repository of content, an important research and scholarship tool in the non-trade world without any recognition or impact on the trade world at all.

. . . .

And, of course, Google is the single most powerful source of “discovery” and many in publishing wonder if books overall would have benefited from Google being more “knowledgeable” about what is inside of them.

So, to this day, years after the litigation and the scanning program have concluded, there is a division of opinion in the publishing community. Some see Google as a bully and a villain, trying to make its own rules to benefit from publishers’ content and crippling the value of copyright. Others focus on the lost opportunity and believe publishers would actually have more valuable intellectual property (more valuable copyrights!) today if they’d just allowed the Google programs to develop and flourish.

. . . .

In the course of the discussion, a very knowledgeable and experienced veteran of publishing across education, professional, and trade offered the comment that “Google is a terrible partner.” I asked him (offline from the group discussion; he’s a friend) to amplify that.

My points of context for Google weren’t in publishing; they were in tech. My own most extensive experiences with the big three tech companies that publishers dealt with — Amazon, Apple, and Google — was working out their participation at publishing conferences.

. . . .

What I saw was that Apple was the most uptight; it was hard to get speakers because messaging was so tightly controlled by upper management.

Amazon would sometimes be very agreeable, but primarily when they had an agenda: some program they wanted to get across or some point they wanted to make. So they were often cooperative, but very much on their terms to put across their message du jour. In general, they wouldn’t do panels or Q&As. They needed to control the conversation and skillfully avoided being pushed to publicly discuss anything they didn’t want to talk about. But they were often available and always interesting, and unlike Apple (in my experience), would engage with you honestly about their agenda.

. . . .

Google was, in my experience, by far the most open and accessible of the three companies. You could tell them you wanted speakers or panelists to cover one subject or another and you’d get directed to people who could help you. And Google employed a pretty fair number of ex-publishing people who were conversant about issues from a perspective that publishers could relate to.

. . . .

What my friend said in response to my inquiry, in which I had only mentioned Google, was, “Google, Apple, and Amazon are all bad partners. Ingram, Baker & Taylor, and Firebrand are good partners.”

So much for my contextual frame.

But grouping the three to me made the point that my context was what mattered. Ingram, Baker & Taylor, and Firebrand all make their living in the book business. Google, Apple, and Amazon have a financial stake in the book business that amounts to a small rounding error to their overall financial performance.

. . . .

For the entire life of the book business until about fifteen minutes ago, it was very much a free-standing industry. The only larger-than-the-industry enterprises it had to deal with were the Post Office and United Parcel Service. Our authors, designers, typesetters, printers, and, most important of all, customers to which we shipped directly (the wholesalers and retailers and libraries) were part of the publishers’ world. They depended on the publishers as much as the publishers depended on them.

Amazon was the first piece of evidence — and still the most important piece of evidence — that the old world has disappeared.  . . . . They sell more than half of the books for most publishers, but all the books they sell probably amount to less than 5 percent of their total margin. And while Penguin Random House may be in the neighborhood of half the consumer book sales overall, they wouldn’t amount to nearly that big a percentage of Amazon’s book sales because Amazon gets a disproportionate share of professional and other niche markets and thus from publishers who don’t compete at all with PRH in the consumer market.

And because Amazon has very intentionally created a whole massive pool of consumer books that nobody else has, through their own publishing and enabling independent authors.

Link to the rest at The Shatzkin Files

PG has had direct business/legal dealings and negotiations with Apple and Amazon over the last 15 years or so. For context, he has also had business negotiations with Microsoft, Oracle, Hewlett-Packard and Intel in the tech world plus every major investment bank in New York (Goldman Sachs, Morgan Stanley, etc., etc.), most of the large accounting firms plus Disney, American Express and a bunch of other big companies.

To be clear, this doesn’t mean PG knows everything about negotiating intellectual property partnerships and other deals with large organizations, but he does know some things about that subject.

PG definitely has not represented any large publishers in their dealings with large tech companies. He has, however, represented a lot of authors in their dealings with large publishers.

Speaking generally, large publishers are not cut out to be good partners for tech companies.

Publishers are simply too rigid in their business vision and very much focused on the short term (which is strange for organizations that license copyrights, which extend far into the future).

This short term outlook is substantially affected by the fact that the Big Five publishers are all owned and controlled by other and larger media conglomerates. Four of the Big Five are owned by large European publishing corporations that are not known for their commitment to innovation and could not be described as tech-savvy in any sense. The fifth Big Five publisher, Simon & Schuster, is owned by CBS.

Each of these media conglomerates is heavily focused on this quarter’s and this year’s income, expenses and profits. They’re not what anyone would call forward-looking or focused on the long term. If they think about the long term at all, they’re convinced it will not be much different than last quarter.

(PG worked for a major subsidiary of a very, very large international media conglomerate for three unhappy years and knows that of which he speaks.)

This means that if Google sends someone to talk to the President of a Big Five publisher, Google is talking to a middle-manager in a much larger business organization. The Big Five President can do pretty much whatever he/she wants to do with Barnes & Noble and Ingram (as long as it doesn’t have an adverse impact on profits), but cutting a strategic deal with Google is way, way out of his/her job description.

Organizations like Google, Apple and Amazon quickly become frustrated with organizations that are not able to move rapidly.

Amazon, Apple, Big Publishing, Google, Mike Shatzkin, PG's Thoughts (such as they are)

14 Comments to “Are the tech giants too big to be good partners for book publishing?”

  1. “Others focus on the lost opportunity and believe publishers would actually have more valuable intellectual property (more valuable copyrights!) today if they’d just allowed the Google programs to develop and flourish.”

    Funny that the article keeps referring to publishers. Google’s power grab targeted individual books, which affected AUTHORS’ rights. As the author of more than 100 books, I get offended when “experts” act as if copyrights and the use of copyright material were simply a matter affecting publishers.

    I’ve revised, updated and reissued more than 40 of my backlist books. An outside party (Google) could in my opinion cause tremendous harm by essentially republishing, without permission, outdated copies of these texts, hurting my reputation and stealing my money. No big deal to Google. A very big deal to me.

    That aside, PG’s comments are always insightful and appreciated.

    • Google never intended to make the entire text of a book available free of charge. Have you ever actually used Google Books for research? If so, you wouldn’t have written this.

      • Correct.
        The whole “orphan works” landgrab was the idea of the Authors Guild.

        • Had Google been able to continue their original plan of displaying snippets of scanned book content, all authors wouod have been equally discoverable by readers regardless of publisher. It would have been a terrific marketing tool for self-pubbed authors and a way to let readers know about current and updated content.

          Publishers successfully fooled authors into acting against their own self-interest.

  2. Shatzkin gets one right for a change.

    It’s not just technology woefulness that penalizes legacy companies when things start innovating; it’s also their business relationships and partner expectations — that’s part of the culture, too.

    • Absolutely. A “good” partner from the perspective of publishers is one that can be controlled. What Mike is saying here is basically (to publishers) too bad, suck it up.

  3. “And because Amazon has very intentionally created a whole massive pool of consumer books that nobody else has, through their own publishing and enabling independent authors.”

    And what happened the last time Amazon negotiated with the BPHs without that pool?

    Hint: 2010. The BPHs were colluding and sharing negotiation information among themselves so that if Amazon made a concession to one, the next day the other four came in demanding the exact same concession, without giving anything in return. There is a reason the DOJ made them stagger their negotiations and contract renewals in their settlement terms. And even then, in 2014, Hachette refused to negotiate at all–presumably waiting for other contracts to expire so they could again gang up on Amazon. Amazon responded by pulling pre-orders and the catfight was on.

    Nobody in the publishing establishment likes to remember that in the midst of the catfight, the DOJ fired a shot across their bow by asking for copies of any communications between them to ensure they weren’t ganging up on Amazon again.

    Collusion is in their corporate genome.

    Now, who in their right mind willingly jumps in to partner with those snakes?

  4. In this particular case, where the blog title is a question, the answer is YES! 🙂

    Oh, is this OP from 2010? If not, it should be!

  5. As we used to say in my old job – the ship is a lot harder to turn when it’s stationary.

  6. A partner has to offer something the other guy wants.

  7. Poor Microsoft. They’ve had their own bookstore since (I think) April selling books in EPUB format and not even Mike S. wants to give them the time of day. ‘Course I had to do the “Creator’s Update” to Windows 10 to even see it, so that might be the problem.

    FWIW, I actually kind of like the interface, it seems much easier to browse with than the one on Google Play. For all you get bizarre results like a book like Silverthorn (pub. 1985) by Raymond Feist showing as a “New” book, that kind of thing, there’s buttons for various genres, which I appreciate.

    Now all I have to do is figure out how I’d read anything I bought there, assuming I actually would buy anything there. I certainly wouldn’t want to do it on my laptop.

    • As near as I can tell they’re only readable in the Edge browser. That makes them app-locked and not something I’d be interested in.

Sorry, the comment form is closed at this time.