Black Friday Showdown: Target Takes On Amazon With New In-Store Strategy

27 November 2015

From The Wall Street Journal:

As thousands of shoppers waited outside Target Corp. stores on Thanksgiving Day to buy toys, electronics and kitchen gadgets, workers inside were getting ready to send some of those very items out the door.

The Minneapolis-based retailer enlisted small teams of workers in about one-quarter of its 1,800 U.S. stores to pack up some of the orders placed through earlier in the day. The employees worked in shifts, in a few cases starting up to 10 hours before the official 6 p.m. store opening, navigating dimly lighted aisles and picking items to mail to customers who pounced on Web deals hours before shoppers could in a store.

The strategy is a new twist on the Black Friday weekend. What for decades had been apurely in-store shopping frenzy has ceded much ground to the Internet. A Deloitte LLP survey found shoppers expect to spend 59% of their money online for the four days starting Thursday, compared with 36% in stores. The remaining 5% is spent on catalogs.

The growth in online spending is affecting how one of the nation’s largest retailers operates on one of the busiest shopping weekends of the year. The change is born out of a need to cut down on delivery time and shipping costs to keep pace with Amazon.comInc., and to put inventory sitting on store shelves to better use by using it to fulfill orders coming from the Internet.

“With the shift online, you’ve got to take advantage of the inventory where it is and when you can,” says Rodney Sides, a vice chairman at the consultancy Deloitte.

. . . .

Mr. Cornell says shipping from store, even on Thanksgiving, is a more efficient way to get orders to customers for that last stretch, especially in lieu of heavily investing to open dozens of additional online shipping centers. “We’ll be able to have product in their doorstep in a couple of days,” he said in an interview Thursday at the Jersey City, N.J., Target store. “If it shows up Saturday afternoon, we’ll see a lot of smiles.”

Physical retailers have long grappled with managing the logistics of selling online. The problem stems from a legacy that includes hundreds of stores that must be filled with millions of pieces of inventory and manned by thousands of employees. Layered on top of that is a network of online fulfillment centers.

Amazon and other pure-play online retailers don’t have that complexity. They can spread out inventory at a smaller number of locations—Amazon says it has more than 50 distribution centers—and focus on shipping packages.

. . . .

Retailers call their answer omnichannel, a strategy that views all inventory the same and uses algorithms to calculate whether it makes more sense to ship online orders from a distribution center or a store. In some cases, customers want the order ready at a store to pick up.

. . . .

While the logistics of shipping from stores before the rush of Thanksgiving shoppers can make sense—stores will be empty, orders will be easy to find before the crowds mess up things—the financials can be a challenge. The biggest cost of shipping from store is labor, analysts say, and holiday-pay rates mean it costs at least 1.5-times more than normal. “Ship from store can turn the model upside down if you’re not careful,” Mr. Sides says.

Retailers face additional margin pressures from shoppers, who don’t want to pay shipping fees. Best Buy and Target have eliminated shipping charges on all orders for the holidays. Wal-Mart, meanwhile, has a $50 threshold to eliminate the charge.

There is also the incongruity of whittling your inventory on one of the few appointment shopping days of the year. “All of your efforts have been toward driving traffic to stores,” says Nikki Baird, managing partner at Retail Systems Research, a research firm. “Why would you then ship from stores to meet demand that’s coming from online?”

The Wall Street Journal (Link may expire)

While PG understands the theory behind omnichannel, sending employees around a store that’s set up for retail consumers vs. setting up a warehouse for optimum picking and shipping operations gives Amazon a huge advantage in efficiency. And exactly where in a Target store is an optimized weighing, boxing and shipping center?

Plus these are retail employees doing a lot of things manually, not experienced and highly-efficient warehouse employees, so each shipment is going to take much more employee time than an Amazon shipment and be more prone to error.

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Jeff Bezos says The Washington Post’s goal is to become the “new paper of record”

27 November 2015

From The Nieman Lab:

CHARLIE ROSE: You now own The Washington Post. Can you tell us where you’re taking it and what’s happening there?

JEFF BEZOS: Well, you know, what we’re doing with the Post is we’re working on becoming the new paper of record, Charlie. We’ve always been a local paper, and just this month The Washington Post passed The New York Times in terms of number of viewers online. This is a gigantic accomplishment for the Post team. We’re just gonna keep after that. The reason that that’s working is because we have such a talented team at the Post. It’s all about quality journalism. And even here in the Internet age, in the 21st century, people really care about quality journalism.

. . . .

ROSE: So define what you think The Washington Post is today.

BEZOS: Well, The Washington Post today is a bright light that helps shine light on all of our institutions in this country, and the political process. We know that some of the things that have happened in the past, we wish we had known more about our political leaders and our other powerful institutions in this country, and that’s been the role of the Post for a long time. And we’re just gonna keep doing that. We’re doing it now with more resources and we have a lot of patience for that job. We’re just gonna keep working at it and make sure that that institution stays strong, so that it can shine a light on all of these important players especially in Washington.

Link to the rest at The Nieman Lab and thanks to Julia for the tip.

Life Among Books

24 November 2015

From The American Booksellers Association:

Bookselling This Week talks to Valerie Koehler, the owner of Blue Willow Bookshop in Houston, Texas.

. . . .

BTW: How did you begin as a bookseller, and how long after starting in bookselling did you begin to feel that you had found a special vocation?

VK: When my husband and I moved our family back to Houston in 1995, we moved into the neighborhood where the bookshop is located. The store, then called Musabelle’s Books, was in existence since 1973. My kids were both in school and I had been considering starting a business that would combine my loves and my strengths. I knew I wanted to be in sales and I love to read and talk about books. I went to the bookshop and volunteered to work there for free. It quickly became painfully obvious that the shop should have gone under at least six years before. The owner was a very kind and knowledgeable book lover, but the business end was not her strength. After a number of months, she offered to sell the shop to me. We borrowed a little bit of money and went bare bones at first.

. . . .

BTW: What do you think are some of the most important changes in bookselling since you bought your store?

VK: When I bought the shop, Amazon was just getting started. We didn’t have a computer or any kind of POS. There were always stacks of catalogs to look through and file! Above The Treeline and Edelweiss has significantly changed our inventory management. Having to compete against Amazon has made us stronger by focusing us on what we do best — curation, customer service, and a smile. We also figured out that we didn’t need the whole pie — just our part — to be profitable and happy.

Link to the rest at The American Booksellers Association

Disappearing Amazon Reviews: The Facts Behind Amazon’s Review Purges

24 November 2015

From Anne R. Allen:

So what’s this about missing reviews?

Go to any author forum or social media group for writers and you’ll see the plaintive posts:

  • “Help! My Amazon reviews are disappearing.”
  • “Amazon rejected my review because they say I ‘know’ the author. I don’t. All I did was friend her on Facebook!”
  • “Amazon has banned my favorite reviewer because they say he got paid for his reviews. He didn’t. His blog is on a book blog tour. But they don’t pay him a penny.”
  • “I offered to give people a free book if they wrote me a review and now all my reviews are gone!”
  • “I got a nasty note from Amazon accusing me of ‘manipulating reviews’. I’ve never done any such thing. I gave reviewers a gift card to buy the book, but they disclosed that.”

These sad cries from the Amazon jungle can sound pretty over the top. Is this stuff really happening?

In a word, yes. Amazon has been conducting a review purge.

. . . .

What is Considered a “Paid Review”?

The following are considered paid reviews according to people I’ve spoken to who have contacted Amazon on the subject. You can read more at Bookworks from marketing guru Penny Sansevieri, who got her info from an Amazon spokesperson:

1) A review by a book blogger whose blog is part of a paid blog tour, even if the book blogger is not paid. Often only the organizer of the tour gets paid, but the blog review is considered a “paid review,” so it can’t be posted on Amazon. (Although you can post a quote from it in the “editorial review” section.)

2) A review written in exchange for a gift card.
Even if that card is only in the amount of the price of the book. A reviewer could possibly use the card for purchasing something else.

3) A review written in exchange for another review. Review trading is 100% verboten.

4) A review written in expectation of a free book. A review copy must be given before the review is written or the book will be seen as payment for the review.

5) A review by a person you “know” online. Yes, you read that right. This can be someone who has friended you on Facebook, followed you on Twitter, or has done business with you in a way that’s detectable to the Amazon review police.

Link to the rest at Anne R. Allen

Here’s a link to Anne R. Allen’s books. If you like what an author has written, you can show your appreciation by checking out their books.


Amazon’s Ingenious Scheme to Undermine Black Friday

20 November 2015

From Wired:

Depending upon your outlook, Black Friday is either a time-honored US shopping holiday or the miserable nadir of American consumer culture. Whichever lens you choose to view it through, there’s no denying that Black Friday is huge.Adobe’s Digital Index shows that last year’s Black Friday holiday set a record, with consumers spending $2.4 billion online, a 24 percent increase from 2013. This year, according to estimates, that trend line is still going up: eMarketerprojects a 5.7 percent gain in retail sales, with e-commerce continuing to grow in the double digits, as it’s done for several years.

Of all the retailers hoping to capitalize on this trend, Amazon is by far the most well-positioned. This week, on the heels of launching a Black Friday online store well ahead of the actual day, the company said that its holiday deals would start rolling out as early as tomorrow—a full week ahead of Black Friday, the day after Thanksgiving here in the US. The company had eight days of Black Friday deals last year, too, but this year it’s giving the promotion an even bigger push: new deals will be added as often as every five minutes on Amazon’s dedicated Black Friday page, twice the rate of last year. In 2014, Amazon offered three “coveted” deals of the day starting on Thanksgiving at midnight, as well as three more on Black Friday; this year, it’s offering ten at the stroke of midnight on both days.

. . . .

Taken together, Amazon seems to be saying it knows all about your impending Black Friday misery—and that it can really and truly relieve you of it. “Customers can truly sit back and relax with their family and friends this holiday season knowing that they will be notified as soon as the products they’ve had their eye on are about to go on sale,” Steve Shure, Amazon’s vice president of consumer marketing, said in a statement.

But Amazon is onto something bigger. It’s a pivotal time in the company’s history, which makes scrutinizing Amazon’s Black Friday strategy even more interesting. After enduring years of razor-thin profits—and even some losses—as the company poured money into building out distribution centers and logistics, it finally looks to be reaping the benefits. Don’t be surprised if 2015 is the tipping point where the world’s largest online retailer makes a lasting mark on the shopping holiday.

“You can’t replicate generate that same kind of excitement if you’re trying to do this in-store,” says Ben Schachter, a Wall Street analyst at Macquarie, who specializes in Amazon. “Consumers aren’t going to be there every day for eight days. That’s not to say they can’t try to replicate customer success online, but Amazon is dominating online.”

. . . .

“If consumers think that they’re getting some good deals, and some special deals even several days before Thanksgiving, I think Amazon could change some of their shopping habits in a way that very few other retailers could do,” says eMarketer retail analyst Yoram Wurmser. “I think they’re really trying to change the landscape with things like Prime Day and these eight days of Black Friday.”

. . . .

The fact that so many people are now starting their product searches online is another factor in Amazon’s favor. In a recent survey from Survata, 44 percent of respondents searching for products online went directly to Amazon, while 34 percent used search engines like Google and Bing, and 21 percent browsed a specific retailer’s site. “Amazon’s scale has almost made it the de facto shopping search engine,” Wurmser says. Not to mention a little feature of the Amazon mobile app—Price Check—that has long been used by shoppers to make sure they’re getting the best deal possible from brick-and-mortar stores—the so-called showrooming effect.

Link to the rest at Wired

How Amazon’s Long Game Yielded a Retail Juggernaut.

20 November 2015

From The New York Times:

To study the graph of Amazon’s stock performance in 2015 is to witness a series of stepwise lurches toward commanding new heights. Over all, the stock market has been flat this year, and technology companies, as a group, haven’t fared much better.

Then there’s Amazon, which slipped the atmosphere. Shares of Jeff Bezos’s company have doubled in value so far in 2015, pushing Amazon into the world’s 10 largest companies by stock market value, where it jockeys for position with General Electric and is far ahead of Walmart.

There is a simple explanation for Amazon’s rise, and also a second, more complicated one. The simple story involves Amazon Web Services, the company’s cloud-computing business, which rents out vast amounts of server space to other companies.

. . . .

Yet the disclosure of A.W.S.’s size has obscured a deeper change at Amazon. For years, observers have wondered if Amazon’s shopping business — you know, its main business — could ever really work. Investors gave Mr. Bezos enormous leeway to spend billions building out a distribution-center infrastructure, but it remained a semi-open question if the scale and pace of investments would ever pay off. Could this company ever make a whole lot of money selling so much for so little?

As we embark upon another holiday shopping season, the answer is becoming clear: Yes, Amazon can make money selling stuff. In the flood of rapturous reviews from stock analysts over the company’s earnings report last month, several noted that Amazon’s retail operations had reached a “critical scale” or an “inflection point.” They meant that Amazon’s enormous investments in infrastructure and logistics have begun to pay off. The company keeps capturing a larger slice of American and even international purchases. It keeps attracting more users to its Prime fast-shipping subscription program, and, albeit slowly, it is beginning to scratch out higher profits from shoppers.

. . . .

Now that Amazon has hit this point, it’s difficult to see how any other retailer could catch up anytime soon. I recently asked a couple of Silicon Valley venture capitalists who have previously made huge investments in e-commerce whether they were keen to spend any more in the sector. They weren’t, citing Amazon.

This week I also asked several stock analysts if they could see any potential competitive threat to Amazon’s online sales dominance. Some literally laughed at the question.

“The truth is they’re building a really insurmountable infrastructure that I don’t see how others can really deal with,” said Ben Schachter, who studies Amazon for Macquarie Securities.

It may be no exaggeration to say that at least in North America and Europe, e-commerce as an expansive category of Internet exploration is on the wane. Mr. Bezos has already won the game.

. . . .

Why is Amazon so far ahead? It is difficult to resist marveling at the way Mr. Bezos has built his indomitable shopping machine, and the very real advantages in price and convenience that he has brought to America’s national pastime of buying stuff. What has been key to this rise, and missing from many of his competitors’ efforts, is patience. In a very old-fashioned manner, one that is far out of step with a corporate world in which milestones are measured every three months, Amazon has been willing to build its empire methodically and at great cost over almost two decades, despite skepticism from many sectors of the business world.

Now those investments are beginning to bear fruit. It’s happening in fulfillment, which is the business term for filling and shipping orders. Amazon has built more than 100 warehouses from which to package and ship goods, and it hasn’t really slowed its pace in establishing more. Because the warehouses speed up Amazon’s shipping, encouraging more shopping, the costs of these centers is becoming an ever-smaller fraction of Amazon’s operations.

. . . .

Growth in Prime subscriptions matters because Prime alters the psychology of shopping. Once you’ve prepaid for shipping, you tend to start more of your shopping excursions at Amazon. According to some estimates, people spend three or four times as much with Amazon after they sign up to Prime.

. . . .

But this “Prime effect” is key to Amazon’s long-term profitability. Analysts at Morgan Stanley reported recently that “retail gross profit dollars per customer” — a fancy way of measuring how much Amazon makes from each shopper — has accelerated in each of the last four quarters, in part because of Prime. Amazon keeps winning “a larger share of customers’ wallets,” the firm said, eventually “leading to a period of sustained, rising profitability.”

Link to the rest at The New York Times

Amazon has been winning a larger share of the wallets in Casa PG for some time.

Amazon Launches Storywriter, a Free Screenwriting Tool

19 November 2015

From the Amazon Media Room:

Amazon today announced Amazon Storywriter, a free, cloud-based screenwriting software for writers of all levels to create movie and TV screenplays in standard format, offering an alternative to costly industry options. Also, in an effort to further enable talented writers to present their work for consideration and to expand its search for the next great movie or TV series, Amazon will now accept drama submissions and will no longer take a free option on scripts submitted directly to the site.

Starting today, creators can simply log in with their Amazon account to access Amazon Storywriter. This writer-friendly software takes the pain out of formatting, with features including auto-format as you type and import/export of PDF, FDX and Fountain formats. Screenwriters can write online while their scripts are saved as they work, knowing all their material is being stored securely in the cloud. Additionally, they can write offline with a free installable Chrome app for Mac and PC.

. . . .

Amazon is always on the lookout for compelling new voices and interesting characters in series and movies that have the potential to become hits. Amazon continues to accept original scripts for feature films, primetime comedy series for adults, series for children between the ages of 2-14, and now for the first time also welcomes drama series submissions. In addition, Amazon will no longer take a free option on script submissions, thus allowing Writers Guild of America and the Animation Guild members to submit their original material through the online submission process.

Link to the rest at Amazon Media Room

Amazon’s Pre-Order Quagmire

19 November 2015

From author Mindy Klasky:

About fifteen months ago, Amazon took a major step to level the playing field for self-published authors: it allowed us to offer books for pre-order to our readers.  Pre-orders provide several advantages to authors, including:

  • Fans can order not-yet-published books on an impulse after finishing and enjoying earlier books by an author;
  • Authors can guarantee a certain release date, rather than relying on the approximation of processing time for new books added to the system; and
  • Authors enjoy an increased likelihood of reaching a bestseller list due to their experiencing a release day “drop” of accumulated pre-orders.

Amazon remains devoted to providing the best customer experience possible. Therefore, if an author misses a release date after accepting pre-orders, the author is banned from using pre-orders for a full year.

. . . .

Alas, in multiple instances Amazon’s pre-order system has been severely flawed, costing authors valuable goodwill and–sometimes–hard cash.

. . . .

A case in point:  the boxed set Mischief Under the Mistletoe, which contains my novella Fly Me to the Moon along with eighteen other hot holiday romances.  In order to provide the best experience for our readers and to maximize our sales of our limited edition boxed set, we decided to make the set available for pre-order. To achieve that status, we uploaded Amazon’s required placeholder text file ninety days prior to our release.  In our case, that placeholder consisted of one draft novella by one of our authors, repeated nineteen times to approximate the length and content of the not-yet-completed other novellas in the boxed set.  We uploaded the placeholder file and began to promote our set on August 25, 2015, with an eye toward a November 17 release.

Our pre-orders for the set steadily grew as we invested time, money, and effort in promoting Mischief. On November 2, 2015, well before Amazon’s ten-day deadline, we uploaded the final version of our text file. That final version contained nineteen novellas, each of which was proofread, formatted, and hyperlinked in a master table of contents. Amazon confirmed receipt of the final file.

On November 17, Mischief Under the Mistletoe went live.  Shortly after midnight, approximately 8100 pre-orders were fulfilled. Alas, Amazon mistakenly sent those customers the placeholder file instead of the final file. (New customers who placed orders after the book released, received and continue to receive the correct file.)

Forty-eight hours later, the situation remains unresolved. Nearly 40% of our reviews are one- or two-star reviews, commenting exclusively about the problems of the placeholder file (without comment on the substance of that one story or, obviously, the content of the missing eighteen novellas.) As a consequence, we have had several advertisers drop our pre-purchased advertisements, because we have not met the four-star threshold for those ads.  (We have been denied refunds on those ads.)

Amazon has admitted its error, confirming that we did upload the final file on a timely basis. They have admitted that pre-order customers incorrectly received the placeholder file.  They maintain they have “pushed” the correct file to pre-order customers; however, very few–if any–customers have received the pushed file.  In fact, some customers who have complained have been instructed to delete the faulty file, request a refund, wait for a week, and re-order the boxed set. Customers who have manually deleted the placeholder file and attempted to download the final file have generally found that their ereaders mistakenly re-load the placeholder file.

Most frustratingly, Amazon refuses to delete the one- and two-star reviews–even though those reviews patently have nothing to do with the quality of the product.

Link to the rest at Mindy Klasky

Here’s a link to Mindy Klasky’s books. If you like an author’s post, you can show your appreciation by checking out their books.

Sprawling? Pssht—no one streamlines everything from books to bots like Amazon

18 November 2015

From Ars Technica:

On the surface, Amazon appears inefficient. In roughly two decades, the Seattle-based retailer has grown from an ambitious bookseller to a many-headed hydra with its necks extending in seemingly disparate directions. It has an Emmy-winning TV production company, a streaming-video device manufacturer, a distributor of hundreds of “actually free” apps, a grocery and restaurant delivery service, a titan in international server storage, an e-book device pioneer, a mobile phone dabbler, an affordable source of two-hour household product deliveries, and on and on the list goes.

As counterintuitive as it may seem, however, the consistent thread between all of these is efficiency. As Amazon’s veritable plate of services spaghetti has grown, they’ve shared a unifying factor of commerce—of making products available to a ton of people as quickly, consistently, and efficiently as possible. The goal is to keep shoppers coming back, and that doesn’t happen without supreme efficiency in every step of the Amazon process.

. . . .

The best way to predict where Amazon will go from here—from announced initiatives to higher-tech offerings we’ve yet to hear about—is to understand the efficiency that has driven the company’s exponential growth. From robots to drones, from warehouse redesigns to database and application debugging tools, the company has come up with many ways to build the leanest paths from a desired product to a delivered one.

. . . .

When the words “Amazon” and “robots” have come up in the same sentence recently, they’ve usually referred to devices like drone-styled aircraft—particularly the ones founder Jeff Bezos announced with a big, 60 Minutes-fueled splash last year. But long before Amazon’s Prime Air initiative received its big public reveal, the company was well invested into a separate robotics initiative.

. . . .

A traditional retail-warehouse workflow might require an employee to walk from department to department (or, in higher-tech times, ride on devices like Segways) to find disparate items in a customer’s order and toss them into a box, which is then processed by the packing and shipping department. Amazon Robotics turns that workflow around by asking a crew of hundreds of short, Roomba-looking robots to bring all of the products to warehouse employees.

At Amazon’s fulfillment centers, the robots automatically roll around a warehouse that’s dotted with stacks of products, and the bots are given assignments to drive under those stacks, pick them up, and carry them around the warehouse. Maybe the robots drop stuff off for warehouse packers or maybe they take an empty stack to a restocking bay. But instead of forcing employees to hunt-and-peck for individual orders, the bots ensure employees receive an efficient queue of stacks to pick through by hand. Employees all along the warehouse chain use smartphone-like devices to scan and keep track of the orders they’re working on as well.

Amazon representatives told Ars that they have reduced packing times on individual packages from over an hour to “as little as minutes” through this process. And more importantly to Amazon, those giant, moveable stacks of goods—which don’t require comfortable, human-sized aisles—allow Amazon to squeeze a lot more merchandise into each fulfillment center. The company estimates a whopping 50 percent increase in inventory per square foot in its eighth generation center over the previous one.

Amazon says it’s operating 13 centers in the United States as of today. Combined, they contain “over 30 thousand robots.”

. . . .

Those warehouses didn’t fill up out of sheer ambition; rather, customers demanded more products. As such, Amazon’s ascent as a cloud computing powerhouse may not have been intentional, but it was certainly organic. As the retailer grew and found itself accessed by millions of users during peak events like Black Friday sales, it had to come up with scaling solutions that nobody else had yet invented. It wasn’t just a matter of adding more servers; Amazon needed elasticity. When Amazon eventually realized it wasn’t alone in that need, particularly in terms of startups and other small businesses, it offered such cloud computing to the public in the form of Amazon Web Services (AWS).

With the now wildly successful AWS, Amazon built something for itself and then released it for public purchase and use once it had proven to make a process more efficient. However, AWS isn’t the only example.

If you want a good sense of how Amazon builds watertight development processes—either to automate the testing process or to enable on-the-fly debugging so that buggy content and updates never launch to the public—take a look at the company’s AWS portfolio. Amazon developers have hinted to Ars that at least some of those services have been rolled out to its cloud customers after having been developed and spit-shined in-house for the sake of making Amazon itself run more efficiently.

. . . .

[T]he concept of removing “little costs” comes up repeatedly when studying any of Amazon’s services. Evidently if you can remove a few footsteps, a few feet of cable, or a few unnecessary tests from processes that repeat on the order of thousands or millions of times a day, you may have a successful business on your hands—no matter what’s being offered.

Link to the rest at Ars Technica and thanks to Julia for the tip.

PG has no doubt that a look inside Big Publishing would disclose similar commitments to innovation and efficiency.

The tech companies that are shaping the world the book business has to live in

18 November 2015

From veteran publishing consultant Mike Shatzkin:

Ever since Amazon arrived in the “book business” 20 years ago, each year the “book business” has become less and less of a stand-alone industry. Of course, the only part that ever really was a stand-alone was the trade business, where the entire ecosystem: authors and their agents, publishers, booksellers, and even — for the most part — the printers lived in a world of mutual dependency but pretty much standing apart from what went on in the rest of the world.

Amazon actually took advantage of that industry insularity. They developed a business model that used books as a customer-recruitment tool but with the intention of making their profits elsewhere. In ways that were not understood at the time, that strategy was both viable (the book publishing world didn’t believe Wall Street would fund a company nearly indefinitely with current losses to build a future position of strength, but they did) and impossible for a book-dependent business to compete with. (Barnes & Noble and Borders had to make money selling books; Amazon didn’t.)

By the latter part of the first decade of this century, a Big Five CEO in the US delivered this observation to me. “I used to be able to get the CEO of my biggest accounts on the phone if there was something to discuss.” That was no longer possible with Amazon. And, in fact, if he could have gotten Jeff Bezos on the phone, there would have been very little to talk about.

. . . .

This year when we met with our Conference Council to plan the next DBW, they told us our business needed to hear more about the big tech companies. That reflected the reality the CEO observed nearly ten years ago. Our world is being shaped by the big tech companies. And that doesn’t just mean the obvious one, Amazon, which is almost every book publisher’s biggest trading partner. It means Facebook and Google, which have become perhaps our primary marketing mechanisms. And, of course, it also means Apple, which has become the second-leading ebook provider to Amazon.

. . . .

Indeed, we have reached a point where every trade publisher needs a strategy for its company’s dealings with the tech giants. And the forces that might affect the growth, stability, or strategies of the big tech companies, including anti-competition actions by and within the European Union, now call for attention and understanding from publishers in the US who could be affected by these changes.

. . . .

[From Mike’s discussion of a list of speakers for DBW]

Jonathan Kanter is an antitrust attorney at Cadwalader, Wickersham & Taft and co-head of the firm’s technology group. Jonathan represents both tech companies and content providers. He is totally familiar with the business models of the major tech companies, including Amazon, Apple, Facebook, and Google. This includes both the benefits they provide and concerns that some of these companies use their position in the market to distort competition to the detriment of content providers. At DBW, Kanter will focus on how book publishers interact with the big tech platforms. He will explain the current antitrust actions pending against big tech companies and the potential impact on US-based book publishers.

We’ve also asked Kanter to talk about what remedies might be applicable here in the longer term to preserve the important services that big tech companies offer to consumers while at the same time protecting the rights and businesses of content creators. Could the government impose rigorous but intelligent remedies that address concerns without destroying the value that these tech companies create? Kanter will spell out how things could get worse for the content industries if there are no controls and explore how government agencies could use enforcement action or regulation.

And we’re working on more. There are anti-monopoly legal actions taking place in Europe against the both Amazon and Google. While Kanter will include those in his analysis, we are also talking to our European friends, looking for the right person to bring us a report from the front on these as well.

Link to the rest at The Shatzkin Files

PG says it’s nice that publishing has discovered Apple, Google and Amazon are important in a digital world.

But here comes antitrust. Again.

All but one of the largest publishers in the United States have recently settled illegal price-fixing charges filed against them by the Justice Department. The collusion was so amateurish and overt that PG concluded that either the CEOs of Big Publishing were total idiots or they had never learned anything about antitrust law.

PG will note that, many years ago, before he went to law school, at his first job out of college, he was required to attend a briefing on antitrust law as part of new employee orientation for a big financial services firm. The type of antitrust violations committed by the Price-fix Six were discussed during that briefing.

Evidently, Big Publishing doesn’t have briefings about antitrust law. Perhaps they don’t have briefings about any kind of law.

Cadwalader, Wickersham & Taft is an ancient and venerable New York law firm with a reputation for being very profit-driven. The Cadwalader attorney will give a fine presentation on antitrust law. Lawyers do this sort of thing in order to attract clients.

One does not attract clients by telling them their legal dreams are hogwash. In a perfect Cadwalader world, every publisher in attendance would hire Cadwalader as its antitrust counsel and illustrious Cadwalader partners would explore a wide variety of antitrust possibilities at close to $2,000 per hour. Publishers would move from not knowing anything about antitrust to learning nearly everything about antitrust . . . and legal billing.

Even with Cadwalader’s help, PG doesn’t think the government is going to save Big Publishing.

PG is pretty sure that Jeff Bezos knows about antitrust law. He understands that being the largest bookstore is not a violation of antitrust law. Selling books at low prices is not a violation of antitrust law. Even upsetting big publishers is not a violation of antitrust law.

At its root, much of antitrust law is designed to protect consumers. It would be hard to find a better friend to consumers than Amazon.

Mike describes the publishing business as a stand-alone industry. PG agrees, although he would use terms like insular, parochial and out-of-touch.

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