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Penguin Random House Is Building the Perfect Publishing House

14 September 2018

From The New Republic:

When Penguin and Random House announced in the fall of 2012 that they intended to merge, Hurricane Sandy was barreling toward New York City, America’s publishing capital. It was an instant metaphor for headline writers: “As Sandy Loomed, the Publishing Industry Panicked.” People inside both companies worried about their jobs; people outside the companies worried about the market power of a new conglomerate comprised of the country’s two largest trade publishers. Agents and authors, meanwhile, worried that the consolidation would further drive down advances.

Random House’s top brass insisted that there was no need to panic. “The continuity will far outweigh the change,” Markus Dohle, the CEO of what would become Penguin Random House, told The New York Times when the merger was completed the following summer. “We have the luxury to take the time before we make any strategic decisions. There is no need to rush.”

This has been the story of Penguin Random House these past five years. Privately owned, the company has moved deliberately, while publicly traded competitors like HarperCollins (which is owned by News Corp) and Simon & Schuster (CBS) have had to fend off pressures from shareholders. It has not used its gargantuan size—it controls more than half of the traditional literary marketplace according to many estimates—to take back territory from Amazon. Instead, it has focused on building equity and ensuring that it publishes the next generation of bestsellers. In so doing, Penguin Random House has built what may be the perfect corporate publishing house. There’s just one problem: Thanks to Amazon, the age of the imperious corporate publishing house is coming to an end.

. . . .

The point of a Penguin Random House is to create scale. It is larger than its four biggest rivals combined, and its sheer size gives it leverage to promote and sell books. “We are able to leverage scale in direct marketing to consumers and in our supply chain to support our retailers and to get our books into the hands of readers quickly,” Penguin Random House spokesperson Claire Von Schilling told me in an email. “We have the largest book sales force in the world, with unparalleled reach into every different kind of bookseller globally.”

Penguin Random House’s digital marketing and data efforts are the envy of the industry, which in many ways still publishes books way the same way that it did 50 years ago. Penguin Random House uses consumer data and information from Goodreads to help acquire prospective bestsellers, which then get the promotional benefits of Penguin Random House’s size and influence. Corporate publishing in the 21st century is driven by bestsellers—both the backlist (older books) and the midlist (non-bestsellers) have never had less impact, making it all the more important to score big hits.

. . . .

Amazon is the most important subject in the publishing industry in 2018, as it has been for the last fifteen years, but Penguin Random House has consistently downplayed the Amazon threat. Asked if additional size has benefited the publisher in its dealings with retailers, Von Schilling responded, “That was not a purpose of the merger.”

Even before the merger, Random House treated Amazon more conservatively than its rivals. While the other five, for instance, were sued for antitrust violations for joining forces with Apple to fight Amazon’s e-book dominance, Random House kept its hands clean (Penguin settled with the Department of Justice less than two months after the merger was announced). To many, this was a savvy play. Penguin Random House’s remit, after all, is to sell books, not to go to war with its retail partners.

But others have expressed frustration with Penguin Random House’s timidity. The point of market share, they argue, is to exert influence over retailers and there is little evidence that Penguin Random House has done this in a meaningful way (though it’s possible that it does receive slightly better terms than its rivals). Still, Amazon has spent the past several years accruing significant power in the industry. It has further cemented its hold over bookselling. It has feuded with other conglomerate publishers, notably Hachette, while building up its own disruptive publishing arms. These include the Kindle Unlimited e-book subscription service, which has taken over genre publishing, and Audible, which has a stranglehold on audiobooks, the industry’s most important growth sector. When it comes to publishing, Amazon has arguably never been more powerful.

It’s possible that some master plan is afoot in the inner sanctum of Penguin Random House to bend Amazon to its will. In the meantime, Penguin Random House has spent the last five years perfecting the corporate publishing house, shoring up its ability to publish bestsellers. The problem is that in the age of Amazon that may not be enough. In the long term, perhaps the wisest move isn’t to build an organism that blends seamlessly with an aggressive retailer, but one that fights against it.

Link to the rest at The New Republic and thanks to DM for the tip.

PG says getting into a fight with your largest customer is a less than optimal business strategy especially when several hundred bookstores operated by your second-largest customer are increasingly likely to close.

“Bending Amazon” to Randy Penguin’s will would be an interesting exercise to watch. However, PG wonders if Amazon would even notice what the benders were trying to do.

Simply put, Amazon doesn’t need to sell books. Randy Penguin does.

PG is continually amazed that anyone in the book business thinks Amazon is anything less than the best thing that has ever happened to traditional publishers and authors of all stripes. Despite all the platitudes staggering around physical bookstores and literary bars, there is absolutely nothing inevitable about the traditional publishing business in the digital age.

French book prize kicks up storm with Amazon selection

12 September 2018

From France24:

Booksellers are furious a novel distributed only by Amazon has made it onto the long-list for one of France’s top literary prizes, saying it rewards the goliath that threatens both their livelihood and the country’s heritage.
It’s the literary equivalent of the Cannes-Netflix brouhaha, a tussle pitting France’s cherished independent bookstores against the American behemoth threatening their fragile ecosystem.

A year after the Cannes Film Festival triggered a fierce backlash from France’s myriad cinemas by inviting online upstart Netflix, one of the country’s top literary prizes – the Prix Renaudot – has sparked similar outrage among bookstores this week by selecting a novel distributed by their mortal foe Amazon.

The book, “Bande de Français” by French-Israeli author Marco Koskas, was included in a long-list of seven essays and 17 novels competing for the Renaudot, generally regarded as the second most prestigious French-language prize after the Goncourt. It is self-published and available only on Amazon – unless bookstores choose to order it from the online platform, a step many are loath to take.

“Do they want us to pay our most ferocious competitor? To give him money so he can kill us?” asked Mélanie Le Saux, a bookseller in the Paris region who posted an open letter on Facebook on Sunday in which she blasted the Renaudot jury for “throwing the door wide open to the beast”.

“Either we buy the book from our competitor, or we just won’t have it,” Le Saux told FRANCE 24. “It’s a very strong signal: Amazon has won their blessing.”

. . . .

France has fixed book-prices and a 5% cap on discounts to protect small shops from larger competitors, measures that are widely credited with protecting the country’s extensive network of independent bookstores.

. . . .

In 2013, parliament passed a bill – dubbed the “Amazon law” – that prevents online platforms from providing free delivery on top of the 5% discount on books, handing a victory to France’s estimated 3,000 independent bookshops.

. . . .

Patrick Besson, a writer and member of the Renaudot jury, has defended the decision to select Koskas’s novel in an interview with French weekly Le Point (where he also publishes a column), arguing that it is not uncommon for authors to self-publish or foot the publisher’s bill.

“Take Proust,” he said. “’Swann’s Way’ was published by Grasset in 1913 at the author’s expense. What farmer would let others plough his field for a meagre 10% return? It’s normal for authors to be unhappy with the current business model and rebel against publishers. It’s the text I’m interested in; I don’t care about the rest.”

The author of “Bande de Français” is hardly a newcomer in the trade. He’s already published a number of books with the likes of Fayard, Grasset and Robert Laffon. But he says his last work, about French Jews who emigrate to Israel, was turned down by publishers – a decision he blamed on “delirious Israelophobia”.

. . . .

“With this decision, does the Prix Renaudot realise it is doing a disservice to the author himself and to bookshops, as well as sending a worrying signal for the future of the industry?” the statement read.

The Syndicat added: “How deceitful and sinister Amazon’s dream world is. No more hierarchy between works, reduced to mere usernames on a platform; no editorial policy but millions of titles accumulated haphazardly; no books in lively areas of ‘commerce’; no people hired to bring works and authors to readers; warehouses and a sophisticated algorithm instead of spoken words.”

Link to the rest at France24 and thanks to DM for the tip.

PG says fixing prices and limiting discounts prevents poor people in France from purchasing books they would like to own. Price-fixing regimes always harm consumers for the benefit of a relatively small group of insiders with political influence.

Amazon is stuffing its search results pages with ads

11 September 2018

From recode:

If it feels as though Amazon’s site is increasingly stuffed with ads, that’s because it is. And it looks like that’s working — at least for brands that are willing to fork over ad dollars as part of their strategy to sell on Amazon.

Amazon-sponsored product ads have been around since 2012. But lately, as the company has invested in growing its advertising business, they’ve become more aggressive.

See, for example, our search below for “cereal.”

The first three results, which take up the whole screen above the fold — everything visible before you scroll — are sponsored placements that appear as search results: Ads for Kellogg’s Special K, Quaker Life and Cap’n Crunch. (It’s similarly dramatic on mobile, where it takes up the entire first screen.) This is followed by a section featuring Amazon’s own brand, 365 Everyday Value, which was part of its Whole Foods acquisition.

Not until scrolling down halfway on the next browser “page” do organic search results — non-paid, non-Amazon brands — come up: Post’s Honey Bunches of Oats and Kellogg’s Frosted Mini-Wheats and Frosted Flakes.

. . . .

Sponsored ads allow vendors to bid auction-style to have their products show up when consumers type in a related search term. If you’re Duracell, for example, you can pay to have your product show up above or among search results when someone types in “batteries” — or “Energizer.”

. . . .

“Nobody is scrolling beyond the first page when they do a search,” Jason Goldberg, SVP of commerce at SapientRazorfish, a digital marketing agency, told Recode. “If you want to be discoverable, you have to find a way to show up in search results.”

To get that prime visibility, brands are responding with more cash. Spending on sponsored products in Amazon’s search increased 165 percent in the second quarter of 2018 compared with a year earlier, according to data from marketing agency Merkle.

The competition for brands to bid on their own or others’ keywords is fierce, and is leading toward what Goldberg called a “perfectly escalating arms race where all the trends are to spend more money to buy more ads to have better visibility on Amazon.”

. . . .

Amazon’s advertising approach is increasingly important for brands, with about half of all product searches beginning there rather than with typical search engines like Google.

It’s also increasingly important to Amazon, which generates most of its revenue from its e-commerce business. Advertising is its smallest segment, measured by revenue, but its fastest-growing. (Its “other” segment — which primarily consists of money it generates from selling ad space on its websites — generated $2.2 billion in sales last quarter, up about 130 percent from the same period a year ago.) Amazon is now a big-enough advertising player that it’s expected to eat into Facebook and Google’s dominant market share.

Link to the rest at recode

PG doesn’t know if it’s an unconscious response to Amazon’s ads or not, but lately, he’s noticed that, when searching for a product to buy on Amazon without any brand or model in mind, he’s experiencing less success immediately and, sometimes, he switches to Google to run the same search with more useful results.

PG has used browser-based adblockers approximately forever and hasn’t tried Amazon with and without an adblocker in place. If adblockers don’t currently work on Amazon, he wouldn’t be surprised if someone were working on one now.

Amazon is bringing together all its ad products under one brand: Amazon Advertising.

10 September 2018

From Edgy Labs:

Following Google’s move earlier this year which saw the search engine giant dropping many of its advertising brands, Amazon has retired three of its ad services and products as well. In an announcement made last week, Amazon SVP Paul Kotas proudly introduced the all-new Amazon Advertising department.

In an effort to make the life of advertisers a whole lot easier, Kotas announced that they would be retiring three of the company’s most popular marketing platforms: Amazon Media Group (AMG), Amazon Marketing Services (AMS), and Amazon Advertising Platform (AAP).

We’ve unified our product offerings under the name ‘Amazon Advertising.’ This is another step towards our goal of providing advertising solutions that are simple and intuitive for the hundreds of thousands of advertisers who use our products to help grow their business.

. . . .

Amazon Advertising is not a new marketing service. Instead, it is a new brand that will unify the three legacy Amazon brand names- AMGAMS, and AAP – as the company starts phasing them out in the next couple of months.

Under Amazon Advertising, the company hopes to eliminate the confusion caused by the number of ad products and platforms they have built these past years as the digital marketing space flourished. Apparently, these multiple marketing services and products have left some marketers and business owners baffled on what product to use.

. . . .

With the new Amazon Advertising platform, marketers and website owners who wish to grow their businesses can take advantage of the benefits offered by AMG, AMS, and AAP under one ad product. These services include the display and video services, sellers ads, and programmable solutions.

. . . .

If you’re still confused about what ad and marketing products the Amazon Advertising will offer, here’s a simplified portfolio of their services.

  • Sponsored Products and Sponsored Brands that will enable advertisers and marketers to promote their products or brand by making it easier for customers to search and purchase products in Amazon.
  • Display ads will help advertisers reach relevant audiences on Amazon, third-party sites, and apps with the aid of customizable brand or e-commerce creatives and actionable insights. This will enable advertisers to optimize their ads further to achieve various objectives. The Product Display Ads will also be available to advertisers that sell products on Amazon, helping them drive traffic to their product detail pages.
  • Video ads will allow advertisers to narrate their brand story and get better customer engagements in brand-safe environments through trusted channels like Amazon and IMDb, on exclusive Amazon devices such as Fire TV or Fire tablet, and across third-party sites and apps.
  • Stores enable vendors and sellers to develop their own website that will have its own branded URL on Amazon. With a Store, vendors and sellers will be able to showcase a brand story and product portfolio in a curated customer destination.
  • Measurement solutions which include campaign reporting, retail insights, and third-party reporting, will help businesses understand advertising’s impact on shopper behavior—whether they run on Amazon or third-party sites and apps—so they can optimize marketing strategies to achieve results.
  • Amazon DSP is a demand-side platform that allows advertisers to programmatically reach their audiences both on Amazon sites and apps as well as through direct publisher relationships and third-party exchanges. Advertisers can manage, optimize, and report on their programmatic display and video campaigns through the Amazon DSP console.

Despite becoming America’s second $1 trillion company, Amazon’s marketing and advertising division still lag behind its two direct competitors: Google and Facebook Ads.

Link to the rest at Edgy Labs

Amazon proving to be solid partner to retailers

29 August 2018

From ZDNet:

The common (and increasingly simplistic) Amazon storyline goes like this: Amazon is killing physical retail as shopping goes digital. The reality is way more nuanced. Amazon is increasingly a partner to the brick-and-mortar crowd and is often involved in win-win deals.

. . . .

Believe it. Here are a few recent mentions from retailers on their earnings conference calls. These comments have been made following strong same-store sales and results generally better than expected. Simply put, retail isn’t dead. It’s on fire, and Amazon, in some cases, is even boosting foot traffic.

. . . .

Best Buy CEO Hubert Joly called out a product development partnership with Amazon and how he was optimistic about it. Best Buy’s second quarter results were strong and smart home is one big reason. Joly said:

The third highlight of the quarter is the launch of the first TV Smart TV that’s part of our product development partnership with Amazon. This partnership is a good example of how we are leveraging our expertise and unique merchandising, marketing and sales assets to help leading technology companies commercialize their new products. As a reminder, the TVs are available only in Best Buy stores on bestbuy.com and on amazon.com through Best Buy as a third-party seller. We’re planning to launch additional models in September and October.

Remember how Best Buy was going to be run over by Amazon?

Link to the rest at ZDNet and thanks to Felix for the tip.

Apple and Amazon Have the Most Annoying Ongoing Feud in Tech

27 August 2018

From Gizmodo:

The world’s most valuable company and a business run by the richest man in modern history have been engaged in an irritating cold war for years, and they need to knock it off.

When I say that Amazon and Apple are engaged in tech’s most annoying feud, I don’t mean it’s the most important battle in tech—it’s not. From a business perspective, Amazon and Apple’s squabbles make a certain amount of sense, but that doesn’t mean the whole thing isn’t obnoxious. I’m referring to the little ways these two giant companies have tried to kneecap each other over the years just to slug their users instead.

Today, one glaring example of these obscenely rich companies giving everyone a headache is the fact that Amazon apps for iPhone won’t allow you to buy e-books or audiobooks from the apps themselves. You can browse Amazon’s Kindle or Shopping apps and have a comfortable mobile experience on iOS—everything is laid out nicely and is easily accessible—but as soon as you decide on the perfect e-book, you’re forced to go to a browser to finalize your purchase. This isn’t an issue on Android.

I have two Kindles, but I usually end up reading books using the Kindle app on my iPhone just because it’s always with me. The first time I realized I couldn’t purchase a book on the Kindle app, I moved over to the main Amazon app where I was foiled again. Eventually, I had to navigate to the Amazon site in my mobile browser and go through the whole process of logging in and checking out. A few months later, I tend to forget about this annoyance and repeat the process. This being 2018, I also tend to spend more time buying books than reading them because the world has broken my brain.

. . . .

Amazon doesn’t disclose how many Kindle devices it sells, but in 2013, research firm Consumer Intelligence Research Partners estimated 20.5 million Kindles were in use in the U.S., and those sales have declined while reading on a phone or tablet has become more common. Let’s just say 20.5 million people have spent five minutes bumbling with the checkout in a browser every year. That would mean people waste over 1.7 million hours in a year because of this problem. This isn’t so much a blood feud in which these companies are trying to mortally wound each other, it’s more like a competition to inflict paper cuts that only hurt users.

The primary reason for this spat is that Amazon apparently doesn’t want to cough up the 30-percent cut that Apple demands from in-app purchases, which includes e-books through Amazon’s apps.

Link to the rest at Gizmodo

PG buys lots of stuff from Amazon using his iPhone, but never realized that he couldn’t buy books on the device.

If Apple had put 10% of the effort Amazon expended in selling books, iBooks wouldn’t be an asterisk in the book business. After Steve Jobs and the Price-Fix Six got caught, Apple evidently didn’t want to get cooties by actively competing for the book business. Evidently, Apple doesn’t understand that it can compete in the book business without violating antitrust laws.

Kindle Romance Bestsellers 

25 August 2018
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Kindle Romance Bestsellers

 

What’s Going On With CreateSpace and KDP Print?

23 August 2018

From The Book Designer:

Are you curious about all of the changes going on at CreateSpace and seeing new offerings being announced at Kindle Direct Publishing? I have been, too.

I will admit that I have not paid as much attention to KDP Print as I should have. I have been happy with CreateSpace for my Amazon printing and distribution and just did not have the bandwidth to turn my attention to yet ANOTHER platform for my paperbacks. Knowing that CreateSpace could get my paperback on Amazon while IngramSpark/Lightning Source was handling the wholesalers/bookstores/libraries, I thought I had all my bases covered.

. . . .

Well, a few months ago, CreateSpace announced that it was discontinuing all author publishing services. Authors and publishers would no longer be able to use CreateSpace for editorial, lay out, design, or cover work. The staff in those departments was let go. This all happened SO quickly and the hue and cry from the self-publishing community was enormous. Yet, CreateSpace and Amazon moved ahead knowing that the profit margins on working with authors and micro-publishers on editorial and design elements were not in line with Amazon’s business model or goals. Authors and micro-publishers are not big enough to keep a design and editorial division at CreateSpace viable. To stay profitable, a company would have to charge a LOT more than CreateSpace was charging.

Years ago, CreateSpace was in the business of attracting authors and getting them to use their POD business (CreateSpace). Offering covers and interiors and help with editorial were wonderful carrots to entice all those authors at the beginning. But like many Amazon programs, once those carrots had done their job, the carrots had to go away. The rates for the services rendered at CreateSpace were not enough to cover what it cost to DO the work.

. . . .

At first glance, the KDP Print Division looks an AWFUL LOT like the CreateSpace Division. But over time, there have been some HUGE changes to KDP that we should all pay attention to:

  1. KDP Print offers Interior Templates in Word and a Cover Creator Tool.

If you were dependent upon CreateSpace formatting your cover and interior before they stopped offering those services, you are now in luck. KDP Print offers Templates for the interior downloadable in Word and cover templates using their Cover Creator Tool. KDP also offers free KDP ISBNs just like CreateSpace (but do yourself a favor and GET YOUR OWN from the proper organization for your country.)

. . . .

3. KDP Print now offers the same distribution and royalty as CreateSpace.

In the past, KDP did not offer expanded distribution for bookstores and libraries. Nor did they offer the same royalty options or international distribution. But all that has changed. Now, KDP Print DOES offer international distribution, expanded distribution to retailers outside of Amazon and the same 60% of retail price set by author/publisher.

. . . .

6. KDP Print does not take down the existing book while approving new versions like CreateSpace does.

This is HUGE. According to KindlePreneur.com in their article CreateSpace vs KDP Print:

“Every time you upload an update, CreateSpace takes down your print/paperback version, which is an entirely separate entity from your Kindle book as far as ranking is concerned.

On the other hand, KDP – both Print and Kindle – keep your old version up and available for purchase until the new version is approved.

Having your print version taken down can be a big deal when that version is selling well (e.g., when you are “riding the algorithm,” and Amazon naturally promotes your paperback book).”

Link to the rest at The Book Designer

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