PG’s Thoughts (such as they are)

‘They Own the System’: Amazon Rewrites Book Industry by Marching into Publishing

16 January 2019

From The Wall Street Journal:

Amazon.com Inc., which over more than two decades made itself the world’s largest book retailer, has created an unrivaled display window that can catapult titles from obscurity to must-reads.

More recently it has built something else: Its own line of published books.

The novel was released in 2017 and featured on Amazon First Reads. The online promotion also is emailed each month to more than 7 million U.S. subscribers and exclusively showcases titles from Amazon Publishing.

“Wham, we get 300,000 downloads,” said Mr. Sullivan, whose title has sold more than 1.5 million print books, e-books and audio books. It was ranked No. 56 on USA Today’s top 100 best-seller list for all of 2018.

The Seattle-based giant houses 15 imprints in the U.S. under the Amazon Publishing banner, turning out everything from thrillers to romance novels to books translated from other languages. Amazon published 1,231 titles in the U.S. in 2017, up from 373 in 2009, the year it entered the $16 billion-a-year consumer book publishing business.

To promote these works, it has tools other publishers can only dream about owning, including Amazon First Reads and Kindle Unlimited, Amazon’s e-book subscription service. Together, they reach an estimated 10 million or more customers who can read offered titles with a few keystrokes.

“They aren’t gaming the system,” literary agent Rick Pascocello said. “They own the system.”

The promotional levers that Amazon has built to lure consumers can boost the opportunities of little-known writers and recharge the careers of experienced authors such as Mr. Sullivan. Amazon Publishing, the company’s book-publishing unit, together with its self-published authors, has made it a fierce competitor in lucrative genres including romance.

To some in the industry, it is an inherently conflicted structure, in which the most powerful retailer has a competing incentive to favor books it publishes and those from authors using its self-publishing technology.

On Wednesday, 16 of the top 20 books on Amazon’s romance best-seller list were titles from its book-publishing arm or were self-published on Amazon’s platform.

Amazon said its marketing and retail programs don’t give its books an unfair advantage, and that it offers all publishers a chance to use them.

“Our focus is on making sure that our customers get great content,” said Jeff Belle, vice president of Amazon Publishing. “The feedback from authors, customers and agents has all been positive.”

Amazon commands some 72% of adult new book sales online, and 49% of all new book sales by units, according to book-industry research firm Codex Group LLC.

. . . .

For authors, the company offers a huge potential audience, especially given the decline in large bricks-and-mortar bookstores. Amazon has more than 100 million Amazon Prime members world-wide, and its U.S. subscribers can pick one title from Amazon First Reads free each month. Non-Prime members pay $1.99.

On Jan. 2, Amazon First Reads sent an email to members about six new titles from Amazon Publishing. By early evening, those books were the top six on Amazon’s Kindle store e-book best-seller list.

. . . .

The scale of Amazon Publishing isn’t readily apparent because many rival booksellers decline to carry Amazon Publishing titles on their shelves.

“They get enough support on their own,” said Lori Fazio, chief operating officer of R.J. Julia Booksellers in Madison, Conn., which doesn’t stock them.

. . . .

Industry trackers say Amazon is shrinking publishing revenue in adult fiction by releasing so many low-price books from Amazon imprints and its self-published authors. Publisher revenue from adult fiction fell 16% to $4.4 billion in 2017 from 2013, the Association of American Publishers said.

“My suspicion is the cumulative impact of Amazon’s highly integrated retail and content programs is cannibalizing traditional publisher fiction sales.” said Peter Hildick-Smith, chief executive of Codex Group, the research firm.

Mr. Hildick-Smith said the decline in revenue for fiction issued by traditional publishers coincided with the Kindle e-book store’s growing share of the overall adult book market—up 43% between 2013 and 2017—to a bit more than a quarter of the total market. E-books skew heavily to fiction, and much of that increase comes from books self-published on Amazon.

Publishers that specialize in genre fiction, especially romance—a fount of publishing profits—are feeling the biggest impact.

. . . .

Independent romance publisher Entangled Publishing LLC offers a small number of erotic titles on Kindle Unlimited. For many titles, the small publishing house uses the distribution arm of a larger publisher to get its books into retail stores, a distributor that doesn’t participate in Kindle Unlimited.

As a result, most Entangled books aren’t likely to reach Amazon’s list of best-selling romance titles, which favors Kindle Unlimited titles. While Amazon has opened a lot of doors for authors and publishers, said Liz Pelletier, Entangled’s chief executive, the extra boost given to Kindle Unlimited titles makes Amazon’s best-seller list less applicable for publishers that don’t participate.

. . . .

Romance writer Lisa Renee Jones pulled her titles out of Kindle Unlimited in 2018 after her income fell by about one-third over a few months.

“I jumped on the bandwagon, but I later regretted it because it devalued me as an author,” said Ms. Jones, whose books have been published by St. Martin’s Press’s Griffin imprint and others.

An Amazon spokesman said thousands of self-published authors in 2018 “earned more than $50,000, with more than a thousand surpassing $100,000 in royalties.” The spokesman declined to say how many self-published books using Amazon technology were published last year. “Hundreds of thousands of authors have self-published millions of book since 2007,” he said.

Some have hit it big. Laurie Ann Starkey, a certified public accountant, quit her job in 2014 to become a full-time writer. She now owns a small independent press and employs 10 people as editors, managers and social-media staff. She generated $1.15 million last year in gross revenue, she said, mostly from her own books. About 89% of her sales were from Kindle Unlimited.

. . . .

Romance writer Inglath Cooper’s self-published novel, “Down a Country Road,” was ranked No. 52 on Amazon’s digital romance list on Jan. 15. She said Amazon has changed publishing, much like Netflix changed the movie and TV business, by making a large inventory of books immediately available to readers.

“Rather than resent the changes,” Ms. Cooper said, “I prefer to choose the opportunities available.”

Amazon Publishing helped resurrect the career of Mr. Sullivan, whose World War II novel found little traction among New York publishers. Previously, he had written more than a dozen novels, including with author James Patterson.

“My son urged me to try Amazon,” he said.

In March 2017, the influential trade publication Publishers Weekly reviewed “Beneath a Scarlet Sky,” saying Mr. Sullivan “lays on history with a trowel in this overstuffed tale of derring-do set in Italy during WWII.”

Amazon told Mr. Sullivan not to worry. “It was such a compulsive read that I knew it had the potential to be a big book,” said Danielle Marshall, editorial director of Lake Union Publishing, the Amazon Publishing imprint.

Link to the rest at The Wall Street Journal

“My suspicion is the cumulative impact of Amazon’s highly integrated retail and content programs is cannibalizing traditional publisher fiction sales.”

Of course, in a well-ordered world, traditional publishers and guys named Leonard would have continued to own the system and handled all the cannibalizing in a far more refined fashion.

We know how Leonard has changed (or not), but PG wonders how such publishers have changed in light of the impact of Amazon.

Of course, (returning to that well-ordered world), Amazon wouldn’t impact anything and nobody who is anybody would live in Seattle.

But order is not to be found in the 21st Century. In its own untidy and ill-kempt manner, change happens.

Or does it? PG hasn’t noticed much change in the cloistered halls of New York publishers. For them, the old ways are the best ways. Are they even capable of change?

Heaven forfend that Big Publishing would ever examine its treatment of all but a tiny slice of its authors or revisit its royalty structure or (gasp!) test whether reducing prices would increase sales on a commodity that, in the case of ebooks, has absolutely no additional incremental cost of goods for each additional copy sold after the first.

In a rational world, publishers would embrace the business of selling organized groups of electrons. After all, Bill Gates got rich selling electrons.

They wouldn’t even have to gather their own electrons. Amazon would collect gobs of electrons and sell them to people who liked to read while destroying nary a tree and then large bank transfers (more electrons!) would decamp from Seattle to Manhattan.

It’s so much easier to hang out with other publishers, whine about Amazon and reassure one another that, any day now, people will come to their senses and flock back to real bookstores to buy dead-tree books from impoverished clerk/drones, just you wait and see.


Clandestine

15 January 2019

PG has discovered an enthusiasm for Field Notes.

He admits this is somewhat irrational because they are paper and PG mostly keeps note-like information in digital form.

OTOH, if you were to spend more than 4 milliseconds examining PG’s desk and its surrounding environs, you would discover that the last thing PG needs is more paper.

However, Field Notes are not normal notebooks. They have a unique persona and, although more expensive on a square-inch basis than a ream of printer paper from Costco, are less expensive than a passion for antique automobiles or a drug habit.

The latest instantiation of Field Notes is the Clandestine edition, the covers of which are “surreptitious Urban Gray” and which includes a Field Notes Cipher Wheel for coding and decoding messages.

.

Link to the rest at Field Notes

 

Bookstores and Libraries (Planning for 2019 Part 3)

10 January 2019

From Kristine Kathryn Rusch:

If you’re a writer and, more specifically, if you’re an indie writer, there’s a lot of opportunity in the bookstore and library markets. Yes, indeedy, I’m talking brick-and-mortar stuff.

First, a reminder: I’m doing a short series reviewing 2018 with an eye toward 2019. If you have not read the first post in this series, please do so. I will be referring to it throughout the series.  In fact, I’d recommend that you read the entire series in order, simply because I’ll be referring to things in one post that I mentioned in a previous post. Otherwise, I’d be repeating myself ad infinitum.

. . . .

If you only saw my post on Barnes & Noble back in October, you’d think that all bookstores were in deep trouble. Barnes & Noble is in trouble. Despite the happy sunny much-too-upbeat headlines about B&N in December, the trouble remains.

The headlines are great, like this one from goodereader.com which says “Barnes & Noble Plans to Open 15 New Stores in 2019.”Doesn’t that sound wonderful? Thriving businesses expand, right?

But you need to actually read past the headline. Barnes & Noble is actually cutting back retail space, and probably cutting back on expensive leases. They’re going from stores that are at least 17,000 square feet to stores that are 14,000 square feet or less. And they’re moving those smaller stores to “entertainment districts or cultural centers.”

Um, you know, like independent bookstores. Only Barnes & Noble will have a self-serve kiosk and a “book theater” (whatever the hell that is) and “plenty of comfortable community seating areas.”

So, less space for books and less interaction with employees, but also lower rents (most likely) and less money invested in inventory.

In my opinion as a long-time retailer, this is about ten years too late for B&N, and I doubt it will fool their investors.

My analysis from October remains the same. If you’re a writer who wants to be traditionally published so that you have high visibility, you are making a bad choice. With B&N reducing shelf space and putting the final nail in the coffin of what once made their brand unique (having so many books on the shelves that readers could find almost anything), most traditionally published books will not be on the shelves in a brick-and-mortar B&N.

. . . .

The other cloud hovering over the horizon, at least for traditionally published writers, is the possible merger between the two remaining large distributors in the United States. On December 4, Shelf Awareness reported  that the Federal Trade Commission is doing a “preliminary nonpublic investigation” of a merger between Ingram and Baker & Taylor, the two big distributors to see if such a merger would violate antitrust law.

If this merger goes through, the United States would be down to one major book distributor for the entire country. Shelf Awareness opined in its article that the single distributor would have a role that would “be all the more significant because of the closure of most regional book wholesalers over the past quarter century.”

Shelf Awareness also wonders if the changes at Barnes & Noble, and the possible sale of Baker & Taylor by its parent company Follett are related. Shelf Awareness believes that Follett is one of the possible buyers of Barnes & Noble, saying:

Follett may want to sell B&T if it aspires to buy B&N, an approach that would lessen FTC concerns and avoid B&T’s non-B&N retail customers objecting and possibly taking their business elsewhere.

For traditionally published writers, the merger could be a serious problem. If, for example, a writer’s traditional publisher gets into a pissing contest with the merged distributor (Ingram Baker Taylor?) the way that the Big 5 got into a pissing contest with Amazon a few years back (a contest that continues on a small level even today), then many books won’t get into the major print distribution channel, and the very reason the writer went to a traditional publisher disappears.

. . . .

More likely, however, for traditionally published writers in this scenario is that their book is the fourth or fifth on the list published that month by an imprint. Publishers invest a lot of money in the top of the list, but rarely invest in the books farther down. Some of those books don’t even make it into the current distribution system, and might be shut out entirely of a single distributor who might mandate that they only take three books per imprint from a publisher. (These things happen all the time.)

If a writer is going to lose control of her copyright for the life of that copyright by going to a traditional publisher, then the writer needs guarantees that the book will visit all the possible store shelves, and get enough visibility to make such a loss worthwhile. But that kind of guarantee is getting harder and harder, and the physical store shelves have gotten smaller and smaller.

. . . .

The consolidation of the distributors will harm the sales of the blockbusters more than it will harm the smaller titles, further causing problems for the big traditional publishers. And you can already see some cracks in that blockbuster façade. For example, when Simon & Schuster released its year-end letter to stockholders, there was no discussion at all of increased sales of the front list (new) titles. Instead, CEO Carolyn Reidy’s claim that 2018 was S&S’s most successful year appears to be based on the growing audiobook division and a new attention to backlist sales. (And the audiobook division news will be part of the copyright discussions we will have later in this series.)

S&S is developing its own distribution line, which, in turn, will have a benefit for smaller publishers and indie writers. The more the big guns run their own distribution systems, the more they train booksellers to order direct from the publisher, cutting out the middleman.

Which means that small publishers and indie writer/publishers will benefit from the willingness of booksellers to order direct.

. . . .

Retailing is changing. The experience is becoming king. Besides, readers have discovered (remembered?) that it’s fun to go into a bookstore to find a book they didn’t even know existed. It’s easier to browse a brick and mortar store. And it’s not just about buying the book.

According to Washington D.C. economic development planner Ryan Hand (quoted in MarketWatch):

Shopping for a book is an emotional experience. The future of bookstores are small and mixed concept stores. [They will be] social spaces where you develop that emotional connection by books that are curated by literature nerds.

I had just such an emotional experience as I was researching this post. I stumbled upon an article in The Wisconsin State Journal about A Room Of One’s Own Bookstore in Madison, Wisconsin. Even though I culled my book collection way down on our move, I still have several books I purchased at A Room Of One’s Own decades ago, and I have very fond memories of the store.

. . . .

In many ways, these trends in bookselling mean that each bookstore will have its own unique inventory. A Room Of One’s Own in Madison won’t have the same books on its shelf as Writer’s Block here in Las Vegas. Some small booksellers will be amenable to carrying print titles from local authors; other small booksellers will not. Some, like a rabid anti-Amazon bookseller that I know in Oregon, refuse to take a book from any writer who publishes through Amazon. As one of those writers, I stopped recommending that bookstore.

The bookstores will develop personalities again, so that when readers travel, they’ll want to stop in the local bookstore—not to pick up the latest bestseller, but to see what kinds of offers that they might have missed in their own hometowns.

. . . .

As ebooks disrupted traditional publishing, traditional publishers have not figured out how to deal with libraries. When a traditional publisher sells a hardcover book to a library, that book gets only so many check-outs before it literally disintegrates and the library has to replace the book. Traditional publishers, faced with unlimited downloads of an ebook sold to a library, had no clue how to price the damn things.

And so began a quiet little war between traditional publishers and libraries that hit its zenith last summer when McMillan decided to “embargo” Tor science fiction and fantasy titles from libraries for four months after release.

Or, to put it in clearer terms, McMillan believed (based on no evidence at all) that library users would spend those four months buying the books they couldn’t get at the library. No journalist asked why they chose to make this move with their Tor book line only.

I suspect the reason was twofold: Tor’s sales have never been all that great, so they’re probably on an internal bubble (about to be chopped off if they don’t become profitable by a specific date) and some stupid logic that all businesses seem to have about science fiction and fantasy—that their consumers are cutting edge because those consumers read about the future.

Traditional publishers have long seen libraries as their enemy. This is because traditional publishers are a B2B (business to business) entity not a B2C (business to consumer) entity. In other words, publishers believe they sell their books to bookstores and retail outlets, not to readers. The bookstore is the B2C business, not the publisher.

. . . .

Let’s look at some information, shall we? This is from the U.S. based Institute of Museum and Library Services, for fiscal year 2016 (the last time these statistics were available):

(The IMLS annual Public Library Survey) shows that public libraries continue to evolve to meet changing community needs. More than 171 million registered users, representing over half of the nearly 311 million Americans who lived within a public library service area, visited public libraries over 1.35 billion times in 2016. Public libraries offered half a million more programs in 2016 than in 2015; 113 million people attended 5.2 million programs in 2016. In addition, the number of electronic materials continued to grow, with public libraries offering over 391 million e-books to their patrons in the United States.

The Library Journal reports that 25% of the collection materials in public libraries are ebooks. Potash told LJ that the publishing industry’s B2B problem means that it has no idea how many (paper) books libraries ordered because the orders were fulfilled by paper distributors.

Potash said,

…prior to ebooks, even the publishers never knew which libraries bought their books or how many copies, because [library orders] were being fulfilled by the traditional wholesale distributors…. Authors and agents aren’t appreciating that libraries are spending hundreds of millions of dollars…in print and digital, which is contributing to their earnings.

That shows up in the behavior of traditional publishers. They continue to treat libraries like a problem rather than an important part of the book ecosystem.

Link to the rest at Kristine Kathryn Rusch

If you like the thoughts Kris shares, you can show your appreciation by checking out her books.



.
A few weeks ago, PG posted a bit about his interaction with an early book wholesaler many years ago. He suggests that the long period of time it has taken for traditional publishers to decide to cut out these middlepersons and ship direct is Exhibit 2,507,438 in PG’s ongoing indictment of what terrible business managers inhabit the world of traditional publishing.

Publishers’ inability to understand the benefits of the marketing and promotional exposure their books gain through libraries is #2,507,439.

PG is less optimistic about the future of physical books and physical bookstores than Kris is.

PG has a long association with physical books. He was fortunate as a child that his mother took him and his siblings to the closest library on a regular basis and made certain there were always books around the house. PG worked in a large university library during his freshman year in college and became an expert at quickly locating books in the huge stacks where few mortals ever trod. When the PG offspring were young, the family visited a Borders on an almost-weekly basis to acquire more books and frequently stopped in at the local library as well.

When Mrs. PG was first published, PG attended a great many book signings at physical bookstores with her. For a period of about three years, the PG’s lived about 10 minutes away from a classic and well-known bookstore, a frequent stop for major authors traveling on national book promotion tours. Mrs. PG did a number of book signings at the store and the PG family frequently visited that bookstore on shopping trips as well.

Even after aggressive culling of the family book collection, PG still sees eight jammed bookcases, each 6 feet tall, whenever he walks out of his office. There are three other large (and jammed) bookcases elsewhere in Casa PG plus books on every coffee table, nightstand, etc., and a few corners where books are stacked on the floor.

PG has inserted that long history as a prelude for saying he doesn’t want to acquire any more physical books, in part because he knows he won’t read them. He can see several examples of unread physical books from where he sits. He much prefers to read ebooks now. The only time he is likely to touch a physical book these days is when he reads poetry to some of the third generation offspring (who are each extremely adept with an iPad).

On those rare occasions when the PG’s enter a physical bookstore, he’s pretty bored and neither of them have purchased a physical book other than as a gift for several years. PG feels no emotional thrill while wandering around looking at the books.

Perhaps PG is an outlier, but he doesn’t think so. He has not been inside a busy bookstore for several years now.

Even assuming that PG’s generation includes many who feel the excitement Kris describes when she discusses some of the attractive and unique bookstores she mentions in the OP, what about the younger generations?

PG submits that music stores were not all that different than bookstores a few years ago, with people of varying ages going in to feel the ambiance, listen to the latest releases and discuss artists and songs with other music aficionados. On Friday and Saturday nights, it wasn’t unusual for a local band to play at some of those stores. Buying a record or a CD in a music store was undoubtedly an emotional experience for many.

What happened to those music stores?

iTunes happened.

Today, only a small fraction of music enthusiasts buy or care about music on physical media. Everybody downloads music from iTunes or other online music retailers. How would you play anything but downloaded music on your smartphone?

PG is informed audiophiles believe that the quality of downloaded music is not as good as music written to CD’s or vinyl, but how many music lovers are interested?

PG would love to hear a reason why digital music and digital books are inherently unlike each other and why physical books will have a unique ability to survive as a mass medium when music in physically recorded form has not.

As DIY Litigants Crowd The Docket, Courts Step In To Help

7 January 2019

Not necessarily about authors and books, but an illustration of a problem that has been around as long as PG has been a lawyer.

From Law360:

Tarikul Khan turned around and whispered, “I’m scared now.”

Waiting in a wood-paneled Brooklyn courtroom for the first hearing in his lawsuit, Khan was watching U.S. Magistrate Judge Lois Bloom grill a plaintiff also representing himself, in an unrelated matter, about his failure to hand over evidence.

When he eventually stepped before Judge Bloom, though, the judge’s first remark was about how Khan’s complaint for disability benefits was unexpectedly shipshape.

Khan, 68, wouldn’t have been able to create that document without behind-the-scenes help from a key consultant.

“Ms. Cat made this. She did help, everything,” Khan told Law360 in the court cafeteria before the Nov. 8 hearing. “I can’t make this thing myself. I finished high school only, no college — a little bit of college. I have nothing like this.”

“Ms. Cat” is Cat Itaya, the director of the Eastern District of New York’s legal assistance clinic for “pro se,” or self-represented, litigants; it lives inside the courthouse and is run by the City Bar Justice Center. Khan visited Itaya beginning four months before his first hearing, and over six or eight visits — a couple with volunteer lawyers, but most with Itaya — she digested his story and put together a complaint in language the court could parse.

While they remain rare for now, clinics like the one in the Eastern District of New York appear to be catching on in federal court as a way to aid self-represented litigants, for whom putting together a legally coherent complaint can be an insurmountable barrier.

Link to the rest at Law360

PG says there is plenty of blame to go around.

– Laws are made by legislatures. Federal laws are made by the Congress of the United States. State laws are made by the legislatures of each state.

Most legislators are not attorneys. Theoretically, legislatures have access to attorneys who may help in drafting the language of the laws the legislatures pass. In practice, political or business advocacy groups may draft language that friendly legislators then submit for passage.

The legislative process involves a lot of negotiations and the results of those negotiations can be various provisions of the statutes that aren’t consistent with each other or that carve out exceptions to the general application of the statutes. Amendments to the statutes to solve perceived problems may generate additional problems.

It is very unusual for a legislature to simply eliminate laws that prior legislatures have passed without providing replacements. The net result of this behavior is a collection of laws that grows larger and larger over time. The first Congress of the United States met from March 4, 1789, to March 4, 1791 and subsequent congresses have been passing laws ever since.

– Many laws authorize federal or state agencies to write regulations to implement the laws. These regulations typically have the effect of laws. Once passed, regulations may be amended by the agencies without going back to Congress for approval.

Every working day, The Federal Register, publishes agency rules, proposed rules and public notices regarding agency rules and practices. During the past several years, The Federal Register has released 70,000-90,000 pages of new federal regulations each year.

To remain current on every regulation released by The Federal Register, an individual attorney would have to read 200-250 pages of new federal regulations per day every day of the year with no time off for weekends, vacations, holidays, etc.

– A popular idea for providing legal assistance for indigent individuals is to require attorneys to provide free pro bono (from the Latin pro bono publico,”for the public good”) services for such individuals.

For reasons that may already be obvious, no attorney is competent to handle every type of legal matter that may arise under state or federal law. The finest patent attorney in the United States would almost certainly have no idea how to handle Mr. Kahn’s disability claim described in the OP.

Speaking from past professional experience, PG can say that indigent individuals have different legal problems and requirements than school teachers, doctors, and bankers. The types of legal issues that indigent individuals face are within the realm of expertise of a very small number of attorneys. The reasons for this will be obvious – If you wish to earn your living as a lawyer, representing bankers is a better professional decision than representing indigents is.

– Can’t U.S. Magistrate Judge Lois Bloom help out Mr. Kahn with his problems as described in the OP?

A magistrate judge or “magistrate” is what amounts to an assistant judge operating under the direction of one or more US District Federal Judges. (A US district judge is one who conducts trials in cases that fall under federal laws. State trial judges do the same things for cases arising under state laws. In the US, there are many more trials conducted by state judges than federal judges.)

Under US law, judges are supposed to be neutral arbiters of the disputes that come before them, favoring neither side.

The OP doesn’t go into detail, but PG suspects Mr. Kahn’s claim for disability insurance was being pursued because the US Social Security Administration had denied Mr. Kahn’s claim for disability benefits for one reason or another. The SSA is the adverse party and Magistrate Judge Bloom is supposed to decide the dispute between Mr. Kahn and the SSA on the basis of the law and facts as she finds them without unduly favoring either side. If she coaches Mr. Kahn, she compromises her obligation to be a neutral arbiter.

Additionally, most Magistrate Judges are enormously busy handling a flood of various cases, including criminal cases in which the constitutional rights of the accused require speedy trials.

– Legal Aid or other legal assistance organizations as described in the OP can be a very good solution to the challenges PG has described. Essentially, such organizations include groups of lawyers who specialize in representing poor people in the types of legal matters in which poor people are commonly involved.

Unfortunately, funding for such organizations is always a problem. Most are funded by state legislatures. In some cases, the state bar association kicks in some money. In large and wealthy cities like New York City, city government and/or the city bar association may also help provide funding.

Whatever the sources of funding, there are always more indigent people with problems than there are salaried lawyers at a legal assistance organization to provide competent legal assistance.

A significant number of private attorneys provide voluntary legal assistance to indigents, either directly or through legal assistance organizations as described above.

Attorneys who specialize in the more remunerative areas of the law are often not of much use in assisting indigents because of their lack of knowledge about the law outside of their specialties. Attorneys in general practice, who, as a group, earn less than legal specialists, are of the most use to legal assistance organizations because of the general practitioner’s broader and more general scope of legal knowledge.

In a former life, PG was an attorney in general practice in a small town located in an area not known for its wealthy residents and represented a lot of poor people, either through the local legal assistance organization or on his own. He was also a member of the board of directors for that organization for several years.

Although he won’t go into detail, PG will say that some of the most personally-satisfying cases he handled in his former practice were for some of the indigent clients referred to him by that legal assistance organization. The term, “deserving poor,” has most definitely fallen out of favor, but some of PG’s former clients were excellent exemplars of that term.

As he said at the outset, this post is not necessarily about books and authors, but more for the general education of US visitors to TPV. PG knows little about similar problems and solutions in other countries other than to know they exist to a greater or lesser extent.

TPV receives visits from more than a few attorneys and they, along with everyone else, are invited to comment.

 

Welcome to The Great Acceleration

4 January 2019

From The Scholarly Kitchen:

My employer, Oxford University Press, holds regular “Oxford Journals Day” events where we bring together our society publishing partners and journal editors to catch up on the latest developments in publishing and to share their experiences. In the autumn of 2017, I was asked to give a “State of Scholarly Communications” presentation for this meeting and, being a fundamentally lazy person, I thought – this is great, Academia moves at such a slow pace that, with some minor tweaks, I’ll be able to re-use this talk for years. Six months later I was asked to reprise the talk for a UK event and I ended up having to rewrite about half of it. Six months later, I had to rewrite the other half.

I like to think of the period that we’ve entered into now as “The Great Acceleration,” a term coined by author Warren Ellis (or, as a recent exhibition states it, “Everything Happens So Much“). We aren’t really dealing with new issues – arXiv has been around posting preprints since 1991, mergers have been common for a while now (Wiley buying Blackwell happened more than 11 years ago), and the open access movement has been front and center since at least the year 2000.

. . . .

But, like every other aspect of our lives in this interconnected, digital utopia in which we live, we’ve reached a point where everything feels like it’s happening at once. Every week it seems like another piece of crucial publishing infrastructure is changing hands, or a new open access policy is announced, or there’s a new open letter petitioning for change that you’re expected to sign onto, or a new technology or standard that you absolutely must implement.

The upside to this accelerated pace is that it gets us closer to our goals faster. We know that the field of scholarly communications is far from perfect, but now it’s so much easier to gather evidence about reader and author needs, so much easier to publicly discuss potential plans, and, at least in some cases, to put those plans into action and draw attention to them.

The downside is that the faster you go, the less effective are your brakes. Scholarly communications is a complex ecosystem, and one that for most participants, largely works pretty well. Deliberately disrupting one aspect of the chain may have unexpected consequences in hundreds of other areas, and by then it may be too late to stop things from collapsing. We know the damage that the “move fast and break things” philosophy of Facebook and others has done to our society at large. Is this what we want for academia as well?

I would argue that the two biggest forces driving change in the scholarly communication landscape are consolidation and regulation. By consolidation, I mean that there’s a now constant cycle of mergers and acquisitions, reducing the number of independent players in the market. By regulation, we’re talking about the increasing number of rules and the compliance burden being put on researchers.

. . . .

We are in the midst of an era of mergers and acquisitions, and the biggest of publishers continue to get bigger. You’ll note that most now have names that are conglomerations of their former entities, “Springer Nature”, for example. The top 5 publishers account for more than 50% of the papers published each year, 70% in the social sciences.

In the past year or two, we’ve seen Wiley purchase Atypon, the platform that hosts more than a third of the world’s English language journals, along with Authorea and Manuscripts.app, both online paper writing collaboration tools. Elsevier has swallowed up bepress, which builds institutional repositories, SSRN, a widely used social sciences preprint network, Plum Analytics, a supplier of altmetrics, Aries, the company behind the Editorial Manager submission system, and in late December, Science Metrix.

. . . .

Some of these acquisitions are driven by need – Wiley reportedly spent a lot of money building a platform that underperformed, and bought Atypon to replace it. The same goes for Elsevier, whose home brewed submission system, eVise, never quite worked out, prompting them to buy Editorial Manager.

But a lot is also driven by Wall Street demands. We know that library budgets are flat, if not declining and that investors demands that companies increase their revenue each year. So first, you gobble up more and more of the existing market. Then you build an open access publishing program – that’s seen as new money, coming directly from funders and institutions rather than from the libraries. A third option comes into play here – if the market is flat, what other markets can a company extend itself into? Remember that Elsevier no longer refers to itself as a publisher, rather it is a “global information analytics business”

. . . .

This is creating a lot of anxiety in the market. If you’re a publisher and suddenly your mission critical infrastructure is owned by a competitor, that has to make you nervous. Combined with concerns about lock-in, this anxiety has led to a growing consensus that the market needs a major investment in shared and open infrastructure and standards. Rather than relying on a competitor or even a private company likely to be acquired by a competitor for key services, perhaps it’s better to work with a community-owned, not-for-profit service. Much of this is being driven by open source software community, which has many advantages due to its transparency, and portability.

It’s unclear whether there’s enough scale in our relatively small community to drive open source development at the level seen for larger industries. We’re just starting to see some of these systems emerging, and while the tools themselves look promising, what’s really needed are services built around those tools. Most publishers don’t have the internal capacity (nor the desire) to become software development and support companies, hence a need for outsourcing remains critical.

. . . .

Given the high number of degrees awarded by universities every year and the very low number of tenure track faculty positions made available, research careers are something of a buyer’s market. We’ve seen universities continually increase the demands they make of their research employees. Researchers are required to do more and more beyond their actual research, including the usual teaching, mentoring, and serving on seemingly endless committees, but also primarily fundraising — science positions are increasingly similar to free-lance work, where the university essentially agrees to rent you space, and then you’re responsible for paying your own salary and costs through whatever grants you can bring in.

Now on top of this, researchers are being asked to jump through an enormous number of additional hoops, ranging from pre-registration of experiments, to posting of preprints (and monitoring and responding to resulting comments), to formal publication (where one must take great care to publish it in an outlet that follows the very specific rules set by your funders, your university, and all of your collaborators’ funders and institutions). Then you need to make the data behind the paper publicly available and help others use it, and if you really want to drive reproducibility, write up and release your methodologies. Societal impact is now deemed important, so you have to become your own publicist, promoting yourself and the work via social media. At the same time, people may be talking about your paper via post-publication peer review systems, so you need to monitor those and respond to any questions/criticisms.

Link to the rest at The Scholarly Kitchen

PG says a lot of the promotion and marketing requirements placed on academic authors sound like what indie authors do when they self-publish a book.

He’s remarked upon the strange economics in the world of academic publishing before, but PG will again remind one and all that the scholarly publishers don’t pay the researchers and authors any royalties or other compensation for the articles they publish.

However, scholarly publishers do charge very high subscription fees for their publications, which, like everything else, are rapidly moving away from paper to electronic form. A large percentage of these subscription fees are paid by college and university research libraries.

PG suggests following the money.

  1. Academic researchers are almost always receiving some sort of financial compensation from academic institutions in the form of salaries, office and lab space, access to the college/university libraries. While outside foundations, etc., may fund some parts of the research, the nonprofit academic institutions, including university-affiliated hospitals and other medical facilities in some cases, are providing support necessary for a great many research projects.
  2. A key deliverable for most academic research is a published report of the results of the research programs. For a variety of altruistic and self-serving reasons, colleges and universities want their contemporaries to know what excellent and innovative work is being done by their scholars.
  3. Instead of simply releasing such research reports directly, by posting them on university computer systems with free downloads available and permitting other relevant online locations academic research to repost, the colleges and universities expect their researchers to obtain what amounts to a stamp of approval from an appropriate third-party privately owned (in most cases) academic publication.
  4. The researchers write up their findings and submit them to scholarly publications. Since such publishers do not employ people with sufficient expertise to determine whether the research has been properly conducted and the research conclusions are supported by the research results, the scholarly publishers send the draft findings and conclusions out to experts in the field. In many cases, those experts are employed by other non-profit academic and research institutions and are certainly not employed by the scholarly publications.
  5. After appropriate third-party scholarly reviews are received by the publisher, sent to the authors, incorporated into revised reports, subjected to follow up examination by third-party experts, etc., the authors’ work is finally published.
  6. The scholarly publisher sells and licenses its publication of the author’s work to libraries, journal subscribers, etc. As mentioned above, scholarly publishers charge very high subscription fees for their publications.

What makes the scholarly publications valuable?

  1. The expertise and labor of the authors of the articles published which may incorporate the results of testing, laboratory research which may involve the use of expensive lab equipment, the use of clinical research facilities in hospitals, etc., which are provided by the institutions where the authors conduct their research,
  2. plus the quasi-certification of the reliability of the articles provided by third-party experts who have reviewed the published materials.

Who receives all the money generated from the sales and licensing of the scholarly publications?

Not the authors or the institutions providing research facilities or the experts capable of reviewing the research and providing the seal of approval.

It may not be the most exciting business in the world, but the publication of scholarly works is a great way to make a large return on the investment necessary to publish journals and books in 2018 2019.

Discoverability: Draft2Digital

3 January 2019

From Draft2Digital:

For sure, 2018 had a few bumps in the road. Amazon shook up the industry first by a shift to favoring paid advertising over organic search results, then with policy changes that led to decreased revenue and even canceled accounts, with effectively no recourse for affected authors.

Other interesting turns included dubious trademark claims, leading to the addition of terms like Cockygate being added to every indie author’s lexicon. Some authors attempted to trademark generic cover layouts and common words to (allegedly) protect their intellectual property. In general, it was a year filled with questionable practices on the IP front.

On a more positive front, Draft2Digital’s 2018 was a year of empowering authors in all-new and pretty exciting ways, with all new sales and distribution options, updates to existing tools, and a whole shelf full of new and exciting resources that make it that much easier to stop worrying about everything else and just write.

. . . .

We spend a lot of our time thinking of new ways to help authors take things to the next level. But for 2018, there was one challenge we were eager to take on: Discoverability.

Finding new ways to help readers discover you and your books was our priority for 2018.

. . . .

D2D Author Pages are your home away from homepage. This is a single platform online, where readers find more about you and find all of your books, all in one place. They’re beautifully crafted—we even updated them with all new features before the year was up! More on that in a minute.

These powerful pages include:

  • Your author bio, and an optional author photo
  • Links to your social media accounts
  • Customizable page elements to help promote your books to readers
  • A button that invites users to follow you, either through D2D’s New Release Notifications or by joining your mailing list, pointing them to your signup tool of choice
  • Carousels of your books and series
  • A “hero” book with optional promotional elements, so you can push a new release, first in series, free book, and more

These pages are perfect if you don’t have a website and either can’t afford one or don’t know how to create one. They’re also great as the “My Books” page of your existing site.

. . . .

D2D Book Tabs are a lot like a product page for your book, but they’re so much more! This is where your book lives and breathes online. D2D Book Tabs give your readers a beautiful and convenient place to find out everything they need to know to make the decision to buy and read your book.

Built on the back of our (very popular) Universal Book Links (UBLs), D2D Book Tabs are entirely independent of any single eBook retailer. Readers can click the Buy Now button and find your book anywhere it’s sold online.

Some key features include:

  • Your book and series titles
  • Your name as the author, with a link for readers to find more books by you
  • The cover image of your book
  • A customizable book description
  • Customizable page elements to help promote your book to readers
  • Your author photo and bio

Both your D2D Author Page and your D2D Book Tabs are designed with a smooth and enticing user experience in mind. They’re a perfect balance of form and function, encouraging readers to click through, to buy your books, and to come back for more. They’re a sleek, attractive, and easy way to promote you and your work and to increase your discoverability online.

. . . .

In 2017 we announced our partnership with Findaway Voices—a new way for you to turn your book into an audiobook and distribute it worldwide, even to Audible and Apple Books.

We saw some pretty amazing things come out of this partnership—

  • More than 4,300 authors produced audiobooks
  • More than 6,000 hours of audio was produced and distributed worldwide
  • More than 1,000 new narrators were added to Findaway’s database

. . . .

We’ve had a blast working with Findaway Voices, and based on feedback from our authors, we know you feel the same. Their recent announcement that they’re offering direct distribution to Apple Books, as well as a new 45% royalty (versus the previous 25%), is only going to make them all the more fun to work with.

. . . .

For months there were rumors, and then in September the bag was opened, and cats just ran everywhere. Kobo had struck a deal with Walmart for not only eBook distribution on Walmart.com, but also through select physical storefronts. Not only could readers buy a Kobo device off of Walmart shelves, they could also pick up a hanging placard that allowed them to purchase an eBook right from Walmart’s registers.

Now you could get your oil changed, buy your groceries, pick up fish food, and load up your Kobo reader all from the world’s biggest retailer*.

*We’re never sure if Walmart or Amazon deserves this title, but we’re inclined to give the win to Walmart on this one.

So what does that mean for D2D authors?

Since we have such a great relationship with Kobo, as one of our top sales channels, it means that D2D authors can have their books distributed to Walmart.com as well! In fact, if Kobo happens to be one of your sales channels, you’re already on Walmart’s virtual shelves.

Link to the rest at Draft2Digital

Disclosure: PG drafted the first Terms of Service for D2D for the initial roll-out of their service and has paid attention to their progress as they’ve grown.

PG has always liked the people running D2D and their attitude toward authors, including their royalty rates. When Mrs. PG read the OP, she told PG that she was going to try out some of their new promotional tools. (She’s had books on D2D since the company started.)

PG was particularly interested in the Walmart.com announcement.

At various times in the somewhat-distant and really-distant past, PG has attended a handful of business meetings with various Walmart executives. The attitude of managers when Sam Walton was still running the place (PG did say this goes back a long time) was much more receptive to new ideas from outside the company than the attitude of the managers after Mr. Sam left Bentonville to investigate potential store sites in an entirely different realm.

To be fair, Walmart is a huge company (2.3 million employees) and PG spoke to a small subset of their management team, so his attitude toward Walmart management has been based on an entirely insufficient sampling of people, most of whom may not be there anymore.

At any rate, PG has continued to watch Walmart from afar. After many years of so-so performance and getting totally beaten by Amazon online, over the past year or so, Walmart appears to have rediscovered some of its retailing mojo.

In particular, Walmart.com has finally become a decent website connected to a warehouse and delivery system that’s competitive with Amazon. For the first time ever, PG purchased a few items through Walmart.com during the latter part of 2018 because  Walmart was offering better prices and selection on those items than Amazon did.

That’s a long way of saying that PG will be interested to see if Walmart becomes a serious destination for book purchasers.

He just did a quick scan of Walmart’s online bookstore and while it’s a long way behind Amazon (for example, ebooks and printed books are sold in two different sections of the store), at least some of Walmart’s hardcopy bestsellers were beating Amazon’s prices by a 10-20% margin.

The Current State of Disruption (Planning for 2019 Part 1)

27 December 2018

From Kristine Kathryn Rusch:

 For years now, I’ve done a year-end review, examining what happened and where the industry stands.

. . . .

I wrote down lists and links and reviewed notes and thought long and hard about things…and still couldn’t figure out how to wrap my arms around what I wanted to talk about.

I initially thought about combining the different parts of the industry under topics, and examine the topic rather than that part of the industry. But the industry is diverging in some important ways, making that way of writing these blogs exceedingly difficult.

This afternoon, it struck me: I write the year-end reviews so that I can focus on what to expect from the year to come.

So rather than look in detail at what happened in 2018, I’ll be looking at what happened with an eye toward the future.

. . . .

A reminder: I write these weekly business blogs for other writers who want to make or already have a long-term career. If you’re just starting out, some of this stuff won’t apply to you. If you’re a hobbyist who never wants to quit your day job, again, some of this stuff won’t apply to you. Don’t ask me to bend the blog toward you. There are a number of sites that cater to the beginner or the writer who doesn’t really care if she makes a living.

. . . .

For the most part, however, dealing with beginner and hobbyist issues doesn’t interest me. I’m a long-term professional writer who has made money as a writer since I was 16, who has made a living at it since I was 25, and who started making a heck of a great living at it by the time I was 35. I started writing these weekly blogs to make some kind of sense out of the disruption in the publishing industry in 2009. I did it for me, because I think better when I am writing things down.

The disruption continues, albeit in a new phase (part of what I’ll discuss below), and so I am focusing on what I need to focus on for my long-term writing career. I hope that some of these insights will help the rest of you.

. . . .

The disruption in the publishing industry will continue for some time now. Years, most likely. I don’t have a good crystal ball for how long it will go on, but we are past the gold rush years in the indie publishing world and have moved into a more consistent business model. It’s at least predictable, now. We know some patterns and how they’re going to work.

. . . .

The disruption in traditional publishing has gone on for nearly two decades now. It began before the Kindle made self-publishing easy by giving writers an easily accessible audience. Traditional publishing became ripe for disruption in the 1990s when the old distribution model collapsed.

Many of you saw it from the outside—the decline of the small bookstore, the loss of bookstores in small towns, the rise of the bestseller only in chain bookstores. All of that came from a collapse in the distribution system, from hundreds of regional distributors down to about five. (I don’t off the top of my head recall the actual number.) That made publishers panic. They couldn’t figure out what kinds of books sold best in the Pacific Northwest as opposed to what sold well in the Southeast, and worse, they didn’t have time to figure it out.

(When I came into the business, a top sales person for a major book company would know that science fiction sold well in California and quest fantasy sold well in Georgia, that the Midwest really enjoyed regional books, while New Yorkers often didn’t.)

Bestsellers sold everywhere, so publishers ramped up the production of already-established authors and sent those books all over the nation. Then, when the crisis leveled out, the publishers did not return to the old ways, scared of what to do. They continued to push for huge sellers rather than grow newer books.

Writer after writer after writer got dumped by their publisher in this period, while some new writers made fortunes because they wrote books that were similar to existing bestsellers.

When the Kindle came around and disrupted publishing, both writers and readers were ready for something new. That combination of forces created the blockbuster indie sellers—which were not blockbuster to traditional publishers. (The writers were making significantly more money, but selling fewer units than trad pub bestsellers.)

Hold that thought for a moment while I remind you that another disruption—a different one—was hitting publishing at the same time. Audiobooks went digital, and exploded. It became easy to download an audiobook and listen to it on your iPod (remember those) or your favorite MP3 player. Some cars made it easy to hook up those players to the sound system of the car.

And thus, commuters wanted everything on audio, and the demand in audio grew exponentially. As so many industry analysts said five or six years ago, if the Kindle hadn’t come around, the big story in publishing would have been the audiobook.

And here’s another publisher problem: most publishers never secured audio rights to the books they published. That money went directly to the authors.

. . . .

For years now, those of us who watch business trends have predicted that book sales would plateau. In reality, “plateau” is the wrong word for overall book sales. Those continue to grow, sometimes in ways that aren’t entirely measurable. New markets are opening all the time, bringing in new readers.

The system for measuring both readers and sales is so inadequate that we can’t count the readers we have, let alone the new readers who are coming into the book industry sideways. However, there is a lot of evidence—scattered, of course—that new readers are coming in. (I’ll deal with this in future weeks.)

Readership is growing, but individual sales are mostly declining. Traditional publishing’s fiction sales are down 16% since 2013. Traditional publishing has a lot of theories about this, delineated out in the Publishers Weekly article I linked to.

Indie writers believe a lot of the trad pub sales migrated to them. Maybe.

But some of what happened here was the inevitable decline from the gold rush of a disruptive technology.

Let’s look at traditional publishing for a moment. Traditional publishing moved to the blockbuster model at the turn of the century, meaning that the books that were published had to have a guaranteed level of sales or the author’s contract wouldn’t be renewed. The sales rose, partly because traditional publishing was the only game in town.

In that period, if you went to bookstores all over the country, and followed that up with a visit to the grocery store, as well as a visit to a story like WalMart or Target, you’d find the same group of books on the shelves. A few more in Target than in the grocery store, and certainly more in the bookstore, but still, the same books. And the airport bookstores were the same way.

If a reader needed reading material, he only had a few hundred titles at any given time in the stores to choose from. So the reader read the best of what he found, not necessarily what he wanted to read.

Then the disruption happened. Kindles and ereaders proliferated. Readers found books they’d been searching for, often for years. The readers also found some genres and subgenres that they hadn’t seen in a decade or more, usually books by indie writers that oculdn’t sell to the big traditional companies.

The boom in ebooks grew and grew and grew. (And if traditional pubishing hadn’t dicked around with pricing, their book sales would have grown even more.) That’s why the S-curves on that graph grow precipitously in between Stages Two and Three. Adoption increases revenue for a very very very short period of time.

That kind of growth is not sustainable for years, though. That’s why I say it was an inevitable plateau. If you’ll look on that graph again, though, you’ll see that both curves end higher on the y-axis—the profit axis—than they were at the beginning.

But hitting that plateau after years of rapid growth and, in the case of traditional publishing, a near-monopoly on the market, is painful. And that’s what we’re experiencing.

Also, sales are spreading out. I’ll talk about this a bit more in the next couple of weeks. But think of it this way. Instead of a lot of readers reluctantly reading the latest blockbuster because they’re trapped in the airport and can’t find anything else to read, those readers are now downloading dozens of books on their phones, and reading a variety of things—some of which we don’t have measurements of. Those readers have left the blockbusters they barely liked behind and found books/authors they like better.

So the money that would have gone to five different authors at three different publishing companies is now going to twenty authors, and only two of those authors are with traditional publishing companies. The books the readers are reading, though, aren’t the latest blockbuster by that author, but an older book that came out a decade ago. The price is lower, and the companies aren’t interested in those sales. They want the newest book to sell the most copies.

The consumer spends the same amount of money, but spreads it out over a wider range. Many of these sales are untrackable. Not all of those twenty authors report their sales to anyone, and not all of those sales were made through traditional channels. A few of the authors sold on their own websites. Some of those books came out of bundles. And some came out of a subscription service like Amazon. The traditional publishing companies lost most of the revenue, because their book sales have legitimately declined.

But that doesn’t mean people are reading less or that fiction reading is declining.

I’m not the only one who sees this. Mark Williams of The New Publishing Standard had the same reaction to the traditional publishing fiction numbers that I did. He wrote on November 18:

The big problem we have is that the fiction market, much more so than the wider book market, is so fragmented now, thanks to digital (by which I mean not just ebooks and audiobooks but online POD and most of all social media democratising the promotion of fiction titles), such that it seems like fewer people are reading fiction, but the reality is likely just the opposite.

The fragmented market is but one thing we’ll talk about in the next few weeks. We’ll look at how writers can use that market to their own advantage.

Link to the rest at Kristine Kathryn Rusch

PG always appreciates the analysis Kris and Dean bring to the publishing world, traditional and indie. He was going to add a few of his thoughts to Kris’ excellent post, but, perhaps as a result of holiday hangover (not the alcoholic kind), his little gray cells are not as well-regimented as usual.

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

Here is the most recent Kris Rusch book selling on Amazon:

Amazon Targets Unprofitable Items, With a Sharper Focus on the Bottom Line

16 December 2018

From The Wall Street Journal:

Amazon.com Inc. has trained people to buy everything from major appliances to daily staples online. Now it is having second thoughts about some of those sales because they don’t make money—and is pushing big brands to change how they use its site.

Inside Amazon, the items are known as CRaP, short for “Can’t Realize a Profit.” Think bottled beverages or snack foods. The products tend to be priced at $15 or less, are sold directly by Amazon, and are heavy or bulky and therefore costly to ship—characteristics that make for thin or nonexistent margins.

Now, as Amazon focuses more on its bottom line in addition to its rapid growth, it is increasingly taking aim at CRaP products, according to major brand executives and people familiar with the company’s thinking. In recent months, it has been eliminating unprofitable items and pressing manufacturers to change their packaging to better sell online, according to brands that sell on Amazon and consultants who work with them.

One example: bottled water from Coca-Cola Co.Amazon used to have a $6.99 six-pack of Smartwater as the default order on some of its Dash buttons, a small device that allows for automatic reordering with a single press. But in August, after working with Coca-Cola to change how it ships and sells the water, Amazon notified Dash customers it was changing that default item to a 24-pack for $37.20.

That raised the price per bottle to $1.55 from $1.17. And Coca-Cola will start shipping those orders directly to consumers, sparing Amazon the expense of shipping from its warehouses. Manufacturers shipping from their warehouses is something Amazon has asked more brands to do to cut its own costs.

Amazon told Coca-Cola that it was losing money on the smaller, cheaper shipments, according to people familiar with the matter.

Coca-Cola responds that it works with partners to learn together and constantly evolves its offerings.

. . . .

For big consumer brands, not being on Amazon “is not an option anymore,” said Guru Hariharan, chief executive of Boomerang Commerce, which makes e-commerce software. “They have the power; they have the shoppers.”

Amazon also has greater leeway to curb CRaP items because of the rise of independent sellers on its site. They have added hundreds of millions of items, helping ensure that Amazon’s virtual shelves are stocked with the variety shoppers expect. And those sales tend to be more profitable for Amazon, which typically collects a 15% cut plus fees for warehousing.

. . . .

Mr. Bergstein said his company has developed new product formats that are more profitable to sell online—on Amazon or elsewhere. Amazon is “really clear that they have a profitability threshold,” he said. “We’ve been clear about saying, ‘Let’s make sure what we’re selling is profitable, and we’re not just lining Amazon’s pockets.’”

That has meant selling smaller, lighter laundry products like detergent pods and skipping cheaper paper towels. Instead of promoting a three-pack of dish soap, Seventh Generation recently started advertising a 6-pack for $17.70, and it created a larger, 504-count package of baby wipes for $19.91 for sale on Amazon and elsewhere.

Link to the rest at The Wall Street Journal

As PG has noted previously, ebooks are an ideal online product for Amazon with extremely low storage and delivery costs.

PG suspects the same could be said for ebooks and traditional publishers although, unlike Amazon, publishers share far less of the money they receive from ebook sales with authors than Amazon does.

Of course, traditional publishers opted to fight with Amazon instead of embrace it as a marvelous way of increasing sales without increasing publisher overhead. They bet their money on Barnes & Noble instead.

While PG is rolling, he’ll briefly address an apparently evergreen story that pops up among various traditional and nontraditional media outlets: Amazon’s warehouse workers.

PG speculates that none of the authors of those articles have ever worked in a warehouse.

By virtue of a summer job during his college years, PG can claim familiarity with warehouse work. It was hard work that involved lugging semi-heavy objects (30-60 pounds) around all day. The surroundings were much dirtier than Amazon’s warehouses, if contemporary photos are accurate. Climate control at PG’s warehouse job consisted of opening a bunch of doors to allow air to circulate at ambient temperatures.

PG expects that if he went on an inspection tour of today’s warehouses, he would find a great many that hadn’t changed much since his college days.

Way back when, PG earned minimum wage. A lot of warehouse workers still earn minimum wage.

In virtually every way, Amazon treats its warehouse workers better than warehouse workers are treated by other American businesses, small or large. Amazon workers earn more than minimum wage. Amazon provides medical insurance. Amazon provides opportunities for promotion. Amazon will pay for further education of its warehouse employees, whether the education is in a field that benefits Amazon or not.

So why are Amazon warehouse stories such an evergreen topic?

Amazon doesn’t want labor unions in its warehouses. For reasons that are not difficult to discern, Amazon believes that unionized employees will not increase productivity at its warehouses. In the US, the number of workers working under union contracts peaked in 1980 and has been declining ever since.

Again in the US, companies with unionized workforces are overwhelmingly operating in old-time bricks and mortar industries. Virtually none of the technology companies that have driven so much economic growth in the US for the last 20 years are unionized.

A common tactic of US labor unions when they’re trying to pressure an employer into agreeing to unionize its employees is to spread horror stories about the working conditions inside of the target employer. The bad PR is supposed to pressure the company into agreeing to permit labor unions into its business. Whether the horror stories are true or not is beside the point.

Amazon presently employs more than 600,000 people. Not all of those people are happy every day. Not all of those people love their jobs.  PG gently suggests that unionized Amazon warehouses won’t change that.

 

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