By now it is clear that wokeness is a contagious malady. Amazon.com made headlines in February when it suddenly delisted Ryan Anderson’s book “When Harry Became Sally: Responding to the Transgender Moment,” a thoughtful, humane and deeply researched investigation of a controverted subject of public debate.
As the publisher of that 2018 bestseller, I was taken aback by reports that Mr. Anderson’s book was unavailable at “the world’s largest bookstore.” At first, I wondered whether there was some mistake.
But no. It was a deliberate act of censorship. Moreover, like the earl of Strafford, Amazon’s motto was “Thorough.” They didn’t just stop selling the book. They pushed it into the digital oubliette, erasing all trace of it from the Amazon website. They did the same thing at their subsidiaries Audible, which sells audiobooks, and AbeBooks, which sells secondhand books.
Now it turns out that Bookshop.org, which bills itself a scrappy alternative to the Bezos Behemoth, is up to the same game. A couple of weeks ago, a reader alerted us that Mr. Anderson’s book had gone missing from the Bookshop.org website.
The organization never responded to our queries. But on Friday we learned from our distributor that Bookshop had deep-sixed the book. “We did remove this title based on our policies,” Bookshop wrote to our distributor—without, however, explaining what those “policies” might be. “We had multiple complaints and concerns from customers, affiliates, and employees about the title.”
Perhaps other customers, affiliates and employees expressed “complaints and concerns” about Heather Mac Donald’s “The War on Cops,” another Encounter bestseller. That book has also been disappeared from the Bookshop website.
. . . .
I couldn’t help but note that at least one of my own books, “Tenured Radicals,” is missing in action there. Apparently there were no “complaints and concerns” about Adolf Hitler’s “Mein Kampf,” however. That book is available in a variety of editions, as are the anti-Semitic lucubrations of Louis Farrakhan and many other similarly unedifying effusions.
Underdogs make for good copy, so it was no surprise that Bookshop was hailed as a brave upstart, a feisty David to the Goliath of Amazon. “Bookshop.org hopes to play Rebel Alliance to Amazon’s Empire,” ran the headline of a valentine in the Chicago Tribune.
Bookshop turns out to be little more than another minion for the Emperor of Wokeness. For the past couple of weeks, the first item advertised on its home page is that bible of antiwhite woke sermonizing, “How to Be an Anti-Racist.” Many readers, I’d wager, would have “complaints and concerns” about that screed. But that doesn’t mean that Bookshop should stop selling it. Nor would it, regardless of how many complained.
The move to squash Mr. Anderson’s book is the vanguard of a larger effort to silence debate and impose ideological conformity on any contentious issue in which the commissars of woke culture have made an investment. It has nothing to do with principle and everything to do with power.
Amazon and now Bookshop have sided firmly with the bullies. Doubtless there will be more interdictions, delistings and suppressions. They can do it, so they will do it.
One of the more tiresome canards from the courtiers is that entities like Amazon and Bookshop are private companies and therefore that they can choose to sell, or not sell, whatever they want.
This is true, but also irrelevant. What we are witnessing are not the prerogatives of the free market but the clashings of a culture war. Those clashings may adopt, as camouflage, the rhetoric of free enterprise, but their end is control and obliteration of opposing points of view.
Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)
Lest any visitors to TPV should have any doubts, PG is concerned about viewpoint discrimination on the part of Amazon.
He acknowledges that, as a private business, Amazon has the right to choose what products it will and will not sell, but this decision drops the company into the middle of a political controversy that it needn’t have joined.
Amazon is a very large target for those across the political spectrum and a serious antitrust investigation of the company’s activities and policies could substantially harm its business.
More than one giant US company has been hamstrung and permanently impaired by a lengthy antitrust probe. Classic examples are AT&T, Kodak and Standard Oil.
Most recently, Microsoft was involved in a lengthy antitrust suit.
Bill Gates later said that the antitrust suit prevented Microsoft from completing development on Windows Mobile, its cell phone operating system (which left the field open to Apple and Android). Apple’s annual revenue is now about twice as large as Microsoft’s.
Gates also cited the stress of the antitrust suit as a contributing factor in his decision to step down from the leadership of Microsoft in 2000. PG is not alone in believing that Microsoft has not been the same company since Gates left.
There has been a growing sentiment in the United States that the big technology companies such as Amazon, Apple, Google and Facebook have become too large and powerful.
Amazon CEO Jeff Bezos had what was widely regarded as a poor showing in his videoconference testimony before the House Antitrust Committee last summer. He recently declined an invitation to testify before a Senate committee investigating “The Income and Wealth Inequality Crisis in America.”
PG notes that TPV is not a political blog and requests that comments not devolve into political name-calling. He is concerned about Amazon’s future primarily because it is the only significant marketplace where indie authors can publish their books on an equal basis with books from traditional publishers and Amazon provides a very large portion of the royalties that indie authors earn from their books.
(Note: PG has removed all the embedded links in the excerpts below. A link to the particular Kindle Vella section is included at the bottom of that section.)
Kindle Vella Royalties
Use Tokens to unlock episodes
Read episodes
To give readers a chance to check out a story, they can read the first three episodes of every story without redeeming Tokens.
Use Tokens to unlock episodes
Readers can purchase and redeem Tokens to unlock later episodes. The number of Tokens needed to unlock an episode is determined by the episode’s word count at the rate of one token per 100 words. For example, it takes six Tokens to unlock a 638-word episode. You can view the number of Tokens needed to unlock an episode on the episode setup page.
We plan to have several bundle options available for readers to purchase Tokens on the web and in the Kindle for iOS app. Token pricing may change before Kindle Vella stories are made available to readers, but here is an example of the Token purchase experience on the web:
Royalties
You’ll earn 50% of what readers spend on the Tokens that are used to unlock your story’s episodes. You’ll also be eligible for a launch bonus based on customer activity and engagement. To make it easy for readers to find stories they love, the first few episodes of every story are free. The number of Tokens needed to unlock an episode is determined by the episode’s word count at the rate of one token per 100 words. You can view the number of Tokens needed to unlock an episode on the episode setup page.
We plan to make Tokens available through mobile channels that charge a fee. In this case, the fee will be deducted from the revenue that is shared.
Here’s how earnings per episode will be calculated:
(Number of Tokens to unlock episode) * (Tokens bundle price/# Tokens in bundle – taxes and fees) * (50% rev share) = Earnings per episode
For example, here’s how we calculate earnings for a 3,025 word episode (30 Tokens) when the Tokens are purchased on the web in a 200 Tokens bundle versus an 1,100 Tokens bundle. In this example, we are assuming no taxes or fees.
Readers will be able to enjoy your stories when we make the Kindle Vella store available in the next few months. Learn more about the reader experience.
2. What happens if I publish an episode before the Kindle Vella store is available to readers?
With Kindle Vella, you can choose to publish your episode immediately or schedule publication on a future date. If you publish a story before Kindle Vella is available to readers, all stories in compliance with our content guidelines with a Live status will be ready and waiting when Kindle Vella stories become available. We recommend publishing at least 5-10 episodes before stories become available so readers can dig in right away.
If you’re not ready to publish or don’t want all your episodes to go live at once, we recommend leaving episodes in a Draft status, then publishing or scheduling publication after the Kindle Vella store is live for readers. Learn more about episode release dates.
3. What kind of content should I publish?
To provide the best experience for readers, Kindle Vella stories should be written specifically to be released in a serial format, one 600–5,000 word episode at a time. If you have a story in this format that is available elsewhere, you can also publish it with Kindle Vella. To ensure a good customer experience, Kindle Vella does not accept content that’s freely available. Learn more about our content guidelines.
4. How will I earn royalties through Kindle Vella?
You’ll earn 50% of what readers spend on the Tokens that are used to unlock your story’s episodes. You’ll also be eligible for a launch bonus based on customer activity and engagement. To make it easy for readers to find stories they love, the first few episodes of every story are free. The number of Tokens needed to unlock an episode is determined by the episode’s word count at the rate of one token per 100 words.
Existing content and metadata guidelines for eBooks apply for Kindle Vella content. In addition to our existing guidelines, we’ve listed new content guidelines related to Kindle Vella below.
Content
Kindle Vella is a serial reading experience. To protect readers from purchasing Kindle Vella content they have already read in a different format, you cannot:
Incorporate your Kindle Vella content into other long-form content (e.g., a book) in any language. If you wish to incorporate an episode or story into other content, you must unpublish all episodes of that story from Kindle Vella.
Publish in Kindle Vella content that is in the public domain or freely available on the web.
Break down your previously published book or long-form content into Episodes and republish in Kindle Vella, even if that book or long-form content is no longer available or is written in another language. If your Episode or Story is derived from another work you have authored (e.g., it continues the story from a book), you may include up to 5,000 words of content from the other work in the first Episode to bridge the story, provided you control the rights to do so.
Tags
You can add up to seven tags for each story. To ensure tags help readers get a feel for your story and make good purchasing decisions, please avoid:
Information covered elsewhere in your Story’s metadata (title, contributors, etc.)
Subjective claims about quality (e.g., “best”)
Time-sensitive statements (e.g., “new”)
Information common to most items in the category (“story”)
Spelling errors
Anything misrepresentative, like the name of an author who’s not associated with your Story. This kind of information can create a confusing customer experience. Kindle Vella has a zero tolerance policy for metadata that is meant to advertise, promote, or mislead
Amazon program names like “Kindle Vella”
Language promoting violence or intolerance
Sexually explicit language
Note all eBook keyword guidelines also apply to tags.
Author notes
This is a tool to build engagement on your story, so avoid including any links or prompting readers to leave the reading experience.
Share your story by publishing one short episode at a time.
. . . .
Publish an episode
After you create a story, you can publish episodes.
To publish an episode:
Go to your Kindle Vella Library.
Select the story to which you want to add an episode.
Click Create episode or Continue episode draft.
Type or import your episode text.
Choose your release date.
Click Publish.
Update an episode
You can edit a published episode at any time.
To edit an episode:
Go to your Kindle Vella Library.
Click Manage your story.
Select the episode you want to edit.
Click Edit Episode.
Enter your changes.
Click Publish.
Delete an episode
You can delete a Draft episode to remove it from your Kindle Vella Library. You can’t delete episodes that have been Live. After you delete or unpublish a story, that action can’t be undone.
To delete an episode:
Go to your Kindle Vella Library.
Click Manage your story.
Go to episode you want to delete.
Click Delete draft.
Click Yes to confirm you want to delete the episode.
Tell us about your episode
Episode details
Description
Episode title (optional)
Enter a name for your episode. An episode title isn’t required. If you don’t include a title, episodes will be titled by number. For example, Episode 1.
Note: We add episode numbers automatically, based on the order they’re created.
Episode content
Import your episode from a Microsoft Word document (DOC/DOCX) or type it directly in the online editor.
Episodes must be in English and between 600-5,000 words. At this time, Kindle Vella supports basic formatting, such as bold, italics, and underlines.
The following formatting is not currently supported:Indented paragraphsImagesChartsTablesSpecial charactersEmojis
Author Notes (optional)
Add Author Notes to share additional details or behind-the-scenes thinking with your readers. This is your opportunity to communicate directly with readers in your own voice.
You can use Author Notes to:Give insight to readers on your writing processShare details on a character’s developmentShare teasers to get readers excited for the next episodeThis is a tool to build engagement with your story, so avoid including any links or prompting readers to leave the reading experience.
Author Notes appear after the episode and can’t exceed 200 words. These notes are not included in your episode word count.
HTML is not supported.
Author Notes must comply with our content guidelines.
Preview episode
View your episode as it will appear to readers. To create a consistent reading experience across all Kindle Vella episodes, we’ll remove paragraph indentations and add a line space between paragraphs during publishing.
If you want to make changes after previewing your episode, make them directly in the online editor or in your original Microsoft Word document and import the new file.
Tokens
Readers can unlock episodes by purchasing and redeeming Tokens. Readers can read the first three episodes in your story without redeeming Tokens. For later episodes, the number of Tokens required to unlock an episode is set automatically based on word count. You can see the number of Tokens a reader needs to unlock an episode on the Episode setup page.
Release date
To keep the story reading experience sequential, we can only release an episode after you’ve released all previous episodes. You can publish your episode immediately or schedule publication on a future date. After your episode goes Live or is Scheduled, we’ll send you an email.
Release now. Publish your episode immediately. After we open the Kindle Vella store to readers, we’ll make all content in compliance with our content guidelines with a Live status available.
Schedule release. After we open the Kindle Vella store to readers, we’ll make all scheduled episodes available on the scheduled release day. Scheduled episodes go live at midnight Eastern Standard Time on the selected release date.
Episode status
Your episode status appears in your Kindle Vella Library. After we open the Kindle Vella store to readers, we’ll make all content in compliance with our content guidelines with a Live status available and publish Scheduled episodes on the scheduled release day.
Status
Description
Draft
Your episode is created, but not published.
In Review
Your episode is under review to ensure it meets our content guidelines.
Failed Publishing
Your episode failed publishing due to a possible technical issue. Please try republishing.
Action Required
Your episode requires changes before it can move to Live status. Check your email for instructions.
Publishing
Your episode passed review and will move to Live status shortly.
Scheduled
Your episode will be available in the Kindle Vella store after we open the Kindle Vella store to readers on the release date you scheduled.
Live
Your episode is ready and will be there for readers when Kindle Vella stories become available to them.
Live with Unpublished Changes
Your episode is ready and waiting for readers, but you have made changes that haven’t been published yet. Publish your updates to make them available to readers after the Kindle Vella store becomes available.
Blocked
Your episode is unavailable for further editing due to a violation with our content guidelines. Check the email you use to access your KDP account for details.
Unpublished
Your episode (and story) will no longer become available in the Kindle Vella store at reader launch.
Perhaps PG missed it in the various links and sub-links, but he didn’t see anything that looked like a typical Amazon Terms & Conditions section that looked like it had been written by Amazon’s legal department.
PG has had prior dealings with Amazon’s in-house attorneys and they have impressed him as being very competent. What passes for terms and conditions in the various Kindle Vella sections is more than a little scattered and vague. He suspects that either Kindle Vella was put together without any legal assistance or Amazon’s legal department had just returned from an offsite meeting that involved a few hallucinogens during the breaks.
If any visitors to TPV locate something that looks like the T’s&C’s for Kindle Vella, PG would appreciate a link either in the comments or via the Contact PG link in the top menu bar.
Merchant groups are forming a national coalition to campaign for stricter antitrust laws, including measures they hope could force Amazon.com Inc. to spin off some of its business lines.
The effort is being launched Tuesday by trade groups that represent small hardware stores, office suppliers, booksellers, grocers and others, along with business groups from 12 cities, organizers say. Merchants plan to push their congressional representatives for stricter antitrust laws and tougher enforcement of existing ones.
The groups, which collectively represent thousands of businesses, want federal legislation that would prevent the owner of a dominant online marketplace from selling its own products in competition with other sellers, a policy that could effectively separate Amazon’s retail product business from its online marketplace.
Members of the House Antitrust Subcommittee are considering legislation along those lines as they weigh changes to U.S. antitrust law, though no bill has yet been introduced.
The merchant groups also want tougher enforcement of competition laws and legal changes that would make it easier for the government to win antitrust lawsuits against big companies.
In a statement, an Amazon spokesperson said the company’s critics “are suggesting misguided interventions in the free market that would kill off independent retailers and punish consumers by forcing small businesses out of popular online stores, raising prices, and reducing consumer choice and convenience.”
“Amazon and third-party sellers complement each other, and sellers having the opportunity to sell right alongside a retailer’s products is the very competition that most benefits consumers and has made the marketplace model so successful for third-party sellers,” the spokesperson added.
Members of the coalition, dubbed Small Business Rising, include the National Grocers Association, the American Booksellers Association and the Alliance for Pharmacy Compounding.
They aim to capitalize on local business owners’ connections to their hometowns by meeting with members of Congress and staff, writing letters, seeking coverage in local media, and other efforts.
“Those stories are powerful and are motivating for lawmakers,” said Stacy Mitchell, co-director of the Institute for Local Self-Reliance, a research and advocacy group that has previously partnered with unions and others to oppose what it views as excessive corporate power and spearheaded the campaign. “It’s a real business that is really going to go under with a real community that is going to suffer as a result.”
. . . .
The business owners come from different industries, but competition from Amazon is a common thread.
Doug Mrdeza, a Michigan-based merchant on Amazon’s marketplace, said he laid off close to 40 employees in late 2019 after Amazon raised his fees and struck deals with some of his suppliers to sell products itself, cutting him out of the supply chain.
David Guernsey, chief executive of Virginia-based office supplier Guernsey Inc., says government agencies are buying more on Amazon’s site, but he is wary of selling there because it would mean giving Amazon access to data on his prices, transactions and customers.
“I’ve never had a competitor that had that kind of insight to my business,” he said.
. . . .
Allison Hill, chief executive of the American Booksellers Association, said some of the group’s roughly 1,800 independent bookstores have started “sleeping with the enemy”—selling on Amazon’s marketplace—to survive.
“If a company was operating that marketplace and was not your competitor, they would be offering very different support and services,” she said.
Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)
So what does the American Booksellers Association want its members to do – survive or die? Trying to force someone to come to your store by denying them their preferred way of purchasing books is a loser’s game.
Clamp down on Amazon, force its book prices up and you’ll see a zillion mini-Amazons springing up online, following the same recipe that made Jeff Bezos rich.
Every day, those who purchase books and everything else vote for their favorite way of purchasing goods and services. There is no standard method consumers use in making this decision that can be captured by a single style of retailer.
If PG runs out of milk at 10:00 AM, he’ll probably put together a list of other things Mrs. PG tells him he should purchase and make a grocery run at a convenient time (which he selects based on his own personal calculations and preferences and what’s happening that day) and pick up milk and a number of other items.
If PG runs out of milk at 10:00 PM, he’ll think about waiting til morning, but he’ll probably take a trip to the closest place to buy milk, purchase that and whatever candy catches his eye at the checkout counter, and get home a few minutes after he left.
Is PG going to buy milk from Amazon? He might if 1. the price was good, 2. He could get it delivered within a reasonable period of time and 3. Amazon provided some means of keeping 8 gallons of milk cold until PG used it all because there is not enough room in PG’s fridge to hold that much milk.
PG doubts that Amazon is going to try to sell him milk any time soon.
Amazon is succeeding because consumers are voting with their dollars. PG suspects that 99.9% of those who purchase books through Amazon know that there is such a thing as a physical bookstore, so knowledge of alternative ways to purchase books is widespread. They still choose Amazon.
Action to impair Amazon’s ability to sell books the way it does so successfully impacts people across the country, including:
Those who live twenty miles (or more, sometimes much more) away from the nearest bookstore.
Those for whom the closest bookstore is a hellhole that’s run by a nasty old man who smells like cheap cigars and doesn’t stock any books for women other than Harlequin Romances (nothing specifically against Harlequin – some intelligent people who read a lot like Harlequin, but others don’t.). The old man leers at women who buy romances (or anything else) as they wait for him to count out their change. Some women use a disposable wipe to clean their hands and their change after they get out of the store.
Those who like to buy and read hardcopy books, but are on a limited budget.
Those readers whose interests Barnes & Noble and its New York purchasing department don’t understand.
Those who like to read books by indie authors and indie presses.
Those who prefer ebooks and barfed the last time they picked up a Nook.
Those who really enjoy Amazon’s ability to suggest other books they might like to read. (PS: Amazon is much, much, much better at this than any bookstore clerk anywhere with whom PG has held a conversation about book recommendations. Traditional bookstores and their low-paid employees (regardless of how pleasant they may be) are quite crude tools for book discovery compared to the Zon. The farther your tastes stray from the NYT bestseller list, the worse they are.)
Amazon has been examining the idea of opening discount stores or outlets selling unsold electronics and home goods at steep discounts, Bloomberg has reported. The products would reportedly be sourced from inventory in its warehouses, and the company has weighed opening permanent locations and pop-up stores in malls and parking lots. The stock would consist of smaller items that don’t take up a lot of space, like home goods, toys, kitchen items and electronics, but not clothing.
A 2019 report detailed how Amazon destroys millions of items it can’t sell, ranging from TVs to diapers — though Amazon later pledged to donate unsold goods. “It’s a way to be able to clean out warehouses and get through inventory without having to destroy it,” one of Bloomberg’s sources said.
PG says there are plenty of large empty retail spaces around the US which would be available for this sort of operation.
OTOH, Amazon receives so much attention from its critics for its warehouse working conditions (despite $15 per hour wages (more than double the US minimum wage) plus a set of employee benefits much broader than most hourly workers receive that it might think discount stores (which often pay low wages) would attract more negative attention.
An Evanston bookstore owner wants to take on Amazon.
Nina Barrett, owner of Bookends and Beginnings, signed on as the named plaintiff in a class-action lawsuit filed last week that accuses Amazon of orchestrating a price-fixing scheme with the nation’s leading book publishers that makes it impossible for other retailers to beat their prices.
According to the suit, contracts that Amazon has with the nation’s “Big Five” publishers — Penguin Random House, HarperCollins, Hachette, Macmillan and Simon & Schuster — block the publishers from giving other retailers better prices.
“I, along with most independent bookstore owners in America, feel incredibly frustrated because we’ve seen that the playing field is not level,” Barrett told the Sun-Times. “We have to talk to our customers all the time about why we can’t match Amazon’s pricing.”
. . . .
The suit, which was filed in New York, seeks to include all booksellers that bought books from the Big Five after March 25, 2017. It seeks damages and an injunction on the “anti-competitive” practice.
“It’s been very frustrating to watch the growth of Amazon and think, ‘Me, just little old me by myself, I can’t stop this, but I can see that it’s unfair,’” Barrett said.
. . . .
Attorney Eamon Kelly, who lives in Evanston and regularly shops for biographies at Barrett’s store, pitched Barrett to his fellow attorneys and then pitched Barrett, who said she “jumped on the idea.”
Barrett’s shop, with its alleyway entrance, is “a magical place to look at books,” Kelly said.
Barrett, 60, opened her bookstore in 2014.
The financial pain felt by her bookstore due to Amazon’s pricing is real, Barrett said, and would have been more acute during the pandemic if not for an online fundraising campaign that raised nearly $50,000, money her business received through the Paycheck Protection Program and the fact that a Barnes and Noble about a block from her store closed last year, funneling more customers her way.
She called Amazon a “juggernaut” and a “bully.”
“We think that being a place matters, that the browsing experience matters,” she said.
“We get up and battle and fight every day to make our business model work, and we do it out of passion. But no one of us would ever have the power to be able to take on Amazon,” she said.
The OP makes Ms. Barrett and her bookstore seem quite nice. PG is very familiar with Evanston and can report that it’s a pleasant tree-filled upscale university town on the shores of Lake Michigan filled with lots of people who have plenty of disposable income. If any location could support a traditional bookstore these days, Evanston could.
The OP didn’t mention whether Ms. Barrett buys the books she sells through a wholesaler like Ingram or not. At least some of Ms. Barrett’s cost of goods can be attributed to Ingram’s markup and shipping fees.
There are a lot of good attorneys in Chicago, although PG is not acquainted with any of the attorneys or firms named in the OP. If they’re not already familiar with the strange and expensive supply chain used by major publishers to get books to retail bookstores, they will certainly become familiar with it soon.
That said, regardless of how much some people think traditional bookstores “matter”, that doesn’t mean they will necessarily continue to be financially viable or have any sort of “right” to be viable.
All sorts of business that were common in PG’s youth are non-existent or effectively non-existent these days. More than a few businesses that have closed their doors during the Time of Covid are not going to reopen.
Perhaps the closure of the Barnes & Noble near Ms. Barrett’s bookstore was indicative that it had problems with a business model quite similar to the model Ms. Barrett is fighting to make work in her store.
Two striking statistics recently reported by Publishers Weekly:
Print book sales rose 8.2% in 2020 versus 2019, according to NPD BookScan.
Bookstore sales fell 28.3% in 2020 versus 2019, according to preliminary estimates from the U.S. Census Bureau.
The year-to-year increase in book sales was the largest since 2010, and was led by demand for books to keep children occupied during the period of remote schooling. Juvenile nonfiction was up by 23%, young-adult nonfiction by 38%. But adult books were up as well. By every measure, more books were sold in 2020 than in 2019.
Those gains aren’t reflected in bookstore sales, though, as pandemic-related closures and restrictions kept us away. The worst months for bookstores were April and May, the leading edge of the lockdowns, but even as restrictions loosened, sales remained 20% or so below previous year levels.
. . . .
I want to suggest that books are not merely a consumer product. Instead, I’d like us to consider books as part of a larger ecosystem, which includes writers, publishers, booksellers and readers, and that good books depend on all parts of the ecosystem being healthy. As such, we cannot be indifferent about where we buy them.
Bookstores are a key component in making sure there is an interesting variety of books that connect with readers of differing stripes. If we lose bookstores, we will lose the places where word-of-mouth hits are born. We will lose the places where we may discover something we’d never heard of, simply because we brush past it on a table. We will lose one of the important congregating places where people who value books come together in fellowship. We will lose the place we might stop in after brunch on a beautiful afternoon when we need to walk off a meal and aren’t ready to go home yet.
We will lose booksellers, the people who tend to book system the same way a gardener works the greenhouse.
. . . .
Right now, with publishing and books, we could be at peak variety. The somewhat worrisome consolidation in corporate publishing is being offset with a greater thirst for diverse voices and books, not to mention the continuing growth of scrappy independent publishers.
But if we narrow the channels through which books are sold, we will also narrow the kinds and varieties of books that will be sold. Books will still sell, because just like apples, you have to have books, but we will be missing something if we lose that variety.
It is fantastic news that book sales have weathered the pandemic — better news than we could have hoped for — but to revivify the ecosystem as a whole will require us to examine our patterns of purchase. We need to make intentional choices about where we shop to seed the return of bookstores.
PG suggests that this is one of the weaker special-favor pleas for traditional bookstores that he recalls reading during the past few months.
The very best place to find diverse voices and for diverse voices to flourish is online.
What about costs for readers of varying income levels?
Ebooks are usually less expensive than printed books. They certainly cost less to manufacture, transport and warehouse.
What about environmental impact? P-books v. E-books = No Comparison.
Ebooks win production, transportation and disposal/recycling hands-down.
Available inventory to allow a customer to buy the book they really want?
Every physical bookstore in constrained in exactly the same manner – it has only so many linear feet of shelf space.
That shelf space must be used to sell books. The fewer copies a book is expected to sell, the less shelf space it will be allocated by the operator of the store.
As a general proposition, having several copies of a given book on the shelf is more likely to catch the eye of a browser than having only a single copy of a book. Several copies on the shelf also means that if someone buys a copy, there are still other copies available to be sold. An employee doesn’t have to immediately recognize that a single book has been sold, then restock the shelf in order for a book to be effectively on sale for customers.
Limited size = limited inventory. Limited inventory = more white-bread, mass market books.
Like many others, PG has enjoyed exploring megabookstores like Blackwells in Oxford, Powell’s in Portland and The Strand in New York. However, giant bookstores are a dying breed. See, for example, Barnes & Noble. And even a giant bookstore has a limit to the number of books it can stock.
Plus, absent a lot of free browsing time, a customer’s discovery experience in a physical bookstore, large or small, can be less than ideal. If you like to wile away the afternoon looking for a good read, go physical. If you prefer to wile away your afternoon actually reading a good book, go online.
Back to inventory, online bookstores can and do stock a much wider variety of books than a physical store. Do you want to allow an author who is a member of an under-represented group in the book business a chance – online is your solution. Would you like to encourage Navajo voices to share their experiences and views with a larger audience off the reservation? Online, baby.
Plus a good online bookstore (like Amazon) makes it much easier for most prospective purchasers to locate a book they will like than Powell’s, even though PG has experienced excellent (for a physical bookstore) customer service in Portland.
There are simply far more methods of locating a desirable book online than there are in a physical bookstore and a much better likelihood of finding a book you will love online.
As one example, one word: Reviews.
Yes, some online book reviews are unreliable, but so are book reviews in newspapers and magazines. At least online, you are much more likely to be able to read more than one review by a single person, reflecting that single person’s class, education, preferences and biases.
Plus, on Amazon, in addition to seeing which books people are buying, Amazon Charts lets you see which books people are actually reading.
Hint for those purchasing gifts, particularly for young adults and children: Seven of the top Ten Most-Read Fiction Books when PG wrote this post were written by J.K. Rowling. The list of Most-Sold Fiction Books was much different.
Comparing the Top Ten Most-Read and Most-Sold Fiction Books, PG noted only two books that were on both lists:
From The US Attorney’s Office, District of Rhode Island:
The former owner of an East Providence automobile transport company . . . was arrested and charged today with allegedly executing an elaborate scheme to defraud Amazon.
It is alleged in court documents that Michael Chaves, 40, former owner of CAT Inc., executed a scheme to defraud Amazon through fraudulent transactions and theft of inventory through falsely represented returns. It is alleged that Chaves ordered thousands of products from Amazon and replaced the original products with lesser value replacements, often items different than the ones he originally ordered, before returning the packages to Amazon for refunds.
According to court documents, since March 2017, Chaves has held approximately 30 Amazon customer accounts under various names and email addresses. Over this time period, Chaves’ accounts placed approximately 10,795 orders totaling approximately $713,970.78, most of which have been refunded based on Chaves’ return of the items purchased. Chaves received a total of approximately $643,324.04 in concessions or refunds on approximately 7,450 orders, including nearly approximately 7,200 items that were physically returned to Amazon. Many of the returned items were sent back in the original packaging in an attempt to deceive Amazon’s incoming inspection process. Amazon’s standard inspection process flagged approximately 149 of the returned items as potentially fraudulent, valued at $23,872.89.
According to court documents, while investigating Chaves’ fraudulent activities associated with his now defunct automobile transport company, Internal Revenue Service Criminal Investigation Division and U.S. Department of Transportation Office of Inspector General agents executed a court-authorized search of Chaves’ home and business. At the business location, agents observed many opened and unopened Amazon packages and packaging materials. The room containing these items appeared to be a packing area for Amazon returns. The room contained a wide-ranging variety of items such as televisions, incense, European wall plugs (some for phone chargers), computer parts, small electronics, and a significant quantity of auto parts. At a later date, a United Parcel Service (UPS) driver told investigators that he would stop at Chaves’ business location every day delivering Amazon packages and picking up returns, often times dropping off an Amazon package one day and picking up the same package the next day as a return back to Amazon.
According to court documents, currently Chaves has six active Amazon accounts. The majority of Chaves’ purchases and returns consist of auto and commercial motor vehicle parts. Chaves also purchased and returned many other non-vehicle related items, including, but not limited to; electronics including cellular telephones and televisions, household items including chandeliers, closet organizers, lawn sheds, lawn mowers and vacuum cleaners. Most of these items were returned in an unsellable condition.
According to court documents, Chaves’ schemes would, at times, include replacing an original product purchased with a substitute product which, at first glance, appeared similar to the original purchase. Other returns were placed in boxes to represent the approximate weight of the original product. Among the examples cited in court documents of purchases and fraudulent returns include Chaves having ordered a commercial truck tire and sending back two pieces of wood; Chaves having ordered Apple Air Pod Pros and returning an unopened package of mini light bulbs; Chaves ordering a vehicle suspension joint and returning an oil filter wrench; and Chaves ordering a stabilizer bar link kit and returned in its place doggie treats.
Chaves was arrested today by U.S. Department of Transportation Office of Inspector General and Internal Revenue Service’s Criminal Investigations Division agents, with the assistance of East Providence Police, on a federal criminal complaint charging him with wire fraud and mail fraud.
On Friday, March 12, The U.S. District Court of Rhode Island sentenced Michael Chaves to 30 months in federal prison for operating a fraudulent product return scheme and defrauding Amazon of more than $50,000, as well as other charges including bank fraud, wire fraud, falsification of records, aggravated identity theft, and tax evasion. Amazon supported the investigation, prosecution, and sentencing.
. . . .
Amazon has teams and systems in place to proactively detect, investigate, and stop suspicious behavior and prohibited activity. Amazon has an extensive history of protecting its customers from fraud and abuse.
From The US Attorney’s Office, District of Rhode Island:
Chaves was sentenced on Wednesday by U.S. District Court Judge William E. Smith to 30 months in federal prison to be followed by three years of federal supervised release, announced Acting United States Attorney Richard B. Myrus Acting Special Agent in Charge of Internal Revenue Service Criminal Investigation Ramsey E. Covington, and Acting Special Agent-in-Charge Daniel Helzner, U.S. Department of Transportation Office of Inspector General, Northeast Region.
A restitution order will be forthcoming from the court. In addition to restitution to be paid in the fraud schemes connected to the operation of his auto transport company, the order will include restitution to be paid by Chaves to Amazon. It was alleged in court documents that Chaves defrauded Amazon through theft of inventory through falsely represented returns. It is alleged in court documents that Chaves ordered products from Amazon and, at times, replaced the original products with lesser value replacements, often items different than the ones he originally ordered, before returning the packages to Amazon for refunds.
Chaves’ alleged Amazon refund scams were discovered during the investigation by Internal Revenue Service Criminal Investigation and U.S. Department of Transportation Office of Inspector General into Chaves’ auto transport company.
PG doesn’t know the background of this particular matter, but the message from Amazon is that it watches for scams of all sorts and is capable of persuading federal law enforcement officials, including Internal Revenue Service Criminal Investigation agents (who are likely to be interested in any claim of financial fraud because fraudsters typically don’t report the fruits of their labors on their tax returns) to take the matters Amazon brings to them seriously.
IRS involvement means that, if for any reason, the criminal fraud claims fall apart, federal prosecutors can prosecute criminal charges for violations of the Internal Revenue Code.
That potential 1-2 threat is enough to persuade a lot of bad guys to plead guilty, even if they’ve managed to cover up some of the evidence of their involvement in the underlying fraud.
Amazon publicizes such prosecutions and convictions to help spread the word that anyone who would like to enjoy a richer long-term lifestyle than can be supported by their lawful labors should probably consider pursuing a softer target than Amazon in their pursuit of their goal.
If Amazon develops a reputation for providing detailed evidence to support a criminal fraud prosecution with federal and state prosecutors, District Attorneys, etc., they’ll find that almost anyone will take their call and schedule a meeting to review what Amazon has located.
It is very common for companies the size of Amazon to hire former law enforcement officials (often at higher salaries than they earned while working for their former agencies) to do this sort of work. Such men and women have a good idea about what it takes to prove a case and how to collect evidence to support criminal charges and successful prosecution of those charges.
Additionally, PG doubts Amazon’s people (unlike a few citizens without such backgrounds) ever try to mislead law enforcement officials due, in part, to the fact that everybody involved has the same backgrounds, values and character traits. They’re brothers and sisters who gain a great deal of personal satisfaction from putting bad guys away.
With the levelling off of e-book sales, many have begun to wonder whether the book publishing industry will be spared the kinds of disruption experienced by other sectors of the media industries. But the digital transformation of the book publishing industry was never fundamentally about e-books anyway: e-books turned out to be just another format by which publishers could deliver their content to readers, not the game-changer that many thought (or feared) it would be. The big question that the digital revolution posed to book publishers is just as pressing today as it was a decade ago: it’s the question of how publishers understand who their ‘customers’ are, and how they relate to and interact with them.
For most of the 500-year history of the book publishing industry, publishers understood their customers to be retailers: publishers were a B2B business, selling books to retailers, and they knew very little about the ultimate customers of their books, the readers. The digital revolution has forced publishers to think again about this model and to consider whether there might be something to be gained by becoming more reader-centric. This fundamental shift in publishers’ self-understanding is likely to be one of the most significant and enduring consequences of the digital revolution in publishing.
But how does a publisher actually become more reader-centric? Over the last decade or so, many publishers have come to realize that one of the most effective ways to make their businesses more reader-centric is to build their own dedicated databases of readers so that they can interact directly with readers via email. Building a customer database can be a slow and laborious process, but with focus and creativity, a publisher can grow a list remarkably quickly: one senior manager I interviewed at a large US trade publisher explained that they had decided to build a customer database in a particular area of their publishing programme and, using a combination of paid ads, partnerships and sweepstakes, they succeeded in getting half a million people to sign up in the first year alone. Having these email addresses and customer information in your own database is much more effective than relying on social media and gives you much more control, as you are not reliant on the algorithms of social media companies to determine which posts get fed through to people’s news feeds. Moreover, with emails to readers, you can get a much higher level of engagement than with many other retail goods, in part because many readers have an emotional connection with authors whose books they enjoy and they want to know more about any new books written by their favourite authors. The benchmark for email open rates is 20%, but the open rate for emails relating to books by brand-name authors can be as high as 60%.
But it’s not just mainstream pubishers who are using digital technologies to establish direct relationships with readers: some start-ups on the margins of the publishing field have taken this much further and are pioneering new kinds of publishing that integrate reader input into their decision-making processes. One example that will be familiar to many in the publishing world are the crowdfunding publishers, Unbound in the UK and Inkshares in the US. While many people think of crowdfunding as an innovative way of raising capital (and it is), the real genius of crowdfunding is that it is an audience-building machine. The crowdfunding model means that every new author brings a few hundred new readers into the system – their friends and family members and the people who have a particular interest in the book they’re proposing to write, and the book goes ahead only when enough readers have pledged their support for the project. Crowdfunding models like Unbound and Inkshares are creating a new kind of relationship between authors and readers in which readers are not simply the buyers of books but, rather, their co-creators. At the same time, they are building networks of engaged readers that enable them to capture customer data rather than leaving it for Amazon to hoover up. By using crowdfunding to create a system of reader curation, they are turning the traditional model of publishing on its head.
. . . .
The real opportunity that the digital revolution opens up for publishers is that, for the first time in the long history of the book, it is now possible for publishers to do something they could never do before: build direct channels of communication with readers and do it at scale. This is a central feature of the digital transformation in publishing, and those publishers that succeed in making their businesses more reader-centric, learning not just how to market more effectively to readers but how to listen to them too, are likely to be the ones that will ride the wave of the digital revolution most successfully in the years to come.
Leveling off of ebook sales? Email lists? Reader-centric? Crowdfunding?
PG is certain that the author of the OP (and the book shown below), an Emeritus Professor of Sociology at the University of Cambridge is an intelligent and probably likeable guy, but PG was a bit surprised while reading the OP that The Bookseller (and, presumably, its readers) will think that anything described is actually new information or insight about the book business these days.
A bit of ebook history for those who may not know or remember it:
While ebooks predated Amazon ebooks, for all intents and purposes, as a meaningful segment of publishing, ebooks didn’t exist until Amazon started selling ebooks and inexpensive ebook readers. (Widespread adoption of small digital screens on phones definitely helped as well.)
As a classic example of Clayton Christensen’s Innovator’s Dilemma, the creative executives and companies that drove the dynamism, growth and profitability of print publishing, bookstores, newspapers and magazines during the second half of the twentieth century didn’t understand how important electronic media would become and how quickly electronics, including digital electronics and digital networks, would replace print as a means of written communication to audiences large and small.
Jeff Bezos moved to Bellevue, Washington, rented a house with a garage and became entranced with the potential of web commerce in 1995. He decided that books were a great product to sell online because of the large worldwide demand for literature, the low unit price for books, and the huge number of titles available in print. That decision started a business that would upend the business empires of the great publishers of New York, then move on to disrupt traditional bookselling and publishing around the developed world.
At the same time Amazon was going public in 1997, Barnes & Noble sued the company, claiming it wasn’t the the world’s largest bookstore, but was, instead, a book broker. Bezos settled out of court and kept going.
Barnes & Noble CEO Leonard Riggio would have been much smarter to use the money he paid his lawyers to buy Amazon stock because $100,000 invested in Amazon on the day it went public would have been worth more than $120 million as of May 2020.
Sometime in the summer of 2009, executives at the highest levels of Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster started meeting secretly in the private dining room of a Manhattan restaurant to develop a strategy to prevent Amazon and other ebook retailers selling their ebooks at a discount from list price.
At the time, these five publishers were producing 48% of the ebooks sold in the United States.
In December, 2009, Apple’s senior VP of Internet Software and Services contacted these New York publishers to set up secret meetings for the purpose of discussing ebook pricing.
Apple planned to unveil the iPad on January 27, 2010, and start shipping iPads in April. As part of the launch, Apple wanted to announce its new iBookstore that would include ebooks from the major publishers.
The Apple VP told the five publishers that Apple would sell the majority of e-books for prices between $9.99 and $14.99, with new releases being $12.99 to $14.99, substantially more than Amazon was charging.
Apple planned to use the same “agency” model which it used in its App Store for distribution of e-books. Apple would be a sales agent and the Publishers would control the price of their e-books in the iBookstore. Publishers would pay Apple a 30% commission on each sale.
Apple didn’t want Amazon to be able to sell ebooks at a lower price. The agreement between Apple and each of the big publishers would include a so-called “most-favored-nation” or “MFN” clause which allowed for Apple to sell e-book at its competitors’ lowest price. If the big publishers allowed Amazon to discount prices, Apple could discount them an equal amount and take its 30% commission from that price.
The Big Publishers concluded that, if Amazon didn’t play ball, their ebook customers would simply buy iPads and buy their ebooks at the iBookstore. Finally, there was a powerful enough tech company to take on Amazon in the ebook game.
On the day of the iPad launch and the announcement of the iBookstore, including an announcement of Apple’s ebook pricing, a Wall Street Journal reporter asked Apple CEO Steve Jobs why people would pay $14.99 for a book in the iBookstore when they could purchase it for $9.99 from Amazon. Jobs replied that “The price will be the same… Publishers are actually withholding their books from Amazon because they are not happy.”
This public statement expressed the terms of the agreement. The big publishers, acting in concert, would jointly force Amazon to increase its e-book prices with the threat to cut off Amazon’s ebook supply. If Amazon refused to increase prices, Apple would be the only place to buy ebooks from the major publishers that controlled most of the book marked. If Amazon knuckled under and raised its prices, Apple would face no price competition.
The United States Justice Department and 31 states filed suit against Apple and the five conspiring publishers for violating longstanding US antitrust laws. Three of the publishers settled the claims on the date the suit was filed, admitting they had violated the law. The other two publishers settled the case prior to trial, also admitting wrongdoing.
News reports stated that the publishing executives had not consulted their own attorneys about whether their actions were legal or not. (PG notes that any law student who had completed more than three weeks of a one-semester law school antitrust course would have known that this scheme was a clear-cut violation of the law. No legal gray areas available for this hot mess.)
After a trial, Apple was found to have wrongfully violated US antitrust laws. Apple appealed the decision as far as it could go and lost. Apple was forced to pay $450 million in damages for its wrongful actions.
And the OP describes ebooks as “the wave of digital revolution” as if this is new information.
PG believes that no one would dispute that Amazon is by far the largest outlet for independently-published ebooks anywhere in the world. Amazon does not break out indie ebook sales in its own accounting reports.
Veteran publishing consultant, Mike Shatzkin, estimated that, between 2011 and 2013, self-published books grew from nothing to almost 30% of the book units sold in the US. This growth coincided with a period during which ebook sales also increased rapidly.
The Alliance of Independent Authors estimated that in 2016, in the US, fewer than 1200 trade-published authors who debuted in the last ten years earned $25,000 a year or more, compared to over 1,600 indie authors who earned $25,000 per year or more.
In 2020, ALLi reported that 8% its members had sold more than 50,000 books in the prior two years.
An Enders Analysis in 2016 found that 40% of the top-selling ebooks on Amazon were self-published.
PG won’t say the ebook and indie revolutions are over, but will say that the trends of the last ten years have undeniably been moving towards more ebooks and more money for indie authors. Any industry statistics that limit themselves to ebooks sold by traditional publishers are missing the majority of the overall market.
PG further suggests that for most authors, indie or traditionally-published, a dozen legitimate positive reviews on Amazon are worth more than a signing at your local Barnes & Noble.
The author of the OP is promoting a book he recently published.
Amazon is withholding ebook and audiobook versions of works it publishes through its in-house publishing arms from US libraries, according to a new report from The Washington Post. In fact, Amazon is the only major publisher that’s doing this, the report states. It’s doing so because the company thinks the terms involved with selling digital versions of books to libraries, which in turn make them available to local residents for free through ebook lending platforms like Libby, are unfavorable.
“It’s not clear to us that current digital library lending models fairly balance the interests of authors and library patrons,” Mikyla Bruder, the global marketing chief at Amazon Publishing, told The Washington Post’s Geoffrey Fowler in an emailed statement. “We see this as an opportunity to invent a new approach to help expand readership and serve library patrons, while at the same time safeguarding author interests, including income and royalties.”
At the heart of the issue is a debate over whether libraries, which often pay far higher than retail price for physical and ebook copies of books, ultimately harm publisher sales by letting people check out copies for free. In the age of mobile apps and widespread Kindle usage, borrowing an ebook is now easier than ever — you need a library card and the Libby app, and you can then place holds and eventually check out ebooks that can be sent directly to your Kindle e-reader or app to access for a limited time.
Yet publishers, not authors, decide the fate of a book’s various distribution deals, and Amazon apparently does not want libraries lending its ebooks, at least not under whatever terms have been discussed. That means many of the authors the company has signed onto its publishing imprints — like Mindy Kaling, Trevor Noah, Andy Weir, and Michael Pollan — are available to read only if you pay the full retail price. That’s true when those same authors have expressed support for libraries and free book lending, as Pollan has to The Post.
Amazon is reportedly negotiating with a nonprofit, the Digital Public Library of America, to coordinate the selling of its ebooks to libraries, but The Post notes that the deal would not include any self-published works or Audible audiobooks. And making matters worse, Amazon is allegedly not negotiating — and hasn’t for years — a serious deal with OverDrive, the maker of the Libby app that’s used by many libraries around the country.
Instead, OverDrive CEO Steve Potash tells The Post the company and Amazon have an “ongoing dialogue” in which OverDerive has communicated its “willingness to innovate in an effort to support their business strategy.” Amazon did not immediately respond to a request for comment.
Link to the rest at The Verge and thanks to Carolyn for the tip.
As regular visitors to TPV already suspect, misinformation is rampant in the OP.
Here’s a bullet-point list:
At present, OverDrive is the only effective way for ebooks to get into libraries, at least in the US.
Amazon Publishing, Amazon’s counterpart to a traditional publisher (albeit with better royalty terms) is a small fry compared to traditional publishers. Book wholesalers that provide physical books to bookstores don’t carry Amazon Publishing books and, even if they did, a great many physical bookstores would refuse to carry Amazon Publishing’s books because Devil Bezos.
PG believes that OverDrive’s prices, to the extent he understands them, are also higher than they need to be for an online service that is effectively a complete ebook lending system with, to the best of PG’s knowledge, no need to integrate with the various physical book management systems libraries may employ.
To the best of PG’s knowledge, OverDrive doesn’t have any serious competition in ebook lending, at least in the United States, and charges libraries accordingly.
OverDrive is owned by KKR, a major US-based private equity firm.
Private equity firms typically acquire assets with a plan to sell them or take other steps to take cash out of their investments. One strategy that some private equity firms utilize is to load an acquired firm up with debt, putting the proceeds of such loans into the pockets of the owners of the private equity firms, then sell the debt-burdened companies to someone else. As with some other Wall Street financial types, private equity firms are often ready and willing to throw sharp elbows on their way to a profit. PG doesn’t know if KKR has done any of these things with OverDrive, however.
Per an article in American Libraries from December 31, 2019, reporting on the sale of OverDrive to KKR,
“OverDrive holds the dominant market share as the leading provider of digital content to libraries, with more than 43,000 libraries subscribing to its content lending platform. The OverDrive catalog currently offers 4.5 million books and audiobooks from more than 25,000 publishers. More than 95% of public libraries in the US and Canada rely on it for digital lending and other services. Though public libraries represent the largest portion of OverDrive’s customers, the company also works with schools and corporate libraries.
“[T]he acquisition of OverDrive is a “financial investment,” in which the buyer, usually a private equity firm or other financial sponsor, expects to increase the value of the company over the short term, typically five to seven years. Financial investments by private equity firms typically take the form of leveraged buyouts, where the buyer contributes only a portion of the purchase price and secures loans from investment banks to meet the full amount negotiated with the seller. Financial buyers control the business strategies and operations of their portfolio companies via placement of representatives on their board of directors, usually in proportion to their ownership stake. The company itself is saddled with paying off the debts, but these transactions provide the company with new capital to fund business expansion and product development.
“KKR also owns RBmedia, one of the major suppliers of audiobooks to libraries. In a transaction announced in July 2018, KKR acquired RBmedia from Shamrock Capital Advisors. As with OverDrive, this investment was made through its KKR Americas XII Fund. KKR’s investments in RBmedia and OverDrive were shepherded by Richard Sarnoff, a veteran of the publishing industry and chairman of media, entertainment, and education for KKR.
“RBmedia offers a subscription service for consumers in addition to its library lending platform. The company, at the time known as Recorded Books, was acquired by Shamrock in August 2015. The previous month, Recorded Books acquired competing audiobook publisher Tantor Media and in May 2014 it acquired HighBridge Audio, partially consolidating the digital audiobook industry.
“Will OverDrive and RBmedia merge? Such a union would signal a major consolidation in the digital content industry for libraries and schools.
“Ebook lending occurs within a highly consolidated publishing industry dominated by the Big Five and Amazon. Some of these corporate forces perceive library lending as intrusive and are not motivated to offer favorable licensing terms. Pricing models that place restrictions on the number of copies available for lending, the number of circulations allowed before the title must be relicensed, and temporary embargos on front-list titles present significant challenges for libraries. OverDrive’s dominant market share in this area could add substantial clout to library interests in negotiating more favorable pricing and terms.
“KKR’s Christmas Eve announcement sounded many alarm bells in the library community. Concerns include the negative impact of private equity ownership and industry consolidation.
“The possibility of a merger between OverDrive and RBmedia into a new superpower is a more valid concern. In sectors involving the sale of products and services, fewer competitors lead to higher consumer prices. But in an arena where pricing is controlled more by publishers than distributors, a larger player could optimize library interests in future negotiations of prices and lending terms.
“As library investments in digital content continue to rise and spending on print stagnates or falls, the dynamics of this sector bring high-stakes ramifications for public libraries.”
In PG’s electronically-driven humble opinion, traditional publishers overprice their ebooks to Amazon and everyone else. That’s good news for indie authors because they can make a lot of money for each ebook licensed/sold via Amazon while still offering their readers a lower purchase price than traditionally published books would cost.
PG expects that Amazon’s lawyers are worried about antitrust problems, but he wishes that Amazon would develop its own system to support library ebook lending. PG has no doubt that Amazon’s system would work better than OverDrive does (PG uses OverDrive via his local library to borrow books from time to time and finds it to be clumsy and outdated. KKR hasn’t appeared to have put much money into improving the user experience of those who use OverDrive.)
PG has one final note – Jeff Bezos owns The Washington Post, which was the source for much of The Verge’s OP. When he acquired the paper, there was lots of Sturm und Drang among the Amazon-haters about how Bezos would ruin the Post and stifle the voices of opposition to Amazon represented by The New York Times, etc.
While PG believes the Post is fully-capable of ruining itself, it appears Bezos isn’t stifling the editorial side of the newspaper for Amazon’s benefit as predicted.
PG put a link to this article at the bottom of a prior post but then realized that it definitely deserved its own post.
From David Gaughran:
Amazon recommendations drive millions of dollars of book purchases every single day, and Also Boughts are central to this system, which can lead to panic when they periodically disappear.
Also Boughts play an important role in Amazon recommendations — that process of pairing books to readers like some literary version of Tinder — but the exact role in Amazon’s recommender system can be misunderstood.
So let’s break it all down today, and show you the exact role Also Boughts play in Amazon recommendations, and why you need to protect yours.
Also Boughts reflect the other purchases your readers are making, and also influence which readers Amazon recommends books to next. As a result, Also Boughts have become the focus of attention among savvy self-publishers in recent years.
You can view them on any book’s product page on Amazon, where you may have noticed a strip of books usually placed underneath the product description, headlined with “Customers who bought this item also bought.” It looks like this:
The Also Bought strip doesn’t update as frequently as some parts of the Kindle Store, but it usually refreshes twice a week, on Thursday and Sunday evenings, which means they are a relatively up-to-date indication of how Amazon’s system views your book.
Meaning that authors watch them very closely.
Amazon’s system is always trying to determine what kind of products each individual customer is most likely to purchase, so it can make more accurate recommendations. One thing which is super important in this process is the connection between products. People who buy printers tend to buy ink, for example, and recommending a printer-buyer some ink to purchase will elicit a lot of clicks.
But it’s not just obvious pairings like leathers and feathers, Amazon’s system is constantly analyzing what everyone purchases and then using that to predict what they will buy next, in its never-ending quest to maximize sales by crunching All The Data.
The net effect when it comes to authors is this: if your book appears in the Also Boughts of a book in your niche which is selling well, this can lead to a considerable spike in sales. Conversely, if something goes wrong with your Also Boughts, it can lead to a measurable dip.
It was understandable that authors would begin worrying when Amazon seemed to remove Also Boughts from book pages, with some speculating that Amazon would stop recommending books organically and only give visibility to those using Amazon Ads.
But that’s not how the recommender system works. And I can show you exactly what I mean.
How Amazon Recommendations Really Work
Amazon makes millions of book recommendations to readers every single day — both on-site in various slots around the Kindle Store, and by email as well. These recommendations take many different forms.
Some Amazon recommendations are very top-down, but most are either personalized for each individual reader, or contextual — based on what the reader is viewing at that moment, or the place they are in the Kindle Store, or an action they just performed. And all of this is completely unaffected by Also Boughts disappearing from book pages.
Let me give you an example.
During the research process for my book Amazon Decoded, I conducted a number of revealing experiments.
Have you ever noticed what happens when you buy a book in the Kindle Store? Specifically, have you noticed what happens on-screen afterwards? Amazon never misses a trick and as soon as you complete payment, a confirmation screen appears recommending more books.
Amazon is split-testing things all the time, so you may see this play out slightly differently each time you purchase a book, but, commonly, you will see Amazon push the book in the #1 Also Bought slot pretty hard.
(Unless there is an audiobook edition which is Whispersynced, then Amazon will often favor that recommendation instead. It can experiment with other approaches, such as a carousel of books, but this will also be heavily influenced by the Also Boughts of what you just purchased.)
If that #1 Also Bought is also the next book in the series, then Amazon will helpfully flag that it is indeed the next in the series – which can really drive that spillover when you are promoting Book 1, especially if you have also discounted Book 2.
(Assuming your Book 2 is that #1 Also Bought, of course, and that your series metadata is in perfect shape.)
This is the kind of thing that doesn’t happen so much on the other retailers, because they simply don’t have recommender systems quite as sophisticated as the one powering the millions of recommendations Amazon makes every day.
Other retailers do have rudimentary recommendation engines, but Amazon is quite literally years ahead of the competition, and it doesn’t feel like that gap is closing because fundamentally different philosophies are at work.
2. Browse “Related Authors” for your author targets
For many advertisers, choosing author targets is a critical part of creating successful ad campaigns. To help make it easier for advertisers to discover author targets with large audiences on BookBub, we added a tab to the author targeting module of the ad creation form to surface “Related Authors.”
After you select at least one author target for a campaign, we’ll generate a list of other authors who share readers with the author(s) you’ve already selected. Of course, you should always test your targets to determine which will be the most effective for your particular books and campaigns, but we hope this will help you find new audiences to test out!
3. View improved stats for individual author targets
When you’ve added more than one author target to a campaign, you can view the impressions, click-through rate (CTR), and cost-per-click for each target under the “Aggregate Stats” tab. These stats are now visible for each target as soon as your ad starts serving impressions.
We recommend waiting to draw conclusions about an author target’s effectiveness until you have at least a few hundred impressions. The more data you have, the more reliable the results.
Note that many of our readers fall into the targetable ad audiences of multiple authors. If a reader who sees an impression of your ad falls into the audience of more than one of the authors your ad is targeting, we include the stats from that impression under each of those authors. This may help you collect data more efficiently than if you were to target each of those authors’ audiences with separate ad campaigns.
PG notes that BookBub is not the only book promo service used by indie authors (there are quite a few).
However, PG included this excerpt because it highlights what can often be a useful principle for marketing and promoting a book (as well as a great many other things) – Watch what your competitors are doing to sell their books and try to determine if it’s working well or not.
One of the common things that advertising agencies do is to carefully monitor all the advertising and marketing activities undertaken by companies that are competitive with the agency’s clients. For example, Coke’s ad agency watches what Pepsi is doing for advertising and promotion and vice-versa.
Sometimes this practice results in copy-cat advertising, but more often, it may disclose something more subtle: the competitor has discovered a consumer segment (let’s use single women over 40 who have a reasonable amount of disposable income as an example) that responds positively to a certain type of message and has created advertisements that carry that message and is placing them in online locations that attract such visitors (or magazines focused on such readers or television programs with a high percentage of such viewers).
BookBub’s suggestion is the same. Very few readers only read books by a single author. One of the reasons that genres exist and are cultivated by publishers and bookstores is that the best way to sell more books to those types of readers.
We’ll take an example: Mystery and Crime Fiction (which are actually two genres, but are often lumped together):
Some basic sub-genres would be:
Detective Novels (Agatha Christie, Raymond Chandler, Dashiell Hammett, and Sue Grafton are some well-known examples)
Cozy Mysteries (Dorothy L. Sayers, Elizabeth Daly and sometimes, Dame Agatha again)
Police Procedural (Ed McBain, P. D. James, and Bartholomew Gill)
Caper Stories (W. R. Burnett, John Boland, Peter O’Donnell, and (sometimes) Michael Crichton)
So, if you write detective novels, you might want to see if you can successfully promote your book by targeting readers who like Sue Grafton’s books. In a crude way, you might use an advertising headline that reads, “If you like Sue Grafton books, you’ll really love mine!”
However, as an indie author who has complete control over your advertising and needs no one’s approval to spend some of your hard-earned royalties to generate more royalties, you can be much more sophisticated and cost effective. You can use the techniques described in the OP and also learn more about Amazon Recommendations and Also Boughts.
Amazon.com Inc. for years has successfully fended off attempts by its U.S. employees to unionize. Now the tech company is preparing for a labor battle unlike anything in its history.
In the next two months, thousands of Amazon employees at an Alabama warehouse are set to cast mail-in ballots over whether to organize into a union, a vote that could reshape the relationship between workers and the nation’s second-largest employer.
The commerce giant faces a familiar opponent: the Retail, Wholesale and Department Store Union, or RWDSU, which along with local organizers is helping to lead the pro-union campaign. The union has helped organize thousands of poultry workers in Alabama, a right-to-work state, and has become a frequent Amazon antagonist in recent years. The RWDSU fought the company’s plans for a second headquarters in New York in late 2018 and supported worker protests at some warehouses during the coronavirus pandemic.
So far, the current effort has had more success than other attempts to organize Amazon workers, according to labor experts. They note that a successful union push at the warehouse could spur similar actions at Amazon’s more than 800 facilities in the U.S.
“Amazon has seen their demand skyrocket” during the pandemic, said Arthur Wheaton, director of Western NY Labor and Environmental Programs for the Worker Institute at Cornell University. The company’s continued growth will bring increasing scrutiny over how it pays and treats its employees, he said.
The effort still faces formidable obstacles. Amazon has sought to postpone the election’s scheduled Feb. 8 start and appealed the National Labor Relations Board decision to allow a mail-in vote. While the vote is likely to proceed as scheduled, a decision to unionize could lead to years of bargaining over the first contract, labor experts say.
The company is holding frequent meetings at the 855,000-square-foot facility about 15 miles southwest of Birmingham to counter the union’s effort, employees say. It also hired a law firm that specializes in countering organizing efforts and set up a website asserting that employees already receive the benefits and pay for which a union would bargain and should vote no to avoid the cost of dues.
An Amazon spokeswoman said the company doesn’t “believe the RWDSU represents the majority of our employees’ views. Our employees choose to work at Amazon because we offer some of the best jobs available everywhere we hire, and we encourage anyone to compare our total compensation package, health benefits, and workplace environment to any other company with similar jobs.”
If workers vote in favor of the union, Alabama’s “right to work” rules mean employees aren’t automatically part of the union. Workers wouldn’t be required to join the union or pay dues, potentially making it harder to expand membership. Some workers interviewed by The Wall Street Journal said they weren’t supportive because they didn’t believe union representation would substantially improve their conditions.
. . . .
Organizers collected thousands of signatures from employees showing support for an election. In December, the labor board decided to allow the election to move forward and later set the February-to-March voting period.
The RWDSU has had success in Southern states, particularly within the poultry industry. The union said it represents roughly 15,000 poultry workers across the South, including Alabama. Early in the pandemic, it reported on deadly Covid-19 outbreaks in poultry facilities while urging employers to improve working conditions. Major poultry companies have implemented temperature checks, increased cleaning and issued protective equipment, among other measures.
Chartered in the late 1930s, the RWDSU now represents thousands of employees from retail chains that include Macy’s Inc. and Bloomingdale’s, as well as workers in warehousing and the service industry.
. . . .
The union was among a group of critics at the heart of a fierce backlash when Amazon announced plans to locate a part of a second headquarters in New York City in late 2018.
Amazon had selected the city as part of its so-called “HQ2” development around the same time the RWDSU had been rallying support for workers to unionize at a facility in Staten Island, an effort that ultimately fizzled. The union opposed the nearly $3 billion in government incentives Amazon would have received for creating 25,000 jobs in the city.
The union was involved in a last-ditch meeting with company executives organized by Gov. Andrew Cuomo to salvage the planned expansion. In the meeting, executives and labor leaders tentatively agreed to continue discussions related to the unionization effort, according to people familiar with the talks.
Amazon ultimately scuttled its plans for the New York expansion, but the company has recently announced plans to hire thousands of new employees in various major U.S. cities, including New York.
“We saw that they were large and big and powerful, but they were also arrogant,” Stuart Appelbaum, president of the RWDSU, said in an interview. “‘You can take on Amazon’ was an important lesson from HQ2.”
Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)
PG tends to be reflexively anti-union because of repeated corruption and criminal charges brought against union leaders.
He certainly believes there was a time when unions were an important force for improving the lives of blue-collar Americans, but, fortunately or unfortunately, that time has passed.
He also suspects that Amazon can afford to shut down the Alabama warehouse in question without seriously harming the company’s operations. At PG’s last check, Amazon had well over 200 general-purpose warehouses (including two others in Alabama plus 25+ warehouses in adjoining states) plus a bunch of additional specialty warehouses in the United States.
PG is not an expert on labor law, but he suspects that, if the employees in the warehouse described in the OP voted to unionize, Amazon might shut down the warehouse permanently or for a long period of time, ship all the computers and equipment to one or more new US warehouses under construction and either try to sell the building or leave it vacant for awhile. Amazon starts its warehouse employees at $15.00 per hour. The minimum wage in the United States and Alabama is $7.25 per hour.
(In the U.S., states can set higher minimum wages. After a quick check, it appears that California’s minimum wage is the highest state minimum wage – $14.00 in 2021 for employers with more than 26 employees.)
How well does your book thumbnail cover work? You might think that your cover image is fantastic. In a full-size view, it may well be.
But when it comes to book covers, the truism that people need to see something seven or eight times before they react is probably correct.
Readers looking for a new book to buy first have to notice, and then click, your thumbnail size cover to get to your buy page.
How does your tiny book cover image stack up for attracting attention-grabbing?
. . . .
Book thumbnail images are used on every book-related site you possibly think of, even on social media.
So it is vital that you consider your small image book cover size when you are making decisions about a new book cover. You need to pay attention to how your fonts and color choices look.
. . . .
Even the featured image of your book cover on your sales pages of Amazon, iBooks, Barnes & Noble, and other retailers are reduced to default thumbnails.
On Amazon, your book cover is reduced to approximately 500 x 333 pixels in the top left of your book sales page. To put this in perspective, an extremely low-resolution ebook cover is around 1280 x 720 pixels.
The best way to start analyzing how well your book cover works is to open your cover file in an image editor. Then reduce the size to create a thumbnail.
Thumbnails can be very small. Start with setting your dimensions to 90 pixels wide x 144 pixels tall.
Then view the actual size. You will see your cover in an approximation of an online thumbnail. You can experiment with additional image sizes.
. . . .
It is also important to remember that on top of reducing the dimensions, all sites reduce the image quality or resolution.
It is usually, at most, 72 dpi to make sure the file size is as small as possible.
If you can also change the resolution in your image editor, it will give you a better estimation of how good, or not, it will look online.
. . . .
Quoting Amazon’s recommendations regarding Kindle book cover size, the ideal size of ebook cover art is a height/width ratio of 1.6:1.
This means that for every 1,000 pixels in width, the image should be 1,600 pixels in height.
A cover 1280 pixels wide is generally the minimum size you should use. You can use jpg, gif, bmp, or png file types.
However, the full size of your custom image upload will never be seen online.
Your original uploaded image file will be reduced to a range of additional custom thumbnail image sizes.
Each one to suit different reading devices, on-screen applications, search engines, and different website use.
Amazon automatically generates a lot of different custom thumbnail sizes on its site.
. . . .
Here are a few examples to help you understand the necessity of covers that work in small dimensions.
On the Top Charts page, covers are quite small to give the chart number significance.
New releases are shown in the most common thumbnail medium view size, which is 107px x 160 px.
Recommendations are a little smaller at 90 px x 135 px.
Series books are usually a maximum of 135 px high.
In the You Viewed pane at the bottom of each book page, books that were viewed by people are squeezed into a 50 px x 50 px box.
As we reported in late November, Audible‘s initial response to what writers called #Audiblegate was soundly rejected as inadequate by authors’ organizations.
Originally, Audible had allowed a subscriber to return or exchange an audiobook within 365 days—and had deducted an author’s royalties from her or his account when that happened if the audiobook was distributed through ACX, the Amazon-owned Audiobook Creation Exchange. This and a lack of an accounting for authors as to unit purchases and returns, the author corps stressed, was unacceptable, with some writers saying they’d seen between 15 and 50 percent of their anticipated ACX revenue withdrawn this way.
What Audible came back with was a reduction from 365 days for returns to seven days, pledging, “Audible will pay royalties for any title returned more than seven days following purchase.”
The writers were less than fully impressed, and a strong coalition of international author advocacy organizations and programs has continued putting pressure on the audiobook giant.
. . . .
It was in early February last year that the Association of American Publishers led an effort by seven major publishing houses to stop the company’s deployment of “Audible Captions” without a publisher’s permission.
In the current question about returns and transparency at Audible, an update arrived on January 20. In that statement, Audible’s ACX unit wrote that starting in March, its producing authors will be able to see details on returns, “including returned units by title” on their sales dashboards and in monthly financial statements, beginning with that month.
. . . .
The three organizations write that “at the heart” of the authors’ coalition’s complaints has been “a lack of transparency—around the implications for authors of key contract terms and in opaque accounting practices which make it impossible for any author to get a true picture of how their income is being calculated.”
. . . .
The original ask, the coalition reiterates, was:
“Provide a full and complete accounting of returns made pursuant to this policy since it was first implemented
“Limit the time period of returns and exchanges that could be deducted from royalty counts from 365 days to a reasonable period, such as 48 hours, and allow only ‘true returns’ (e.g., where less than 25 percent of the book has been read) to be deducted from royalty accounts
“Show the total number of unit purchases and returns on the author dashboards, not just the “net sales” already adjusted for any returns; and
“Take action against abuse of the ‘return and exchange’ terms by listeners”
Conceding that Audible “has made progress on some of these demands and other subsequent ones,” the coalition says, “our reasonable demands for a full and complete accounting of returns made to date—to recompense authors and narrators for returns unfairly charged back to their accounts, and to stop charging back returns when more than 25 percent has been read—have not been met.”
. . . .
Ability to Terminate Audible Distribution
Quoting the coalition:
“Starting February 1, all ACX rights holders (including authors who self-publish audiobooks through ACX, as well as independent publishers that rely on ACX services to create audiobooks)—both exclusive and non-exclusive—may, with notice, terminate distribution of any title that has been in distribution for at least 90 days. To withdraw titles created using a royalty share option with the producer, however, the ACX rights holder will need to obtain consent from the producer.
“Titles for which distribution is terminated will be removed from all sales and distribution through ACX including Audible, Amazon, and Apple. Audible will share details about the process for termination in the January payments letter, including details about how termination requests will be processed.”
The State of Play: ‘An Important Step Toward Fairness’
The coalition of three leading authors’ advocacy organizations in its summation, is indicating to the groups’ respective memberships exactly what good diplomacy dictates—an outlook that there is more progress yet to be made but that cooperation to date is worthwhile and to be appreciated. There are politicians working in many countries at this moment who could learn something from this.
What’s encouraging here is the bargaining efficacy these long-running authors’ organizations are able to show as they work through this thicket of rights holders’ and content providers’ issues with Audible. Even the leading writers’ trade associations in the field have been too easily dismissed at one time or another by some players—by no means all—in the publishing industry.
. . . .
“With input from independent authors,” the coalition writes, “we raised other issues, including the one-year commitment to exclusivity and the mandatory seven-year license term in Audible contracts, and are pleased to see that progress was made on these demands.”
PG is always happy for anyone to lobby for authors and other creators to be treated better by publishers of all sorts.
PG thinks that it would be great for authors’ organization to approach traditional print publishers to negotiate “a one-year commitment to exclusivity and the mandatory seven-year license term” in order to give authors of printed and ebooks the ability to move away from publishers who aren’t treating them right.
PG suggests there’s nothing special about what’s fair in audiobooks that should not also be considered for all the different formats for books that authors create.
PG will look forward to soon reading reports that the Authors Guild, the Society of Authors and the Alliance of Independent Authors are pressuring traditional publishers, large and small, for freedom from the onerous terms of typical print and ebook terms, such as exclusive contracts that are binding for the life of the author plus 70 years, twice-yearly royalty reports and payments, opaque reserves for returns provisions and practices that give authors no real information or rights to understand how such reserves are calculated and how long they will be held by publishers, etc., the ability to book sellers to return unsold printed books for full credit weeks or months after ordering and receiving them from publishers, etc.
Traditional publishing would be far fairer and more invested in the financial well-being of authors if it changed its publishing agreements in the same way these large authors groups, dominated by traditionally-published authors, are insisting Audible, an Amazon subsidiary, change its contract terms.
Attorney’s Sperling & Slater acting on behalf of three eBook buying plaintiffs are suing Amazon and the “big 5” publishers (Hachette, Macmillan, Penguin Random House, Simon & Schuster, Harpercollins) for eBook price collusion in the Southern District Court in Manhattan. These plaintiffs are deemed representative of the following class:
All persons who, on or after January 14, 2017, purchased in the United States one or more eBooks sold by the Big Five Publishers through any other retail e-commerce channel in the United States other than the Amazon.com platform.
The filing alleges that Amazon.com employs anticompetitive restraints to immunize its platform from the negative effects of the Big Five’s inflated eBook prices and that these ‘inflated prices’ are a result of the imposition by publishers of the agency pricing model.
There are several exhibits in this filing including the following:
As the following chart shows,15 the Big Five’s eBook prices decreased substantially from 2013-2014, as long as the consent decrees prevented the Big Five from interfering with retailer discounts, but they immediately increased their prices again in 2015 after renegotiating their agency agreements with Amazon and have continued to maintain supracompetitive prices
.
What the above chart seems to be suggesting is that eBook prices from the big five are now at a level comparable to the 2014-15 time period which is when they were lowest.
In their argument the attorneys focus on the use of ‘most favored’ pricing models which Amazon requires of its vendors. Basically no other vendor (including the publisher) can offer better prices to consumers. Due to this according to the suit, Amazon removes any opportunity for price competition and therefore perpetuates higher (anticompetitive) pricing of eBooks. As follows:
27. Amazon’s and the Big Five’s continued anticompetitive use of MFNs in the United States is astonishingly brazen, given the DOJ’s high-profile enforcement against Apple and the Big Five in 2012 and the EU’s own proceedings against the Big Five and Apple in 2011 and subsequently against Amazon in 2015 for its own use of anticompetitive MFNs in eBook sales. Despite multiple investigations and censure, Amazon and the Big Five have engaged and continue to engage in a conspiracy to fix the retail price of eBooks in violation of Section 1 of the Sherman Act.
28. Amazon’s agreement with its Co-conspirators is an unreasonable restraint of trade that prevents competitive pricing and causes Plaintiffs and other consumers to overpay when they purchase eBooks from the Big Five through an eBook retailer that competes with Amazon. That harm persists and will not abate unless Amazon and the Big Five are stopped; Plaintiffs seek a nation-wide injunction under the Clayton Act to enjoin Amazon and the Big Five from enforcing this price restraint.29.Amazon’s conduct also violates Section 2. Amazon has obtained monopoly power in the U.S. retail trade eBook market, where it accounts for 90% of all eBook sales. Through its conspiracy with the Big Five Co-conspirators, Defendant Amazon has willfully acquired its monopoly power in the U.S. retail trade eBook through anticompetitive conduct, fixing the retail price of trade eBooks and causing supracompetitive prices for eBooks sold by or through Amazon’s eBook retailer rivals. Such conduct is an abuse of monopoly power in violation of Section 2 of the Sherman Act.
Trigger Warning: Those susceptible to any adverse reactions or consequences as a result of reading an extended opinion of PG should stop reading NOW.
If such persons take the risk of reading further, they should notify a relative or friend that an intervention may be necessary to pull them back to some semblance of sanity following their consumption of an excessive dose of PG.
You Have Been Warned!!
Love and Kisses, Your Buddy,
PG
XXOOXX
First, some language clarification. As used in legal parlance, especially in antitrust matters, “MFN” refers to Most Favored Nation clauses.
The term, Most Favored Nation has its origin in international trade and tariff negotiations.
From The Balance:
Most-favored-nation (MFN) status is an economic position in which a country enjoys the best trade terms given by its trading partner. That means it receives the lowest tariffs, the fewest trade barriers, and the highest import quotas (or none at all). In other words, all MFN trade partners must be treated equally.
While international trade agreements are, at least generally, not subject to lawsuits in US courts, at some point in time, US (and perhaps other nations’) antitrust lawyers borrowed the MFN term and applied it to describe a concept in antitrust law:
From Practical Law Company:
Most favored nation clauses (MFNs), sometimes also referred to as most favored customer clauses, are agreements in which a supplier agrees to treat a particular customer no worse than all other customers (see Standard Clause, General Contract Clauses, Most Favored Customer (www.practicallaw.com/8-510-7389)). Under most MFNs, a seller agrees to provide a product or service to a buyer at a price no higher than the price it provides to any other buyer, now or during the term of the agreement. Contracting parties commonly use MFNs to:
– Reduce uncertainty about potential price fluctuations.
– Transfer risk of opportunism.
– Reduce the transaction costs of both initial and later bargaining.
While commentators and courts have found MFNs to be competitively benign in most circumstances, recent actions and comments by enforcement agencies have raised the possibility that MFNs may be found to be anticompetitive in several specific situations. This Note surveys those developments and discusses some of the risk factors that a company should consider when analyzing the legality of specific MFNs.
Long-time visitors to TPV will recall that, in 2012, an antitrust case, United States v. Apple Inc., was filed by the U.S. Department of Justice against Apple Computer and five of the six largest traditional publishers in the United States.
The suit alleged that the six defendants had violated the US antitrust laws by agreeing to set fixed prices for e-books and force Amazon to sell e-books at those prices, which were higher than the discounted prices Amazon was then charging for Big Publishing’s ebooks.
Top executives of Big Publishing had been meeting secretly for some time to decide how to keep Amazon from selling their books at a discount. Apple was planning the launch of the first iPad and the opening of its iBookstore to sell ebooks and didn’t want Amazon to offer ebooks for discounted prices.
At the iPad launch, when Apple CEO Steve Jobs was asked by a Wall Street Journal columnist how the iBookstore was going to compete with Amazon when Amazon was going to be offering ebooks for lower prices, Jobs assured the columnist that the ebook prices would be the same on Amazon as they were at the iBookstore.
Such collusive price-fixing was and is, of course, wildly illegal under US antitrust law. In PG’s transcendently-humble opinion, only rank stupidity on the part of publishers and complete arrogance on the part of Apple’s highest execs can be concluded from such a stupid move.
PG is acquainted with some attorneys who work or have worked for Apple and is confident that if Apple execs had consulted inside or outside counsel, they would have been informed that it was a dumb thing to try and had a high probability of being slipping out into the light in one way or another.
Shortly after the suit was filed, each of the publishers caved, paying a fine and agreeing never to fix ebook prices again. Apple fought the matter and lost in the trial court, the US Court of Appeals and the US Supreme Court.
With that overlong background, now we find Amazon being accused of conduct similar to Apple, in company with the same group that got into trouble with Apple.
PG’s initial reaction was that Amazon would be too smart to fall into any sort of antitrust trap of the same general type that caused Apple embarrassment and money about 9 years ago. Why collude with convicts? (that’s a little over the top, nobody went to jail)
PG hasn’t had a chance to read the Complaint in this case in any detail, but it appears that counsel for the plaintiffs is focused on Amazon’s requirement that it receive the best price that the publishers offer anyone else for ebooks it licenses. Plaintiffs’ counsel also draws a specific parallels between what it alleges Amazon’s behavior to be today and what Apple’s was in former days.
In the former antitrust case, the publishers were threatening to cut off access to their products for Amazon if it didn’t raise its prices.
PG’s has not read anything about the present claims that suggest that competitors to Amazon are being forbidden from discounting their ebooks below Amazon’s prices.
Nothing in the idea of a free market guarantees that everyone is entitled to a profit on any sale. If a competitor of Amazon wishes to acquire ebook licenses from major trade publishers and chooses to resell licenses for less than it paid for them as loss leaders in order to capture market share, there is no harm to consumers because they’re given the choice to purchase a given title at a lower price than they can from Amazon.
Amazon was reported in past times to have engaged in such discounting for various products in exactly that manner – attracting customers to its store by selling some products at a loss in order to sell other things to a customer at a small profit during the same visit or later visits when the customer returned to purchase things from Amazon.
There is a distinction between Amazon requiring that large publishers sell ebook rights to Amazon at a price that is equal to the best price the publishers offer anyone and Amazon requiring that publishers somehow force others to sell ebooks at a price no lower than Amazon sells them.
PG has digressed too long in speculation, however.
One point PG hasn’t seen mentioned anywhere else is that Amazon offers a wide range of much lower-priced ebooks from indie authors.
Forget about traditional publishing. Lots of readers enjoy buying high-quality ebooks from indie authors on Amazon because indies are willing to price their books lower than New York or London corporate publishers are.
Some buyers may also be aware that, when they buy books from indie authors, a much higher percentage of each dollar they spend on Amazon ends up in the author’s pocket than if they buy a book from a traditional publisher.
PG would argue that looking at what has happened to the ebook prices of traditional publishers with their excessive cost structures and obligations to kick lots of money upstairs to their often privately-held overseas owners is only looking at the portion of the ebook market that is in slow decline.
The growing market for indie ebooks notwithstanding, if, as one of the OP’s claims, if Amazon is using:
“‘most favored’ pricing models which” prevent any “other vendor (including the publisher)” from offering “better prices to consumers.
PG has no sympathy for Amazon and hopes it is punished for such activities.
If, on the other hand, Amazon is using its power to control its costs only (not the amount that competitors can charge for an ebook), Amazon is requiring that it be given the right to sell ebooks while paying the publisher a price that isn’t higher than the publisher is charging a competitor of Amazon to sell the same ebook, then Amazon is not demanding an uneven playing field.
In such case, Amazon is demanding a flat field, an equal cost basis upon which it it can set its own retail prices just as a competitor of Amazon can set its own retail prices.
In such case, Amazon is not saying, “You have to force any other ebook retailer to not underprice Amazon.”
Again, PG isn’t opining about the full range of ways Amazon may be accused of violating antitrust laws.
Amazon as the overwhelmingly largest seller of ebooks in the US is subject to antitrust restrictions different than Amazon as a scrappy little online bookseller.
For the record, PG is not saying that Amazon can do no wrong. Earlier in Amazon’s history Jeff Bezos was fully hands-on with a smaller company and he was able to know most of what was happening inside a smaller Amazon.
These days, a post-divorce/new girlfriend Jeff Bezos has reportedly handed off a lot of day-to-day management responsibilities to others.
While PG would like to believe that the corporate culture that Bezos impressed upon Amazon during the early and middle part of its explosive growth still governs the operations of the company, he realizes that those handling the day-to-day business decisions for the company may be motivated by other incentives.
PG has personal experience with the vast changes that can occur in an organization when the management who hired him was replaced by management with a much different outlook on business life.
Amazon.com and the “Big Five” publishers – Penguin Random House, Hachette, HarperCollins, Macmillan and Simon & Schuster – have been accused of colluding to fix ebook prices, in a class action filed by the law firm that successfully sued Apple and the Big Five on the same charge 10 years ago.
The lawsuit, filed in district court in New York on Thursday by Seattle firm Hagens Berman, on behalf of consumers in several US states, names the retail giant as the sole defendant but labels the publishers “co-conspirators”. It alleges Amazon and the publishers use a clause known as “Most Favored Nations” (MFN) to keep ebook prices artificially high, by agreeing to price restraints that force consumers to pay more for ebooks purchased on retail platforms that are not Amazon.com.
The lawsuit claims that almost 90% of all ebooks sold in the US are sold on Amazon, in addition to over 50% of all print books. The suit alleges that ebook prices dropped in 2013 and 2014 after Apple and major publishers were successfully sued for conspiring to set ebook prices, but rose again after Amazon renegotiated their contracts in 2015.
“In violation of Section 1 of the Sherman Antitrust Act, Defendant and the Big Five Co-conspirators agreed to various anti-competitive MFNs and anti-competitive provisions that functioned the same as MFNs,” the complaint states. “Amazon’s agreement with its Co-conspirators is an unreasonable restraint of trade that prevents competitive pricing and causes Plaintiffs and other consumers to overpay when they purchase ebooks from the Big Five through an ebook retailer that competes with Amazon. That harm persists and will not abate unless Amazon and the Big Five are stopped.”
. . . .
Hagens Berman sued Apple and the Big Five publishers for fixing ebook prices in 2011, in a case that would eventually lead to suits from several US states and the Department of Justice, which accused Apple of colluding in order to break up Amazon.com’s dominance in the ebook market.
Connecticut is actively investigating how Amazon.com Inc. sells and distributes digital books, according to the state’s attorney general, the latest of several state and federal probes into the tech giant’s business practices.
The investigation is examining whether Amazon engaged in anticompetitive behavior in the e-book business through its agreements with certain publishers, Connecticut Attorney General William Tong said in a statement.
Connecticut asked Amazon to provide documents related to its dealings with five of the largest U.S. book publishers, according to a subpoena issued in 2019. The Tech Transparency Project, a nonprofit that investigates technology platforms, obtained the subpoena through an open records request and shared it with The Wall Street Journal.
. . . .
“Our office continues to aggressively monitor this market to protect fair competition for consumers, authors, and other e-book retailers,” Mr. Tong said in a statement.
The publishers cited in Connecticut’s Amazon subpoena include HarperCollins Publishers, which like The Wall Street Journal is owned by News Corp ; Lagardere MMB; SCA’s Hachette Book Group; Penguin Random House, a unit of closely held German media company Bertelsmann SE; Simon & Schuster, the book publishing arm of ViacomCBS Inc.; and Macmillan. Penguin Random House has agreed to acquire Simon & Schuster, pending regulatory approval.
. . . .
The Connecticut investigation is one of several ongoing probes into the Seattle-based company’s market power. In October, the House Antitrust Subcommittee completed a 16-month investigation into Amazon and other technology companies, concluding that Amazon has amassed “monopoly power” over sellers on its site.
. . . .
Amazon is the dominant U.S. e-book retailer, accounting for 76% of digital books sold in the U.S. in September, according to Codex Group LLC, a book audience research firm. Rival sellers of digital books include Apple, Alphabet Inc.’s Google and Barnes & Noble.
The e-book market has been controversial for years. Amazon kick-started the business when it introduced its Kindle e-reader in November 2007, a launch that offered digital bestsellers for $9.99. The discounted offering helped Amazon build market share, but publishers believed it hurt the industry.
Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)
A team of independent publishing consultants with broad and deep experience in the industry have produced an excellent report on the effects of the past year’s pandemic on the book publishing business called “COVID-19 and Book Publishing: Impacts and Insights for 2021”. Cliff Guren, Thad McIlroy, and Steven Sieck are real pros and they have been systematic and rigorous in their methodology. The report is free (here) and is bound to be among the most widely-read papers in our industry very quickly.
The notion was to look at the changes that have taken place in the worlds publishing lives in and work back to the impact on the publishers. This approach makes sense. You can’t analyze or predict the future about trade publishing without looking at what is happening in the world of retail. You need to understand what the impact of change is on schools and colleges to gain insight into how publishers will have to adjust. Indeed, that’s how publishers themselves will approach the challenge: they will try to understand the environments they have to live in to formulate their go-forward strategies.
And the authors have captured the reality that the pandemic was not really bad for the book business. In fact, for many publishers it has been a boon. The authors amply document that most book sales have been sustained and that most book publishing operations have managed to shift staff to working remotely and are still able to continue to produce effectively.
One impact of the pandemic on retailing that was thoroughly appreciated by Guren, McIlroy, and Sieck (and seldom remarked on elsewhere) is the rise in importance of the brick-and-mortar “equivalents” to Amazon: like Target, Walmart, and Costco. Those stores have long had the in-store presence of a limited number of book titles but in the online environment, with Ingram in the background, they can sell just about any book except some proprietary Amazon titles. Online non-book consumers can put books in their grocery basket with these retailers as readily as they can with Amazon and more and more of them appear to be doing that. Although it is more likely that many of these new book customers for them were filched from local brick and mortar retail rather than from Amazon, the net effect has been to really grow books in importance to them.
. . . .
Discovery that shifts from bookstores to online favors backlist. And publishers have been challenged to deliver new titles with the same marketplace impact in the readjusted book marketplace. Some new title production has continued, to be sure. But there are anecdotal reports of postponements with some publishers choosing to hold back quite a bit until things change.
. . . .
“Covid Impacts and Insights” discusses the relative ease with which publishers have maintained their operations without using their offices. Discovering how to work this way is bound to have implications on the future of offices — where they’ll be, how full they’ll be, and what percentage of each employee’s time will be spent in them — in our business. The report notes the fact that a lot of publishers spend big money on Manhattan real estate. In a margin-challenged business like ours, that is bound to come under closer scrutiny as the pandemic fades.
. . . .
One is touched on in the Executive Summary at the top and not returned to: the efforts by publishers to compensate for a declining infrastructure of intermediaries (particularly bookstores) with more D2C — direct to consumer — efforts. For well over a decade, even the most general of the general trade publishers have been building those efforts. They all have databases with millions of consumer names that they are able to use with varying amounts of success. This creates subtle distinctions between the sales capabilities of the houses based on their different abilities to reach direct audiences.
So when Penguin Random House acquires Simon & Schuster (assuming the sale is allowed to proceed), the chances are that they will both get some new books that are appropriate for some of their “captive” audiences and, conversely, that they will acquire some D2C reach that S&S developed that can now be applied to PRH books. Not much is known about the specific proprietary D2C capabilities the houses have, but those sales assets, however slowly they grow, become increasingly important as bookstore opportunities shrink. Both the publisher marketing efforts and the brick-and-mortar erosion are accelerated by the pandemic.
There is another change that has been slow and inexorable over the past decade or more and which the pandemic can only exacerbate. Since the center of gravity has shifted away from bookstores, a domain publishers “controlled” and which shielded them from competition from books that had no powerful publisher, it has become increasingly difficult for publishers to make new books “work”.
. . . .
How does new title production of the established trade houses today compare to what they issued ten or twenty years ago? (One hint: it is almost certain that the combined new title output of PRH and S&S will be less after the merger than it was before.) And how do sales of new titles compare to sales of backlist? And how much of the new title output survives to become contributing backlist?
This is a tough set of facts to compile, but it is almost certain they’d show that big publishers are living off their backlist and not making it grow like they did in past decades. The “moat” around established publishers was always the bookstores; real publishers could put inventory into them and mere aspirants could not. When there were thousands of bookstores carrying tens of thousands of titles (or even hundreds of thousands) and almost all the books were sold through brick-and-mortar retailers (a fair description of the world before 1995, or even before 2005), the big publishers had an advantage that no number of D2C names can win back for them.
. . . .
In pandemic times, when output is constrained in many ways, the ability to print at the point of distribution changes everything. The striking example of how much this matters was a NY Times paperback bestseller list at the end of June which had a majority of the titles being printed and distributed by Ingram.
Having learned the many benefits of being able to meet substantial demand without inventory in place, the publishers aren’t likely to forget it. The fact that a unit costs more to deliver when you print one was always well understood; now it can also be seen that shipping and handling and returns costs are avoided so the difference in profits is not as great as the difference in unit cost. Publishers know this now. It will change things going forward.
Mike points out that the ability of traditional publishers to put product into physical bookstores (and the larger publishers could do this more successfully than most small publishers) was important for their success and prosperity. Fundamentally, traditional publishers controlled this retail channel and large publishers paid a lot of attention to large bookstores and even more to large bookstore chains.
However, Barnes & Noble is about the only large bookstore chain still in business. The latest pre-Covid data PG could find was that there were 633 BN physical stores in the US. Books-a-Million was second with 260 stores in 32 states and store numbers dropped quickly farther down the list. These numbers are almost certain to decline when the retail sector can finally open up and have a reasonable expectation of customers entering their stores. PG’s bet is that there will be a lot fewer physical bookstores after Covid than there were before.
A whole lot of readers who purchased their books from physical bookstores pre-Covid have learned that Amazon has everything and can deliver a physical book to their home tomorrow or the next day if they order it as soon as they leave Barnes & Noble. Even early books by current bestsellers may be a special-order item in a physical bookstore. And those readers will quite possibly pay less than if they waited for a BN special order to arrive in a week or two. Smaller bookstore chains may require an even longer wait.
PG was interested in Mike’s observations that publishers’ back list had become a larger contributor to revenue and sales than it had been prior to Covid. He rightly pointed out that the migration of sales from physical bookstores to Amazon and other online bookstores had been a primary cause of this rebalancing.
PG suspects that some veteran authors who were/are traditionally-published may wonder whether it’s fair for their publishers to be harvesting the large majority of the money from these backlist sales when the author’s advance has long been spent and the publishers haven’t devoted any significant amounts of money or effort promoting the author or her books for a very long time, particularly if the publisher isn’t providing much in the way of advances for new books the author has written lately.
You can download the complete COVID-19 and Book Publishing: Impacts and Insights for 2021 HERE. While Mike focuses mostly on the trade publishing business (which is likely the most interesting part of for most visitors to TPV), the complete report includes some information about academic and research publishing which is under pressure because its primary customers – academic institutions – has been severely stressed by Covid.
Hold onto your pens, people…it’s going to be a wild ride.
It’s that time of year again. I present to you Predictions in Publishing: the 2021 Edition!
It’s hard to believe that last year at this time I was bemoaning the fact that the book publishing industry seemed to have stagnated and not a lot was changing. Then, WHOOSH, in March everything changed all at once. And here we are counting down the days to the final end to the Year of the Great Pause, where we can see the light at the end of the tunnel into 2021. Let’s hope it’s not a train! (It’s not a train…)
. . . .
1) Publishing Professionals Leave New York
More editors, agents and other publishing pros have moved out of the New York City metro area, and are working from homes in other cities, and even states, where the cost of living is significantly lower. If they bought or rented a house with a yard and several bedrooms/office space elsewhere, or moved in with their parents and find it delightful, the thought of moving back into a comparably-priced studio or one-bedroom apartment in Manhattan or Brooklyn might not be strong enough to get them to return.
They have gotten comfortable with working remotely. They are now Zoom or Google Meeting pros. And they see how much more work they can get done (especially editing) if they don’t have to commute or do endless in-person meetings every day. Even art departments have developed successful workarounds. This has fundamentally changed the publishing process.
As we move into the future, I believe you’ll see a diaspora of publishing professionals, just like tech workers or other non-geographically-tied workers have experienced, and eventually they will either be located in a smaller building in NYC or will Zoom-in remotely when needed, only visiting the main office once a month or so. It has long been the case with agents and even the odd editor, but now it will be commonplace among the major houses. New York will be the center of publishing in name only. Virtual companies will have the edge.
. . . .
3) Reading on Screens Increases
Everyone got used to buying all kinds of things online, and that includes ebooks. But will this trend continue once bookstores are open again?
I believe so. Readers have become comfortable with reading on a screen as part of the total ecosystem of reading, just as they’ve become comfortable with shopping at their local retail stores as well as Amazon, Bookshop.org, indie bookstores, reading apps, etc.
They will consume hardcover, trade paperback, mass market, ebooks, audiobooks and any new format that comes along. Publishers need to understand that and work it into their P&Ls on stories and worlds they want to license.
. . . .
5) Bookstores Adapt
Indie bookstores (traditional publishing’s main retail outlet) have been severely disrupted. Do they survive and thrive or collapse? Will Barnes & Noble make it? Will Amazon continue to dominate or will Bookshop.org challenge them? I think all these issues will play out in the latter half of 2021.
I think indie bookstores have already pivoted successfully by being creative and community-minded. They rocked drive-by distribution and deliveries. They figured out how to do many of their promotional events and author “signings” online.
It’s the larger box bookstores like Barnes & Noble, now under a new management team led by Brit James Daunt, who I see fumbling the ball and perhaps not being fiscally viable much longer. Five years and they’ll either be gone or severely smaller. That’s my prediction. Amazon is hastening their exit. Look back at prediction number 3.
. . . .
8) Online Book Promotion Becomes the Norm
Virtual book promotion is here to stay. It already was not making economic sense to send an author on a multi-city tour to promote a book, when only a handful of fans would show up at the local Barnes & Noble in each city. If all bookstores, even small ones in rural locations, can get an author to do a 1-hour Zoom chat about their book with fans who’ve already ordered the pre-autographed book from said indie bookstore, it’s going to catch on. It’s affordable, easy to accomplish, and readers will like it if they can watch their author heroes while in their jammies.
Also, need I say, school visits will become a lot more accessible and affordable if done virtually. This way authors can earn a few dollars and bookstores can scale up or down depending on the popularity of the authors virtually visiting their locales.
It is 2021, but PG still does not always agree with everything he posts on TPV.
For one thing, Bookshop.org hasn’t a chance in hell of taking a hundredth of one-percent of Amazon’s share of the book business.
PG will note that, although more honored in the breach than in the observance, the .org extension was originally intended to be reserved for non-profit organizations.
In the case of Bookshop.org, the website is run by a Limited Liability Company (LLC) which, at least in the United States, denotes an organization that strives to earn a profit. Again, in the United States, a charitable organization is typically operated as a non-profit corporation. Corrected per CE Petit’s comment and superior knowledge of current LLC practices and law.
That said, regardless of its intent, PG suggests that Bookshop.org will have quite a bit of difficulty generating a profit of any sort and its business and commission structure is designed for traditional publishers, so it will generate teeny-tiny royalties for the authors who make books possible in the first place.
PG says that, if you or your reading friends wish to encourage and compensate authors, buying through Amazon is the only way you go.
Note: PG doesn’t always agree with the items he posts on TPV.
From The Wall Street Journal:
Jeff Bezos built Amazon.com Inc. from his garage with an underdog’s ambition to take on the establishment. He imbued staff with an obsession to grow fast by grabbing customers using the biggest selection and lowest prices. Today, he has more than 1.1 million employees and a market valuation around $1.6 trillion.
But Amazon never really grew up. Mr. Bezos still runs it with the drive of a startup trying to survive.
That ethos helps keep Amazon booming. Aggressive competition—including wresting market share from rivals—is often a hallmark of a successful business. It’s also why the tech-and-retail giant is the target of rivals, regulators and politicians who say its tactics are unfair for a company its size, and potentially illegal. As the company has grown, so has its capacity to take on an ever-growing array of competitors.
To keep customers happy, which Mr. Bezos has long said is Amazon’s fixation and growth strategy, executives behind the scenes have methodically waged targeted campaigns against rivals and partners alike—an approach that has changed little through the years, from diapers to footwear.
No competitor is too small to draw Amazon’s sights. It cloned a line of camera tripods that a small outside company sold on Amazon’s site, hurting the vendor’s sales so badly it is now a fraction of its original size, the little firm’s owner said. Amazon said it didn’t violate the company’s intellectual-property rights.
When Amazon decided to compete with furniture retailer Wayfair Inc., Mr. Bezos’s deputies created what they called the Wayfair Parity Team, which studied how Wayfair procured, sold and delivered bulky furniture, eventually replicating a majority of its offerings, said people who worked on the team. Amazon and Wayfair declined to comment on the matter.
. . . .
From its start as an online bookstore 26 years ago, Amazon has expanded into an online retailer with a presence in nearly every major category. It is also the leading provider of cloud-computing services, a gadget maker, a major entertainment player and a rival to United Parcel Service Inc. and FedEx Corp. Mr. Bezos is the world’s richest man, with a net worth Forbes estimates at $187 billion.
He still exhorts employees to consider Amazon a startup. “It is always day one,” he likes to say. Day two is “stasis, followed by irrelevance, followed by excruciating, painful decline, followed by death.” Mr. Bezos originally considered calling his company Relentless, and www.relentless.com still redirects to Amazon’s site.
. . . .
Some rivals and partners say Amazon’s competitive zeal looks like unfair practices. The Journal this year reported that Amazon employees used data about independent sellers on its platform to develop competing products and that it has used the investment and deal-making process in ways that entrepreneurs and others said helped it develop products that competed with its would-be partners. Journal reporting showed how Amazon has limited some competitors’ ability to promote rival streaming devices and other gadgets on its dominant e-commerce platform.
Mr. Bezos in July testimony to the House Antitrust Subcommittee about the Journal’s private-label article, said: “I can’t guarantee you that that policy has never been violated.” The Amazon spokesman said the company doesn’t use confidential information that companies share with it in the mergers-and-acquisitions and venture-capital processes to build competing products. Amazon didn’t directly address the question of whether it hobbles rivals’ marketing, saying it is common practice among retailers to choose which products they promote.
Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)
PG says that US antitrust law is designed to protect competition, not competitors. The beneficiaries of antitrust law are intended to be consumers.
For as long as people have been making and selling products with a view toward improving their material conditions, other people have decided they might be able to improve their material conditions by doing the same thing.
No one forces a company, large or small, to sell on Amazon. No one forces a company selling on Amazon to keep selling on Amazon.
Absent patent, copyright or similar intellectual property protections, nothing protects any manufacturer or seller from a competitor, small or large, making a similar or identical product and selling it in competition with the earlier vendor. It happens every day of the week.
Per the OP, as an amateur photographer, PG can assure one and all that there are a zillion different tripod manufacturers in the world selling tripods of all different shapes, sizes and prices.
If PG is shopping for a tripod (no, he really doesn’t need another tripod, but . . .), he can find cheap tripods, expensive tripods, knock-offs of expensive tripods, etc., from all different types of manufacturers. A new idea for tripods appears approximately once every thirty years and manifests itself as a tweak, not a revolution. Certain brands appeal to photographers who want to impress others and have money to spend in order to do so.
If PG were to start a tripod business, he wouldn’t waste his time trying to interest camera stores (a rapidly disappearing phenomenon) in purchasing his tripods at a wholesale price for resale. He would sell online and almost certainly sell via Amazon because that’s where people go to buy tripods these days.
It would be easy for PG to set up his own online tripod store, but getting anyone to come to PG’s tripod website would be another challenge entirely.
What Amazon offers is people — eyeballs with credit cards. That is a very, very hard thing to do. Look at all the other etail websites and compare them to Amazon. PG suggests you’ll see why Amazon is the preferred destination.
Apparently, lots and lots of tripod manufacturers and sellers want to reach Amazon’s customers. PG just checked and there appear to be 400 pages of tripods (with 8-10 tripods per page) for sale on Amazon.
So, the small tripod manufacturer that the WSJ mentioned in the OP was in a very, very competitive world long before Amazon decided to make its own tripods.
From Amazon’s Beginner’s Guide to Selling on Amazon:
When you start selling on Amazon, you become part of a retail destination that’s home to sellers of all kinds, from Fortune 500 organizations to artisan vendors who make handcrafted goods. They all sell here for a reason: to reach the hundreds of millions of customers who visit Amazon to shop.
Since third-party sellers joined Amazon in 1999, they’ve grown to account for 58% of Amazon sales
Third-party sales on Amazon are growing at 52% a year (compared to 25% for first-party sales by Amazon)
If you enroll your eBook in KDP Select, you’re eligible for the KDP Select All-Star Bonus. In addition to paying royalties from the KDP Select Global Fund, each month we award All-Star bonuses to books and authors that are read the most in Kindle Unlimited (KU) and the Kindle Owners’ Lending Library (KOLL). All-Star recipients are also eligible for All-Star badges on their book detail pages. Anyone with titles in KDP Select—even a brand-new author—is eligible.
We award All-Star bonuses to authors and titles that provide our customers the best reading experience based on how much they’re read in KU and KOLL. Authors who publish books together are considered a single “author” for the purposes of KDP All-Star bonuses. We email the award winners.
One of the comments was from a long-time regular on TPV, PolyWogg, and provided detail and discussion that PG thought deserved a more prominent position on this illustrious online stage.
Here’s PolyWogg:
In my view, there is quite a bit of disingenous hand-wringing here, and while part of it is the digital nature of the product that confuses things, two other elements are worse.
NOT ALL RETURNS ARE THE SAME. In a paper world, returns take two forms — seller returns and buyer returns. To be clear, the current issue is about buyer returns. People are not very careful with their wording though and some articles have referred to “longstanding conflicts over returns” which is the first type, not the second, and completely irrelevant to this discussion. Yet some of the authors fed that narrative.
For the “buyer” return, buyers return products for a bunch of reasons according to the popular research:
a. They already had it and didn’t need another one / they bought several and only needed one; b. It was a gift and they didn’t want it; c. It’s defective; d. It didn’t perform as expected; or, e. They used it and don’t need it anymore.
From market research, most people are generally okay with (a) to (c). A simple return. Almost all stores offer it, even when there is no legal requirement to do so. They can say, “All sales final” if they wish, subject to consumer protection legislation, but most places accept returns.
IRREGULAR RETURNS. A smaller percentage of the population are also okay with d (poor performance), but depends on the product. For example, if you bought a vacuum cleaner and found out it doesn’t pick up cat hair, it may not be defective but it doesn’t do what you expected. And if you return it soon enough, most stores will take it. They’ll reseal it, put back on the shelf or sell it as open box, and away it goes. There is, after all, nothing wrong with it. However, for the writer, what exactly does this mean? If you read 50 pages of the book, decide the author sucks, can you return it? Many buyers say absolutely yes, authors want to say, “Of course not”. But the publisher and the store makes that decision in paper world, not the author. And most of them will take the return unless the book is marred in some way. And even then, many of them will take it rather than alienate the customer.
The other area (e used/need) is a not-insignificant area of concern. The cliché is the girl who buys a party dress / man who buys a suit but doesn’t cut the tags off so that they return it the next day. They’re essentially converting their purchase into “borrowing” for the night cuz they either can’t afford it or see nothing wrong with ripping off the store. People do it with tools, computer equipment (like scanners), anything that can be a “use once” type situation where you need it but when you’re done with it, you don’t need it anymore. According to most market research, people are usually of the view that this is scummy behaviour and SHOULD NOT be allowed. I even bought a special purpose computer tool from a computer store about two years ago and the salesman told me to take it home, use it, fix my problem, and then bring it back afterwards. I bought it, I didn’t return it. It didn’t feel right to me, but not everyone feels that way.
For the author in the Audible situation, where they want to allow long-term returns, everybody wants to paint it as (e used/need), not (d poor performance), and therefore should not be allowed.
DIGITAL PURCHASES. The problem with all of this, which is exacerbated by the timeline, is that it is a digital product with no degradation from a return. It’s not “used” in that sense, just that potentially the buyer already got the benefit from it. Audible wants to give them the right to return something up to a year after they bought it. Which all the authors then say, “Well sure, you’ve listened to it by then, and NOW you want to return it?”. Putting it squarely in group (e). Bought, used, returned.
Except the authors are wrong. Sure, there will be people in that category, as there are for lots of industries, and for those people, it is similar to a subscription / all you can eat buffet. But market research puts it in the 5% category as legitimate purchasers (not pirates) believe it is wrong. They feel like they would be cheating, so they don’t do it. Pirates and pseudo pirates would, but they’re a small percentage and don’t really represent lost sales. They aren’t going to buy anyway. Would/could it increase? Sure.
But the real question is *why* would Audible want to offer that length of time instead of 1m, 3m, etc.? It puts no money in their pocket and actually costs them money to do it. Every business model out there (except two) would tell them this is a bad idea.
One exception to that general limitation on returns is the “lifetime guarantee” or “extended warranty”. Sears in Canada used to have their “satisfaction guaranteed” promise and the best story I ever heard was a refrigerator that crapped out after 20 years, the guy tried to get it fixed, couldn’t get the parts, and the STORE TOOK IT BACK SINCE HE WASN’T SATISFIED. He didn’t even ASK for it, they just did it. Of course, small differential in price to buy the new one, but that was their model. About 6 years ago, I returned a tablet within a 2-year warranty and they gave me the full original cost back because none of their current tablets had the same features to give me a replacement.
The new “disrupted” exception is digital purchases. Since there is nothing to repackage, check for defects, etc., it is 100% resellable (although not really since it is just a digital copy anyway). There is no added cost to the returns. So why would Audible embrace this model for long returns? Because the buyer isn’t using the product right away.
If you look at the number of books bought for Kindles the day after Xmas, another example, people load them up. Dozens of books. Do they read them all in a month? Nope. Some they might not get to for several months. Or perhaps never.
Audible is identical. People buy several books, and might take up to a year to get to listen to them. Perhaps they buy four books in a series so they can listen to them. And after partway through Book 1, they realize they really don’t like them. This puts it SQUARELY back in category (d poor performance). And for Books 2-4, those are more like category (b a gift they didn’t want).
Now, well after the purchase time, the reader/listener is sitting there with multiple books they don’t want, they bought in advance, and now they want to return them. More than 6m after they bought them. If it was paper, they probably couldn’t normally because too much time had passed.
If they can’t return them, what do listeners do? They stop buying in bulk. They buy 1 book now, and they wait until it is finished before buying the others. THIS is why Audible wants to offer the return. So that people will keep buying well in advance knowing that they might not read it for several months. And if they get to book 3 and find they don’t like the series anymore, they can return it.
Audible knows that if they don’t accept the returns, sales will go down in the short-term. People won’t binge buy. It’s part of the reason Kindle sales die off after a short while. Yet one of the other questions is why doesn’t Amazon offer it for ebooks?
In short, because the lead time from purchase to reading ebooks isa bout the same as it is for paper books, no differential. Audio books though tend to have strong purchasing from really busy people looking to timeshift their listening (commutes, workouts), and with COVID, many of them are NOT getting through their audio books as fast as they used to with commutes and gyms eliminated.
Audible is doing it because they’re tryign to keep buyers buying at sales and promotions, and buying in advance generally, not just when they run out of the previous one.
I agree there’s an issue of transparency, as there is in EVERY CORNER OF PUBLISHING, but there isnt’ a scandal here except that once again, a bunch of writers/authors are trying to tell you they are “artistes”, not business people making widgets that can be returned.
Welcome back to Audiblegate, the place where things just keep getting weirder and weirder. Settle in, this is a long one but ends, no less, in Brussels after we visit the Emperor’s New Clothes Policy, the pot theory, unicorns, pirates and so much more. If you haven’t read my first blog post on Audiblegate, start here first. Everything, of course, is all ALLEGED.
One of my favorite stories is Hans Christian Andersen’s The Emperor’s New Clothes. You know, the tale of two swindlers masquerading as tailors who trick the vain Emperor into believing that the new clothes they’ve created for him are only visible to those who are clever and competent? Nobody’s going to admit they couldn’t see these clothes, not him, nor his most trusted minister, the courtiers, or those in the crowd as he parades by, nobody! That is until a young child calls out “but he hasn’t got anything on.” Still the Emperor continues with his parade even though he suspects the boy is correct and he has indeed been tricked. Who wants to admit they’ve been conned?
Well, we authors, Audiblegate whistleblowers, are not happy to be swindled, but we’re not ashamed to admit we were conned. After all, the swindle was well played and though some out there, including Audible and ACX, still want you to believe this isn’t as bad as it seems or that it’s part of business in the modern age, don’t you believe it.
THE SWINDLE
The swindler in our story, Audible/ACX (both pretty much acting together and residing in the same building, so let’s call a spade a spade) wrote to all those trapped in contracts with them on the 12th November, apologizing and offering “to show our appreciation for your continued support of ACX, for the month of December 2020 we will pay an additional 5% royalty on all sales of your ACX audiobooks through Audible, Amazon, and iTunes.”
They end with a heartfelt, “ACX would be nothing without you, the creators of more than 200,000 audiobooks that have delighted listeners for the past nine years.”
Gee, that’s nice, glad you feel that way guys. Please pay for those books then and provide transparency while you’re at it. This email arrived following more than three weeks of an avalanche of emails from authors, rights holders and narrators asking that we receive our returns data separated out from our reports. We replied immediately repeating our request for transparency and what with all the advertising of their returns “benefit,” we certainly felt as though the days of trust were behind us, and we’d appreciate seeing how much we were actually worth to them.
But something’s not right here with your offer, we added, because our math tells us that 5% of nothing, which is what we’ve been receiving for up to fifty to sixty percent of our audiobooks is, well, a big fat 0% nothing.
Link to the rest at Susan May Writer and thanks to R. for the tip.
Perhaps PG has been sheltering in place for too long because he had not heard about Audiblegate before.
Visitors to TPV are invited to share, fill in the blanks, debunk, etc., on this topic.
Amazon.com Inc. AMZN 0.32% will pay front-line staff a special holiday bonus as the e-commerce giant responds to a surge in online sales during the coronavirus pandemic that is driving record results.
Full-time employees at Amazon from Dec. 1 through Dec. 31 qualify for a bonus of $300, while part-time employees will receive $150, Dave Clark, senior vice president of world-wide operations, said in a blog post. The special bonus will total more than $500 million, he said.
. . . .
Amazon, which raised its U.S. minimum pay to $15 an hour in 2018, reported a profit of $14.11 billion on $260.51 billion in net sales for the first nine months of this year and projected $112 billion to $121 billion in sales this quarter. In 2019, Amazon reported a $11.59 billion profit on $280.52 billion in sales.
Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)
Audible has announced an alteration to its returns policy, following an open letter signed by over 10,000 authors and industry representatives calling for it to make changes.
From 1st January 2021, the company will pay royalties to authors for any title returned more than seven days following purchase. The company currently deducts royalties from authors’ and narrators’ accounts when a purchased audiobook is returned or exchanged within a year.
. . . .
“In instances where we determine the benefit is being overused, Audible can and does limit the number of exchanges and refunds allowed by a member. But as designed, this customer benefit allows active Audible members in good standing to take a chance on new content, and suspicious activity is extremely rare.”
PG can visualize how returning an audiobook an individual has purchased and listened to could be carried out. That said, thieves gonna thief and that has been a fact of life for centuries.
(“Visualize” means PG can imagine how it might conceivably be done, not that PG could actually execute his visualization with mere bits and hardware. PG’s visualized world works so much better than the alternative, it’s quite frustrating at times.)
It’s that time of year for everyone to start releasing their “Best Of” lists. Here at Book Riot, we love seeing what other publications choose for the best books of the year.
Yesterday, Amazon released their picks for the best books of 2020. The list, selected by Amazon editors, includes a total of 100 titles from a wide range of genres, including biography and memoir, literature and fiction, mystery and thriller, children’s, science, and more.
. . . .
According to an insider peek from the Amazon Book Review, the majority of the year’s Best Of picks come from Amazon’s Best of the Month series. Editors collect these selections in October and consider any upcoming titles before voting on the best of the year. Many of the books selected are bestsellers, but editors try to include lesser-known titles as well.
Apple Inc. is halving the commission it charges smaller developers that sell software through its App Store, a partial concession in its battle with critics over how it wields power in its digital ecosystem.
The iPhone maker said that starting next year it will collect 15% rather than 30% of App Store sales from companies that generate no more than $1 million in revenue through the software platform, including in-app purchases. The fee will remain 30% for developers whose sales through the App Store, excluding commission payments, exceed $1 million—meaning the reduction won’t affect such vocal Apple opponents as videogame company Epic Games Inc.
Apple’s 30% take has been at the heart of complaints this year from other tech companies and some users over how it manages the vast digital world of people who use iPhones, iPads and other Apple devices. The policy is also central to a major legal battle with Epic, and to government examinations in the U.S. and Europe of Apple’s competitive behavior as a gatekeeper between software makers and the hundreds of millions of people who use Apple’s gadgets.
Critics have charged that Apple’s commission is too large, is unfairly levied against different companies, leaves customers footing the bill and leads to workarounds by some developers to avoid the fees.
. . . .
A tiny fraction of developers account for the vast majority of sales in the App Store, which is central to a services unit that brought Apple $53.77 billion in revenue in its latest fiscal year. Research firm Sensor Tower estimates that only about 0.2% of the 1.8 million apps in the App Store generated more than $1 million last year, and says that group accounted for an estimated 92% of Apple’s App Store revenue.
The fee cut, therefore, gives Apple ammunition to rebut claims that its practices hurt smaller developers, while leaving untouched the vast bulk of its App Store revenue.
Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)
PG was interested in this article because apps and ebooks are really quite similar to each other (although a dropsy epidemic would rage through New York publishing if such a statement were to be uttered within hearing range.)
Apps are electronic code and ebooks are electronic code as well. Apps run on tablets, smartphones, etc., and ebooks “run” on the same devices. Ebook readers don’t use their thumbs as actively as people who play app games on their phones, but, fundamentally, both purchase software for their electronic devices.
Apps and ebooks are sold online through digital storefronts in exactly the same manner.
Unlike app developers, when it comes to royalties, more than a few authors may analogize the sales of ebooks to the sales of printed books with printing costs, shipping fees, physical stores, warehouses full of books, etc., etc.
From the point of view of those who are running ecommerce at Amazon and Apple, ebooks and apps are just two different file formats.
It would be interesting if the people running iBooks caught the spirit of their much larger and more profitable contemporaries in the App department and decided that indie authors are pretty much like small app developers and should be paid 85% of the purchase price of ebooks instead of a much small percentage.
On more than one occasion, PG has been accused of being an Amazon shill because he likes the way Amazon treats indie authors and says so.
However, PG thinks it would be a great idea if Amazon treated indie authors like Apple treats small indie app developers and reduced Amazon’s take on KDP indie ebooks so authors received 85% of the proceeds Amazon collected for their books. (Amazon could also get rid of its ridiculous “Delivery Cost for a Digital Book” charge at the same time.)
Amazon has announced the US launch of its prescription drug service, Amazon Pharmacy, a major incursion into a $300 billion sector dominated by giants like CVS, Walgreens, and RiteAid, all of which have seen their share price dip by as much as 16% on the news.
Amazon is using PillPack, the company it acquired in 2018 for nearly $1 billion as its Trojan Horse; and has appointed its founder, TJ Parker, as pharmacy VP. But PillPack will continue to operate a service for mainly older users who require combinations of medications, which are sent in monthly packages with pills grouped in characteristic white envelopes that the user opens each day, a method that improves adherence to treatment and reduces errors.
The idea behind Amazon Pharmacy is to make the purchase and refilling of prescription drugs — with the exception of Schedule II pharmaceuticals: primarily opiates, stimulants, antidepressants or hallucinogens — as simple as purchasing any other product, including the usual advantages of Amazon Prime for shipping and discounts negotiated by Amazon with drug suppliers, of up to 80% in the case of generic drugs and 40% in the case of brand name medications, prompting some analysts to estimate that the purchase of many products could even be cheaper at Amazon than through the user’s health insurance.
In addition, the company will have to break its characteristic integral architecture of data capture from its users: their information will not be shared, so as to comply with the Health Insurance Portability and Accountability Act (HIPAA). The company has also integrated the vast majority of health insurance providers in order to receive both the prescriptions and the discounts that each user has established, has created a 24/7 service with pharmaceutical professionals who will answer questions and consultations, and claims to have the infrastructure to validate each prescription and eliminate possible fraud.
For a number of years now Amazon has been making series pages for Kindle ebooks. One of their bots would identify all of the books in a particular series, and then list them all on the same page so that a reader could buy all of the books at once, paying retail.
I can’t find my first post on the topic, but I always thought this idea was a good one because it aligned with how I buy ebooks (when I find a new favorite author, I buy their backlist).
And now Amazon has given authors the option of creating series pages on their own. A couple days ago they published an announcement in the KDP support forums:
You can now publish and update eBook and Paperback series detail pages automatically through KDP. With the launch of series in KDP, you can:
Create a new series: For any titles in your KDP account, create an ordered or unordered series to help readers on Amazon.com, Amazon.co.uk and Amazon.de find all the books in your series on a single page. Learn more.
View and organize your series: Navigate from a series title on your Bookshelf to view and manage books in your series. Review series details and titles to ensure the information is up-to-date for readers. Learn more.
Edit an existing series to control how it appears to readers: Adjust description. In addition, add, remove, re-order or change whether your titles are main or related content. Learn more.
If you already had an eBook series detail page available on Amazon.com, we’ve added that series in your KDP account. You can view existing series in your account by visiting your KDP Bookshelf and checking the box on the bookshelf for “View titles in series”. If you don’t see your series in your account, you can create a new series by following the steps here.
Not all features are available in every marketplace. Series that contain paperback and pre-order books are available on Amazon.com, but not Amazon.co.uk and Amazon.de. We’re working to add more series features in the future. For more information on KDP series, click here.
Does anyone know how long this feature has been available?
Amazon today announced it has promoted more than 35,000 Operations employees in 2020, that 30,000 employees have taken advantage of Amazon’s Career Choice program, and that it’s creating an additional 100,000 seasonal jobs. With more than 12 million Americans out of work according to the U.S. Bureau of Labor Statistics1 these new seasonal roles in several locations across the US and Canada will complement its regular full- and part-time positions. Amazon offers jobs for people of all backgrounds and skill levels, and these 100,000 new, seasonal jobs offer opportunities for pay incentives, benefits, and a path to a longer-term career, or can simply provide extra income and flexibility during the holiday season.
Amazon today announced it has promoted more than 35,000 Operations employees in 2020, that 30,000 employees have taken advantage of Amazon’s Career Choice program, and that it’s creating an additional 100,000 seasonal jobs. With more than 12 million Americans out of work according to the U.S. Bureau of Labor Statistics these new seasonal roles in several locations across the US and Canada will complement its regular full- and part-time positions. Amazon offers jobs for people of all backgrounds and skill levels, and these 100,000 new, seasonal jobs offer opportunities for pay incentives, benefits, and a path to a longer-term career, or can simply provide extra income and flexibility during the holiday season.
. . . .
Amazon has invested more than $60 million in Career Choice—an innovative program designed to help upskill people who are interested in pursuing a future in a high-demand field. With more than half of participants from underrepresented minority groups, the program offers courses covering 20 different career paths, including computer support specialist, web developer, nurse, aircraft mechanic, commercial trucker, paralegal/legal assistant, IT security assistant, and network technician, among others. Amazon has partnered with more than 85 education partners and community colleges in the U.S. and continues to grow its educator network.
. . . .
Patricia Soto is a former Amazon employee who went through Career Choice and is now a certified clinical medical assistant at Sutter Gould Medical Foundation.
“I had worked in a warehouse setting for years but knew I wanted to help people and had been curious about healthcare. In just nine months, I became a certified clinical medical assistant while working at Amazon in Tracy, California, thanks to Career Choice,” she said. “A career in healthcare would have been difficult to obtain without tuition support from Amazon and an internship opportunity to apply my new skills. For anyone thinking about it, you only have something to gain from participating in the Career Choice program.”
To be clear, this is an Amazon press release, not a story written by a reporter for an independent news organization.
That said, since Amazon is a public company, the company’s executives face potential lawsuits from individual shareholders if they permit whoever is in charge of creating and issuing a press release like this one to release information that isn’t factually accurate.
In addition to outside fact-checkers employed by news organizations and labor unions who are waiting to pounce on anything the Zon says, there are law firms that spend a lot of time suing corporate officials on behalf of shareholders for making or permitting the issuance of such false or misleading statements and, the larger the company the larger the potential payoff.
In a company the size of Amazon, it is likely that a press release such as the OP goes through several layers of review and fact-checking for accuracy, including by inside counsel, before it is issued.
So, those who believe you can’t trust anything Amazon says are probably not correct about criticisms that this type of press release is just more corporate happy talk and deceit.
For PG, after months of news about business closures and layoffs in the United States, the Amazon release is a breath of fresh air.
PG has mentioned some of the following before, but not recently.
Operations is a part of Amazon that includes its warehouses and fulfillment centers. Northwestern MBA’s are unlikely to apply for a job working at an Amazon warehouse. For most employees, it involves manual labor and hard work.
A lot of people earn their living doing manual labor that is hard work.
PG worked in a production facility and warehouse one summer while he was in college. This warehouse was much, much less automated than Amazon’s warehouses are.
During PG’s shifts, much of the work in the warehouse was powered by PG’s back, arms and legs. It wasn’t terribly dangerous, but PG got cut a few times and could have been more severely injured if he had been careless. Whatever temperature it was outside, it was 5-10 degrees warmer inside. Ventilation consisted of one open door that a delivery truck could back through.
Since PG grew up on ranches and farms, he was quite familiar with heavy manual labor under difficult circumstances. When one is wrestling and stacking hay bales that weigh 35-40 pounds each in an enclosed barn loft with no fan of any sort for 10-12 hours with a couple of short breaks and it’s close to 100 degrees Fahrenheit outside, one learns something about manual labor.
At the end of such a day, after removing one’s shoes and socks (stacking hay is a shirt-optional job) and leaving them on the back porch, one also enjoys hosing all sorts of dirt, grit, hay flakes and sweat off of oneself from head to toe with ice-cold well water from a garden hose outside before entering an unfinished basement featuring a concrete floor, clothes washer and shower. After disrobing and spending some time in the shower, one then must ask Mom to throw some clean jeans and underwear down the basement stairs and remember to say, “Please” and “Thank you.”
The warehouse job and stacking hay bales in the loft weren’t the hardest jobs PG had.
If PG needed any additional incentive to graduate from college and law school so he could make a lot more money with his fingers on a computer keyboard and his voice speaking with people in person, on the phone or in a courtroom, his experience with many different jobs where he earned his pay with his back and arms and legs provided it.
If PG complained about being tired from doing farm work, his father would sometimes reply, “Go to college!”
To be clear, PG held some hard jobs, but lots of people in the US have harder ones and have had to work at them for a lot longer than PG had to work at his summer and farm jobs. PG is just demonstrating that he has first-hand experience with manual labor, the type of labor Amazon warehouse workers (and a great many other people) do every day to support themselves and their families.
He’s not an effete lawyer snob who had everything given to him on a silver platter. As a matter of fact, he doesn’t remember when he first saw a silver platter. It definitely wasn’t while he was living at home with his parents. If he’s turned into an effete lawyer now, he hasn’t always been that way.
Back to Amazon’s warehouses, the current minimum wage under US law is $7.25 per hour. Some states have laws setting a higher minimum wage. California’s current minimum wage is $12 per hour. In the State of New York, the minimum wage is currently $11.10 per hour. In some states, individual municipalities are permitted to set higher minimum wages.
It is safe to say that, when choosing locations for warehouse or factory sites that will be employing a significant number of unskilled laborers, the minimum wage is an important factor.
Nevada’s minimum wage is currently $8.25 per hour. If you know where to look, you will find quite a lot of large warehouses in Nevada that are close to the California border and also close to major highways that will allow large trucks to pick up goods at a Nevada warehouse and quickly haul them into California where they will be sold.
In the world of warehouse jobs, PG suspects it is very difficult to find very many jobs that pay a starting salary of $15 per hour, the lowest wage Amazon pays anyone working in its warehouses, at least in the US. The job also provide health, dental, and vision insurance, 401K with 50 percent company match on day 1. Again, depending upon state laws, some employers are not required to provide any of those benefits or may offer such benefits, but require employees to pay all or most of the costs of such benefits.
Suffice to say, if you’re a high school graduate or a high school dropout and have the physical ability to work hard in a climate-controlled environment (no 40 pound hay bales at 100 degrees), an Amazon warehouse job is quite likely to offer the best compensation and benefits you can find almost anywhere.
PG isn’t claiming that Amazon is a perfect company. No large company with a zillion employees is.
However, to the best of PG’s knowledge, Amazon does treat authors and warehouse workers better than any other large company does.
From the Associated Press via ABC News Wire Services :
With many independent bookstore owners facing the most dire financial crisis in their lifetimes, the American Booksellers Association has teamed with an award-winning advertising agency known for “culture hacking” to dramatize the threats of the pandemic and the growing dominance of Amazon.com.
On Tuesday, the trade group launched the “Boxed Out” campaign, for which a handful of bookstores around the country will have windows boarded up and boxes piled up out front that resemble Amazon delivery containers, with one label reading “Don’t Accept Amazon’s Brave New World.” The beginning of what the booksellers association hopes will be a conversation in stores and online, “Boxed Out” was designed by DCX Growth Accelerator, a Brooklyn-based firm which attracted national attention in 2018 when it set up a fake “Palessi” luxury shoe store and stocked it with items from the Payless discount chain.
“Boxed Out” coincides with Amazon Prime Day, when the online giant offers special deals to its members.
“We’re hoping that people will understand the juxtaposition and support their local stores,” says booksellers association CEO Allison Hill.
Independent booksellers had enjoyed a resurgence over the past decade after being devastated in the 20 previous years by the rise of the superstore chains Barnes & Noble and Borders, and then the emergence of Amazon. ABA membership, once more than 5,000, was down to just 1,401 in 2009 during the height of the Great Recession and was apparently set to keep declining as e-books began to catch on.
But the digital revolution stalled, Borders went out of business and Barnes & Noble retreated after a long era of expansion. In 2019, the last time the ABA released yearly numbers, membership was up to 1,887, with some sellers even opening additional outlets. Hill’s predecessor, Oren Teicher, who retired at the end of 2019, received an honorary National Book Award earlier that year for his success in “working to strengthen and expand independent bookstores nationwide.”
But the pandemic could wipe out all the gains since 2009. An ABA survey from this summer found that some 20 percent of members could go out of business, meaning hundreds of stores face closure, especially as government aid runs out. Meanwhile, the number of new independent stores opening has dropped sharply, according to the ABA, just 30 this year compared to 104 in 2019.
While the overall market for books has been surprisingly solid in 2020, Amazon.com has apparently fared best as the public increasingly makes purchases online. According to a report issued last week by the antitrust subcommittee of the House Judiciary Committee, “Amazon accounts for over half of all print book sales and over 80% of e-book sales” in the U.S. market.
Link to the rest at ABC News and thanks to DM and others for the tip.
Somehow, PG missed the news about the “fake ‘Palessi’ luxury shoe store” publicity event.
He also has doubts about the efficacy of a promotional campaign featuring “a handful of bookstores around the country [with] windows boarded up and boxes piled up out front that resemble Amazon delivery containers, with one label reading “Don’t Accept Amazon’s Brave New World.””
Apparently the CEO of the sponsor of this campaign, the American Booksellers Association may also have at least some misgivings, “We’re hoping that people will understand the juxtaposition and support their local stores.”
PG hopes the American Booksellers Association hasn’t paid DCX Growth Accelerator much money for this promotion.
Potential problems that immediately float into PG’s mind include:
At least some people will conclude the participating bookstore has gone out of business, another victim of Covid and mentally mark it off their list of places to go shopping.
Amazon will be the one thing that 90% of those who see this display remember, not the name or anything else about the bookstore.
PG isn’t certain how a pile of empty Amazon boxes connects with dystopian science fiction.
Depending upon the neighborhood in New York City and other cities around the country, upwards of half of the people who pass by won’t know what “Brave New World” means and won’t get the slogan.
Somewhere in the installation, it would be a good idea for the promotion agency to place a notice that all the Amazon boxes will be taken to a recycling center instead of being dumped into the closest collection of trash cans or some passersby will be very upset and, perhaps, organize a boycott of the bookstore.
Somehow, PG doesn’t think anyone at Amazon will feel the least bit frightened by this publicity campaign. But photos of it will undoubtedly be a big hit in the obscure nooks and crannies of social media inhabited by Amazon haters and other losers. And somebody will put up a copy of the photo up on the bulletin board in at lease one Amazon break room.
Amazon has been accused of anti-competitive practices in a scathing report into US tech giants by Democratic politicians. The online retailer has rebutted the claims, saying “the presumption that success can only be the result of anti-competitive behavior is simply wrong”.
The 450-page report written by Democrats on the House Judiciary Subcommittee on Antitrust, released on 7th October, comes after a 16-month probe into whether Amazon, Facebook, Google and Apple abuse their power. Republicans on the committee have refused to sign the report and are releasing a series of their own instead.
The report, which calls for US antitrust rules to be overhauled, said the companies were running marketplaces they also competed in, allowing them to “write one set of rules for others, while they play by another”.
Book publishers told the committee Amazon uses retaliation “to coerce publishers to accept contractual terms that impose substantial penalties for promoting competition” with its rivals. One publisher claimed the platform’s retaliatory conduct shows “Amazon’s ability and willingness to leverage its market power to prevent publishers from working effectively with rival e-book retailers and, thereby, maintain and enhance its dominance in e-book distribution.”
Retaliation included Amazon removing the “buy” and “pre-order” button from products, or showing titles as out of stock or with delayed shipping times, it was claimed.
The report states: “According to credible reports, Amazon used these tactics in its public battle with Hachette Book Group in 2014 over e-book pricing, and has used them or threatened to use them in more recent negotiations. Publishers, authors, and booksellers have ‘significant fear’ because of Amazon’s dominance.”
. . . .
According to the report, Amazon hosts 2.3 million third-party sellers from around the globe, with around 37% of them, or more than 850,000, relying on the site as their sole income source.
However, the report claims Amazon uses sales and product data from its marketplace to identify and replicate popular, profitable items offered by third-party sellers. It will then create a competing product, or identify and source the product directly from the manufacturer “to free ride off the seller’s efforts, and then cut that seller out of the equation”, it is claimed. Amazon says that it has no incentive to abuse sellers’ trust because third-party sales make up nearly 60% of its sales, a claim the committee cast doubt on.
It hasn’t been the best decade for Barnes & Noble, the biggest bookselling chain in the United States. As sales slowly eroded—and Amazon gained dominance—the position of CEO became one of the fastest revolving doors in the publishing industry. Each new leader trotted out a revised “concept store” to revive the fortunes of the bookseller, none succeeding.
. . . .
The Nook debuted in October 2009, two years after Amazon Kindle. At its peak, Nook enjoyed sales of nearly $1 billion a year. By summer 2019, in the last public earnings report from Barnes & Noble, Nook delivered less than $100 million in revenue per year, with negative profits.
In acknowledgment of Nook’s failure to compete against Amazon’s Kindle or even Apple’s iBooks, Barnes & Noble’s chairman at the time, Len Riggio, told investors in 2017, “There is no business model in technology” for the chain.
. . . .
In a 2018 podcast from Knowledge@Wharton, a few marketing professors discussed what the future might hold for the beleaguered retailer. Wharton’s Peter Fader said, “They’ve tried lots of different things from devices to experiences to broadening the merchandise. Nothing’s working. At this point, they haven’t found that hook to save the business; nor have they found the vision or leadership to give people any confidence in it.” Wharton’s Barbara Kahn said that while the retailer probably does a good job overall, “The problem is they’re not the best at anything.”
. . . .
James Daunt is perhaps best known for spending the last eight years getting the venerable but once shaky Waterstones (with 283 stores) on its feet.
. . . .
Early on, when Daunt was asked what he thought of Barnes & Noble on his last store visit, he said, “There were too many books,” by which he meant that featuring the right inventory is more important that stocking a big blur of titles. Back in 2015, he commented to Slate, “My faculties just shut down when I go in there.”
On Sept. 11 of this year, the Book Industry Study Group hosted a conversation and Q&A with Daunt, in which he stressed a local-first selling strategy. Daunt says that if you give booksellers the autonomy to choose and display and curate their stores (rather than making decisions on a corporate level), those booksellers will make sure the books that customers want to buy are in front of them. “Ultimately we will sell more, customers will come into the store more, and publishers will sell more. That is the happy outcome that should reconcile publishers to this [new model].”
However, because of the focus on local booksellers making their own stock decisions, there won’t be any co-op going forward. Co-op is the practice of publishers paying for title placement throughout the chain. It’s a reliable way for publishers to guarantee sales, but it’s also associated with high returns. Daunt said, “Co-op and promo and all of that doesn’t actually work with my way of running things, when one talks about giving stores the autonomy to do what they want. That’s not a form of words. That’s actually meant. Therefore you can’t take co-op.” Daunt said that no store would be required to stock even blockbuster titles like Rage by Bob Woodward (although it would be expected every bookseller would logically want some number of copies).
Furthermore, because of this local-first strategy, a number of longtime buyers for the chain (headquartered in New York City) have been let go. Some of these buyers, such as fiction buyer Sessalee Hensley—once profiled in The Wall Street Journal under the headline “So Many Books, So Much Power”—had been with the company for decades.
PG says there are a million questions about the future of Barnes & Noble after the pandemic.
In retrospect, Len Riggio picked a pretty good time to sell his controlling interest in Barnes & Noble. The bookstore chain is now owned by Elliot Management. Elliot says the following about itself:
There are a number of elements of the firm’s investment and risk-management activities that Elliott believes are essential to its goal of generating a consistent return to its investors. These elements include an opportunistic trading approach, the creation – not just the identification – of value, effective liquidity management, and managing operational and counterparty risk. The firm employs a value-added global investment approach.
More perceptive readers than PG may be able to discern what Elliot is thinking about its investment in Barnes & Noble based upon that statement. PG cannot.
Some possibilities occur to PG:
Elliot’s other investments and businesses may have been so badly-damaged by the economic effects of widespread pandemic shutdowns that it has much more urgent issues to deal with than paying attention to or spending any money on Barnes & Noble. One possibility that comes to mind is that Elliot may have to sell itself to another company. Or divest itself of some of its major assets. (Note that this is pure speculation on PG’s part. He hasn’t done any research on Elliot and hasn’t any inside knowledge about what Elliot’s current financial circumstances are.)
Elliot may apply the greater fool theory and search for someone who will buy Barnes & Noble.
Elliot may give James Daunt some time to see if Daunt has any book magic left that might work to bring Barnes & Noble back from the dead.
Elliot may require a huge cutback in the number of stores Barnes & Noble operates, keeping only stores in the most wealthy and book-loving locations and dumping the rest. Choosing this alternative might involve taking Barnes & Noble through a Chapter 11 bankruptcy proceeding.
On what may be an even more important question – What’s happened to the Barnes & Noble employees that were staffing the stores prior to the shutdown?
How many experienced bookstore managers have retooled themselves or otherwise obtained other jobs? Other than an unknown number of managers who have been sitting around waiting for Barnes & Noble to reopen, how many managers will decide they like their new jobs more or feel more secure in their new jobs than their old jobs managing a Barnes & Noble store? Will those managers willing and able to return to Barnes & Noble be the best of Barnes & Noble’s managers, the worst or something in-between?
PG suspects that most of the peons working at Barnes & Noble stores prior to shutdown have found something else to do, maybe something that pays more than they earned at Barnes & Noble. At a minimum, the managers of reopened Barnes & Noble stores will have a big job hiring and training a bunch of newbie employees to avoid driving away early customers who venture into the reopened stores.
The next questions relate to Barnes & Noble customers:
Presumably, many regular purchasers of books who used to patronize Barnes & Noble and other physical book stores and who have not been subject to personal financial stress have continued to buy books.
Where have they purchased those books? Quite likely from Amazon.
PG suspects some percentage of those book buyers have become familiar with how to find books on Amazon, have enjoyed being able to order any book they like and having it delivered to them in one or two days. There may even be a small bit of satisfaction that arises from not having to pay the full retail price as they would if they had gone to a bookstore.
In its typical Amazonian fashion, the Big A has closely watched which books these new customers have purchased and started suggesting other books they might like. Perhaps the new Amazon customers have found some enjoyable new authors and their books via Amazon’s suggestions, including talented indie authors. Maybe Amazon’s suggestions have proven to be better than those they received when they asked a question of a clerk at Barnes & Noble.
One of Amazon’s largest competitive advantages over its online competitors is the extraordinary variety of ways that it helps its customers discover products they might like. There are lots of tools like Also Boughts and sub-sub-categories of books that let fans of Cowboy Science Fiction Romances find more of their favorite reads. Some book purchasers who have taken a deeper than normal dive into Amazon’s book section will become hooked. Amazon’s magic works for fishing lures, cooking utensils and leaf blowers. It also works for books.
Other questions that have occurred to PG include whether any of the Barnes & Noble landlords have gone broke and closed the malls or strip malls where Barnes & Noble stores formerly operated. And, for those landlords who have stayed open, has Barnes & Noble been able to keep up with lease obligations during this period of time or will the landlords be in a position to terminate Barnes & Noble leases and find other tenants?
Not really to do with books, but definitely related to Amazon.
From Amazon:
We heard you loud and clear! Samuel L. Jackson celebrity voice just got easier to use. Now you can simply say “Hey Samuel” to ask for jokes, weather, and more. To get started, just say, “Alexa, introduce me to Samuel L. Jackson” and choose the “Hey Samuel” wake word. You will still be able to use Alexa’s default voice just as you do now. Check below to see if your device works with “Hey Samuel”.
Already have Samuel L. Jackson celebrity voice? You can set up “Hey Samuel” by saying “Alexa, enable ‘Hey Samuel’”.
GET STARTED WITH SAMUEL – Samuel L. Jackson is here to add extra personality to your Alexa experience. Just ask and Samuel will set a timer, tell you a story, and more.
KEEP IT CLEAN, OR DON’T – Choose whether you’d like Samuel to use explicit language or not. If you change your mind later, simply go to the settings menu of the Alexa app to turn explicit content on or off.
ASK AWAY – After purchasing, try saying:
“Hey Samuel, what’s the weather?” “Hey Samuel, tell me a joke.” “Hey Samuel, set an alarm for 7am.” “Hey Samuel, tell me a story.” “Hey Samuel, what can you do?” “Alexa, ask Samuel to give me advice.” “Alexa, ask Samuel what he thinks of snakes.”
Amazon.com Inc. plans to hire 100,000 additional employees in the U.S. and Canada, continuing a rapid expansion that began as the coronavirus pandemic forced many people to stay home and shop online for work and other necessities.
Amazon’s seemingly relentless hiring this year has come even as the wider economic picture has darkened, with companies across a range of industries slashing workers and filing for bankruptcy. Robust online spending during the crisis has fueled Amazon’s growth and created a need for more workers.
Not including temporary employees the company describes as seasonal, its total world-wide workforce will be roughly one million after accounting for the 100,000 new warehouse positions and 33,000 positions Amazon is hiring for in its corporate divisions. Once those positions are filled, it will have more than 700,000 employees in the U.S.
. . . .
New jobs will be added at dozens of Amazon locations paying at least $15 an hour and including benefits and signing bonuses of as much as $1,000 in some cities. Hiring for the jobs has already begun. The positions are all nonseasonal, Amazon said.
The company also said it would open 100 operational buildings this month alone, including fulfillment centers, delivery stations, sorting centers and other sites. That will add to more than 75 others already opened this year in Canada and the U.S., it said. Amazon has more than 600 facilities in the U.S., according to logistics consultant MWPVL International.
. . . .
Amazon, which accounts for more than a third of online U.S. sales, has recorded record profits during the pandemic. The company posted a record $88.9 billion in sales during its second quarter, and profit doubled year-over-year to $5.2 billion.
Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)
As we continue to stay home as much as possible, even the most die-hard “give me paper or give me death” readers have been dipping their toe into the ebook waters. And they’re discovering what long-time users have known forever.
Good news! You can get ebooks from your library!
But (bad news) only if you’re willing to wait for-EVER for the most popular titles.
Even for some of the less popular titles, wait times are much longer for ebooks than their print versions, and it’s just gotten worse as ebook popularity has dramatically increased this spring and summer.
Which leads to the following questions:
Why do you have to wait for an ebook at all?! Why doesn’t my library just buy more copies?! And the conclusion I’ve come to for both questions is: I think most publishers hate libraries.
I wish I were kidding.
When libraries and publishers entered the ebook landscape, they went with a model they knew and understood: they licensed library ebooks with a one copy/one user. While some other models have come out since then (such as cost-per-circ, where the library pays every time someone checks a book out, which you see with services like Hoopla) one copy/one user remains the most common way ebooks are sold for lending. However many licenses a library buys is how many people can read a book at a time.
So why doesn’t the library just buy more copies?
Because ebooks for libraries are really, really, really expensive.
Really expensive.
And then we don’t even get to keep them. Librarians pay wholesale for print books that can remain in circulation for literal decades, but ebooks are very different in terms of access and in terms of cost.
. . . .
So I started a project where every week I shared what was on the best seller list and how much those books cost. I shared specifically how much the library would spend to buy those titles in a paper book or an ebook and how much those same books (paper and ebook) would cost for a regular person.
. . . .
First, let’s look at averages for print, digital book, and digital audio.
On average, the Suggested Retail Price for a print book (aka the price that’s printed on the cover) was $24.78.
On average again, Amazon would sell you (a reading consumer) a paper copy of that print book for $16.77.
Your library could buy a print copy from their vendors for $14.14.
Looking for digital?
You could buy that same book on average for $12.77 on your Kindle.
The library had to pay an average of $45.75.
YES WE HAD TO PAY THAT MUCH. 3.5 TIMES MORE THAN YOU DID.
On average, this means that we (libraries) can buy 3 print copies for every single ebook license, and still have some money left over.
$14.14 + $14.14 + $14.14 = $42.42 for 3 print books in circulation vs. $45.75 for a single license of an ebook.
And then there’s audio.
If you’re curious, the average price to buy the book on Audible was $27.28, but for libraries to get it in digital audio? $69.76.
. . . .
Of the popular titles included in this dataset:
44.3% of digital library books were between $50.00 and $59.99.
19.4% of digital library books were between $60.00 and $69.99.
18.2% of digital library books were between $20.00 and $29.99.
In other words:
64% of ebooks cost over $50 for libraries, but none of the titles included in this data set are that much for anyone else.
99% of Kindle books cost $19.99 or less, but only about 13% of library ebooks do.
. . . .
Pour yourself another drink, because it gets worse when the usable lifespan of these purchases is examined against the price per item.
. . . .
86% of the ebooks from that list have to be repurchased on a regular basis, most commonly after 24 months, even if the book is never checked out.
This is why libraries can be reluctant to take an ebook chance on an unknown author.
When libraries buy the ebook, the terms of purchase are actually a lease. The publisher will take the book back after 24 months. If libraries want to still have that ebook available for checkout, they need to buy it again.
Publishers do this because, once again, they’re working off the print model, and print books don’t last forever. They get eaten by the dog or dropped in the tub or coffee gets spilled on them or after it’s been checked out a million times, it just wears out. And if people still want it, we’ll buy another copy.
But…(and this is a big but)
Remember how much libraries pay for print? ($14.14 on average, see above?)
How they pay even less than the average Amazon price?
The average price of an ebook that has to be repurchased is $49.48.
Wait, isn’t that higher than the average price of library ebooks?
YES IT IS.
The more expensive a book is, the more likely we have to rebuy it on a regular basis.
Only 1% of the books that cost over $50 don’t have to be regularly repurchased.
I know it doesn’t make sense.
Prices and terms for digital books are set by the publisher, and most publishers have broad rules that apply to all of their books.
And some very large publishers *cough* Penguin Random House, Macmillan, and Hachette *cough* have set high prices for books that expire quickly.
Why would they do this? Because they can. If libraries want to provide what our users want, we’ll pay their prices on their terms, no matter how ludicrous, because what choice do we have?
. . . .
Some publishers refuse to sell digital formats to libraries.
Major side-eye to every single Amazon imprint and company, which includes Lake Union, Audible, and more. All of those wonderful Audible exclusive audio books? Are Audible exclusive, which means libraries cannot acquire them.
Some self-published authors don’t make their stuff available on OverDrive, and if they’re part of Kindle Unlimited, they’re not allowed to.
How big of a problem is this?
Libraries were unable to buy 1.5% of this year’s bestsellers in ebook.
It’s worse for audio–libraries were unable to buy 15% of this year’s bestsellers in eaudio.
. . . .
If libraries have to pay that much money for an ebook and can only keep it for 24 months, they’re going to concentrate purchasing power on titles they know will circulate heavily, to get the most bang for the limited buck. Which means lots of blockbuster sure-bets, and less midlist or new authors.
For romance readers, fans of Avon and Harlequin are in luck, because they’re both HarperCollins imprints. HarperCollins charges Suggested Retail Price and libraries can keep the ebook for 26 checkouts. As with most romance publishers in mass market paperback, most of their ebook titles are $7.99 and libraries can keep them until they use up all 26 checkouts. While it’s still not as good as print (which libraries would pay less money for and which usually last far longer than 26 checkouts) it’s still the best pricing offered by any of the major traditional publishers.
But St. Martins is Macmillan, and Macmillan charges $60 for new ebooks (regardless of Suggested Retail Price) and their ebooks expire after 24 months, even if no one checked it out. Berkley is Penguin Random House, and they charge $55 for new ebooks that libraries can only keep for 24 months.
That can be really hard math to justify! With our vendor discount, libraries usually pay $4.95 for a mass market paperback with a Suggested Retail Price of $7.99, so they can buy a full dozen print copies for the same price of a single ebook (and that ebook expires after 24 months)
PG will note that the digital vendor his library uses is perfectly capable of proving any publisher with anonymized data reporting how many people checked out an ebook, how many people returned the ebook without reading it, how many people read part of the ebook (and how many pages they read) but returned the ebook without finishing it and how many people read the entire ebook.
PG is disappointed that Amazon won’t provide a simple path for indie authors to make their ebooks available to libraries at a price set by the author. Just like perma-free, ebooks in libraries can be a superb way for readers to discover new authors and books, helping authors and Amazon sell more.
PG will note that the digital vendor his library uses sends him to Amazon to download a library ebook which, on the book’s regular Amazon product page where the Add to Cart button is replaced by a Borrow button which he clicks to send the ebook to his selected reading device. So it would appear that much, if not most, of the plumbing is in place for indie authors to make their ebooks available to libraries.
Visitors to TPV can feel free to harass KDP and anyone else at Amazon to urge them to allow library purchase of KDP ebooks for lending by the libraries. Amazon could even require a minimum license price for library loans of indie ebooks if it felt library borrowing would eat into Amazon’s revenue stream from ebooks in some way.
If PG were in command of Amazon’s indie library sales initiative, he would be inclined to redesign the landing page where a library patron came to borrow an ebook to show other books by the same author, perhaps some Also-boughts or Also-borrows and an opportunity for the borrower to voluntarily link her/his Amazon account so Amazon could understand even more about the borrower’s interests.
In connection with the release of Mrs. PG’s latest book, she ran a price promotion on the first book in this series, featuring a female Oxford professor/amateur sleuth.
Yesterday, early in the evening, she checked the performance of An Oxford Murder, Book 1 of her series, and was pleased to discover that it had a Best-sellers rank in the US Free Kindle Store of #1 for all ebooks, regardless of genre.
A bit earlier this morning, her book was still ranked #1 overall in the US and, on Amazon UK, #3 for Historical Mysteries.
When PG just checked, the book was ranked #4 overall for free books and #1 in Historical Mysteries, #1 in Women Sleuths and #2 in Literature & Fiction, each in the Free Kindle Store. It’s still hanging in as #3 for Historical Mysteries in the UK store.
Mrs. PG has always enjoyed good sales at the launch of a new book and for her free book promos, but this one is particularly good.
With respect to her latest book, Murder at Tregowyn Manor (which is priced at $2.99 for the ebook), most of her sales are coming from the US, as usual, but she’s also generating nice sales numbers from Australia and the UK as well.
PG shares these results for the benefit of other indie authors who may find them useful for their launch plans.
PG thanks all the kind visitors to TPV who have continued to support Mrs. PG’s books over the years since the launch of TPV.
In a letter provided to Publishing Perspectives this morning (August 17), three leading American publishing industry professional organizations tell the House of Representatives’ Antitrust Subcommittee that “a few tech platforms in the digital marketplace” wield “extraordinary leverage over their competitors, suppliers, customers, the government, and the public.
“Regrettably,” they write, “as the subcommittee’s hearings have laid bare, the competitive framework of the publishing industry has been fundamentally altered in recent years—and remains at serious risk of further diminishment—because of the concentrated power and influence of one company in particular: Amazon.”
The letter is written to Rep. David Cicilline, Democrat of Rhode Island, who chairs the subcommittee, which is housed under the House Judiciary Committee.
The hearings referenced in the letter brought Amazon’s Jeff Bezos, Apple’s Tim Cook, Facebook’s Mark Zuckerberg, and Google’s Sundar Pichai into the line of fire. And as Joe Nocera wrote in his commentary for Bloomberg on the hearings, “Preventing abusive monopoly practices by today’s dominant technology companies has proved to be difficult in part because antitrust law never anticipated the business models that have made Google, Facebook and others so powerful.” And Amazon, which of course famously based some of its retail development originally in book sales, has been the main target for years of many in publishing.
“Together,” the letter dated today reads, “our organizations—the Association of American Publishers, the Authors Guild, and the American Booksellers Association—represent thousands of authors, publishers, and booksellers in the United States who serve the democratic exchange of ideas by creating, publishing, and selling books. Our members rely upon a level playing field in the marketplace of ideas to reach, inform, and transact with customers for the delivery of books, whether in physical or digital form.”
. . . .
The Seattle-based giant sells more books than any other single retail outlet in history. In December, analyst Benedict Evans saw Amazon controlling some 35 percent of US e-commerce. But in adding in the fact that the company competes with physical retailers, not just with online rivals, he wrote, “Amazon’s real market share of its real target market is closer to 6 percent.”
In print books, however, Amazon has a generally recognized 50 percent or more of the American market “and at least three quarters of publishers’ ebook sales,” Evans wrote.
In ebooks, it sells “at least three-quarters of publishers’ ebooks” and “also has its own ebook publishing business, for which it has never disclosed any data.”
. . . .
[from the letter]
“Amazon’s scale of operation and share of the market for book distribution has reached the point that no publisher can afford to be absent from its online store.
“A year ago, The New York Times reported that Amazon controlled 50 percent of all book distribution, but for some industry suppliers, the actual figure may be much higher, with Amazon accounting for more than 70 or 80 percent of sales. Whether it is the negative impact on booksellers of Amazon forcing publishers to predominantly use its platform, the hostile environment for booksellers on Amazon who see no choice but to sell there, or Amazon’s predatory pricing, the point is that Amazon’s concomitant market dominance allows it to engage in systematic below-cost pricing of books to squash competition in the book selling industry as a whole.
“Remarkably, what this means is that even booksellers that avoid selling on Amazon cannot avoid suffering the consequences of Amazon’s market dominance.
“The ongoing COVID-19 crisis is exacerbating the problem: it continues to threaten the financial well-being of authors, publishers, and booksellers, some of whom will not survive the year.
“Amazon, by contrast, with its ever-extensive operation and data network, has grown only more dominant, enjoying its largest-ever quarterly profits during April, May and June.”
The organizations go on to criticize “the astonishing level of data that it collects across its entire platform,” writing. “The result is that Amazon no longer competes on a level playing field when it comes to book distribution, but, rather, owns and manipulates the playing field, leveraging practices from across its platform that appear to be well outside of fair and transparent competition.”
. . . .
“Amazon employs non-transparent data algorithms and recommendation engines to steer consumers toward Amazon’s own products, or even toward infringing products without disclosing to consumers that it is doing so. It has required suppliers to agree to most-favored-nation provisions (MFNs) that stifle the emergence and growth of competitive alternatives in the book distribution marketplace. And it manipulates suppliers and rivals by tying the purchase of distribution services to the purchase of its advertising services.”
. . . .
Prohibit Amazon from leveraging data from the operation of its online platform to compete with and disadvantage the suppliers doing business there
Prohibit Amazon from tying distribution services to the purchase of advertising services
Prohibit Amazon from imposing Most Favored Nation and other parity provisions
Prohibit Amazon from using loss-leader pricing to harm competition
Amazon has disrupted the traditional publishing establishment and caused problems for publishers, bookstores, agents, associations comprised of the aforementioned parties and various other hangers-on. Amazon has disrupted the world of physical retailing as well. You can add competitive cloud computing companies to this group (although they’re not psychotic about Amazon). These people don’t like Amazon because, in the form of a question, “Whose goose is Amazon cooking?”
Other than those people and compulsive cranks, everybody else loves, loves, loves Amazon.
Particularly when things get tough because of Covid, everybody loves Amazon because they can shelter in place and still get the stuff they want, including, in many places, food.
Per the OP, English majors are complaining because Amazon uses math. That’s inherently unfair. If English majors understood how good cloud computing is at math, they’d complain about that, too.
Is there any retailer on the planet that does not watch the sales of its goods, note purchaser behavior and adjust placement and pricing based upon the behavior of its customers? Does Random House keep track of what books Barnes & Noble is buying? (Note that PG did not ask, “Does Random House do a good job of keeping track of what Barnes & Noble is buying?)
It’s not antitrust, but, in 2020, the overall quality (and social virtue) of a business organization usually includes an assessment of how it treats its employees, particularly those on the lower rungs of the organization chart.
Amazon starts its warehouse workers at $15 per hour with fringe benefits, including “comprehensive healthcare from day one, 401(k) with 50 percent match, up to 20 weeks paid parental leave, and a flexible Ramp Back Program and Leave Share Program that allows employees to share their paid leave with their spouse or partner. For associates reaching their one-year employment mark, Amazon offers warehouse employees a Career Choice Program, which pre-pays 95 percent of tuition for courses in high-demand fields.
What’s the starting salary of worker bees at a publisher? Do those stats include unpaid interns?What are their fringe benefits? Ditto for a bookstore?
Let’s take a moment to consider the underlying memes that pop up in complaints from traditional publishing and its enablers, outliers and posse members.
!!!!Evil Big Company!!!!
Amazon is a really big company. However, such was not always the case.
Concerning evil and illegal behavior, eight years ago, in 2012, when Amazon was a little fish who wasn’t behaving itself, most prominently, by selling ebooks at way too low a price, and discounting printed books, five evil big publishers and Apple got together to force Amazon out of the ebook business.
Starting some time in 2011, the CEO’s of Random House, Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster, had been secretly meeting for dinner on a regular basis in a private dining room in Manhattan to discuss a common problem: Amazon. Amazon’s sin was selling books to readers at a price that was too low. Readers loved Amazon’s prices and were buying more and more books. Barnes & Noble and other bookstores were complaining that readers were buying too many books from Amazon.
Apple was getting ready to introduce a new iPad with a new feature, iBooks, an online bookstore.
Apple didn’t like it when anyone tried to discount its products and kept a tight rein on non-Apple retailers and anyone else to prevent price discounts. Steve Jobs and his executives did not like Amazon’s discounting of ebooks because discounts were not the Apple Way. Premium prices for premium products was the Apple Way and Apple had made a lot of money with this policy.
Jobs sent Eddy Cue, his right-hand guy, to New York City, to take care of the Amazon pricing problem. After meetings with Cue and (PG thinks) one or two more private dinners between the publishing bigshots, the deal was made. The publishers would use a joint boycott to force Amazon to raise its prices for their books to the suggested retail price, the same price Apple would charge on iBooks.
After the launch of the new iPad and iBooks, a Wall Street Journal reporter asked Jobs how Apple was going to deal with the lower prices Amazon was charging for ebooks. Jobs gave a short answer to the effect that there wouldn’t be a problem because ebook prices on iBooks and Amazon would be the same.
Apple and the Price-Fix Five were guilty as hell. This was not a gray area in the antitrust and related laws. It was straight-out price-fixing, a criminal offense under Section 1 of the Sherman Antitrust Act.
Amazon’s net sales for F2011 were $48 billion, but its net income was only $631 million.
Apple’s net sales for F2011 were $108 billion and its net income was $25 billion, almost 400 times the size of Amazon’s net income at the time. There was no question which company was financially more powerful.
The United States Department of Justice sued Apple and the five large publishers for illegally conspiring to fix prices for ebooks. At the time the suit was filed, the US Attorney General said, “As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles.”
Each of the publishers fessed up to violating the law and paid a big fine. Apple appealed its losses all the way the the U.S Supreme Court, lost and paid a $450 million fine.
PG concludes in the Evil Big Companies competition, Big Publishing has admitted to being far more evil than Amazon.
Speaking of Big Companies
Big Amazon vs. little New York publishers is not quite right, either.
Each of the current five largest trade publishers in New York is owned by a very large parent company with deep pockets.
Publisher
Owner
Owner’s Annual Revenue (most recent year available)
Owner’s Annual Profit (most recent year available)
Penguin Random House
Bertelsmann
Privately held. In 2019, the company reported “Revenues exceed €18 billion” – approximately $21.41 billion
Privately held. In 2019, the company reported “€1.1 billion” in Group profit.
Hachette Book Group
Lagardère Publishing
€6.936 billion in 2019 – approximately $8.251 billion
Profit before finance costs and tax was €411 million
Harper Collins
News Corp,
$10.07 billion in 2019
2019 Net Income – $228 million
Simon& Schuster
ViacomCBS Corporation
$27.812 billion in 2019
2019 Operating Income – $4.273 billion
Macmillan
Georg von Holtzbrinck GmbH & Co.
Privately held. Releases almost no financial data. 2005 estimate of €2.1 billion – approximately $2.48 billion – by an unrelated third party. 2018 estimate of €1.494 billion – approximately $1.79 billion – by an unrelated third party
Privately held. Releases almost no financial data.
Amazon is a Big Bully That Exploits the Peons
As long as we are discussing allegedly shameful corporate behavior, let us consider the way the major publishers (which effectively control the Association of American Publishers) treat their small independent contractors AKA authors as compared with Amazon’s treatment of this same group. PG posits that Amazon treats 99.9% of authors much better than traditional publishers do. (James Patterson is a special case.)
Big Publishing
Amazon
Royalty Calculations
Opaque to the max. You have to hire an accountant to conduct an audit if you have any concerns or even want to find out what’s really going on. If the principal publisher has entered into agreements for the publication of the book in other countries, opacity is doubled (at least, sometimes tripled or quadrupled).
Straightforward and easy to understand. Calculations are laid out in detail in online terms and conditions. Author Dashboard shows daily reports of units ordered overall and as broken down by 13 different country sites. For ebooks enrolled in KU (Kindle Unlimited) and KOLL (Kindle Owners’ Lending Library), the author can see how many pages were read each day. (This is for the legacy dashboard. The beta version of the new dashboard is even more informative and easier to understand.)
Royalty Payments
Two times per year with payments delayed for a period of time following the close of the 6-month period for which royalties are to be paid. Amount of payment may be reduced by a reserve for returned books as determined solely by the publisher and calculated in a manner unknown to the author. The size of the royalty payment is always a surprise to the author. No interest is paid to the author to compensate for the use of funds belonging to the author for a half-year.
Monthly. The Author Dashboard shows how much the payment will be.
Costs Deducted from Author’s Royalties
15% (occasionally higher) for an agent’s fee. Submission of a manuscript without an agent means a virtually certain rejection.
No agency fee. Plus, no lost time waiting for traditional publishing contracts, production, etc. When you finish your book, format it yourself or hire someone to format it, the book goes up to Amazon and is on sale worldwide within a day or two.
How Often Can You Publish?
Unless you are James Patterson, likely no more than one book every year or two.
No lost time waiting for traditional publishing contracts, production, etc. When you finish your book, format it yourself or hire someone to format it for you, and get a cover, the book goes up to Amazon and is on sale worldwide within a day or two.
Ebook Royalties
25% of publisher’s net receipts
70% of list price if price is $2.99-9.99 in a long list of countries, including all major English-speaking countries. 35% of list price is price is below $2.99 or above $9.99. For 70% royalty, a small digital delivery fee is subtracted from royalty (PG thinks it’s usually 10-25 cents, but the size of the ebook will impact that.) Amazon ebooks can also participate in other Amazon programs that will pay the author and provide additional online promotion tools under KDP Select.
Trade Paperback
7.5% of cover price (may vary, but almost never over 10%)
60% of the list price for books sold on Amazon, less printing costs (which depend upon the number of pages in the book, the market in which it is sold and whether colored inks are necessary). Amazon offers an online calculator to determine actual royalties paid based upon the number of pages in the book. Suffice to say, PG has never seen Amazon POD royalties as low as those paid by traditional publishers.
The largest mall owner in the U.S. has been in talks with Amazon.com Inc., the company many retailers denounce as the mall industry’s biggest disrupter, to take over space left by ailing department stores.
Simon Property Group Inc. has been exploring with Amazon the possibility of turning some of the property owner’s anchor department stores into Amazon distribution hubs, according to people familiar with the matter. Amazon typically uses these warehouses to store everything from books and sweaters to kitchenware and electronics until delivery to local customers.
The talks have focused on converting stores formerly or currently occupied by J.C. Penney Co. Inc. and Sears Holdings Corp., these people said. The department-store chains have both filed for chapter 11 bankruptcy protection and as part of their plans have been closing dozens of stores across the country. Simon malls have 63 Penney and 11 Sears stores, according to its most recent public filing in May.
It wasn’t clear how many stores are under consideration for Amazon, and it is possible that the two sides could fail to reach an agreement, people briefed on the matter said.
The talks reflect the intersection of two trends that predate the pandemic but have been accelerated by it: the decline of malls and the boom in e-commerce.
. . . .
For Amazon, a deal with Simon would be consistent with its efforts to add more distribution hubs near residential areas to speed up the crucial last mile of delivery.
But for Simon, any deal to surrender prime space to Amazon would signal a break from a longtime business model for malls: reliance on a large department store to draw foot traffic to neighboring shops and restaurants.
That model has broken down in recent years, as many department stores are now fighting for their lives. Lord & Taylor also filed for bankruptcy early this month, while Neiman Marcus Group Ltd. filed in May. Nordstrom Inc. closed 16 stores in recent months.
Their big-box spaces are typically more than 100,000 square feet and often span more than one level. Smaller mall tenants have counted on traffic to department stores to spill over to neighboring retailers, and many have clauses that allow them to reduce rents or break their leases if the department store stays empty.
Having an Amazon fulfillment center could still trigger some of these cotenancy clauses, but some landlords say even that scenario would be preferable to keeping that yawning space vacant.
. . . .
Amazon fulfillment centers wouldn’t draw much additional foot traffic to the mall, though some employees could eat and shop at the mall. That is why landlords have preferred to replace department stores with other retailers, gyms, theaters or entertainment operators. Yet many of these tenants are struggling to survive during the pandemic and aren’t in expansion mode.
Simon would likely rent the space at a considerable discount to what it could charge another retailer. Warehouse rents are typically less than $10 a square foot, while restaurant rents can be multiples of that. Depending on when the leases were signed and their locations, department-store rents can be as low as $4 a square foot or as high as $19 a square foot.
But Amazon’s growth and healthy balance sheet would make it a reliable tenant at a time when most retail business has been waylaid by the pandemic. Simon, which owns 204 properties in the U.S., has had to contend with a ramp-up in retail tenant closures in recent years that has accelerated during Covid-19.
. . . .
Malls’ strategic locations often make them attractive as distribution hubs. Many are near main highways and residences. Amazon has already acquired the sites of some failed malls and converted them to fulfillment centers. FedEx Corp. and DHL International GmbH have done the same.
My mom, Jackie, had me when she was a 17-year-old high school student in Albuquerque, New Mexico. Being pregnant in high school was not popular in Albuquerque in 1964. It was difficult for her. When they tried to kick her out of school, my grandfather went to bat for her. After some negotiation, the principal said, “OK, she can stay and finish high school, but she can’t do any extracurricular activities, and she can’t have a locker.” My grandfather took the deal, and my mother finished high school, though she wasn’t allowed to walk across the stage with her classmates to get her diploma. Determined to keep up with her education, she enrolled in night school, picking classes led by professors who would let her bring an infant to class. She would show up with two duffel bags—one full of textbooks, and one packed with diapers, bottles, and anything that would keep me interested and quiet for a few minutes.
My dad’s name is Miguel. He adopted me when I was four years old. He was 16 when he came to the United States from Cuba as part of Operation Pedro Pan, shortly after Castro took over. My dad arrived in America alone. His parents felt he’d be safer here. His mom imagined America would be cold, so she made him a jacket sewn entirely out of cleaning cloths, the only material they had on hand. We still have that jacket; it hangs in my parents’ dining room. My dad spent two weeks at Camp Matecumbe, a refugee center in Florida, before being moved to a Catholic mission in Wilmington, Delaware. He was lucky to get to the mission, but even so, he didn’t speak English and didn’t have an easy path. What he did have was a lot of grit and determination. He received a scholarship to college in Albuquerque, which is where he met my mom. You get different gifts in life, and one of my great gifts is my mom and dad. They have been incredible role models for me and my siblings our entire lives
Amazon reported second-quarter results late Thursday that blew past Wall Street estimates as the pandemic continues to present the company both challenges as well as opportunities. Amazon stock climbed.
The company reported adjusted earnings of $10.30 per share on revenue of $88.9 billion. Wall Street expected earnings of $1.48 on revenue of $81.4 billion,
Amazon stock jumped 5%, near 3,205.50, during after-hours action on the stock market today.
Revenue climbed 40% from the year-ago period, its strongest growth in nine quarters. Earnings powered above estimates even though it spent $4 billion during the quarter on coronavirus-related costs as previously announced. In addition, the company plowed more than $9 billion in capital projects, including fulfillment, transportation and Amazon Web Services.
Operating income increased to $5.8 billion in the second quarter, compared with $3.1 billion a year ago.
. . . .
Over the past several months, the pandemic has led to an elevated usage of e-commerce platforms due to convenience and a large number of retail store closures and bankruptcies. Amazon has been hiring furiously to keep up with demand.
. . . .
Amazon said it increased grocery delivery capacity by more than 160% and tripled grocery pickup locations. Online grocery sales tripled in the second quarter when compared with the same period last year.
As much of the retail world faces crisis, book publishing is positioned to grow in terms of unit sales when compared to 2019. In fact, 2020 may prove to be one of the strongest sales years in recent memory.
A few factors are likely contributing to the resilience of sales:
the prevalence of online purchasing in the US market (driven by Amazon, of course)
the strength of Ingram’s print-on-demand operations in the US—and the overall robustness of the US supply chain thus far
the current events/bestseller effect, with race relations and politics driving high sales of titles such as White Fragility by Robin DiAngelo, How to Be an Antiracist by Ibram X. Kendi, John Bolton’s The Room Where It Happened, and Mary Trump’s Too Much and Never Enough. (Outperforming titles can bring a book category into a growth position or soften—even turn around—a decline for the market.)
the high adoption rate of ebooks and audiobooks in the US market prior to the pandemic
the migration of print sales to big-box retailers, as written about by the New York Times.
Let’s dig deeper into what’s happening.
US print unit sales are up by 3.6% so far versus 2019
As much of the retail world faces crisis, book publishing is positioned to grow in terms of unit sales when compared to 2019. In fact, 2020 may prove to be one of the strongest sales years in recent memory.
A few factors are likely contributing to the resilience of sales:
the prevalence of online purchasing in the US market (driven by Amazon, of course)
the strength of Ingram’s print-on-demand operations in the US—and the overall robustness of the US supply chain thus far
the current events/bestseller effect, with race relations and politics driving high sales of titles such as White Fragility by Robin DiAngelo, How to Be an Antiracist by Ibram X. Kendi, John Bolton’s The Room Where It Happened, and Mary Trump’s Too Much and Never Enough. (Outperforming titles can bring a book category into a growth position or soften—even turn around—a decline for the market.)
the high adoption rate of ebooks and audiobooks in the US market prior to the pandemic
the migration of print sales to big-box retailers, as written about by the New York Times.
Let’s dig deeper into what’s happening.
US ebook sales are up by 4% versus last year—an excellent result
US traditional publishers report 4.3% growth in ebook sales through May 2020, after years of decline. All of that growth is the result of the pandemic; during the first three months of 2020, NPD showed ebook sales down 18% versus 2019. Publishing Perspectives offers more detail on ebook sales trends, with category-specific information.
Bricks-and-mortar bookstore sales are down
The US Census Bureau publishes preliminary estimates of bookstore sales, and even though print unit sales are up according to NPD BookScan, the government report shows bookstore sales declining by 33 percent in March, 65 percent in April, and 59 percent in May. The most obvious explanation for why book publishing continues to perform well as an industry: print sales have drifted to online channels, such as Amazon or Bookshop, and to big-box stores.
Barnes & Noble CEO James Daunt says that its sales are down about 20 percent overall from last year.
. . . .
What might happen next?
According to Kristen McLean at NPD Books, it won’t be demand that determines the industry’s future. Rather, she says it will be driven by:
The stability of the channels which are currently selling and delivering books. Will stores stay open? Will the supply chain (printers, print-on-demand facilities, other delivery channels) remain resilient?
The length and depth of the economic crisis which has been unfolding. Will governments help consumers, businesses and others?
The pre-existing (financial) health of the businesses in the traditional book industry. Do they have the capital and the resources to get through this?
Ms. Friedman has always impressed PG as an intelligent, articulate and insightful expert on the book business. However, the questions she includes at the end of her post from Ms. McLean are not those that come to PG’s mind after reading the OP.
Are traditional bookstores important any more?
Book sales seem to have done well during at least the early part of the pandemic, but traditional bookstores have, by and large, been pretty much shut down. How many of these generally thinly-capitalized businesses will be closed permanently is an open question.
But if traditional publishing sales have held up, perhaps Amazon really is the future for readers and publishers will be fine when competing head-to-head with indie authors on Amazon’s pages.
Anything troubling about strong sales of traditionally published books in Big Box stores?
PG only has current knowledge about the Big Box stores he slips into and out of, trying not to inhale too much. His experience is that Big Box stores had been reducing the amount of floor space devoted to books over the several months prior to the arrival of the current plague. He can’t say he’s paid much attention to that element of Big Box retailing recently.
However, Big Box stores routinely sell books at significant discounts from list price. The same book at the local Barnes & Noble or indie bookstore will cost much more.
PG suspects that at least some serious readers may have previously ignored the book displays in the Big Box stores on their way to fill up their carts with large quantities of diapers, soup and chocolate-chip cookies.
If book sales at Big Box stores are strong during this current time period, are serious readers going to stop buying nicely-priced books at the local Big Box and pay more at their local B&N when Covid fades into history? Or will readers default to Big Box to pick up a current best-seller? As mentioned previously, it won’t take much of a permanent decline in business to close a lot of bookstores for good.
How many people will keep buying lots of stuff (including books) from Amazon?
PG believes that more than a few readers who regularly purchased books from their local bookstore prior to Covid have continued to buy books – from Amazon. (Yes, PG knows there are other online bookstores, but he’s looking at the big picture here.)
Just like the Big Box customer, some readers who have done serious book shopping on Amazon for the first time will have become accustomed to the experience and enjoyed it. Instead of asking their good friend at Friendly Books Bookstore for book recommendations, some of these readers have discovered AlsoBoughts and intelligent Amazon customer reviews. Since Amazon always pays attention to what its customers purchase, the Amazon computers will regularly be suggesting other books the reader might enjoy and getting smarter with those suggestions.
Better prices online are also a big plus, particularly if the family income has taken a hit from Covid and its consequences.
Some readers will recognize that nobody ever got Covid (or any other transmissible disease) from buying an ebook online. Plus ebooks are cheaper and you can get them right away, any time and anywhere.
Plus, you don’t have to worry about how many people were coughing, sneezing and caressing the books in the romance section before you arrived at your local Barnes & Noble. Plus+Plus, nobody will see you browsing through the steamy titles on Amazon.
What is the new normal going to look like?
PG believes we don’t really know what the mid-term and long-term economic results of Covid shutdowns will be. A great many people, at least in the United States, are operating on credit cards, savings, the occasional government Covid check and some sort of income generated via reduced hours, one of two working spouses still working, etc.
The big economic question for PG (who is a lawyer, not an economist) is how many businesses will reopen when the shutdowns end, how many will be closed for good and what will those businesses that do reopen look like. Half of their employees temporarily laid off until business picks up? How many will never be asked to return? Some business locations reopened and others permanently closed?
What will the new normal look like and how long will it take to arrive there?
Closer to home, PG is, unfortunately, quite confident that there will be significantly fewer retail locations in the business of primarily selling books. If the local bookstore closes, how many people will decide not to travel farther to the next-closest bookstore?
Keen observers of the trade publishing scene this week may have noticed in the news Publishing Perspectives reported on Monday about longtime bestseller Dean Koontz taking a new five-book series and short story collection to Amazon Publishing.
For decades, the prolific Koontz made his publishing home primarily at Penguin Random House’s Bantam, racking up more than 45 titles with the Big Five imprint, only to be discovered now talking of being “creatively rejuvenated” to have found a publisher “where change is understood and embraced” and he’s being provided with “a marketing and publicity plan smarter and more ambitious than anything I’d ever seen before.”
And yet, years ago, many in publishing, including veteran observer Mike Shatzkin, were watching for “defections” from major houses—not to Amazon Publishing, the company’s trade publishing house, but to the self-publishing platform Kindle Direct Publishing (KDP).
The idea was that an established and well-heeled author could easily hire the “author services,” as they’re called, to do the grunt work of preparing a manuscript for self-publication and managing its life in the online sales maelstrom, while using print-on-demand to produce brick-and-mortar store copies for print fans.
. . . .
Instead, Koontz may be the canary in the trade industry mines who hops off that darkening perch and buzzes out into the sunlight of Internet sales leadership—where, as we reported on June 23, the Association of American Publishers’ annual StatShot tells us, more book sales now are happening than on physical retail channels.
I SOMETIMES THINK that if you could look in the safe behind Jeff Bezos’ desk, instead of the sports almanac from Back to the Future you’d find an Encyclopedia of Retail, written in maybe 1985. There would be Post-It notes on every page, and every one of those notes would have been turned into a team and maybe a product.
Amazon is so new, and so dramatic in its speed and scale and aggression, that we can easily forget how many of the things it’s doing are actually very old. And we can forget how many of the slightly dusty incumbent retailers we all grew up with were also once considered radical, daring, piratical new businesses that made people angry with their new ideas.
This goes back to the beginning of mass retail. In Émile Zola’s Au Bonheur des Dames, a tremendously entertaining novel about the creation of department stores in 1860s Paris, Octave Mouret builds a small shop into a vast new enterprise, dragging it into existence through force of will, inspiration, and genius. In the process, he creates fixed pricing, discounts, marketing, advertising, merchandising, display, and something called “returns.” He sends out catalogs across the country. His staff is appalled that he wants to sell a new fabric at less than cost. “That’s the whole idea!” he shouts. Loss leaders are nothing new.
Meanwhile, the other half of the story follows the small, traditional shopkeepers in the area, who are driven out of business one by one. Zola sees them as part of the past to be swept away. They’re doomed, and they don’t understand—indeed, they’re both baffled and outraged by Mouret’s new ideas. Here’s the draper Baudu:
The place would soon be really ridiculous in its immensity; the customers would lose themselves in it. Was it not inconceivable? In less than four years they had increased their figures five-fold … They were always swelling and growing; they now had a thousand employees and twenty-eight departments. Those twenty-eight departments enraged him more than anything else. No doubt they had duplicated a few, but others were quite new; for instance a furniture department, and a department for fancy goods. The idea! Fancy goods! Really those people had no pride whatever, they would end by selling fish.
Mouret had a catalog, but it was Sears Roebuck that used catalogs to transform retail again.
. . . .
Amazon, of course, is the Sears Roebuck of our time, but it’s more than that. Amazon is systematically going through every branch of the idea tree around what retail is, and doing it without any pride. It’s trying everything that anyone has ever tried before, and anything else that it can think of that might make sense, as well. There is no one saying “that’s a good idea, but we’re a website so we wouldn’t do that.”
. . . .
The clearest place to see this is in Amazon’s moves into physical retail. This is the opposite of pride or “principle.” Amazon’s job is “to get you the thing,” not “to be a website,” so what are the best ways to do it? What else might work? The project to make a convenience store with no human checkout process is an obvious experiment, now that machine learning and computer vision offer a route to make it work.
. . . .
More interesting, though, are the Amazon Four-Star stores, physical retail stores —currently in New York and Berkeley, California—that only sell products rated highly by users on its site. I joked on Twitter that they feel as though they were designed by very clever people who have seen shops in Google Street View but have never actually been inside one. There’s a sense of cognitive dissonance: The selection of products appears to be completely random. There’s a rice cooker, a Harry Potter Lego set, a cushion, a Roomba, a mixing bowl, a book about trees … It makes no sense. (In the words of Zola’s Baudu, “Those people have no pride!”)
Of course, sometimes “it makes no sense” is the right reaction (remember the Fire Phone after all). But when clever people do things that make no sense, it can be worth looking twice. Is this a new discovery model? A different way to change how people think about purchasing? Well, it’s another experiment.
. . . .
Sometimes the experiment is still in progress: Though Amazon has managed to put Alexa into more than 50 million homes, it’s not yet clear what strategic value it will gain. But it’s better to own the experiment and get the option value than to sit on the business you already have and watch someone else try something new.
On the other hand, it’s interesting that Amazon seems to be doing as much experimentation as possible around the logistics model—from stores to drones to warehouse robots of every kind—but much less around the buying experience.
. . . .
This has always been the gap in the Amazon model. It’s ever more efficient at finding what you already know you want and shipping it to you, but bad at suggesting things you don’t already know about, and terrible whenever a product needs something specific—just try finding children’s shoes by size.
According to the bio accompanying the OP, the author is:
“a partner at Andreessen Horowitz with a focus on consumer technology, ecosystems, and mobile platform. A long-time mobile analyst, Benedict has been working in the media and technology industries for 15 years.”
Andreessen Horowitz is a Silicon Valley venture capital company.
Whenever PG reads something written by a venture capitalist, he always suspects a hidden motive.
Maybe the VC has an investment in a startup that plans to fill some gap in Amazon’s operations and is trying to prepare the ground so prospective customers realize they have a problem that the startup can solve.
On the other hand, more than a few Sili Valley veterans resent that Amazon started and grew in Seattle, driving a significant number of venture-backed eCommerce companies into bankruptcy (or worse, obscurity), when everyone knows that cool technology companies are supposed to be founded, discovered, financed, grown and monetized within a reasonable drive-time from Stanford.
The simple fact is that Amazon is very, very good at its core businesses.
And it has continued to be very, very good for a long period of time, eternity in internet time, and nobody has so much as put a dent into Amazon’s retail operations.
The Fire phone was an experiment that failed, another tech product, the Kindle Fire has not.
While no venture capitalist would permit one of his/her offspring to use anything other than the latest-model iPad, the Kindle Fire has sold a lot of units to families that don’t want to pay for a new iPad every time junior tries a science experiment with the local tablet.
The Kindle Fire also permits families with multiple children avoid arguments, screaming, crying, etc., over whose turn it is to use the tablet to purchase a Fire for each child when a similar expenditure on individual iPads (plus the replacement of science experiment casualties) would not be feasible.
Plus, Amazon offers a Kindle Fire Kids Edition with a protective case that could double as body armor at a reasonable price and Amazon provides ways of securely locking down the Fire so little Johnnie or little Suzie can’t wander off into nasty places even if little Suzie is a computer genius. The attractive features of the Amazon Fire for families also make the tablets quite attractive to schools, especially public elementary schools.
The Amazon Fire Kids Edition sells for about $75 and, for nearly-instant household peace, a parent can acquire one at the local Best Buy or Staples at the same price (and avoid the insufferable yuppie vibe of an Apple Store).
PG doesn’t know whether the company makes a profit from its various Fire tablets, but nobody who grows up with a Kids Edition is ever going to forget Amazon.
Amazon is more on what works and what its customers and prospective customers AKA pretty much the entire known universe, will use over and over and over and over than it is about the latest cool new thing that will attract the attention of a venture capitalist.
Touting the fact that the US audiobook market had seen double-digit growth for the eighth successive year, the Audio Publishers Association, referencing a survey of 24 reporting companies, paints a rosy picture of the US audiobook scene without questioning whether it might be even more dynamic were publishers to be more open to opportunities.
Chris Lynch, co-chair of the APA’s research committee and president & publisher of Simon & Schuster Audio, summed up the understandable excitement among mainstream publishers:
Eight straight years of double-digit revenue growth is simply phenomenal. Even more encouraging are the continued upward trends in consumer listening behavior—both in how many titles they listen to per year and in their finding more time in their day to listen.
The latter point declines to note the pandemic-induced lockdown which might be responsible for all this extra time consumers are finding to listen to audiobooks, and stands at odds with another common theme being touted by publishers: that audiobook consumption was down because fewer people were commuting to work.
Of such contradictory and confusing sentiments are publishing urban myths built.
Not that the rise and rise of audio is an urban myth, although we should remember that back in the day ebooks were regularly seeing triple-digit growth, until mainstream publishers reigned in their ebook engagement and deliberately raised prices to stifle demand, leaving an open goal for self-publishers to seize a hefty chunk of the market.
With audiobooks the self-published element, while growing, is still a small part of the scene, and as audiobooks generally are not seen to cannibalise print sales in the way ebooks supposedly do, audiobooks for now are the publishing world’s darling format.
. . . .
A separate survey found US audiobook consumption by title up from 6.8 in 2019 to 8.1 in early 2020, with mystery and thriller leading the way, in stark contrast to “reading” books where romance heads the genre choice in the US.
Quality of narration (professional voice-artist vs author read-aloud) was deemed important to consumers.
More than 50% of audiobook fans said they were listening to more, making extra time.
Most significantly 43% of consumers queried said they preferred shorter length audio (1-3 hours). What isn’t clear from that response is whether that is related to the time needed to listen to a book or simply the fact that shorter length audiobooks tend to be considerable cheaper if buying as a unit.
. . . .
We’ve seen time and again how, where unlimited subscription is an option, consumers flood to the format.
Next month Amazon will turn 9,500 days old. But for Jeff Bezos, the company’s founder and chief executive, it is always “Day 1”. Amazon, he has insisted since its founding in 1994, must forever behave like a feisty startup: innovate aggressively and expand relentlessly.
Adherence to this rule has made Amazon as convenient to consumers as it is feared by businesses which stand in its way. Today roughly $11,000-worth of goods change hands on Amazon’s e-commerce platform every second. The company delivered 3.5bn packages last year, one for every two human beings on Earth. Amazon Web Services (aws), its cloud-computing division, enables more than 100m people to make Zoom calls during the day and a similar number to watch Netflix at night. In all, Amazon generated $280bn in revenues last year.
This year Amazon has become not just convenient, but essential. The smiling brown package left at the threshold as the neon-vested delivery worker backs swiftly away has become the hallmark of the locked-down pandemic. Shopless and officeless life would be unimaginable without deliveries and cloud-based work—and insufferable without distractions like video-streaming. Investors see this as an acceleration of a long-term trend towards life online from which the world will not turn back. “The explosive demand created by covid-19 catapults Amazon straight into 2025,” says Michael Moritz of Sequoia Capital, a venture-capital firm.
Amazon’s market capitalisation doubled to $734bn between 2016 and 2018. Since then it has close to doubled again. Its shares trade at 118 times earnings, compared with 25-35 times for Apple and Microsoft, the other members of the trillion-dollar-company club. Up and down Wall Street, brokers tell clients to hold Amazon shares if they have them, or buy them if they don’t.
. . . .
No firm bestrides the physical and digital worlds in the way Amazon does. In the physical world, it has a logistics system second to none. The 150m customers who subscribe to its Prime service get all their purchases delivered promptly—as well as perks like free streaming of videos and films—for a flat fee, with same-day delivery in some places. The convenience leads them to shop more. The logistics system is also used to fulfil orders for other companies. In 2018 “third-party” sales accounted for 58% of sales through the platform.
The scale of its retail operation gives Amazon an unparalleled collection of data on the desires and decision-making of hundreds of millions of shoppers—the sort of data that advertisers love. Amazon’s advertising revenues are now $11bn; its 7% share of the global online-ad market is larger than any save Google’s (38%) and Facebook’s (22%).
California investigators are examining Amazon.com Inc.’s business practices as part of an inquiry into the tech giant, according to people familiar with the matter.
The state’s review focuses at least in part on how Amazon treats sellers in its online marketplace, these people said. That includes Amazon’s practices for selling its own products in competition with third-party sellers, one of the people said. Neither Amazon nor California has disclosed an antitrust investigation.
The inquiries come as Amazon faces antitrust scrutiny from Washington, D.C., and abroad. The European Union is planning formal antitrust charges against the firm over its treatment of third-party sellers, The Wall Street Journal reported Thursday.
. . . .
“It would be hard to believe that you’re not going to look at a company like Amazon, given how pervasive it is,” [California Attorney General Xavier Becerra] said in an interview, pointing to how much data the firm collects. “Are they using all of this data in ways that allow them to essentially kill real competition?”
In April, the Journal reported that Amazon employees used data about independent sellers on its platform to develop competing products. Following the story, lawmakers on the House Judiciary Committee called on Amazon Chairman and Chief Executive Jeff Bezos to testify on its private-label practices.
. . . .
The House Judiciary Committee is also examining Amazon, its competitive practices and impact on markets. Lawmakers have said Amazon hasn’t fully responded to requests for information about its relationship to sellers.
“Seven months after the original request—significant gaps remain,” said a letter sent from senior members of the House Judiciary Committee to Mr. Bezos in early May.
In a May 15 letter to the committee, the company said it is providing significant information to the committee and is “prepared to make the appropriate Amazon executive available,” without committing to Mr. Bezos making an appearance.
The formal charges in Europe would be the commission’s latest step in a nearly two-year probe into Amazon’s alleged mistreatment of sellers that use its platform.
The charges—called a statement of objections—stem from Amazon’s dual role as a marketplace operator and a seller of its own products, the people said. In them, the EU accuses Amazon of scooping up data from third-party sellers and using that information to compete against them, for instance by launching similar products.
When coronavirus lockdowns sent Americans into a frenzy of panic buying, the bad news came almost as quickly as the good for online organic grocer Thrive Market.
In March, the company that aims to compete with Amazon.com Inc. in the health-food sector suddenly found customers flocking to its site as its giant rival struggled to handle its own pandemic business surge. Thrive notched record sales and membership sign-ups.
Then it buckled. Orders ballooned to five times what Thrive could handle. Delivery times for some customers reached two weeks. About 30% of items were out of stock on some days. To keep delivery times from slipping further, Thrive made the previously unimaginable decision to throttle demand by limiting shopping hours.
“It was excruciating,” recalled co-founder and Chief Executive Nick Green. “It felt like a pick-your-poison moment.”
Thrive Market, based in Los Angeles, is one of a host of retailers that have spent years trying to compete against the Amazon retail juggernaut. The coronavirus pandemic provided a fleeting window of opportunity. Amazon, overwhelmed by a wave of orders, temporarily reoriented its business toward essential items, leading consumers to begin looking elsewhere.
But capturing that opportunity—and trying to ensure it is more than a temporary blip—brought extraordinary challenges for Thrive and others, demonstrating the difficulty of competing with even a weakened Amazon.
. . . .
The pandemic has accelerated the shift to online shopping and devastated traditional retailers, including Neiman Marcus Group Inc. and J.Crew Group Inc., which have filed for bankruptcy protection. Financial-services firm UBS Group AG recently predicted the percentage of groceries sold online will rise from 3% this year to 15% by 2025.
. . . .
Mr. Green calls Thrive the “un-Amazon” because, he says, it offers a curated selection of merchandise. Early on, many reluctant investors had the same question: How would it compete with Amazon or Whole Foods Market?
Mr. Green was betting that consumers would try it out for its carefully selected inventory and competitive prices and stick around because they feel good about shopping there. He also billed the company as socially conscious by adhering to such practices as not offering genetically modified products.
Thrive, which is privately held, eventually raised more than $160 million. It now has more than 800,000 members who pay $60 a year. Although Thrive doesn’t disclose sales, Mr. Green said they were in the hundreds of millions of dollars annually.
On March 11, Mr. Green was preparing to leave work when he glanced at a computer monitor showing the company’s financial metrics. That day’s revenue line shot up like the handle of a hockey stick.
He messaged an executive to make sure there wasn’t a bug in the system. There wasn’t. Checking CNN’s website, he learned the World Health Organization had declared the coronavirus a pandemic. People were buying in a panic.
. . . .
Days later, the country shifted into lockdown mode. Within a week, Amazon was struggling to meet orders promptly. On March 17, it said it was prioritizing the shipments of medical supplies, household staples and other high-demand products. Toilet paper and many cleaning supplies became unavailable, and shipping was taking weeks for some products. Amazon retooled its website to encourage shoppers to buy fewer items.
A survey by investment bank Jefferies Group LLC showed that almost one-third of respondents said they turned to non-Amazon sites during the pandemic because of delivery and inventory problems.
At Thrive, new paid membership sign-ups in March and April were up threefold from the prior year. But the same problems that plagued Amazon ravaged Thrive. Customers rushed to buy cleaning supplies, canned food and other essentials. A six-month supply of toilet paper ran out in three days. Mr. Green wasn’t sure how quickly the company could address the backlog.
Earlier in March, Chief Financial Officer Karen Cate had asked Thrive’s supply-chain director to order five times the usual amount of canned goods and cleaning supplies. She left out toilet paper. “If I could go back, I would change that one,” she said.
. . . .
To some, limiting online store hours seemed a sensible middle ground. Ms. Cate, the CFO, was skeptical. She said she felt Thrive could gain control of its order backlog without limiting members to ordering during working hours. She worried that members who worked during the day—including her daughter, a nurse at a hospital in Pasadena, Calif.—would be shut out.
She relented after seeing internal metrics that showed delivery times would only increase. “OK, I surrender,” she recalled thinking.
On a midnight call, Mr. Green and co-founder and Chief Technology Officer Sasha Siddhartha decided to move forward with limiting the hours. They told other executives the next day and instituted the new policies on March 25.
. . . .
The stress mounted for Mr. Green, whose wife had just given birth to their second child. He was getting a handful of hours of sleep per night and didn’t shave for a month. He stopped working out. Outside of work hours, his time was consumed by his newborn son and late-night emails and calls with executives.
It was difficult to concentrate from his setup in the family’s guest bedroom. He took two monitors and his MacBook Pro and set up an office in his closet, placing the equipment on shelves near his T-shirts and jeans. He scrapped a strategic plan and built a new one, staying up one night until 3 a.m. to finish it. The plan re-examined hiring goals and when the company should expand its fulfillment network, among other things, to ramp up faster.
. . . .
Holding on to customers became harder as Thrive struggled to handle the order influx. Online, customers were threatening to leave over the delays. Members were frustrated and questioned why Thrive was taking on new customers.
. . . .
By early April, Thrive Market was hiring as many as 30 warehouse workers a day. Using several recruiting agencies, it hired more than 300 warehouse workers in less than two months, adding to the roughly 500 it had. Labor costs jumped 20%.
The company also removed nonessential items such as water bottles and yoga mats from its website to concentrate on delivering essentials like food and cleaning supplies. It tinkered with its fulfillment processes, processing orders for high-demand products in one section of warehouses. It prioritized orders with the longest delivery times. It stopped selling low-demand items in the back of the warehouses, partly so workers wouldn’t have to waste time fetching them.
. . . .
Higher costs have reduced the percentage of profit made on orders, Mr. Green said. And the store has had to dip into its cash reserves to pay for a spike in inventory expenses. But the year’s revenue projections have risen, and the company is in a strong cash position, he said, although he declined to provide details.
Thrive’s goal to reach profitability by the end of 2022 hasn’t changed, he said. “With our growth accelerated,” he said, “we expect to get profitable even faster.”
. . . .
The lessons from the pandemic have changed its fulfillment processes. Mr. Green said the company will hold 20% more inventory and will work with a larger number of suppliers. Its technology team plans to roll out improved recommendation functions on the website for when items are out of stock.
PG has a soft spot for scrappy young tech startups and was heartened by the apparent survival of Thrive as depicted in the OP. For PG, a couple of smart young gals/guys who put it all on the line to start their own internet business is the cutest thing since puppies. That’s one reasons why he appreciates indie authors.
PG remembers when he first heard about Amazon from a friend and read an interview with Jeff Bezos. Later, PG created quite a few posts as the illegal Apple/Big Five Publishers scheme to kill Amazon fell apart.
Of course, Amazon has probably been the best single thing to happen to authors and readers in the last twenty years. Gatekeepers of dubious ability knocked back on their heels. Talented authors who want to move fast and write a lot of books unchained. Indie authors who know their readers because they pretty much are their readers instead of believing most people are more like their classmates at Swarthmore and Princeton than anything else.
Literati will go to their graves without admitting it, but Amazon has also helped Big Publishing to avoid becoming Semi-Big or Largish-Medium Publishing during the same time-frame. Since a great many publishing executives fall into the category of smartish, Amazon may have even prevented Big Publishing from becoming Chapter 11 Publishing.
Based upon a whole bunch of authors that he knows and carefully monitoring of what authors, particularly indie authors, are sharing about the business side of their art, PG feels comfortable in stating that Amazon’s self-publishing programs have made it more possible for many, many more authors to quit their day jobs than any other organization or collection of organizations on the planet.
As he has mentioned before, PG hopes JB’s style and savvy doesn’t slowly fade away at Amazon since he’s becoming less and less involved in the management of the company. Amazon works in a tough neighborhood. The list of huge, well-known retailers that have lost their mojo and disappeared into Chapter 11 or, at best, irrelevance is a long one and if Amazon ever starts taking its customers for granted, it might join the Wikipedia throng of giant retailers that are no more.
Following its deadline of January 15 for applications, the Amazon Literary Partnership has this morning (May 27) announced $1 million in grants to 66 organizations in the United States. And as the country approaches the terrible milestone of 100,000 deaths to the coronavirus COVID-19, the funds being issued by the program may look better than ever.
In fact, Amazon already has provided COVID-19 emergency relief donations to Artist Relief and PEN America’s Writers’ Emergency Fund, the latter of which is also supported by the Lannan Foundation, and The Haven Foundation.
Publishing Perspectives readers are familiar with Amazon’s program, both for its more than $13 million in funding since Jon Fine directed the establishment of the program in 2009, and for its focus on supporting nonprofit efforts that serve writers, with a traditional emphasis on “overlooked and marginalized writers,” as Neal Thompson, another director of the program, has put it.
Today, Alexandra Woodworth guides the program, which has touched the work of more than 150 organizations.
. . . .
The theme is the author—with an emphasis on underrepresented voices—and supporting that writer’s needs
The variations or genres are represented by the wide variety of organizations and services funded
This translates into direct support for nonprofit writing centers, residencies, fellowships, after-school classes, literary magazines, national organizations supporting storytelling and free speech, and internationally acclaimed publishers of fiction, nonfiction, and poetry.
On today’s announcement, Woodworth says, “The Amazon Literary Partnership champions organizations that support writers, poets, translators, and diverse voices at every stage in their career. Given the impact that COVID-19 has had on the literary community, we’re proud to continue to fund these remarkable organizations sustaining literary culture in our communities now and for the future.”
