Amazon

Amazon.com and ‘Big Five’ publishers accused of ebook price-fixing

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From The Guardian:

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.

Link to the rest at The Guardian

Connecticut Investigating Amazon’s E-Book Business

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From The Wall Street Journal:

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.)

Thoughts about what Covid and 2020 mean for book publishing

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From veteran publishing consultant Mike Shatzkin:

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.

Link to the rest at The Shatzkin Files

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.

Agent Laurie McLean Gives 10 Publishing Predictions for 2021

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From Anne R. Allen’s Blog… with Ruth Harris:

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.

Link to the rest at Anne R. Allen’s Blog… with Ruth Harris

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.

How Amazon Wins: By Steamrolling Rivals and Partners

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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)

KDP Select All-Stars

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From 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.

. . . .

KDP Select All-Star bonuses by marketplace

Amazon.com

Author rankingBonus amount
1-10$25,000
11-20$10,000
21-30$5,000
31-50$2,500
51-100$1,000
Title rankingBonus amount
1-10$2,500
11-50$1,000
51-100$500

Link to the rest at Amazon KDP Select Bonuses

PG notes that there are separate KDP All-Star sites with bonuses for Amazon UK and Amazon DE plus Illustrated Kids Book bonuses at the link.

Audible Returns and Indie Author Royalties – A Detailed Discussion

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A couple of days ago, PG posted an item about author dissatisfaction with Audible’s return policies and the negative impacts they were having on indie authors’ audiobook royalty payments.

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.

Audiblegate 2: The Emperor’s New Clothes Policy

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From Susan May Writer:

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 Promises $500 Million in Holiday Bonuses for Front-Line Staff

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From The Wall Street Journal:

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 bows to pressure and changes returns policy

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From The Bookseller:

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.”

Link to the rest at The Bookseller

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.)

Amazon Releases List of The Best Books of 2020

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From BookRiot:

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.

Link to the rest at BookRiot

The Top 100 Print Books

The Top 100 Kindle Books

Best Books of 2020 by Category

The Best Books of the Month

Apple Slashes App Store Fees for Smaller Developers

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From The Wall Street Journal:

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 Turns Its Sights On Pharmacies: This Could Get Ugly

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From Forbes:

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.

Link to the rest at Forbes

PG says that, while everyone else is sheltering in place, Amazon keeps on disrupting.

Build and Manage Series Pages in the Kindle Store

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From The Digital Reader:

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:

  1. 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.
  2. 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.
  3. 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?

Link to the rest at The Digital Reader

More Job Openings at Amazon

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From BusinessWire:

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.”

Link to the rest at Business Wire

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.

Indie bookstores launch anti-Amazon ‘Boxed Out’ campaign

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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 accused of anti-competitive practices

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From The Bookseller:

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.

Link to the rest at The Bookseller

A reminder that PG doesn’t always agree with everything he posts on The Passive Voice.

Everyone Wants Barnes & Noble to Survive. Can It?

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From Jane Friedman:

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.

Link to the rest at Jane Friedman

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?

Samuel L. Jackson – celebrity voice for Alexa

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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.”

Link to the rest at Amazon

Amazon to Hire 100,000 in U.S. and Canada

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From The Wall Street Journal:

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.)

Hold On, eBooks Cost HOW Much? The Inconvenient Truth About Library eCollections

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From Smart Bitches, Trashy Books:

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)

Link to the rest at Smart Bitches, Trashy Books and thanks to DM for the tip.

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.

#1 Most Popular Book

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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.

US Publishers, Authors, Booksellers Call Out Amazon’s ‘Concentrated Power’ in the Book Market

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From Publishing Perspectives:

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

Link to the rest at Publishing Perspectives

PG will summarize/criticize the OP:

  1. 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?”
  2. Other than those people and compulsive cranks, everybody else loves, loves, loves Amazon.
  3. 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.
  4. 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.
  5. 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?)
  6. Is there any retailer or manufacturer that doesn’t offer some of its products below cost in order to incentivize prospective purchasers to acquire them? See Remaindered Book, Barnes & Noble Seasonal Promotions and 50% Off Thousands of Items in Stores.
  7. See also, Loss Leader Strategy and Customer Lifetime Value, but those are business school strategies which constitute unfair competition when used to harm English majors.
  8. 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.
    1. 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.
    2. 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.

PublisherOwnerOwner’s Annual Revenue
(most recent year available)		Owner’s Annual Profit
(most recent year available)
Penguin Random HouseBertelsmannPrivately held. In 2019, the company reported “Revenues exceed €18 billion” – approximately $21.41 billionPrivately held. In 2019, the company reported “€1.1 billion” in Group profit.
Hachette Book GroupLagardère Publishing€6.936 billion in 2019 – approximately $8.251 billionProfit before finance costs and tax was €411 million
Harper CollinsNews Corp,$10.07 billion in 20192019 Net Income – $228 million
Simon& SchusterViacomCBS Corporation$27.812 billion in 20192019 Operating Income – $4.273 billion
MacmillanGeorg 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 PublishingAmazon
Royalty CalculationsOpaque 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 PaymentsTwo 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 Royalties15% (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 Royalties25% of publisher’s net receipts70% 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 Paperback7.5% 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.

Amazon and Mall Operator Look at Turning Sears, J.C. Penney Stores Into Fulfillment Centers

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From The Wall Street Journal:

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.

Link to the rest at The Wall Street Journal (Sorry if you encounter a paywall)

My mom, Jackie

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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

Jeff Bezos

appearing before the U.S. House of Representatives
Committee on the Judiciary
Subcommittee on Antitrust, Commercial, and Administrative Law
July 29, 2020

Amazon Quarterly Results Smash Estimates By Big Margin

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From Investors Business Daily:

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.

Link to the rest at Investors Business Daily

US Book Publishing Remains Resilient: Print and Ebook Sales Are Growing

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From Jane Friedman:

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:

  1. 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?
  2. The length and depth of the economic crisis which has been unfolding. Will governments help consumers, businesses and others?
  3. 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?

Link to the rest at Jane Friedman

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?

Amazon Publishing on Wooing Dean Koontz

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From Publishing Perspectives:

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.

Link to the rest at Publishing Perspectives

Amazon’s Revolutionary Retail Strategy? Recycling Old Ideas

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From Wired:

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.

Link to the rest at Wired

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.

US audiobook market value up 16% to $1.2bn in 2019. Unit sales also up 16%. But how much does the delivery model hold back the format?

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From The New Publishing Standard:

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.

Link to the rest at The New Publishing Standard

Can Amazon keep growing like a youthful startup?

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From The Economist:

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%).

Link to the rest at The Economist

California Is Examining Amazon’s Business Practices

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From The Wall Street Journal:

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.

Link to the rest at The Wall Street Journal (sorry if you run into a paywall)

PG notes that he casts an even more-jaundiced eye than usual on the actions of government officials during an election year.

He’ll sharpen his eye to double-jaundiced given the highly-charged political atmosphere in the US lately.

Can Rivals Take Advantage of Amazon’s Pandemic Woes?

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From The Wall Street Journal:

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.

Link to the rest at The Wall Street Journal (sorry if you run into a paywall)

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.

Amazon Literary Partnership Names More Than $1 Million in New Grants

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From Publishing Perspectives:

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.”

Link to the rest at Publishing Perspectives

PG must have missed the announcements of Random House, Simon & Schuster, etc., about their donations to worthy nonprofits supporting diverse voices.

Coronavirus Lockdowns Trigger Rapid Drop in Retail Sales

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From The Wall Street Journal:

U.S. lockdowns to contain the coronavirus pandemic prompted record monthly drops in retail spending and industrial output, as consumers pulled back sharply on shopping and eating out and factories suffered a sharp drop in demand.

The Commerce Department on Friday said retail sales, a measure of purchases at stores, at restaurants and online, fell a seasonally adjusted 16.4% in April from a month earlier. The drop eclipsed a revised 8.3% drop in March sales, and marked the steepest month-over-month decline in records dating to 1992.

The Federal Reserve separately said industrial production dropped 11.2% in April, its steepest monthly fall on records dating back more than a century, as the coronavirus response closed factories, sapped demand and froze supply chains.

“They’re just dramatically weak numbers,” said Jim O’Sullivan, an economist at TD Securities. “We’re obviously in this big hole now.” He said a key question is how long it takes to climb out of it, which depends in part on the speed of reopening.

Social distancing, business closures, travel restrictions and other disruptions that started in mid-March have taken a particularly heavy toll on retail stores and restaurants, many of which remain closed or are opening gradually as states begin to reopen their economies.

Consumer spending in April was down more than 20% from the same month last year, and certain categories posted dramatic declines. Clothing-store sales in April were nearly 90% lower than a year earlier, while sales at department stores, bars and restaurants, and sporting goods stores were all down nearly half. By contrast, sales were up over 20% on the year for online retailers and up 12% at food and beverage stores.

Lower vehicle sales and spending at bars and restaurants drove last month’s decline in retail sales, but nearly every other category suffered too as commuters worked from home and malls remained shut.

The exception were sales at nonstore retailers, a category that includes internet merchants such as Amazon.com Inc. and which grew 8.4% month-over-month.

. . . .

Sales were weak across a range of categories, but nonessential businesses were particularly hard hit. Sales at furniture stores dropped 58.7% and electronics fell 60.6%. Clothing sales plummeted 78.8% from March.

. . . .

Consumer spending is the main driver of the U.S. economy, accounting for more than two-thirds of economic output, and retail sales account for about a quarter of all consumer spending.

. . . .

Workers also are losing jobs in record numbers because of the coronavirus pandemic, another factor hitting consumer spending. And declining consumer sentiment has economists worried about how quickly people will return to spending, as the economy opens back up.

. . . .

Some retailers are also unlikely to weather the pandemic and face permanent closures.

“2020 is going to be a year of rebalancing,” said Under Armour Chief Executive Patrik Frisk during an earnings call Monday. The athletic-apparel retailer reported that about 80% of global business has been at a standstill since mid-March, and revenue may drop as much as 60% in the second quarter.

Retailers on both sides of the Atlantic are “trying to figure out how fast they can open and how fast the consumer is going to come back,” Mr. Frisk said.

Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)

PG hasn’t seen any information from major business publications about Big Publishing, Barnes & Noble and other parts of the publishing establishment.

His guess, as mentioned previously on TPV, is that Barnes & Noble will experience a substantial financial impact and that its online business won’t be nearly large enough to materially offset the costs of cutting off its retail arm for an extended period of time.

At least some B&N stores located in malls will have problems if major mall tenants close and/or the foot traffic they generate is substantially diminished. If a mall shuts down, as many malls have done in the recent past, there is likely to be one fewer Barnes & Noble store in the vicinity.

A year from now, PG believes there will be substantially fewer Barnes & Noble stores than their were pre-corona. Ditto for a great many other physical bookstores. He suspects this is the type of major societal and financial upheaval that changes some habits and institutions on a permanent basis.

Unfortunately, PG believes a number of small traditional publishers won’t be able to reopen or will reopen with substantially reduced staff and much-reduced advances.

PG suspects that traditional publishing will see mixed results with bookstore declines offset to some extent by improved Amazon sales. It’s pure speculation on PG’s part, but he would guess that Amazon sales of ebooks from traditional publishing will have seen an uptick while the market share of hardcopy books may decline.

In the short run, an increased proportion of ebook sales, which involve no costs for warehousing, shipping or returns of unsold hardcopy books from physical bookstores may well increase the profit margins of traditional publishers even as, if PG is correct, gross sales revenues suffer steep declines.

Over a longer period of time, if readers under lockdown have sampled ebooks from Amazon or their local libraries to read on their own electronic devices (or devices purchased from Amazon for the purpose), PG suspects some proportion of this group will become permanent ebook aficionados.

It may be too much to expect, but PG would hope that those in traditional publishing with any business sense would put a stop to the childishly petulant attitude displayed toward Amazon by so many New York publishing drones and their associated literati. Absent Amazon or someone like Amazon, traditional publishing’s future would look a lot more like Barnes & Noble’s than is the present case.

PG predicts that, ten or twenty years from now, intelligent and informed individuals will have concluded that Amazon saved literature (and a bunch of jobs in the literature biz that don’t involve writing books) during this difficult time.

Bookshop, a new startup, is offering publications bigger kickbacks than Amazon

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From Nieman Lab:

The pitch is simple. “They get to feel good about themselves. They get to diversify the revenue. And they don’t have to take a financial hit because we’re able to deliver the sales that they want.”

. . . .

The Rebel Alliance to Amazon’s Empire. A David taking on Goliath. Any way you want to put it, the new ecommerce site Bookshop has attracted a lot of attention for challenging Amazon on its original turf. (What, did you forget Amazon launched as “Earth’s biggest bookstore”?)

Bookshop, which was founded to support independent bookstores, distributes earnings through a pooled fund and provides digital storefronts that let local stores keep the profits on any sales they generate. Launched in late January, Bookshop has served as a lifeline for indie booksellers during a pandemic that has forced many of them to shut up shop. Here in Massachusetts, for example, local favorites like Harvard Book Store, Brookline Booksmith, and Porter Square Books — not considered “essential businesses” — have closed and suspended curbside pickup. This could change after May 18, but until then, online orders are keeping them afloat.

There’s something in it for publications that cover books, too.

If a publication refers a sale to Bookshop, the site will kick back 10 percent of the book’s price. That’s more than twice the going rate — 4.5 percent for physical books — through Amazon’s affiliate program.

. . . .

News organizations have seen ecommerce as an attractive way to diversify their revenue streams for a while now. The concept is straightforward (even if the ethical questions aren’t): An outlet publishes an affiliate link — in a review or gift guide, maybe — and earns a small percentage of any sales.

Back in 2016, The New York Times paid more than $30 million for the product review site Wirecutter, a major investment that now seems like a bargain. (The Times doesn’t break out affiliate revenue in its financial reports, but we noted a 20.9 percent increase in “other revenue” back in 2017 that was largely credited to referral revenue. That category has grown in the years since, though the latest earnings report credited revenue from The Weekly and Facebook licensing.) Wirecutter often points readers toward Amazon, which runs the largest, best-known affiliate revenue program. But, as the book publishing industry learned early on, it’s not smart to be overly dependent on the whims of a tech giant. Just last month, Amazon cut commission rates across several categories, which can’t have been welcome news for digital publications like BuzzFeed and New York magazine that regularly publish shopping guides to drive affiliate revenue. The company is also delaying shipping on some items — including books.

By providing an alternative, Bookshop offers an opportunity for publications that rely on ecommerce to diversify at least part of their payouts.

For all the galaxy-sized metaphors in the press, Bookshop isn’t trying to beat Amazon at its own game — just loosen its vice-like grip on bookselling. (More than 90 percent of ebook and audiobooks sales and about 42 to 45 percent of print book sales happen on Amazon, according to industry tracker BookStat.) Part of the solution, concluded Bookshop CEO Andy Hunter, was developing an affiliate program that worked for publishers but supported many independent stores instead of one trillion-dollar company.

Link to the rest at Nieman Lab

E-book VAT: the other side of the story

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From The Bookseller:

In his recent blog, ‘Amazon’s VAT Windfall’, Anthony McGowan expressed concern that the Bezos behemoth had not changed e-book prices following the recent VAT cut, and were set to profit to the tune of millions as a result. He and I have been arguing on Twitter, very politely I might add, about this as I think he’s got it wrong.

Where I do agree with Anthony is regarding Amazon’s monopoly when it comes to e-books. They won’t share figures, so the numbers can’t be confirmed, but I would be amazed if there is any publisher in the UK who doesn’t receive 90% or more of their e-book turnover from Amazon. And for some it will be close to 100%. That is a monopoly, pure and simple.

But are they ignoring the VAT cut and pocketing the difference? In Anthony’s blog he said he had checked and “the prices don’t seem to have come down at all”. I had a look moments after reading his blog and the Kindle charts were full of books at odd prices – £2.07, £3.29, £0.83 – which certainly strike me as ex-VAT. Sure, there were still lots at 99p price points, and I assume Anthony viewed those as evidence of Amazon shenanigans, but there is a perfectly logical explanation for this.

Publishers tend to sell books to Amazon in one of two different ways, using a wholesale or agency model. With the wholesale model, the publisher sets a wholesale price for the e-book – usually an amount that, once VAT is added, results in a .99 RRP – and then sells to Amazon at that price minus any agreed discount. Now that VAT has been scrapped, those 99p prices have dropped by 20%, and that seems to have happened pretty much straight away.

The other prevalent model is the agency model, where publishers set an RRP – again, nearly always a 99p price point – and the retailer sells at that price and deducts a commission. Here the publisher has determined the selling price, in much the same way as they do with RRPs on printed books. Looking through those Kindle charts, I suspect many of the books that have not changed prices are sold on this model.

My take when I first heard about the VAT cut being brought forward was not that Amazon would make a mint, instead I saw it as an opportunity for publishers. Right now, publishers across the UK are deciding what to do with their e-book pricing. Should they reflect the VAT cut so that all e-books are now 20% cheaper than they were? Or do they carry on with a pricing policy that keeps those 99p price points?

If they go with the former, then readers get a 20% saving, which was Rishi Sunak’s intention. If they go with the latter, they increase e-book revenue by 20% and authors will see their royalties go up.

But which is the right thing to do?

Most of our bookshops are closed and the big chains are, it seems, not paying their bills as promptly as they once were. Publishers are facing a big drop in income and this will have a knock-on effect for authors in the next batch of royalty statements. Anecdotally, e-book sales are on the rise during lockdown. If a publisher’s duty is to support its authors, and its own business, then here is a chance to boost one area of turnover when others are taking a beating. It could be argued as the right thing to do.

But the point of the VAT cut was to make digital reading cheaper for consumers. Surely if we don’t ensure e-books are 20% cheaper then we are ripping off readers? And that is a reasonable point but, to be frank, will readers know, or care? The difference between wholesale and agency models means that there is no consistency in e-book pricing at the moment, anyway. And most publishers play around with prices regularly, with promotional offers, so a snapshot of the Kindle charts at any given time will see prices ranging from free to over a tenner.

How can anyone tell if a £3.99 e-book today is actually an old £4.99 e-book minus the VAT or one that has always been £3.99 and the publisher is pocketing the difference? Spoiler: they can’t.

Link to the rest at The Bookseller

As an American who has (alas) only spent several short weeks in Britain, PG doesn’t claim any expertise about the VAT and the ways in which it impacts prices at various stages in the chain between manufacturer and the ultimate consumer of the product and how various participants in that chain may respond to significant changes in the rates at which the VAT is levied.

However, as one who has observed the behavior of Amazon in the US and elsewhere for what has grown to quite a number of years, PG has observed that, with respect to prices for goods which are set by Amazon because Amazon has purchased the goods and is reselling them to consumers (as opposed to retail prices that are set by the owner of the goods when the owner is paying a fee to Amazon for its services in attracting customers, filling and delivering customer orders, processing credit card charges for the purchase, etc.), when Amazon is acquiring the goods and setting the prices, those prices tend to be very competitive when looking at the consumer market as a whole.

(Sorry for the over-long sentence.)

Amazon wants prices for goods on its website to be lower than prices for the same goods when they are sold by other retailers. The Amazon website is designed to highlight and boost the visibility of the lowest-priced vendors. As one of the most basic, but effective examples of this design, when operating in default mode, Amazon’s product presentation engine will usually show it’s best-selling products which tend to highlight the lowest-priced seller of a good at the top of its search results where their offer is most optimally exposed to purchasers.

Should the shopper explicitly want the lowest priced item in the category no matter what, in the upper left corner of the screen, the shopper can easily select “Price: Low to High” where, under some circumstances, the shopper may find that one can of soup is less expensive than four cans of the same brand of soup. In the default best-selling listings, those products that sell best typically provide the best overall value, albeit sometimes requiring the purchase of multiple cans of soup or another product.

This is basically an overly-long explanation that demonstrates that, per one of the claims reported in the OP that lowering or eliminating the VAT on books meant that Amazon would simply increase its profits from the sale of the books by the amount by which the VAT had been lowered is not the way Amazon does business. Even if every other bookseller did not adjust its prices in response to the VAT change, Amazon would do whatever was permitted to sell books at a meaningfully lower price than they were on offer elsewhere.

Amazon makes a great deal of money by maintaining itself as the place where, if a consumer is willing to wait for a couple of days, he/she will acquire a good for less than it could be purchased elsewhere. Amazon is unlikely to endanger that reputation among consumers to grab some money from book purchasers. After all, book purchasers are widely known to purchase other items besides books on a regular basis.

Sam Walton, the founder of Walmart, was an astute observer of human behavior and the ways of making larger profits at retail. His approach? “Pile it high. Sell it cheap.”

“Say I bought an item for 80 cents. I found that by pricing it at $1.00, I could sell three times more of it than by pricing it at $1.20. I might make only half the profit per item, but because I was selling three times as many, the overall profit was much greater. Simple enough.”

Due to its online existence and the extraordinary capacity of its cloud computing operation, Amazon can use techniques that Sam Walton would have loved, but Walmart couldn’t accomplish because Walmart stores were physical and Amazon’s store has always been digital.

From Quartz in 2015:

Amazon is famous for changing prices frequently to test the demand for products or undercut a competitor on hot items like Beats headphones or Razor electric scooters.

A generic King James version of the Holy Bible wouldn’t seem like an obvious candidate for such dynamic pricing.

But data show that Amazon has changed the price of the top Bible in a Google search for “Amazon Bible” more than 100 times since May 2010, according to price-tracking site Camelcamelcamel.

. . . .

The price changes have been significant. At its lowest price on Amazon, this version of the Bible cost $8.49, and at its highest, $16.99.

The shifts in pricing are presumably automated, as Amazon’s computer systems react to rising or falling consumer demand and other factors. But the fact that such a standard, age-old item as the Bible can change in price so frequently and dramatically suggests strongly that dynamic pricing affects almost anything a consumer can buy online.

Amazon changes the price on as many as 80 million items on its site throughout day, and went into overdrive to match prices of its competitors during last year’s holiday shopping season, according to Forbes. Amazon spokesman Scott Stanzel declined to discuss how the company’s dynamic pricing works, telling Quartz that it has ”a cost structure that allows us to adjust our pricing quickly.”

The e-commerce giant is apparently using dynamic pricing on other holy books beyond the Bible. Pricing data show that Amazon’s shifts affect the most-Googled Koran, Torah, and to a lesser extent, Bhagavad Gita, on its site.

Stanzel declined to comment on whether Amazon’s prices change in response to real life events. But it’s interesting that the single largest price shift for the Bible happened around the same time as the world was predicted to end in December 2012. And there was a steady increase in its price when The History Channel’s miniseries “The Bible” originally aired in the US in March 2013.

Link to the rest at Quartz

One of Walmart’s most-used advertising slogans during Walton’s lifetime was “Low Prices Every Day.”

Amazon’s version of that same philosophy might be, “Optimum Prices Every Hour.”

Indie Publishing in the Time of Covid

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From Writers in the Storm:

When New Jersey went into lockdown on March 21st, I foolishly thought that I would get infinite amounts of writing done. During the day, I am the author acquisitions manager at IngramSpark and by night I like to write humorous personal non-fiction and romance novels. In my mind, I thought that the pandemic would give me a small reprieve from business as usual that included a very busy travel schedule.

I didn’t expect that business as usual would take on a whole new meaning.

As the publishing world began to screech to a halt with independent bookstores closing, publishers furloughing staff, Amazon focusing on essential items, and other printing plants closing, all of a sudden Ingram and the IngramSpark felt the burden, more than ever, to uphold our commitment to the publishing industry to keep it all humming. Needless to say, the writing really hasn’t happened.

. . . .

I am privileged to work with self-published authors all day. I have always been awestruck by their ingenuity and resilience. In the past six weeks those qualities have quadrupled, because the indie publishing world is uniquely suited to adapt to abrupt changes.

My clients have taught me several valuable publishing lessons recently that I would like to share.

. . . .

#1- Authors Have More Power Than Ever

I keep finding myself saying, “The author has more power than ever!” Before the pandemic hit, I still found this to be resoundingly true. Now, in the time of Covid, I believe that the shift in power has become even more apparent.

When I first started at IngramSpark, self-publishing was still the “red-headed stepchild” of the publishing industry. In the years that followed, self-publishing started to become a legitimate route to getting published. I believe that the pandemic has shifted the landscape even more.

While large businesses were slowed down or forced to close, indie authors kept plugging away. In fact, they took the opportunity to grow their burgeoning businesses. Being nimble is a hidden superpower of the indie author.

When this all shakes out, no one can predict what the publishing landscape will look like. Sadly, there will likely be some casualties when it comes to publishing businesses. This will allow indie authors with small publishing enterprises to emerge as serious players in the game.

. . . .

#2- Direct to Reader Sales are the Future

Early on in the pandemic, both indie authors and publishers saw the benefit in direct-to-reader sales. Larger retailers became overtaxed with the influx of orders and shipping has been taking longer than the two days Amazon has spoiled us to expect. Why not sell directly to your fans?

There are plenty of great ways sell directly to readers.

  • Shopify and other services can plug into your social media.
  • Ingram has a great direct to consumer tool called Aer.io that is very easy to use.
  • There has been a lot of buzz around Bookshop.org, an online bookshop run by the American Booksellers Association.

Why the buzz about Bookshop.org?

10% of all proceeds from Bookshop.org sales are put in a pot and given to independent bookstores. With those stores closed now, this is a wonderful way to support your indie bookstore. They have raised $1.1 million dollars already! The real perk about Bookshop.org is that you can set up your own affiliate shop.

Early adoption of these tools has given indie authors and publishers personal relationships with their readerships and a whole new sales vertical to explore. That brings me to #3…

#3- Direct Engagement with Readers is Powerful

Selling directly to readers is the perfect way for indie authors and publisher to engage directly with their readers and create personal, lasting relationships with them. These relationships create super fans which in turn create an army of evangelists for their books.

Authors and publishers have also found that direct sales are an opportunity to capture valuable information about your reader like their email address. If a reader opts to give their email address, this provides the huge bonus opportunity for long term engagement in the form of email blasts and personal, targeted communication.

The more an author engages with their fans, the more lifelong readers they will capture.

Link to the rest at Writers in the Storm

PG notes that Ingram Spark is effectively a sort-of competitor of Kindle Direct Publishing. In PG’s stunningly personal opinion, KDP is probably the best way into Amazon. Ingram provides “connections” to Amazon, libraries, Barnes & Noble and indie bookstores. Whether those connections ever generate any meaningful sales is another question.

PG also notes that if an indie author wishes to qualify for the 70% royalty on ebooks under KDP Select (which includes Kindle Unlimited and the Kindle Owners Lending Library which provide additional ways to increase ebook royalty revenues), she/he will not be able to sell the same titles as ebooks via Ingram Spark. Adding new content and/or bonus content that doesn’t appear in the KDP ebook to an Ingram Spark ebook won’t fly if you want to stay in the 70% royalty tier on KDP Select.

Amazon will definitely bounce a book out of KDP Select if it discovers an author doing this sort of thing or otherwise violating the KDP Select Terms and Conditions. The same warning that applies to Ingram Spark and KDP Select also applies to other independent epublishing outlets like Smashwords.

As a general proposition, if an author wants to stay in KDP Select and try out Ingram Spark or another route to non-Amazon bookstores, PG strongly advises the author to carefully read the Terms and Conditions Governing KDP Select (URL for US terms) or an alternative version applicable to KDP Select Ts&Cs in her/his country of residence.

If an indie author wants a hardcover version of his/her book, Ingram a way to go because Amazon only offers ebook and POD paperback options for indie authors.

As usual, PG will remind one and all that he doesn’t provide legal advice via his comments on TPV. If you want to obtain legal advice, you will need to hire PG or another lawyer of your choice.

(PG is not quite certain how he got the drop-cap in the prior paragraph with his recently updated WordPress theme, but he likes the look and won’t try to figure out how to undo the giant A.)

Amazon’s Sales Jump as Coronavirus Prompts Surge in Online Shopping

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From The Wall Street Journal:

Amazon.com Inc. reported soaring quarterly sales as the company experienced a surge in online orders from homebound customers contending with the coronavirus pandemic.

The tech giant said Thursday that revenue rose 26% from a year earlier to $75.5 billion in the three months through March—by far the highest on record for what is usually Amazon’s slowest period of the year. The boom in sales came at a cost, though, as profit fell 29% from a year earlier to $2.5 billion, well short of analysts’ average estimate of $3.26 billion, according to a survey by FactSet. Operating profit for the quarter also missed the estimate Amazon gave in January.

The results, which follow relatively robust earnings reports by several other big tech companies in recent days, reflect the central role Amazon has played during the coronavirus crisis, delivering goods to people stranded at home by government shelter-in-place orders. The surge in online buying taxed Amazon’s fulfillment centers, which saw unprecedented volumes for this part of the year. In response, Amazon temporarily stopped taking inventory for products deemed nonessential and announced plans to hire 175,000 more staffers for its warehouses and delivery network. Amazon said it ended the quarter with 840,000 employees.

. . . .

Amazon’s booming sales stand in stark contrast to many companies across the U.S. economy, which shrank in the first quarter at its fastest pace since the last recession. Investors had sent the Seattle company’s stock price up nearly 34% this year through Thursday’s close, while the Dow Jones Industrial Average fell nearly 15% and the Nasdaq Composite Index was down about 1%.

Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)

PG suspects that Amazon’s reliability and credibility as a seller will be enhanced in the eyes of most buyers going forward.

If he is correct, the “Don’t Buy from Nasty Amazon” meme so beloved by Big Publishing and many physical bookstores is going to lose even more credibility in the future.

During the past several weeks, PG certainly appreciated the doorbell at Casa PG ringing and finding an Amazon box containing items he couldn’t find locally sitting outside his front door with social distancing fully intact.

Booksellers Association criticises Amazon for ‘ill-judged’ hardship fund donation

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From The Bookseller:

The Booksellers Association (BA) has branded Amazon’s £250,000 donation to a booksellers hardship fund an “ill-judged attempt to mitigate a decades-long campaign to undermine the bookselling sector”.

Yesterday, it was revealed the retail giant was behind a huge donation to the Book Trade Charity fund for booksellers facing hardship during the pandemic. The pledge was sparked by a trade crowdfunder and brought the total fund up to £380,000.

Meryl Halls, m.d. of the BA, earlier supported the crowdfunding effort and praised the “heartfelt and moving response” from the trade for her struggling members.

However, Halls said she was now shocked by the revelation that Amazon had donated the large sum and said many of her members were angry and had responded by calling for the company to pay its fair share of tax.

She said: “The BA and our independent booksellers are taken aback by the revelation that the recent large donation is from the company held responsible by the majority of booksellers for the long-term demise of high street bookselling, and booksellers’ responses have been first stunned silence as they process the dissonance of the situation, followed quickly by a real sense of anger at the discordance at the heart of the gesture.

“There is a definite sense that this seems like an ill-judged attempt to mitigate a decades-long campaign to undermine the bookselling sector at the moment when we are facing the biggest existential threat we have ever faced.

“A common reaction amongst booksellers has been – ‘if Amazon really wants to support independent bookshops, then let them join bookshops in paying its fair share of tax’.”

The identity of the donor was originally not revealed by the charity, who said only that it had come from someone “committed to independent bookshops as part of a mixed bookselling economy”.

Link to the rest at The Bookseller

Perhaps he missed it, but PG didn’t see anything in the OP indicating that The Booksellers Association had refused to accept the £250,000 donation from Amazon or sent the money to Chancellor of the Exchequer as a portion of Amazon’s fair share of tax payments.

9 Tips for Creating Amazon Ads that Convert

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From Indies Unlimited:

Amazon ads can be a big opportunity for authors looking to up their sales especially during a time where it’s difficult to write the next book (like now, for instance). But if you don’t know how to use them intelligently, they can also be a big waste of money and time.

In this article, we’ll look at 9 tips all authors can use when advertising on Amazon, including:

  • How to get your book appearing next to the biggest authors in your genre
  • Why it’s okay to lose money on some ads
  • How you can make sure your book doesn’t end up in the wrong hands

. . . .

1. Choose Manual Keyword Targeting

Keywords play a huge role in ads because they help you control where your ads appear and who sees them. By default, Amazon chooses keywords for you to target–but you can select your own keywords for your Sponsored Product ads. You can do this by selecting ‘Manual targeting’ and then scrolling down to add your keywords.

. . . .

Sure, you can let Amazon do the targeting for you, but doing it yourself will allow you to explore more options and find better opportunities. You can find ad keywords in plenty of the same ways you’d find regular keywords, there’s even a dedicated tool inside Publisher Rocket to help you do just that.
It’s important to have at least 200 keywords in each of your ads–yep, you heard right… 200 keywords.

2. Target the Books of Authors in Your Genre

Using your ads to target a popular author in your genre can be an effective strategy.

If shoppers are already searching for the author, and your books have some similarities, you can use ads as a chance to get in front of your ideal readers.

Selling books through these keywords can also be a way to get yourself on the ‘also-bought’ section for that author. Though, that’s entirely dependent on whether the person who’s on another author’s page buys their book and then clicks on your ad and buys your book too.

If you’re targeting authors who write books like yours, and you understand your target market and have books that fit it, this could work out for you. Especially in markets with voracious readers.

. . . .

You may be wondering why “also-boughts” are important. Well the “also-boughts” are one of the main ways Amazon suggests new books to their readers. So, if your book makes the “also-bought” section for a well-known independent author in your genre, there’s a fair chance that you’ll get sales. I wouldn’t suggest you go for traditionally published authors like J.K. Rowling, though, as those types of keywords will be highly competitive and cost you too much for little return.

3. Target Books on the BookBub List

In a similar way to the previous tip, you can target books that have been recently featured on the BookBub daily email — these books get thousands of downloads, and you can take advantage of that.

Also, books that appear on BookBub will more than likely be less

competitive than the big-name authors in your genre. For example, it’s going to be cheaper to target an indie author who writes vampire fiction than it would be to target the Twilight series.

Thanks to BookBub promotions, there’s a good chance these keywords will lead to traffic.

Link to the rest at Indies Unlimited

Penguin Random House India opens an exclusive ebook store – on Amazon

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From The New Publishing Standard:

When India’s Prime Minister extended one of the world’s harshest national lockdowns to May 3, as the country tries to ensure the coronavirus tragedy in West Europe and the USA is not replicated, it became clear publishers needed to adapt, and fast.

Penguin Random House India did so in style, launching a 400-title ebook store within the Kindle India store on Amazon, to make sure eager readers could still access the books they want to read.

. . . .

In a press release, PRH India’s senior vice president marketing, digital and communications Niti Kumar said:

India is an up and coming market in ebook consumption and we are confident that with over 500 million internet users, there is definite potential that more people can take to reading ebooks.

Initiatives built on ebooks can bring the spotlight on a mode of reading, which in addition to being safe and easily accessible, is also more affordable and comes with additional features that make reading more pleasurable and informational.

The press release adds in broader terms:

In a time when so many people find themselves housebound, reading has come up as one the top activities they are engaging in. Getting hold of new books can pose a challenge since many e-commerce websites are prioritizing deliveries to essential products and delivery of physical books has been affected. So, in these strange and difficult times, ebooks are gaining popularity as a convenient, accessible and safe ways to keep one occupied, entertained and fulfilled.

. . . .

As the country’s largest English language trade publisher Penguin Random House India pushes out 250 new titles each year and has an active backlist of over 3000 titles.

It’s not clear from the press release why the PRH India ebook store features only 400 titles, given a 3,000 title catalogue. Possibly this reflects the level of digitisation PRH India has achieved thus far and the other books have yet to be made available in digital format.

Link to the rest at The New Publishing Standard

PG suspects that Penguin Random House India would not have taken this step without prior approval from the PRH Mothership.

Assuming that PRH operates in a reasonable way on Amazon (or its contract with Amazon for the PRH store requires it to do so), this potentially implies that it will release books to the PRH Amazon bookstore at the same time it releases them to bricks & mortar stores.

As PG has suggested before, after a long Coronavirus shutdown of traditional bookstores in many parts of the world, an unfortunately large number of these stores may be unable to open again or will open in a manner that carries a scent of going out of business.

If several B&M bookstores (or one large bookstore) in a geographic area are pricing in a manner that expresses or implies they’re going out of business, that’s going to be a drag on the sales and profitability of other bookstores who are reopening with traditional product pricing.

Then there’s the new ownership of Barnes & Noble, hedge fund Elliott Management.

From CNBC:

Billionaire Paul Singer’s Elliott Management said global stocks could tumble more — ultimately losing half of their value from February’s high— as the world braces for the deepest recession since the 1930s-era Great Depression, according to a letter sent to clients on Wednesday and reviewed by Reuters.

The New York-based hedge fund firm, which controls $40.4 billion in assets and whose views on markets and economics are closely watched by investors, wrote that the sharp market decline seen between late February and late March “provided a heavy bookend to a dozen years of basically nonstop positive returns in global stocks, bonds and real estate.“
And the rout is likely not yet over.

“Our gut tells us that a 50% or deeper decline from the February top might be the ultimate path of global stock markets,” the letter said.

Link to the rest at CNBC

Will Elliott be in the mood to drop a bunch of additional money into helping Barnes & Noble to stagger to its feet?

PG was not able to find any reliable online sources that opined one way or the other. Given the scope of the worldwide financial disaster, Barnes & Noble is a very small fish indeed.

Amazon to Expand Shipments of Nonessential Items

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From The Wall Street Journal:

Amazon.com Inc. will begin allowing third-party sellers on its platform to resume shipping so-called nonessential items this week, a signal that the company is ramping up to meet broader consumer needs, according to people familiar with the matter.

Last month, Amazon made a decision to prioritize at its warehouses those items deemed essential during the coronavirus outbreak, such as cleaning products, health-care items and shelf-stable food. Amazon stopped accepting shipments of items from sellers that didn’t correspond to the shopping needs of consumers hunkering down during the pandemic. The mandate caused unrest for its army of third-party sellers, which account for 58% of Amazon’s sales.

Sellers of items unrelated to health, wellness and cleaning will be able to send inventory to Amazon later this week, but there are limits on how much they can ship to ensure there is warehouse space for essential goods, people familiar with the matter said.

. . . .

The tech giant has been inundated by orders as Americans follow shelter-in-place guidance to stop the spread of the coronavirus. As a result, its network of warehouses has struggled to keep up, and delivery of orders in its Prime program that previously happened in one day or less has slipped to as long as a month in some cities.

On Monday, Amazon announced that it was hiring an additional 75,000 employees to help fill the mounting demand. Over the past month, the online retailer has hired more than 100,000 people in full- and part-time jobs in distribution centers and across its delivery network in the U.S.

The hiring spree represents almost two-fifths of Amazon’s typical U.S. workforce of 500,000.

A spokeswoman said the recent hiring is akin to what happens during the holiday period when Amazon adds thousands of temporary workers.

. . . .

Walmart, which is hiring about 5,000 workers a day, has added about 100,000 positions of a previously announced plan to hire 150,000, according to the company.

Kroger Co.,  the nation’s biggest supermarket chain, has hired more than 23,500 workers and plans to bring on an additional 20,000 people over the next several weeks. Instacart Inc. is looking to add 300,000 shoppers for its grocery-delivery service.

Having additional hires in the warehouses has helped Amazon ease back into handling nonessential merchandise, said one of the people familiar with the matter. The company’s hiring frenzy has made it one of the most-active employers during a time when many other companies are laying off their staff.

Link to the rest at The Wall Street Journal

PG thinks it’s great that some employers are hiring.

Most of the people laid off from a Barnes & Noble bookstore will receive a major salary boost to $15 per hour (plus excellent fringe benefits) if they go to work at an Amazon warehouse.

Will We Forgive Amazon When This Is Over?

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From The Wall Street Journal:

It’s by now something like accepted wisdom that Amazon. com Inc. could be one of the few firms to come out ahead in the wake of the coronavirus pandemic. But all is far from well in the kingdom of Bezos. At a defining moment for the company, it is letting customers down.

True, all retailers are under enormous strain, and the Amazon boxes keep arriving. But the promise to ship anything to our doorstep in a day or two that has gained it the trust of an astonishing 112 million Prime members in the U.S. (a nation of 129 million households) has evaporated nearly overnight.

Weeks into America’s national experiment in only going to the store when absolutely necessary, it feels like Amazon is little better than any other retailer at getting us what we need, when we need it.

Every part of the company’s sprawling empire—from its eponymous e-commerce operation and its considerable physical retail to its market-dominating cloud services—is being tested. The fact that Amazon’s retail operations are functioning at all is a testament to the flexibility of the company’s infrastructure during a health crisis that few if any companies were prepared for.

But the crisis is laying bare the cracks in Amazon’s ability to be there for its customers when they need it most, much less to “delight” them, as Chief Executive Jeff Bezos once urged his employees to do. Those cracks include times when up to half the workers in some of the company’s facilities haven’t shown up, with some saying it was due to their fear they wouldn’t be adequately protected from coronavirus. It’s also due to Amazon’s just-in-time supply chain, reliance on third-party sellers and largely automated systems of buying and selling that were never designed to handle such a crisis.

. . . .

When parrying claims that it’s a monopolist, Amazon often cites the statistic that e-commerce is only 16% of all retail. With stores closed and delivery the only safe option for many vulnerable people, it’s clear that proportion will spike in the coming months. Reports from employees and analysts indicate volumes in Amazon’s warehouses are on par with seasonal surges around the holidays. Market-research firm CommerceIQ reported sales of toilet paper are up 186%, while cough and cold medicine sales are up 862%.

While demand for those products remains high, Amazon shoppers are unable to get many of the essential products the company says it’s prioritizing now. My search for toilet paper on Amazon yielded a jumbo 700-foot roll of commercial toilet paper in the first slot. In the second? A baffling block of text in lieu of a product image, stating that customers ordering this product after April 6 won’t receive it, so they shouldn’t bother. And everything considered nonessential takes more time than the two days Amazon conditioned us to expect.

“We continue to focus on receiving and shipping high priority products that customers need at this time,” said an Amazon spokeswoman. “Although we have more limited capacity due to the extensive health and safety measures we are taking across the network, we have begun selectively bringing more products from our selling partners into our fulfillment centers,” she added.

Link to the rest at The Wall Street Journal

__________________________________________________________________________________________________________

PG says some people are idiots.

Their faith in Amazon may be shattered by the company’s performance in the face of a huge world-wide pandemic that, at this writing, has infected a half-million Americans and killed over 20,000 and for which there is no proven cure. If that is the case, these individuals’ faith will be shattered with respect to almost everything else as well. PG predicts shattered faith therapy groups will pop up and participants will talk about their shattered faith in a long list of things.

Stuff happens.

As for the people who are not idiots, the fact that orders at Amazon have skyrocketed, that many of its suppliers have closed their doors per government decree and that each of its 800,000+ employees is subject to infection, sickness and death from the Coronavirus, will explain why Amazon’s delivery of some product offerings may be impacted.

PG suspects most Amazon customers are happy that Amazon is working as well as it is under these circumstances.

Is anything else working well in the US and elsewhere?

  • Military? One of the largest aircraft carriers in the United State Navy (out of a total of 11 aircraft carriers) is out of action due to the virus
  • US Supreme Court? Unable to hear arguments – 1/3 of docket in limbo
  • State and local governments? Per The Hill, “Many states, cities and counties are about to, suddenly, run out of money. Wages won’t be paid. Services won’t be delivered. Institutions will shut down abruptly. Many state colleges may fold.”
  • Coronavirus Will Change the World Permanently per Politico

Almost Everything About Goodreads Is Broken

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From OneZero:

Goodreads, the largest literary social media network, should be a good gathering place for readers. It is one of the only online communities for people who like to read books, but the service’s apparent monopoly seems to have stopped it from innovating, based on complaints from users and, well, basic observation. As a result, readers don’t have a good, central online community where they can discuss favorite novels or dish about exciting new releases; authors and publishers don’t have a reliable, trustworthy way to promote their books and interact with fans; book clubs and literary publications don’t have a good way to use the site to gain members and foster discussions.

What Goodreads is good for is keeping your own list of books you want to read or have read this year. It’s a list-making app. And while that’s useful, it doesn’t live up to the company’s full promise of being a haven for readers. Readers and authors deserve a better online community. And while Amazon has at least some nominal interest in improving many of its other products — Alexa, for example, becomes more advanced with each passing year — Goodreads lingers in the dustbin of the early aughts, doomed to the hideous beige design and uninspiring organization of a strip mall doctor’s office.

“It’s just really clunky and slow,” says Dustin Martin, a reader, Goodreads user, and software engineer. “Even having the resources of Amazon behind it, the site feels like a relic, an early web 2.0 sort of deal. I don’t think I’ve seen real improvement or new features since I started using the site in 2014.”

Martin brings up the difficulty of searching for books, a feature that numerous other frustrated Goodreads users complained to me about: The search tool is not intuitive, and if the user makes any mistakes, the book may not come up in Goodreads search at all. Even when a book or author is accurately entered into the search bar, the correct result is often, inexplicably, at the bottom of a list following 10 irrelevant other books.

. . . .

And while Goodreads calls itself “the world’s largest site for readers and book recommendations,” many of the 18 or so people I spoke to for this story insisted that, in fact, Goodreads is nearly useless for finding recommendations. “For some reason, Goodreads seems to attract an audience of people with insanely bland and entry-level taste,” Martin says. He points to the site’s Best Books Ever list, which includes Harry Potter, high school curriculum novels, and copious YA. “That would be fine if it didn’t seem to poison the site’s recommendation algorithm, which in my experience is entirely useless.” Gaby, a journalist who requested that only her first name be used because she’s not allowed to speak with press, agrees. “It’s generally not a good place to find new things to read,” she says. “The recommendations suck, the lists suck — it’s like, 100 lists telling me to read The Handmaid’s Tale and Harry Potter.”

Link to the rest at OneZero

PG never really got into Goodreads, so he’s not in a position to know whether the OP is right, wrong or partially right and partially wrong.

Feel free to critique in the comments.

The Hate Store: Amazon’s Self-Publishing Arm Is a Haven for White Supremacists

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From Pro Publica:

“Give me, a white man, a reason to live,” a user posted to the anonymous message board 4chan in the summer of 2017. “Should I get a hobby. What interests can I pursue to save myself from total despair. How do you go on living.”

A fellow user had a suggestion: “Please write a concise book of only factual indisputable information exposing the Jews,” focusing on “their selling of our high tech secrets to China/Russia” and “their long track record of pedophilia and perversion etc.”

The man seeking advice was intrigued. “And who would publish it and who would put it in their bookstores that would make it worth the trouble,” he asked.

The answer came a few minutes later. “Self-publish to Amazon,” his interlocutor replied.

“Kindle will publish anything,” a third user chimed in.

They were basically right. It takes just a couple of minutes to upload one’s work to Kindle Direct Publishing (KDP), Amazon’s self-publishing arm; the e-book then shows up in the world’s largest bookstore within half a day, typically with minimal oversight. Since its founding more than a decade ago, KDP has democratized the publishing industry and earned praise for giving authors shut out of traditional channels the chance to reach an audience that would have been previously unimaginable.

It has also afforded the same opportunity to white supremacists and neo-Nazis, an investigation by ProPublica and The Atlantic has found. Releases include “Anschluss: The Politics of Vesica Piscis,” a polemic that praises the “grossly underappreciated” massacre of 77 people by the Norwegian neo-Nazi Anders Breivik in 2011, and “The White Rabbit Handbook,” a manifesto linked to an Illinois-based militia group facing federal hate-crime charges for firebombing a mosque. (Amazon removed the latter last week following questions from ProPublica.) About 200 of the 1,500 books recommended by the Colchester Collection, an online reading room run by and for white nationalists, were self-published through Amazon. And new KDP acolytes are born every day: Members of fringe groups on 4chan, Discord and Telegram regularly tout the platform’s convenience, according to our analysis of thousands of conversations on those message boards. There are “literally zero hoops,” one user in 4chan’s /pol/ forum told another in 2015. “Just sign up for Kindle Direct Publishing and publish away. It’s shocking how simple it is, actually.” Even Breivik, at the start of the 1,500-page manifesto that accompanied his terrorist attacks, suggested that his followers use KDP’s paperback service, among others, to publicize his message.

That these books are widely available on Amazon does not seem to be an accident but the inevitable consequence of the company’s business strategy. Interviews with more than two dozen former Amazon employees suggest that the company’s drive for market share and philosophical aversion to gatekeepers have incubated an anything-goes approach to content: Virtually no idea is too inflammatory, and no author is off-limits. As major social networks and other publishing platforms have worked to ban extremists, Amazon has emerged as their safe space, a haven from which they can spread their message into mainstream American culture with little more than a few clicks.

. . . .

“As a bookseller, we believe that providing access to the written word is important,” an Amazon spokesperson said in a statement. “That includes books that some may find objectionable, though we have policies governing which books can be listed for sale. We invest significant time and resources to ensure our guidelines are followed, and remove products that do not adhere to our guidelines. We also promptly investigate any book when a concern is raised.”

The growing influence of social networks on political life has prompted a national debate about what should stay up on these platforms, what should come down, who’s to blame and who decides. Following the deadly far-right violence in Charlottesville, Virginia, in 2017, Facebook, Twitter, Reddit and PayPal cracked down on the activities of white supremacists and hate groups on their platforms. In recent years, Amazon has barred several high-profile white supremacist authors, including former Klan leader David Duke, from its bookstore. It does occasionally pull extremist books from KDP, sometimes months or years after publication, and often in secret, without providing any explanation to authors or readers. But these removals appear to be the exception. KDP’s terse policies do not address hate speech, racism or incitements to violence, though Amazon reserves the right to remove any items from its store, including “content that disappoints our customers” or fails to “provide an enjoyable reading experience.” By and large, Amazon, which in the United States controls around half of the market for all books, and close to 90% for e-books, has become a gateway for white supremacists to reach the American reading public.

. . . .

Before the internet, Roper’s reach would have likely been limited by bookstores’ shelf space and curatorial judgement. But in today’s world of digital abundance, far-right authors have enjoyed a newfound visibility. Gary Lauck, the leader of NSDAP/AO, an American neo-Nazi party, used to rely on snail mail to smuggle neo-Nazi propaganda into Germany and other European countries where it’s been banned. Today, several works published by his organization’s press are available to anyone in the U.S. and Europe on Amazon and on Kindle Unlimited, a program that offers books to readers for a subscription fee. KDP has also revived an older white nationalist canon. Many works by historical Nazis and anti-Semites, no longer held by copyright and long out of print, have been reprinted through KDP. Members of far-right chatrooms often link to them.

. . . .

Like other savvy authors, some white supremacists go beyond Amazon’s automated assistance to boost sales. One technique is to “category squat” — that is, classify one’s books in low-traffic or obscure categories such as “Ancient Greek History” to game their rankings. As a commentator on the 4chan /pol/ forum explained to someone interested in self-publishing on KDP, “If you pick a good niche and the book is good and you understand their search algorithm you can make a lot of money.” “Jewish Privilege,” by the anti-Semitic commentator E. Michael Jones, is ranked as the 10th-most-popular book in “LGBT Political Issues,” despite being about the alleged evils of Jewish people.

Other authors manipulate their ratings by making their self-published books temporarily free so that readers can “purchase” them and leave a positive review. “ALL of my books are available for FREE in e-book form this week in exchange for an honest review on Amazon later,” Roper posted in 2017 on the neo-Nazi message board Stormfront. As a result of this behind-the-scenes lobbying, Berger said, far-right texts often seem to have better reviews than other kinds of books, which may affect how frequently Amazon recommends them. The first installment of Roper’s trilogy has 70 reviews and a rating of four out of five stars. Roper even gave the book a five-star review on Goodreads: “I liked it so much that I’m currently working on the sequel!”

. . . .

When the retailer decides to drop a publisher or remove a book, it offers no explanation, no appeals process and little to no warning. “Amazon will be as ambiguous as possible, and when they terminate or suspend accounts, they will essentially imply, You know what you did and shame on you,” said Dale L. Roberts, who hosts a popular YouTube channel about the self-publishing business. Its notice to authors is “very generic copy and paste.”

This opacity makes it difficult for authors and readers to know how and why these decisions are made. For instance, while books such as Johnson’s “The White Nationalist Manifesto” have been removed from the site, self-published manifestos such as “The Declaration of White Independence” and “Foundations of The 21st Century: The Philosophy of White Nationalism” remain for sale. We also came across nearly a dozen Holocaust-skeptic books still available on Amazon, including some for sale in Germany, where such texts can be illegal. In response to our questions, Amazon took three of them down. It declined to share information about the number of books it’s taken down, its internal policies or how it enforces them.

Amazon’s ambiguous guidelines are not without reason. Given the company’s prominence in the marketplace, overly broad content restrictions might threaten literary expression as a whole. Louis-Ferdinand Céline, for instance, was a fascist, an anti-Semite and a Holocaust denier; he also wrote “Journey to the End of the Night,” which is among the most acclaimed works of French fiction. “Even if a book contains hate speech, it may be that it’s quoting other people’s hate speech or has other social, historical or literary merit,” said Eric Goldman, a leading First Amendment and content-moderation expert. It would be misguided to apply to a book-length essay or novel the same policies that attempt to govern tweets and Facebook posts, he adds.

Hate speech is also notoriously difficult to define. “There’s still nothing like consensus about what extremism even is in general, let alone when you get down to what’s considered to be a controversial and difficult decision about the whole of a book,” Berger said. “Even I, who’ve studied elements of this, would be hesitant to say that there’s any easy recipe to decide what stays and what goes.”

Smaller self-publishing companies say they have taken a more proactive stance. Lulu, Smashwords and Kobo all explicitly prohibit authors from self-publishing discriminatory or hateful content through their platforms. Representatives from each company spoke with us about navigating the tension between free expression and fomenting hate. “We don’t enjoy acting as a gatekeeper,” the Smashwords founder and CEO Mark Coker said. “We don’t enjoy serving as arbiter of what’s acceptable and what’s not. But it’s a responsibility we have to take on.”

Lulu and Smashwords have banned Roper from using their platforms in recent years. (Roper has not uploaded his works to Kobo.) When Smashwords terminated Roper’s account, a representative explained that it was because his work was “advocating hateful, discriminatory or racist views or actions toward others,” according to emails shared with us by Smashwords.

Link to the rest at Pro Publica

UK online print at risk as Gardners and Hive suspend activity and Waterstones struggles

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From The New Publishing Standard:

If it seemed, for a while, that online print sales could sustain publishers and booksellers through the pandemic crisis, it now looks increasingly like the UK will follow the path of Italy and Spain where print distribution is at a virtual standstill.

Here’s the thing: it may well be convenient and safe for consumers to sit at home and order their next print book without having to get off the sofa, but that order has to be processed at a warehouse, packed for shipping, and then it has to work its way through the delivery system to the customer’s door.

At every stage there needs to be someone risking infection with the coronavirus for that delivery to happen, and increasingly, where such actions are not yet barred, workers are reluctant to put themselves on the line.

In the UK the book wholesaler Gardners which also operates the indie bookstore website Hive, at first tried to carry on as the UK entered lockdown. No longer.

A statement on the Gardners website states:

It is with great sadness that we have taken the difficult decision to temporarily suspend taking new orders for physical product at Gardners due to the current Corona Virus Pandemic, however our digital services will be unaffected. We will be working hard to clear all outstanding orders over the coming days, so any existing orders should be processed.

We have continued over the past few weeks providing our usual high quality service to the Book and Entertainment trades around the world, however this is becoming increasingly more difficult as this crisis develops. The safety and well-being of our amazing workforce is the primary reason for making this decision.

We will be looking to see what key services we can turn back on as soon as possible, and will be updating all our customers and suppliers on regular basis as to the progress we are making.

Waterstones, for now, believes it can continue its warehouse operations, but admits on its website that things will be slower than usual

How long the UK government will allow loopholes like this to continue, always assuming the workers continue to turn out, is unclear, but it’s unlikely to be long.

With all the Waterstones stores closed for business across the country the warehousing operation is the company’s only income generator right now, and no question that will welcomed by consumers wanting more books during the lockdown.

But James Daunt must be regretting shutting down the Waterstones ebook site, which might otherwise now be a vital survival lifeline for the company.

While Gardners have suspended the warehouse operation their digital books sector continues unaffected.

Link to the rest at The New Publishing Standard

PG doesn’t claim any detailed knowledge of the printed book business in Britain, but, nevertheless, will opine that Mr. Daunt was an idiot to shut down Waterstones ebookstore. In the short term, it doesn’t cost much to keep an ecommerce site running once it’s set up and, with Waterstone’s retail business shut down, there are likely a lot of empty offices where any ecommerce support staff could be installed with ample distance between each person.

PG doubts that publishers are going to release many new books until at least a few weeks following major decline in the British portion of the virus pandemic so Daunt doesn’t need to pay people to set up new titles for sale. Just keep the link between Waterstone’s computers and those of its payment processors up and at least some money keeps coming in the door.

In a little longer view, with retail bookshops and physical libraries likely closed for the duration, some serious print readers are almost certain to point their iPads somewhere to buy an ebook to fill the reading gap.

Would Mr. Daunt prefer they buy an ebook from Waterstones or Amazon? If Waterstones ebookstore is closed, these customers will be quite likely to fall under the Zon’s spell. For a great many people, once they are exposed to the power, pricing and majesty of the Zon, they start chanting Bezos’ name over and over and are never seen in polite book society again.

Back to the more familiar territory of the US book business.

The new owner of Barnes & Noble, Elliott Management Corporation, is an investment management company. Its management committee (nine men, one woman who runs Human Resources) appears to be made up of typical finance guys, nary a book person or a retail mavin in the bunch.

Under the What We Do tab on Elliott’s website, the first entry is “Distressed Securities” which, in PG’s distressingly cynical opinion, fits Barnes & Noble to a T although he would not apply any variation of the adjective secure to the company.

“What,” you may ask, “are Distressed Securities?”

The firm’s distressed-securities trading strategies are rooted in complexity, either by itself or together with process, rather than business-value-driven situations. To create value in complex, dynamic situations, distressed securities are highly dependent on deep skill sets and lengthy, intensive hands-on efforts. Our primary focus is uncorrelated situations governed by process, complexity, negotiations, and factors unrelated to the forces impacting stocks and bonds generally.

So now you know.

PG notes no mention of anything that sounds like the business of selling books (although uncorrelated situations governed by process might be a subtle indirect reference).

In PG’s distressingly firm opinion, once the last Corona is chased back to hell (Per the CDC, Coronaviruses derive their name from the fact that under electron microscopic examination, each virion is surrounded by a “corona,” or halo. [No, PG doesn’t know what a virion is.]), Elliott will cast its uncorrelated eye on BN and see a bunch of commercial real estate leases, a lot of unsold inventory that has not become more valuable with the passage of time and a bunch of debts plus a few other random factors unrelated to forces impacting BN’s share price.

PG suspects one of the conclusions Elliott will reach is that BN is worth a lot less than the price they paid. Speaking technically, it has become a far more distressed security than it was when they bought it.

Bringing BN back to life will cost a lot of money and take more than a bit of time. You have over 600 stores full of a wide range of merchandise that may or may not be something customers may find interesting.

You probably can’t reopen a store without hiring several people. One or two employees can’t run a Barnes & Noble by themselves. Will all the employees Barnes & Noble fired be anxious to return to their low-wage jobs? Probably not unless they can’t find a better job.

One way of reducing the corporate obligations of Barnes & Noble is to return a whole lot of unsold books to their publishers for credit and then having the publishers send you a large number of new books for which payment is not required until you sell them.

Barnes & Noble probably can’t return the tchotchkes and trinkets in the stores for any sort of credit, assuming the manufacturers can even be located. Those will constitute distressed inventory, maybe another of Elliott’s specialties.

Assuming that Elliott is not willing to write off its investment and send everything that used to be BN to bankruptcy court, PG suspects it will be very choosy about which stores to resuscitate and which stores to let the mall owner take back. So, instead of 600+ bookstores, BN will consist of 200 or so bookstores located in upscale areas plus the honor of beind the defendant in a bunch of breach of contract lawsuits that Elliott will strive to settle for pennies on the dollar.

PG’s bottom line is that he doesn’t believe that the post-Corona Barnes & Noble will ever sell as many books as it did before anybody had heard of Wuhon.

A very large piece of the sales and distribution system relied upon by traditional publishers will be gone, gone, gone and it won’t be coming back. Print book sales won’t ever return to pre-Corona numbers.

The Zon will have to be careful to avoid antitrust charges for having an effective monopoly on the retail book trade, print and electronic.

Since predicting the future is not one of PG’s practice area, he could be dead wrong. His analysis and conclusions above are pretty much stream of consciousness and sometimes the stream gets pretty muddy without PG noticing.

Amazon Struggles to Find Its Coronavirus Footing

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From The Wall Street Journal:

On a mid-March midnight shift, one of Kristy Granados’s co-workers coughed and said he felt nauseated.

As he took a break, workers at the Amazon.com Inc. warehouse in Charlotte, N.C., shared worries that they could catch the coronavirus, Ms. Granados said. Most didn’t have masks or supplies to disinfect workstations, even as cleaning products streamed past them on conveyor belts. On some recent days, about half the workers hadn’t even shown up, she said.

Her co-worker soon returned to his station, and Ms. Granados continued preparing packages, concerned but also mindful her work was likely essential for the millions of people who had turned to online shopping for groceries and thermometers. She never found out what was ailing him.

“We’re playing a vital role to get people the supplies they need, whether it’s the elderly or people with health issues,” said Ms. Granados, who is 41 years old. “A lot of people are depending on us.”

The coronavirus is pulling Amazon, America’s largest online retailer, in many directions. Chief Executive Jeff Bezos is counting on front-line workers like Ms. Granados to bring essential goods to millions of homebound Americans. So far, it has been a bumpy ride.

. . . .

Amazon order volumes match those of the holiday season. Usually, the company has months to prepare. Before the pandemic hit, it has had just weeks, and the strain is showing in shortages, delays and worker unrest, including some walkouts, no-shows and Covid-related sickness.

At times, Amazon has had to operate warehouses with half the typical number of workers, according to employees. On Tuesday, employees at Whole Foods Market, a grocer owned by Amazon, organized a “sick out” at its stores and called on management to provide hazard pay and other benefits.

While the coronavirus is straining Amazon’s retail operations, it is boosting some of its other businesses. Companies are relying on its cloud-computing arm, Amazon Web Services, as their employees work from home, and customers are streaming home-entertainment content on Amazon Prime.

. . . .

In some areas that have emerged as hot spots for the virus, including San Francisco, Chicago and New York, items such as Lysol disinfecting wipes and office supplies useful for working at home haven’t been available or cannot be delivered for a month or longer. Many customers in those areas haven’t been able to place grocery orders.

“Leaders across Amazon are meeting every day to consider the evolving situation and are consulting with medical experts to ensure the safety for our sites, employees and customers,” an Amazon spokeswoman said via email. She said the company has a unique role to play in getting needed goods to families in a time of social distancing and that the company is “working around the clock to bring on additional capacity to deliver all customer orders.”

Amazon has been processing from 10% to 40% more packages than normal for this time of year, according to an employee tally at one delivery center. The company’s website had 639,330,722 visits for the week of March 9, according to data from Comscore, up 32% from the year earlier.

From Feb. 20 to March 23, Amazon’s sales of toilet paper increased 186% from the year-earlier period, according to analytics firm CommerceIQ, which said that before the coronavirus hit it had forecast a 7% increase for the period. CommerceIQ said sales of cough and cold medicine grew by 862%, compared with a forecast growth rate of 110%, and children’s vitamins by 287%, compared with a forecast rate of 49%.

. . . .

Mr. Bezos is focusing almost exclusively on Amazon’s coronavirus response. Although he and President Trump have been frequent antagonists, Mr. Trump has praised the company for keeping deliveries going in a time of need. The company recently announced plans to hire 100,000 new workers in the U.S. to deal with the crisis.

“This isn’t business as usual, and it’s a time of great stress,” Mr. Bezos said in a memo to employees on March 21. “It’s also a moment in time when the work we’re doing is its most critical.” Through a company spokesman, Mr. Bezos and other Amazon executives declined to be interviewed.

. . . .

Although Amazon does disaster and business-continuity planning, it didn’t model for a pandemic, according to people familiar with the matter. Most of its planning revolved around responding to a major earthquake in Seattle, former executives said. All critical executives at the company carry satellite phones they test every quarter to make sure they could run operations, the former executives said.

. . . .

Employees have tested positive for Covid-19 or been placed in quarantine in at least 15 Amazon locations in the U.S. used for storing, sorting or delivering packages, from California to New York, according to the company. Facilities with at least one confirmed case can be temporarily closed for cleaning and reopen once that process is complete, Amazon said. In states with more stringent guidelines, warehouses can be closed for longer.

Absences have been one reason for delayed shipments. Amazon went from being able to deliver some orders in hours or days to needing weeks for certain in-demand products. Social distancing efforts have contributed to delays, said a person familiar with the matter.

That was an impetus for Amazon’s U.S. hiring spree, a figure that would represent a 20% increase in its workforce in the country.

Amazon, which is responsible for more than one-third of e-commerce volumes in the U.S., has long faced complaints from warehouse workers about working conditions and their position in the employee hierarchy. The company, which is the nation’s second-largest employer, in recent years has taken steps to boost hourly wages and improve employee-training opportunities.

Now, front-line workers find themselves with more leverage. Facing a daily threat of coronavirus infection at work has galvanized some.

Since the emergence of the coronavirus, workers have pushed for and received a raft of concessions. On March 9, Amazon announced it would relax its time-off policy for warehouse employees, allowing them unlimited unpaid time off that now extends through April.

Two days later, it revised its stance to offer paid sick days to fulfillment center workers possibly infected, and said subsequently that employees who show any symptoms could be eligible for paid sick leave. Amazon raised pay for all employees in fulfillment centers, transportation, stores and deliveries in the U.S. and Canada by $2 an hour through April, bringing its lowest hourly rate to $17 per hour for those employees.

Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)

PG has not been a fan of what workers unions have become in the late 20th and 21st centuries. He doesn’t think unions would be of any substantial assistance in helping Amazon and its employees to deal with all the strains of responding to the current Coronavirus infections.

Additionally, from PG’s viewpoint (which could be wrong), he doesn’t see a great many large organizations, private or public, that seem to have a very good Coronavirus footing.

The Bakers and the Pot of Gold

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From Mark Coker on the Smashwords Blog:

Who doesn’t love cookies and the bakers who bake them?

And if you’re the baker, you probably appreciate your own fresh-baked cookies all the more.

Why am I talking about cookies on a blog for indie authors?

The other day, I received an email from Canadian author Nicky Charles.  She had just read my 2020 Publishing Predictions: House of Indie on Fire post and felt inspired to write an allegory featuring cookie bakers and pots of gold.

I was floored by her story.  It struck me as a must-read for anyone who loves books and the writers who write them. 

. . . .

Nicky asked me to make clear that for this allegory, she employed hyperbole.  She in no way wants to infer that any of the bakers featured in this story make bad cookies.

. . . .

THE BAKERS AND THE POT OF GOLD

By Nicky Charles

Once upon a time there was a land dotted with quaint little cafés.  The cafés were renowned for serving wonderful fresh-baked cookies to the customers who lined up outside in anticipation of the treat.

The cookies were produced by the bakers of the land who used only the finest and freshest ingredients.  Each batch was tenderly measured and mixed, then sampled with care before being baked to perfection.  It was a long process, but the bakers didn’t mind.  Their goal was to ensure each cookie was a worthy treat for their customers.

Because the bakers worked so hard to produce delicious products, they couldn’t deliver to the cafés every day.  Good cookies took time, after all, and so they rotated who baked each day.  This gave the customers a nice variety of cookies as well as giving the bakers time to clean their kitchens, care for their ovens and shop for ingredients.

The customers at the cafés understood this and saved their money, while waiting excitedly for when their favourite baker would make a new batch of cookies.  On delivery days, the people would rush to the cafés to buy the fresh batch and enjoy the special treat, savouring each mouthful and murmuring about the skill of the baker.

Everyone in the land was happy with the arrangement.  The bakers delivered amazing cookies for the customers. The customers had delicious treats to eat and the cafés made a nice profit, which they shared with the bakers.

One spring day, however, a new café opened. It was big and shiny and sold a vast array of products.  Everyone who visited it stared in wonder.

“Do you sell cookies?”  The people asked hopefully.

“Not yet,” the new café owner said. “But soon we will.”

And sure enough, the very next day the new café owner went in search of bakers.

“I would like to sell your cookies,” the new café owner said to the bakers.  “Lots of people visit my café every day, even people from Far-Away-Places.  I promise you will make lots of gold if you let me sell your cookies.”

The bakers thought about it and began to take some of their cookies to the new café.  Just as promised, many cookies were sold, especially to the people from Far-Away-Places who had never tasted such wonderful baked goods before.  With their pockets filled with gold, the bakers rejoiced that the new café had come to town.

When the people of the land saw this, some began to think they’d like to be bakers as well.

“Baking looks like such fun,” one person said.

“We can sell our cookies to people from Far-Away-Places if we bake for the new café,” another declared.

“We will make lots of money just like the other bakers!”  A third cried in delight.

And so new bakers began to emerge.  Some baked wonderful cookies right away while others learned over time how to mix the ingredients perfectly.  A few decided baking was too hard and quit, but others loved their new occupation and sold so many cookies they even gave up their old jobs to become full time bakers.

The people of the land greatly enjoyed having so many new bakers to choose from and there were now cookies every day at the cafés.

“This is wonderful,” everyone said.

But then, the new café owner made an announcement.  “I have a large pot of gold and I will share it with any baker who sells cookies at my café.”

“A large pot of gold?”  The bakers began to get excited.

“Oh yes,” said the new café owner.  “It is a very large pot of gold. But you can only have the gold if you deliver all your cookies to me.”

“But what about the other cafés?” Some of the bakers frowned in concern.  “And what about the people who eat our cookies there?”

“The people who like your cookies can buy them here,” the new café owner explained.  “I will even serve them on a special plate.”

“That sounds great,” said some of the bakers.

A few bakers, however, thought the pot of gold seemed too good to be true, and some wanted to keep selling their cookies at all the cafés.

The story continues at the Smashwords Blog

As PG has mentioned before, he thinks Mark’s anti-Amazon postings have become old for a great many people.

From Merriam Webster:

Definition of sour grapes

disparagement of something that has proven unattainable

. . . .

Examples of sour grapes in a Sentence

Recent Examples on the Web

  • Jennifer Aniston has some sour grapes over Ryan Seacrest‘s real estate history.— Benjamin Vanhoose, PEOPLE.com, “Jennifer Aniston Teases Ryan Seacrest for Buying House She Wanted from Ellen DeGeneres,” 5 Jan. 2020
  • To the president and his supporters, the arguments from critics amount to sour grapes, an effort by an impeachment-crazed opposition to play down the success of a focused, successful clandestine operation that echoed the killing of Osama bin Laden.— David E. Sanger, New York Times, “Al-Baghdadi Raid Was a Victory Built on Factors Trump Derides,” 27 Oct. 2019

Link to the rest at Merriam Webster

From The Urban Dictionary:

In an old fable by Aesop, a hungry fox noticed a bunch of juicy grapes hanging from a vine. After several failed attempts to reach the grapes, the fox gave up and insisted that he didn’t want them anyway because they were probably sour.

Nowadays when somebody expresses sour grapes, it means that they put down something simply because they can’t have it.

Link to the rest at The Urban Dictionary

Big Tech Could Emerge From Coronavirus Crisis Stronger Than Ever

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From The New York Times:

Amazon is hiring aggressively to meet customer demand. Traffic has soared on Facebook and YouTube. And cloud computing has become essential to home workers.

Amazon said it was hiring 100,000 warehouse workers to meet surging demand. Mark Zuckerberg, Facebook’s chief executive, said traffic for video calling and messaging had exploded. Microsoft said the numbers using its software for online collaboration had climbed nearly 40 percent in a week.

With people told to work from home and stay away from others, the pandemic has deepened reliance on services from the technology industry’s biggest companies while accelerating trends that were already benefiting them.

Amazon has muscled in on brick-and-mortar retailers for years, but shoppers now reluctant to go to the store are turning to the e-commerce giant for a wider variety of goods, like groceries and over-the-counter drugs.

Streaming services like Netflix have dampened box office sales for movies in recent years. Now, as movie theaters close under government orders, Netflix and YouTube are gaining a new audience.

Companies were already dumping their own data centers to rent computing from Amazon, Microsoft and Google. That shift is likely to speed up as millions of employees are forced to work from home, putting a strain on corporate technology infrastructures.

Even Apple, which once appeared to be among the American companies most at risk from the coronavirus because of its dependence on Chinese factories and consumers, appears to be on good footing. Many of Apple’s factories are nearly back to normal, people are spending more time and money on its digital services, and on Wednesday it even released new gadgets.

“The largest tech companies could emerge on the other side of this much stronger,” said Daniel Ives, managing director of equity research at Wedbush Securities.

. . . .

[W]hen the economy does eventually improve, Big Tech could benefit from changes in consumer habits. And despite more than 18 months of criticism from lawmakers, regulators and competitors before the pandemic hit the United States, the biggest companies are likely to finish the year stronger than ever.

. . . .

Michael Crowe of Charlotte, N.C., ordered groceries from Amazon for the first time a few days ago because he didn’t want to risk going to a supermarket, he said.

“I could see myself doing it longer term when this is over,” said Mr. Crowe, 36, who works for the home improvement retailer Lowe’s.

As more customers try different Amazon services, they may create permanent shifts in buying habits, said Guru Hariharan, a former Amazon employee and the founder of CommerceIQ, a company whose automation software is used by major brands like Kellogg’s and Kimberly-Clark.

In a blog post last week, Dave Clark, Amazon’s senior vice president of worldwide operations, said it was adding the new jobs at its U.S. warehouses and delivery network because “our labor needs are unprecedented for this time of year.”

One reason for Amazon’s increase in demand is that shoppers are buying a broader variety of goods. From Feb. 20 to March 15, over-the-counter cold medicine sales rose ninefold on Amazon in the United States from a year earlier. Dog food orders increased 13-fold, and paper towels and toilet paper sales tripled, according to CommerceIQ.

Link to the rest at The New York Times