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Three Crucial Changes to the Book Publishing Industry

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From Writers Digest:

The new book Book Wars: The Digital Revolution in Publishing documents in detail the changes in the book publishing industry in recent years. Author John B. Thompson gives a glimpse of three crucial changes.

When I set out, around 10 years ago, to study the impact of the digital revolution on the world of books, there was a great deal of uncertainty—and, in some quarters, considerable apprehension—about what might happen when digitization took hold in the oldest of our media industries. Many people in publishing were looking over their shoulders anxiously at what had happened in the music industry and thinking: This could happen to us too. The print-on-paper book could suffer the same fate as the vinyl LP—why not? The textual content of books could be digitized just as easily as music could, and the physical book could be swept aside by cheaper and more efficient forms of content delivery. Like the vinyl LP, the old-fashioned print-on-paper book could become a collector’s item, still cherished by the aficionado but banished to the margins of the industry.

In the years immediately following the launch of the Kindle in 2007, it looked to many like the physical book could indeed suffer the same fate as the vinyl LP, as e-book sales surged. But it soon became clear that the e-book surge was going to be short-lived: By 2012, the rapid growth of e-books had come to an abrupt halt. For some kinds of books, especially genre fiction like romance, mystery, and sci-fi, e-books were by then accounting for a sizable proportion of sales—as much as 40–50 percent. But in other genres, like nonfiction and children’s books, e-books represented a much smaller percentage of sales, and that percentage was either leveling off or declining. If the digital revolution in publishing was about e-books, then it seemed that this was, at best, a stalled revolution. In any case, it certainly didn’t look like a re-run of what had happened in the music industry.

However, the digital revolution in publishing was never only, or even primarily, about e-books: E-books were just one aspect of a much more complex and varied series of transformations that were disrupting the publishing world. In Book Wars, I take the reader on a journey through the decades of disruption that began around 2000 and continues unabated today, a period that has witnessed an enormous proliferation of new ventures and initiatives which, taken together, have radically altered the landscape of contemporary publishing. The world of books today looks very different from the way it looked 30 or 40 years ago. Among the many changes, three stand out as particularly significant.

. . . .

1. Amazon Online Retail

First was the rise of Amazon and the transformation of the retail side of the book business. Amazon was a child of the digital revolution—it wouldn’t have existed without digitization and the internet. In an astonishingly short time period, Amazon grew from its humble origins as a small tech startup in a Seattle garage to become the most powerful organization the world of books had ever known. Today, Amazon accounts for around 45 percent of all print book sales in the US and more than 75 percent of all e-book sales, and for many publishers, around half—in some cases, more—of their sales are accounted for by a single customer, Amazon. Never before in the 500-year history of book publishing has there been a retailer with this kind of market share, and with market share comes power, including the power to negotiate favorable terms with suppliers and to command the attention of readers. It’s hard to over-state the significance of this development: Its consequences are profound, not only for publishers and for other booksellers who struggle to compete with Amazon but also for the whole ecology of the publishing world, including the ways in which books are made visible to readers and discovered by them.

. . . .

2. Self-Publishing Boom

A second enormous change has been the explosion of self-publishing. Of course, self-publishing is not new: It can be traced back to the so-called vanity presses that emerged in the early and mid-twentieth century. But the new age of self-publishing that was ushered in by the digital revolution is very different from the old vanity presses. The key idea that underpins this new age is the idea that authors who want to self-publish their work should not have to pay for the privilege, and the organizations that facilitate self-publishing should not be making money by charging fees to authors. On the contrary, self-publishing organizations or platforms should be there to help authors publish their work, and these platforms would pay authors if and when their work sells, taking a commission on sales to cover their costs. It was this simple but fundamental idea, turning on its head the relationship between author and self-publishing organization, that underpinned the explosion in self-publishing that occurred from the early 2000s on, starting with pioneering organizations like Lulu and Smashwords and continuing through the establishment of Amazon’s self-publishing platforms, CreateSpace and Kindle Direct Publishing, and including many other platforms and services. The world of self-publishing is now an enormously complicated world in its own right—a parallel universe that exists alongside the world of traditional publishing and that has grown enormously in recent years. Quite apart from the sheer volume of self-publishing output, the growth of this sector has altered the traditional power structures of the publishing world. The established publishers and agents who have long acted as gatekeepers in the publishing world, deciding which authors and projects should be published and on what terms, could now be bypassed by following entirely new pathways to publication that had been opened up by the digital revolution. Of course, publishing a book is one thing, getting people to notice and buy it is quite another, and traditional publishers continue to have much more marketing and sales clout than most self-published authors. But there are many indie authors who have managed to earn appreciable amounts of money from their writing, even if the commercially successful indie authors still represent a tiny fraction of the total. Apart from the financial rewards, the growth of self-publishing has massively increased the range of options available to writers, creating a more varied publishing environment in which authors can move back and forth between traditional publishing and self-publishing, depending on what they want to achieve and the options available to them at the time.

. . . .

3. Reader-Centric Business Model

The third change is in many ways the most fundamental: the digital revolution transformed the broader information and communication environment within which publishing existed, thereby creating both the necessity and the opportunity for publishers to adapt to a new and rapidly changing world of information and communication flows. For centuries, publishers had thought of themselves primarily as B2B businesses: They produced books and sold them to intermediaries in the book supply chain—to retailers and wholesalers. Publishers didn’t have a direct relationship with readers and they didn’t know much about them: The job of dealing with readers was left to the booksellers. But this traditional model of the publishing business was radically disrupted by the digital revolution. As competition from Amazon led to more and more bookstore closures, publishers realized that they could no longer count on physical bookstore to do what intermediaries in the traditional book supply chain had always done: make books visible and available to readers. They realized that they had to jettison the old model of the publisher as a bookseller-focused business and become more reader-centric: in other words, they had to re-orient their businesses in such a way that readers were not an afterthought but rather a central focus of their concern. And just as the digital revolution forced this shift upon publishers, it also made available to them a variety of new tools with which they could build direct channels of communication with readers and do so at scale. It is this fundamental shift in publishers’ self-understanding that is likely to be one of the most significant consequences of the digital revolution in publishing, one that will continue to play itself out in the years to come. 

Link to the rest at Writers Digest

Amazon Publishing, DPLA Ink Deal to Lend E-books in Libraries

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From Publishers Weekly:

The Digital Public Library of America (DPLA) today announced that it has signed a much-anticipated agreement with Amazon Publishing to make all of the roughly 10,000 Amazon Publishing e-books and digital audiobooks available to libraries, the first time that digital content from Amazon Publishing will be made available to libraries.

In a release today, DPLA officials said that lending will begin sometime this summer, with Amazon Publishing content to be made available for license via the DPLA Exchange, the DPLA’s not-for-profit, “library-centered” platform, and accessible to readers via the SimplyE app, a free, open source library e-reader app developed by the New York Public Library and used by DPLA. Library users will not have to go through their Amazon accounts to access Amazon Publishing titles via the DPLA, and DPLA officials confirmed that, as with other publishers DPLA works with, Amazon will not receive any patron data.

The executed, long awaited deal comes nearly six months after Amazon Publishing and the DPLA confirmed that they were in talks to make Amazon Publishing titles available to libraries for the first time.

The deal represents a major step forward for the digital library market. Not only is Amazon Publishing finally making its digital content available to libraries, the deal gives libraries a range of models through which it can license the content, offering libraries the kind of flexibility librarians have long asked for from the major publishers.

DPLA officials said that Amazon Publishing titles will begin with four available licensing models this summer:

  • Unlimited, one user at a time access, two-year license
  • Bundles of 40 lends, available with a maximum of 10 simultaneously, with no time limit to use the lends
  • Bundles of five lends, available simultaneously, with no time limit to use the lends
  • 26 lends, one user at a time access, the lesser of two years or 26 lends license

. . . .

The deal will also serve to blunt a major criticism of Amazon, which until now had not made its digital content available to libraries under any terms—an exclusion that librarians have loudly criticized for years, and which was brought to the attention of lawmakers in an ALA report last year. In fact, an Amazon spokesperson revealed news of the potential deal with DPLA last year after reporters from The Hill contacted the company regarding a petition urging Congress to pursue “an antitrust investigation and legislative action to preserve and expand library services.”

Link to the rest at Publishers Weekly

Outcry over book ‘censorship’ reveals how online retailers choose books — or don’t

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From The Washington Post:

Crying “Censorship!” has become the right’s favorite book marketing technique.

Roger Kimball, president of Encounter Books, is the latest publisher to hawk his wares this way in the Wall Street Journal. Last week, on the op-ed page, Kimball complained that Amazon had stopped selling “When Harry Became Sally: Responding to the Transgender Moment,” by social conservative Ryan T. Anderson. Kimball called the move “a deliberate act of censorship” — presumably to placate critics who call the book transphobic. (Amazon founder Jeff Bezos owns The Washington Post.)

Kimball went on to note that “When Harry Became Sally” has also been dropped by Bookshop.org, the indie alternative to Amazon. Far from providing an alternative, “Bookshop,” he claimed, “turns out to be little more than another minion for the Emperor of Wokeness.”

That’s silly, but one point Kimball made draws blood: How can Bookshop defend removing this 2018 book that offends liberal sensibilities while continuing to offer about 20 different editions of Hitler’s “Mein Kampf”?

Bookshop did not respond to a request for comment. But the reason you can buy the Führer’s memoir from a woke online bookseller says a lot about how Web-based merchants function and how they’re changing our relationship to retailers.

Consider that your local indie bookstore contains titles that have been carefully curated according to how much physical space is available, which books the managers consider worthy and what they anticipate customers will want to buy.

The World Wide Web is a different world. Large online book retailers are essentially search engines. They populate their sites by automatically sucking up inventory data from vast wholesalers, such as Ingram, so that they can, in effect, offer every book that exists. In the 1990s, that was part of Amazon’s great innovation, which allowed it to be the World’s Largest Bookstore, despite the fact that it began in Bezos’s garage.

But the convenience of having more than 10 million titles at our fingertips fundamentally changes retailers’ function in ways people don’t often acknowledge or readily understand. There is, it turns out, a price for that infinite inventory. Unlike the cozy bookstore in your town, online booksellers don’t choose each book they’re offering. The role of curator — if it exists at all — has effectively been passed from seller to customer.

Under this system, if a title attracts sufficiently convincing and public objections, that title is taken down from the website. I saw this process firsthand in 2019 when I asked Barnes & Noble why it was selling David Icke’s antisemitic book “The Trigger.” B&N blamed “an independent publishing distributor,” and the book vanished. Earlier this year, I asked Walmart why it was offering the racist “Turner Diaries” on its website; I never got an answer, but the title stopped showing up.

It’s highly unlikely that anyone at Barnes & Noble or Walmart ever looked at these bizarre and hateful books and decided, “Yes, I think our white supremacist customers will love this!” Instead, these books were simply swept up in the retailing equivalent of bottom trawling that drags a net across the ocean floor, catching cod and shrimp along with old barrels of toxic waste.

This feels like a problematic way to curate literature. I don’t want to read antisemitic, racist or transphobic books, but I also don’t want the marketplace of available titles to be shaped by my own or other customers’ objections. If these massive book retailers aren’t really choosing which books to sell except in rare occasions when a few titles are excluded — then perhaps they’ve relinquished their editorial control and become merely administrators of public space, in which case the public may have the right to make certain demands on them.

. . . .

[Justice Clarence Thomas] went on to suggest that Amazon (along with Twitter, Google and Facebook) may be what’s called a “common carrier,” like a railroad or a telephone network. These older entities don’t choose whose freight or data they carry; if you can pay and you have a legal product, they must take it without discrimination.

He went on to suggest that Amazon (along with Twitter, Google and Facebook) may be what’s called a “common carrier,” like a railroad or a telephone network. These older entities don’t choose whose freight or data they carry; if you can pay and you have a legal product, they must take it without discrimination.

Thomas wrote, “There is a fair argument that some digital platforms are sufficiently akin to common carriers or places of accommodation to be regulated in this manner.”

If that’s true — or if the court later decides it’s true — large online booksellers could find themselves in a very different universe. At the moment, Amazon, Bookshop and others are playing two different characters simultaneously: They essentially function as common carriers, offering everything their wholesale databases and distributors can supply. But when a particular book attracts negative attention and offends public sensitivities, these same booksellers act as private businesses and remove that title. The time may be approaching when that clever maneuver is no longer tenable.

Link to the rest at The Washington Post

PG wonders who exactly decided that book curators were necessary or desirable.

He suggests that “book curation” was and is, more or less, a marketing slogan designed to attract potential purchasers who want to elevate themselves above the hoi polloi who don’t see any particular virtue in a self-appointed tastemaker deciding what they will or won’t be permitted to ready.

For those outside the US, the reference to a “common carrier” is a US legal term that describes is a person or company that transports goods or people for any person or company.

Per Wikipedia:

A common carrier (also called a public carrier in British English) is distinguished from a contract carrier, which is a carrier that transports goods for only a certain number of clients and that can refuse to transport goods for anyone else, and from a private carrier. A common carrier holds itself out to provide service to the general public without discrimination (to meet the needs of the regulator’s quasi judicial role of impartiality toward the public’s interest) for the “public convenience and necessity.” A common carrier must further demonstrate to the regulator that it is “fit, willing, and able” to provide those services for which it is granted authority. Common carriers typically transport persons or goods according to defined and published routes, time schedules, and rate tables upon the approval of regulators. Public airlines, railroads, bus lines, taxicab companies, phone companies, internet service providers,[4] cruise ships, motor carriers (i.e., canal operating companies, trucking companies), and other freight companies generally operate as common carriers.

An important legal requirement for common carrier as public provider is that it cannot discriminate, that is refuse the service unless there is some compelling reason. 

(per Wikipedia)

Generally common carriers have a competitive advantage over private carriers because they are cost-effective and convenient. Common carriers typically offer standard or quite similar terms and conditions and often compete on pricing.

In many cases, common carriers are regulated by law in various ways to provide a more predictable and reliable service to shippers as opposed to a private carrier which may not be operate according to industry standard terms and expectations.

Back to bookstores, PG tends to prefer a store that is likely to have a book that he desires, regardless of whether the book PG desires is part of the book mainstream or not. For that reason, if Amazon starts to delist a wider range of books because one or more pressure groups find objectionable, PG will begin to look elsewhere on a regular basis rather than wasting his time on a site that is not a reliable purveyor of books he likes.

Additionally, rallying groups of people to demand book banning can definitely go more than one way. People with a wide variety of beliefs and opinions are fully capable to organizing themselves online to bring pressure on Amazon or any other vendor that has shown it will respond to pressure to delist this or that book.

A Tale of Two Platforms

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From Marker:

Jeff Bezos is the world’s richest person, and Amazon, the company he founded, one of the world’s most admired and valuable. Two recent books, Invent and Wander: The Collected Writings of Jeff Bezos, with an introduction by Walter Isaacson, and Working Backwards, by longtime Amazon executives Colin Bryar and Bill Carr, offer lessons from the company’s enormous success.

The Family Business, by Keel Hunt, due out April 20, tells the story of another company, Ingram Industries, which, not coincidentally, played an indispensable role in enabling Amazon’s initial success as the world’s largest online bookstore. Ingram is a family owned business, founded in 1857 as a sawmill in Wisconsin but reinvented multiple times, eventually becoming a transportation and distribution company based in Nashville. 50 years ago, it branched out into book wholesaling, later adding video (and in the heyday of that industry, packaged software.) When Amazon was founded In 1995, it was essentially a web front-end to Ingram’s warehouses and its database of virtually every book that was commercially available. Even today, the Ingram Content Group is a key part of the hidden infrastructure of publishing and bookselling in the US, including Amazon.

Reading these corporate biographies in parallel provides a lot of food for thought. I spend a lot of my time these days studying marketplaces and the technology platforms that enable them: Amazon, Google, Shopify, Alibaba, and of course, my own O’Reilly learning platform. I’m interested in what makes marketplaces succeed and what makes them fail. And in particular, I’m trying to understand how modern technology-based platforms decide the central question of economics: who gets what and why?

. . . .

The core narrative of Silicon Valley is of the invention of a new, magical user experience so transformative that it draws hundreds of millions of users: a storefront from which you can order any product with one click, a search engine that gives access to all the world’s information, a phone that is “insanely great,” an app that summons a car and driver to pick you up within minutes wherever you are and take you wherever you want to go. Exponential user growth is seen as the ultimate measure of success. Today, Silicon Valley companies look to be valued at billions of dollars on that metric alone, when some of them can hardly be called businesses, since they have no profits and may even lack a plan for earning any.

Jeff Bezos founded one of the first of the internet’s hyper growth companies, but he understood that the reality is far more complex than simply growth in users. In 2001, he supposedly drew Amazon’s strategy on a napkin. The picture looked something like this:

Jeff pictured a flywheel in which sellers provide a big selection of products, and the unique Amazon customer experience of unparalleled access to those products drives more traffic, drawing even more sellers. Growth of a super-scale business allows a lower cost structure, allowing Amazon to lower prices for customers, which drives an even better customer experience, which drives more traffic, draws more sellers and more products, around and around, faster and faster.

Companies like Amazon, Uber and Lyft, and even Google and Netflix, are marketplaces, connecting and enabling both buyers and sellers. Amazon connects buyers to hundreds of millions of products; Uber and Lyft connect riders with drivers, and Google and Netflix connect readers and viewers with content providers.

One of the big problems in these hyper-scaled marketplaces is building up both sides of the market at the same time. 

. . . .

It’s a lot easier if you only have to build one side of the market. When Amazon launched in 1995 as “the world’s biggest bookstore,” it didn’t have to spend money assembling a critical mass of books, publishers, and authors. Ingram had already done that. Starting in 1970, Ingram had been connecting publishers and bookstores, such that any bookstore — not just Amazon — had access to every book in print. Jeff’s revolutionary insight, the one that launched Amazon, was that the web made it possible to create a friendly online interface to Ingram’s enormous catalog and that technology could be used to radically simplify the process of ordering and delivering. And the flywheel began to spin.

By 2001, when Jeff drew his flywheel diagram, Amazon was already selling electronics and music CDs as well as books, and before long, it was the interface to virtually anything its customers might want to buy. Amazon also created its own, much faster, real-time distribution layer, while continuing to rely on Ingram (and other wholesalers of different kinds of products) for those products that have less demand. As its flywheel spun faster and faster, Amazon took in more and more products and vendors, built more and more infrastructure for warehousing and delivery, and became the master of logistics that we see today. With the success of its third-party marketplace, millions of sellers now compete to offer hundreds of millions of products.

. . . .

In his 1998 Letter to Shareholders, Bezos wrote, “Our customers have made our business what it is, they are the ones with whom we have a relationship, and they are the ones to whom we owe a great obligation.”

And there’s the rub. Because Amazon understands so well that delighting the customer with lower prices, faster delivery, and a better customer experience drives its growth, it can sometimes forget that it operates a two-sided marketplace in which its merchants also matter. Rather than considering its merchants as among those “with whom we have a relationship, and … the ones to whom we owe a great obligation,” Amazon seems to view them as a resource to be exploited, an inexhaustible fount of redundant supply to whom no obligation is owed.

This is the Achilles heel of Silicon Valley. Focus on the user, taken as the only gospel, becomes a liability. Amazon faces antitrust investigations in both Europe and the US based not just on strongarm tactics against competitors but against its merchants. Google is likewise being investigated for competing against the web sites whose content it was originally created to help consumers search. Uber co-founder and CEO Travis Kalanick’s palpable disdain for one of his drivers led to a massive PR backlash and his ouster from the company.

Amazon’s treatment of its merchants seems like a curious blind spot in a company that has been so prescient, so innovative, and so capable of creating value for those in its ecosystem. Looking at Bezos’s flywheel, it should be clear to the company that merchants are as important to the flywheel as customers.

Why does this happen? Unlike many critics of Silicon Valley, I don’t think it’s because the leaders of these companies are making decisions solely motivated by profit as is so often claimed by their critics. In fact, Jeff Bezos, Larry Page and Sergey Brin, and Mark Zuckerberg are profoundly thoughtful individuals working to do the right thing. The problem is that they are working within an economic system that values growth above all else, disdains small businesses as inefficient, and tilts the playing field against them.

. . . .

Jeff Bezos has told his team that “[other companies’] margin is our opportunity,” and accordingly, Amazon works to eliminate anyone it considers a middleman between the consumer and the ultimate source of supply. As Business Insider pointed out, though, this didn’t eliminate costs so much as it “shifted them to different, often hard to police and control places instead.”

“Before online retail, supply chains relied on friction to achieve quality. Becoming a vendor to Walmart required years of work and experience. Those vendor relationships were precious and would last for decades. Because of how hard it was to build one, Walmart could trust on the network of vendors to keep up the quality. In turn, they were invested in vetting their suppliers. Friction in the system meant the supply chain could be trusted. And if anything went wrong, there was a clear path to follow to find the responsible party.”

For Amazon, competition with its merchants also means that those merchants have an incentive to look elsewhere for a better deal. Over the years, Amazon has rebuffed competitors from Ebay to Walmart. Shopify, a platform company that provides infrastructure for companies to operate their own ecommerce sites, is the first rival that has begun to catch up to Amazon, with Gross Merchandise Volume now about $120 billion to Amazon’s $490 billion (versus $38 billion for Ebay, and Walmart in the “single digit billions.”) One executive at Shopify said to me, “Amazon went down the wrong path enough for us to exist.”

What does all this have to do with Ingram?

Ingram is a private company. That means it doesn’t have a public stock price that allows it to receive decades of future earnings today. In this sense, it’s an old-fashioned company, which provides a service and makes its money in the form of each year’s profit. A dollar of earnings is worth a dollar to the company, not $1100 (Tesla), not $77 (Amazon), not $34 (Apple) or $37 (Google or Microsoft.)

Unexpectedly, this allows a company to take a longer-term, more balanced view. If you can achieve an astronomic valuation on user growth alone, it is easy to convince yourself that any improvement that delights users and speeds user acquisition is worthwhile, whether it be lower prices, faster delivery, or more corporate efficiency to enable those things, even if it is at the expense of other elements of the flywheel, such as the merchants who sell on your platform or the drivers who deliver the packages or the passengers to their destination.

Ingram doesn’t have “users.” It is a B2B platform. Both sides of its marketplace are businesses: that is, publishers and bookstores (in the segment of its business that we have always dealt with.) And it has to thoughtfully balance the needs of both of them. It can’t sacrifice one to please the other. And it doesn’t have to do so to please Wall Street. Ingram’s management understands that the businesses on both sides of its marketplace are its customers, and obsesses about both of them.

Ingram’s innovation began with support for booksellers. In 1973, the company provided a weekly microfiche feed of new titles, radically improving the ability of small bookstores to keep up with the output of the fast-growing publishing industry. However, much of what has driven Ingram over the years is innovation designed to support its suppliers (authors and publishers). 

. . . .

There’s no question that Amazon has also introduced many services that benefit the supplier side of its marketplace. But Amazon’s innovations on behalf of the supplier side often come with costs designed to soak up their margin. Merchants on the platform are expected to compete fiercely with each other for attention. Amazon’s huge and fast growing advertising business, for example, can be seen as a tax on merchants. Before the addition of this lucrative business, merchants mostly had to compete on product quality and price. Now, they must also pay to play.

Link to the rest at Marker

As PG read the OP, he was reminded of an old quote which is attributed to many different people:

What you see depends on where you stand.

The author of the OP, Tim O’Reilly, is the founder and CEO of O’Reilly Media, a company that may be most known by those who formerly spent time in college bookstores or the technology section of traditional bookstores for the distinctive covers of its technical publications.

PG can’t say for certain, but he expects O’Reilly’s book business was pretty well decimated by the Web which was, from the very beginning, jammed with free information on the topics covered by pretty much any book O’Reilly sold.

As far as the OP’s assessment of who Amazon’s “customers” are, the question for any business is, “What’s the best price (from my standpoint) I can find that will maximize my profits from everybody necessary for my business to survive and succeed?”

Paying close attention to both outgo and income is essential for survival and success.

  • If Amazon is not willing to pay enough to its suppliers to ensure it has products its customers want to purchase, Amazon has a problem.
  • If Amazon is not willing to price its products/services at a level that customers are willing to pay, Amazon has a problem.

These calculations are not subject to a one-and-done approach for Amazon. It has to constantly consider what prices will result in its having products to sell and what prices its customers will pay.

If O’Reilly is willing to sell Amazon a box of tech manuals today for $1.00 less than yesterday’s price, is Amazon treating O’Reilly badly or unfairly if it says it wants today’s price not yesterday’s price?

Nearly everything Amazon sells is available from a variety of other retailers. Hardcopy books, ebooks, toothpaste, diapers, are all available from a zillion other vendors.

PG just checked and Amazon’s top five bestselling products included four different brands of disposable diapers and one brand of baby wipes for cleaning up while changing a diaper. PG is not an expert on diapers and baby wipes, but he expects that a great many other vendors, both online and IRL (in real life) are offering to sell disposable diapers and baby wipes.

Amazon is never free from price competition, service competition and every other sort of competition known to humankind for 99.9% of the products it sells.

PG just checked and Amazon’s percentage net profit margin over the last ten years is in the low to mid single-digits, typical of a great many other retailers, small and large.

Censorship Competition Heats Up

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From The Wall Street Journal:

By now it is clear that wokeness is a contagious malady. Amazon.com made headlines in February when it suddenly delisted Ryan Anderson’s book “When Harry Became Sally: Responding to the Transgender Moment,” a thoughtful, humane and deeply researched investigation of a controverted subject of public debate.

As the publisher of that 2018 bestseller, I was taken aback by reports that Mr. Anderson’s book was unavailable at “the world’s largest bookstore.” At first, I wondered whether there was some mistake.

But no. It was a deliberate act of censorship. Moreover, like the earl of Strafford, Amazon’s motto was “Thorough.” They didn’t just stop selling the book. They pushed it into the digital oubliette, erasing all trace of it from the Amazon website. They did the same thing at their subsidiaries Audible, which sells audiobooks, and AbeBooks, which sells secondhand books.

Now it turns out that Bookshop.org, which bills itself a scrappy alternative to the Bezos Behemoth, is up to the same game. A couple of weeks ago, a reader alerted us that Mr. Anderson’s book had gone missing from the Bookshop.org website.

The organization never responded to our queries. But on Friday we learned from our distributor that Bookshop had deep-sixed the book. “We did remove this title based on our policies,” Bookshop wrote to our distributor—without, however, explaining what those “policies” might be. “We had multiple complaints and concerns from customers, affiliates, and employees about the title.”

Perhaps other customers, affiliates and employees expressed “complaints and concerns” about Heather Mac Donald’s “The War on Cops,” another Encounter bestseller. That book has also been disappeared from the Bookshop website.

. . . .

I couldn’t help but note that at least one of my own books, “Tenured Radicals,” is missing in action there. Apparently there were no “complaints and concerns” about Adolf Hitler’s “Mein Kampf,” however. That book is available in a variety of editions, as are the anti-Semitic lucubrations of Louis Farrakhan and many other similarly unedifying effusions.

Underdogs make for good copy, so it was no surprise that Bookshop was hailed as a brave upstart, a feisty David to the Goliath of Amazon. “Bookshop.org hopes to play Rebel Alliance to Amazon’s Empire,” ran the headline of a valentine in the Chicago Tribune.

Bookshop turns out to be little more than another minion for the Emperor of Wokeness. For the past couple of weeks, the first item advertised on its home page is that bible of antiwhite woke sermonizing, “How to Be an Anti-Racist.” Many readers, I’d wager, would have “complaints and concerns” about that screed. But that doesn’t mean that Bookshop should stop selling it. Nor would it, regardless of how many complained.

The move to squash Mr. Anderson’s book is the vanguard of a larger effort to silence debate and impose ideological conformity on any contentious issue in which the commissars of woke culture have made an investment. It has nothing to do with principle and everything to do with power.

Amazon and now Bookshop have sided firmly with the bullies. Doubtless there will be more interdictions, delistings and suppressions. They can do it, so they will do it.

One of the more tiresome canards from the courtiers is that entities like Amazon and Bookshop are private companies and therefore that they can choose to sell, or not sell, whatever they want.

This is true, but also irrelevant. What we are witnessing are not the prerogatives of the free market but the clashings of a culture war. Those clashings may adopt, as camouflage, the rhetoric of free enterprise, but their end is control and obliteration of opposing points of view.

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

Lest any visitors to TPV should have any doubts, PG is concerned about viewpoint discrimination on the part of Amazon.

He acknowledges that, as a private business, Amazon has the right to choose what products it will and will not sell, but this decision drops the company into the middle of a political controversy that it needn’t have joined.

Amazon is a very large target for those across the political spectrum and a serious antitrust investigation of the company’s activities and policies could substantially harm its business.

More than one giant US company has been hamstrung and permanently impaired by a lengthy antitrust probe. Classic examples are AT&T, Kodak and Standard Oil.

Most recently, Microsoft was involved in a lengthy antitrust suit.

Bill Gates later said that the antitrust suit prevented Microsoft from completing development on Windows Mobile, its cell phone operating system (which left the field open to Apple and Android). Apple’s annual revenue is now about twice as large as Microsoft’s.

Gates also cited the stress of the antitrust suit as a contributing factor in his decision to step down from the leadership of Microsoft in 2000. PG is not alone in believing that Microsoft has not been the same company since Gates left.

There has been a growing sentiment in the United States that the big technology companies such as Amazon, Apple, Google and Facebook have become too large and powerful.

Amazon CEO Jeff Bezos had what was widely regarded as a poor showing in his videoconference testimony before the House Antitrust Committee last summer. He recently declined an invitation to testify before a Senate committee investigating “The Income and Wealth Inequality Crisis in America.”

PG notes that TPV is not a political blog and requests that comments not devolve into political name-calling. He is concerned about Amazon’s future primarily because it is the only significant marketplace where indie authors can publish their books on an equal basis with books from traditional publishers and Amazon provides a very large portion of the royalties that indie authors earn from their books.

Kindle Vella Royalties, Content Guidelines and Publishing Process

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From KDP Publishing’s Kindle Vella section:

(Note: PG has removed all the embedded links in the excerpts below. A link to the particular Kindle Vella section is included at the bottom of that section.)

Kindle Vella Royalties

Use Tokens to unlock episodes

Read episodes

To give readers a chance to check out a story, they can read the first three episodes of every story without redeeming Tokens.

Use Tokens to unlock episodes

Readers can purchase and redeem Tokens to unlock later episodes. The number of Tokens needed to unlock an episode is determined by the episode’s word count at the rate of one token per 100 words. For example, it takes six Tokens to unlock a 638-word episode. You can view the number of Tokens needed to unlock an episode on the episode setup page.

We plan to have several bundle options available for readers to purchase Tokens on the web and in the Kindle for iOS app. Token pricing may change before Kindle Vella stories are made available to readers, but here is an example of the Token purchase experience on the web:

Royalties

You’ll earn 50% of what readers spend on the Tokens that are used to unlock your story’s episodes. You’ll also be eligible for a launch bonus based on customer activity and engagement. To make it easy for readers to find stories they love, the first few episodes of every story are free. The number of Tokens needed to unlock an episode is determined by the episode’s word count at the rate of one token per 100 words. You can view the number of Tokens needed to unlock an episode on the episode setup page.

We plan to make Tokens available through mobile channels that charge a fee. In this case, the fee will be deducted from the revenue that is shared.

Here’s how earnings per episode will be calculated:

  • (Number of Tokens to unlock episode) * (Tokens bundle price/# Tokens in bundle – taxes and fees) * (50% rev share) = Earnings per episode

For example, here’s how we calculate earnings for a 3,025 word episode (30 Tokens) when the Tokens are purchased on the web in a 200 Tokens bundle versus an 1,100 Tokens bundle. In this example, we are assuming no taxes or fees.

  • Episode purchased with 200 Tokens bundle: 30 Tokens * ($1.99/200 Tokens – 0) * 50% = $0.1493
  • Episode purchased with 1,100 Tokens bundle: 30 Tokens * ($9.99/1100 Tokens – 0) * 50% = $0.1362

Link to the rest at Kindle Vella Reader Experience

Kindle Vella FAQ

Frequently asked questions

1. When will my story be available to readers?

Readers will be able to enjoy your stories when we make the Kindle Vella store available in the next few months. Learn more about the reader experience.

2. What happens if I publish an episode before the Kindle Vella store is available to readers?

With Kindle Vella, you can choose to publish your episode immediately or schedule publication on a future date. If you publish a story before Kindle Vella is available to readers, all stories in compliance with our content guidelines with a Live status will be ready and waiting when Kindle Vella stories become available. We recommend publishing at least 5-10 episodes before stories become available so readers can dig in right away.

If you’re not ready to publish or don’t want all your episodes to go live at once, we recommend leaving episodes in a Draft status, then publishing or scheduling publication after the Kindle Vella store is live for readers. Learn more about episode release dates.

3. What kind of content should I publish?

To provide the best experience for readers, Kindle Vella stories should be written specifically to be released in a serial format, one 600–5,000 word episode at a time. If you have a story in this format that is available elsewhere, you can also publish it with Kindle Vella. To ensure a good customer experience, Kindle Vella does not accept content that’s freely available. Learn more about our content guidelines.

4. How will I earn royalties through Kindle Vella?

You’ll earn 50% of what readers spend on the Tokens that are used to unlock your story’s episodes. You’ll also be eligible for a launch bonus based on customer activity and engagement. To make it easy for readers to find stories they love, the first few episodes of every story are free. The number of Tokens needed to unlock an episode is determined by the episode’s word count at the rate of one token per 100 words. 

Link to the rest at Kindle Vella

Kindle Vella – Content Guidelines

Existing content and metadata guidelines for eBooks apply for Kindle Vella content. In addition to our existing guidelines, we’ve listed new content guidelines related to Kindle Vella below.

Content

Kindle Vella is a serial reading experience. To protect readers from purchasing Kindle Vella content they have already read in a different format, you cannot:

  • Incorporate your Kindle Vella content into other long-form content (e.g., a book) in any language. If you wish to incorporate an episode or story into other content, you must unpublish all episodes of that story from Kindle Vella.
  • Publish in Kindle Vella content that is in the public domain or freely available on the web.
  • Break down your previously published book or long-form content into Episodes and republish in Kindle Vella, even if that book or long-form content is no longer available or is written in another language. If your Episode or Story is derived from another work you have authored (e.g., it continues the story from a book), you may include up to 5,000 words of content from the other work in the first Episode to bridge the story, provided you control the rights to do so.

Tags

You can add up to seven tags for each story. To ensure tags help readers get a feel for your story and make good purchasing decisions, please avoid:

  • Information covered elsewhere in your Story’s metadata (title, contributors, etc.)
  • Subjective claims about quality (e.g., “best”)
  • Time-sensitive statements (e.g., “new”)
  • Information common to most items in the category (“story”)
  • Spelling errors
  • Anything misrepresentative, like the name of an author who’s not associated with your Story. This kind of information can create a confusing customer experience. Kindle Vella has a zero tolerance policy for metadata that is meant to advertise, promote, or mislead
  • Amazon program names like “Kindle Vella”
  • Language promoting violence or intolerance
  • Sexually explicit language

Note all eBook keyword guidelines also apply to tags.

Author notes

This is a tool to build engagement on your story, so avoid including any links or prompting readers to leave the reading experience.

Link to the rest at Kindle Vella Content Guidelines

Kindle Vella – Publish an Episode

Share your story by publishing one short episode at a time.

. . . .

Publish an episode

After you create a story, you can publish episodes.

To publish an episode:

  1. Go to your Kindle Vella Library.
  2. Select the story to which you want to add an episode.
  3. Click Create episode or Continue episode draft.
  4. Type or import your episode text.
  5. Choose your release date.
  6. Click Publish.

Update an episode

You can edit a published episode at any time.

To edit an episode:

  1. Go to your Kindle Vella Library.
  2. Click Manage your story.
  3. Select the episode you want to edit.
  4. Click Edit Episode.
  5. Enter your changes.
  6. Click Publish.

Delete an episode

You can delete a Draft episode to remove it from your Kindle Vella Library. You can’t delete episodes that have been Live. After you delete or unpublish a story, that action can’t be undone.

To delete an episode:

  1. Go to your Kindle Vella Library.
  2. Click Manage your story.
  3. Go to episode you want to delete.
  4. Click Delete draft.
  5. Click Yes to confirm you want to delete the episode.

Tell us about your episode

Episode detailsDescription
Episode title (optional)Enter a name for your episode. An episode title isn’t required. If you don’t include a title, episodes will be titled by number. For example, Episode 1.

Note: We add episode numbers automatically, based on the order they’re created.
Episode contentImport your episode from a Microsoft Word document (DOC/DOCX) or type it directly in the online editor.

Episodes must be in English and between 600-5,000 words. At this time, Kindle Vella supports basic formatting, such as bold, italics, and underlines.

The following formatting is not currently supported:Indented paragraphsImagesChartsTablesSpecial charactersEmojis
Author Notes (optional)Add Author Notes to share additional details or behind-the-scenes thinking with your readers. This is your opportunity to communicate directly with readers in your own voice.

You can use Author Notes to:Give insight to readers on your writing processShare details on a character’s developmentShare teasers to get readers excited for the next episodeThis is a tool to build engagement with your story, so avoid including any links or prompting readers to leave the reading experience.

Author Notes appear after the episode and can’t exceed 200 words. These notes are not included in your episode word count.

HTML is not supported.

Author Notes must comply with our content guidelines.

Preview episode

View your episode as it will appear to readers. To create a consistent reading experience across all Kindle Vella episodes, we’ll remove paragraph indentations and add a line space between paragraphs during publishing.

If you want to make changes after previewing your episode, make them directly in the online editor or in your original Microsoft Word document and import the new file.

Tokens

Readers can unlock episodes by purchasing and redeeming Tokens. Readers can read the first three episodes in your story without redeeming Tokens. For later episodes, the number of Tokens required to unlock an episode is set automatically based on word count. You can see the number of Tokens a reader needs to unlock an episode on the Episode setup page.

Release date

To keep the story reading experience sequential, we can only release an episode after you’ve released all previous episodes. You can publish your episode immediately or schedule publication on a future date. After your episode goes Live or is Scheduled, we’ll send you an email.

  • Release now. Publish your episode immediately. After we open the Kindle Vella store to readers, we’ll make all content in compliance with our content guidelines with a Live status available.
  • Schedule release. After we open the Kindle Vella store to readers, we’ll make all scheduled episodes available on the scheduled release day. Scheduled episodes go live at midnight Eastern Standard Time on the selected release date.

Episode status

Your episode status appears in your Kindle Vella Library. After we open the Kindle Vella store to readers, we’ll make all content in compliance with our content guidelines with a Live status available and publish Scheduled episodes on the scheduled release day.

StatusDescription
DraftYour episode is created, but not published.
In ReviewYour episode is under review to ensure it meets our content guidelines.
Failed PublishingYour episode failed publishing due to a possible technical issue. Please try republishing.
Action RequiredYour episode requires changes before it can move to Live status. Check your email for instructions.
PublishingYour episode passed review and will move to Live status shortly.
ScheduledYour episode will be available in the Kindle Vella store after we open the Kindle Vella store to readers on the release date you scheduled.
LiveYour episode is ready and will be there for readers when Kindle Vella stories become available to them.
Live with Unpublished ChangesYour episode is ready and waiting for readers, but you have made changes that haven’t been published yet. Publish your updates to make them available to readers after the Kindle Vella store becomes available.
BlockedYour episode is unavailable for further editing due to a violation with our content guidelines. Check the email you use to access your KDP account for details.
UnpublishedYour episode (and story) will no longer become available in the Kindle Vella store at reader launch.

Link to the rest at Kindle Vella Publish an Episode

Perhaps PG missed it in the various links and sub-links, but he didn’t see anything that looked like a typical Amazon Terms & Conditions section that looked like it had been written by Amazon’s legal department.

PG has had prior dealings with Amazon’s in-house attorneys and they have impressed him as being very competent. What passes for terms and conditions in the various Kindle Vella sections is more than a little scattered and vague. He suspects that either Kindle Vella was put together without any legal assistance or Amazon’s legal department had just returned from an offsite meeting that involved a few hallucinogens during the breaks.

If any visitors to TPV locate something that looks like the T’s&C’s for Kindle Vella, PG would appreciate a link either in the comments or via the Contact PG link in the top menu bar.

Kindle Vella

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PG hasn’t checked the Terms of Service to see what Amazon’s royalty structure is for Kindle Vella.

Amazon Is the Target of Small-Business Antitrust Campaign

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From The Wall Street Journal:

Merchant groups are forming a national coalition to campaign for stricter antitrust laws, including measures they hope could force Amazon.com Inc. to spin off some of its business lines.

The effort is being launched Tuesday by trade groups that represent small hardware stores, office suppliers, booksellers, grocers and others, along with business groups from 12 cities, organizers say. Merchants plan to push their congressional representatives for stricter antitrust laws and tougher enforcement of existing ones.

The groups, which collectively represent thousands of businesses, want federal legislation that would prevent the owner of a dominant online marketplace from selling its own products in competition with other sellers, a policy that could effectively separate Amazon’s retail product business from its online marketplace.

Members of the House Antitrust Subcommittee are considering legislation along those lines as they weigh changes to U.S. antitrust law, though no bill has yet been introduced.

The merchant groups also want tougher enforcement of competition laws and legal changes that would make it easier for the government to win antitrust lawsuits against big companies.

In a statement, an Amazon spokesperson said the company’s critics “are suggesting misguided interventions in the free market that would kill off independent retailers and punish consumers by forcing small businesses out of popular online stores, raising prices, and reducing consumer choice and convenience.”

“Amazon and third-party sellers complement each other, and sellers having the opportunity to sell right alongside a retailer’s products is the very competition that most benefits consumers and has made the marketplace model so successful for third-party sellers,” the spokesperson added.

Members of the coalition, dubbed Small Business Rising, include the National Grocers Association, the American Booksellers Association and the Alliance for Pharmacy Compounding.

They aim to capitalize on local business owners’ connections to their hometowns by meeting with members of Congress and staff, writing letters, seeking coverage in local media, and other efforts.

“Those stories are powerful and are motivating for lawmakers,” said Stacy Mitchell, co-director of the Institute for Local Self-Reliance, a research and advocacy group that has previously partnered with unions and others to oppose what it views as excessive corporate power and spearheaded the campaign. “It’s a real business that is really going to go under with a real community that is going to suffer as a result.”

. . . .

The business owners come from different industries, but competition from Amazon is a common thread.

Doug Mrdeza, a Michigan-based merchant on Amazon’s marketplace, said he laid off close to 40 employees in late 2019 after Amazon raised his fees and struck deals with some of his suppliers to sell products itself, cutting him out of the supply chain.

David Guernsey, chief executive of Virginia-based office supplier Guernsey Inc., says government agencies are buying more on Amazon’s site, but he is wary of selling there because it would mean giving Amazon access to data on his prices, transactions and customers.

“I’ve never had a competitor that had that kind of insight to my business,” he said.

. . . .

Allison Hill, chief executive of the American Booksellers Association, said some of the group’s roughly 1,800 independent bookstores have started “sleeping with the enemy”—selling on Amazon’s marketplace—to survive.

“If a company was operating that marketplace and was not your competitor, they would be offering very different support and services,” she said.

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

So what does the American Booksellers Association want its members to do – survive or die? Trying to force someone to come to your store by denying them their preferred way of purchasing books is a loser’s game.

Clamp down on Amazon, force its book prices up and you’ll see a zillion mini-Amazons springing up online, following the same recipe that made Jeff Bezos rich.

Every day, those who purchase books and everything else vote for their favorite way of purchasing goods and services. There is no standard method consumers use in making this decision that can be captured by a single style of retailer.

If PG runs out of milk at 10:00 AM, he’ll probably put together a list of other things Mrs. PG tells him he should purchase and make a grocery run at a convenient time (which he selects based on his own personal calculations and preferences and what’s happening that day) and pick up milk and a number of other items.

If PG runs out of milk at 10:00 PM, he’ll think about waiting til morning, but he’ll probably take a trip to the closest place to buy milk, purchase that and whatever candy catches his eye at the checkout counter, and get home a few minutes after he left.

Is PG going to buy milk from Amazon? He might if 1. the price was good, 2. He could get it delivered within a reasonable period of time and 3. Amazon provided some means of keeping 8 gallons of milk cold until PG used it all because there is not enough room in PG’s fridge to hold that much milk.

PG doubts that Amazon is going to try to sell him milk any time soon.

Amazon is succeeding because consumers are voting with their dollars. PG suspects that 99.9% of those who purchase books through Amazon know that there is such a thing as a physical bookstore, so knowledge of alternative ways to purchase books is widespread. They still choose Amazon.

Action to impair Amazon’s ability to sell books the way it does so successfully impacts people across the country, including:

  1. Those who live twenty miles (or more, sometimes much more) away from the nearest bookstore.
  2. Those for whom the closest bookstore is a hellhole that’s run by a nasty old man who smells like cheap cigars and doesn’t stock any books for women other than Harlequin Romances (nothing specifically against Harlequin – some intelligent people who read a lot like Harlequin, but others don’t.). The old man leers at women who buy romances (or anything else) as they wait for him to count out their change. Some women use a disposable wipe to clean their hands and their change after they get out of the store.
  3. Those who like to buy and read hardcopy books, but are on a limited budget.
  4. Those readers whose interests Barnes & Noble and its New York purchasing department don’t understand.
  5. Those who like to read books by indie authors and indie presses.
  6. Those who prefer ebooks and barfed the last time they picked up a Nook.
  7. Those who really enjoy Amazon’s ability to suggest other books they might like to read. (PS: Amazon is much, much, much better at this than any bookstore clerk anywhere with whom PG has held a conversation about book recommendations. Traditional bookstores and their low-paid employees (regardless of how pleasant they may be) are quite crude tools for book discovery compared to the Zon. The farther your tastes stray from the NYT bestseller list, the worse they are.)

Amazon reportedly explored opening discount stores to offload unsold electronics

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From Yahoo Finance:

Amazon has been examining the idea of opening discount stores or outlets selling unsold electronics and home goods at steep discounts, Bloomberg has reported. The products would reportedly be sourced from inventory in its warehouses, and the company has weighed opening permanent locations and pop-up stores in malls and parking lots. The stock would consist of smaller items that don’t take up a lot of space, like home goods, toys, kitchen items and electronics, but not clothing.

A 2019 report detailed how Amazon destroys millions of items it can’t sell, ranging from TVs to diapers — though Amazon later pledged to donate unsold goods. “It’s a way to be able to clean out warehouses and get through inventory without having to destroy it,” one of Bloomberg’s sources said.

Link to the rest at Yahoo Finance

PG says there are plenty of large empty retail spaces around the US which would be available for this sort of operation.

OTOH, Amazon receives so much attention from its critics for its warehouse working conditions (despite $15 per hour wages (more than double the US minimum wage) plus a set of employee benefits much broader than most hourly workers receive that it might think discount stores (which often pay low wages) would attract more negative attention.

Bookstore owner suing Amazon over alleged price-fixing scheme that makes it impossible for other retailers to compete

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From The Chicago Sun Times:

An Evanston bookstore owner wants to take on Amazon.

Nina Barrett, owner of Bookends and Beginnings, signed on as the named plaintiff in a class-action lawsuit filed last week that accuses Amazon of orchestrating a price-fixing scheme with the nation’s leading book publishers that makes it impossible for other retailers to beat their prices.

According to the suit, contracts that Amazon has with the nation’s “Big Five” publishers — Penguin Random House, HarperCollins, Hachette, Macmillan and Simon & Schuster — block the publishers from giving other retailers better prices.

“I, along with most independent bookstore owners in America, feel incredibly frustrated because we’ve seen that the playing field is not level,” Barrett told the Sun-Times. “We have to talk to our customers all the time about why we can’t match Amazon’s pricing.”

. . . .

The suit, which was filed in New York, seeks to include all booksellers that bought books from the Big Five after March 25, 2017. It seeks damages and an injunction on the “anti-competitive” practice.

“It’s been very frustrating to watch the growth of Amazon and think, ‘Me, just little old me by myself, I can’t stop this, but I can see that it’s unfair,’” Barrett said.

. . . .

Attorney Eamon Kelly, who lives in Evanston and regularly shops for biographies at Barrett’s store, pitched Barrett to his fellow attorneys and then pitched Barrett, who said she “jumped on the idea.”

Barrett’s shop, with its alleyway entrance, is “a magical place to look at books,” Kelly said.

Barrett, 60, opened her bookstore in 2014.

The financial pain felt by her bookstore due to Amazon’s pricing is real, Barrett said, and would have been more acute during the pandemic if not for an online fundraising campaign that raised nearly $50,000, money her business received through the Paycheck Protection Program and the fact that a Barnes and Noble about a block from her store closed last year, funneling more customers her way.

She called Amazon a “juggernaut” and a “bully.”

“We think that being a place matters, that the browsing experience matters,” she said.

“We get up and battle and fight every day to make our business model work, and we do it out of passion. But no one of us would ever have the power to be able to take on Amazon,” she said.

Link to the rest at The Chicago Sun Times

The OP makes Ms. Barrett and her bookstore seem quite nice. PG is very familiar with Evanston and can report that it’s a pleasant tree-filled upscale university town on the shores of Lake Michigan filled with lots of people who have plenty of disposable income. If any location could support a traditional bookstore these days, Evanston could.

The OP didn’t mention whether Ms. Barrett buys the books she sells through a wholesaler like Ingram or not. At least some of Ms. Barrett’s cost of goods can be attributed to Ingram’s markup and shipping fees.

There are a lot of good attorneys in Chicago, although PG is not acquainted with any of the attorneys or firms named in the OP. If they’re not already familiar with the strange and expensive supply chain used by major publishers to get books to retail bookstores, they will certainly become familiar with it soon.

That said, regardless of how much some people think traditional bookstores “matter”, that doesn’t mean they will necessarily continue to be financially viable or have any sort of “right” to be viable.

All sorts of business that were common in PG’s youth are non-existent or effectively non-existent these days. More than a few businesses that have closed their doors during the Time of Covid are not going to reopen.

Perhaps the closure of the Barnes & Noble near Ms. Barrett’s bookstore was indicative that it had problems with a business model quite similar to the model Ms. Barrett is fighting to make work in her store.

Book sales are up, but bookstores are struggling. It matters where you shop.

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An Opinion Piece from The Chicago Tribune:

Two striking statistics recently reported by Publishers Weekly:

  • Print book sales rose 8.2% in 2020 versus 2019, according to NPD BookScan.
  • Bookstore sales fell 28.3% in 2020 versus 2019, according to preliminary estimates from the U.S. Census Bureau.

The year-to-year increase in book sales was the largest since 2010, and was led by demand for books to keep children occupied during the period of remote schooling. Juvenile nonfiction was up by 23%, young-adult nonfiction by 38%. But adult books were up as well. By every measure, more books were sold in 2020 than in 2019.

Those gains aren’t reflected in bookstore sales, though, as pandemic-related closures and restrictions kept us away. The worst months for bookstores were April and May, the leading edge of the lockdowns, but even as restrictions loosened, sales remained 20% or so below previous year levels.

. . . .

I want to suggest that books are not merely a consumer product. Instead, I’d like us to consider books as part of a larger ecosystem, which includes writers, publishers, booksellers and readers, and that good books depend on all parts of the ecosystem being healthy. As such, we cannot be indifferent about where we buy them.

Bookstores are a key component in making sure there is an interesting variety of books that connect with readers of differing stripes. If we lose bookstores, we will lose the places where word-of-mouth hits are born. We will lose the places where we may discover something we’d never heard of, simply because we brush past it on a table. We will lose one of the important congregating places where people who value books come together in fellowship. We will lose the place we might stop in after brunch on a beautiful afternoon when we need to walk off a meal and aren’t ready to go home yet.

We will lose booksellers, the people who tend to book system the same way a gardener works the greenhouse.

. . . .

Right now, with publishing and books, we could be at peak variety. The somewhat worrisome consolidation in corporate publishing is being offset with a greater thirst for diverse voices and books, not to mention the continuing growth of scrappy independent publishers.

But if we narrow the channels through which books are sold, we will also narrow the kinds and varieties of books that will be sold. Books will still sell, because just like apples, you have to have books, but we will be missing something if we lose that variety.

It is fantastic news that book sales have weathered the pandemic — better news than we could have hoped for — but to revivify the ecosystem as a whole will require us to examine our patterns of purchase. We need to make intentional choices about where we shop to seed the return of bookstores.

Link to the rest at The Chicago Tribune

PG suggests that this is one of the weaker special-favor pleas for traditional bookstores that he recalls reading during the past few months.

The very best place to find diverse voices and for diverse voices to flourish is online.

What about costs for readers of varying income levels?

Ebooks are usually less expensive than printed books. They certainly cost less to manufacture, transport and warehouse.

What about environmental impact? P-books v. E-books = No Comparison.

Ebooks win production, transportation and disposal/recycling hands-down.

Available inventory to allow a customer to buy the book they really want?

Every physical bookstore in constrained in exactly the same manner – it has only so many linear feet of shelf space.

That shelf space must be used to sell books. The fewer copies a book is expected to sell, the less shelf space it will be allocated by the operator of the store.

As a general proposition, having several copies of a given book on the shelf is more likely to catch the eye of a browser than having only a single copy of a book. Several copies on the shelf also means that if someone buys a copy, there are still other copies available to be sold. An employee doesn’t have to immediately recognize that a single book has been sold, then restock the shelf in order for a book to be effectively on sale for customers.

Limited size = limited inventory. Limited inventory = more white-bread, mass market books.

Like many others, PG has enjoyed exploring megabookstores like Blackwells in Oxford, Powell’s in Portland and The Strand in New York. However, giant bookstores are a dying breed. See, for example, Barnes & Noble. And even a giant bookstore has a limit to the number of books it can stock.

Plus, absent a lot of free browsing time, a customer’s discovery experience in a physical bookstore, large or small, can be less than ideal. If you like to wile away the afternoon looking for a good read, go physical. If you prefer to wile away your afternoon actually reading a good book, go online.

Back to inventory, online bookstores can and do stock a much wider variety of books than a physical store. Do you want to allow an author who is a member of an under-represented group in the book business a chance – online is your solution. Would you like to encourage Navajo voices to share their experiences and views with a larger audience off the reservation? Online, baby.

Plus a good online bookstore (like Amazon) makes it much easier for most prospective purchasers to locate a book they will like than Powell’s, even though PG has experienced excellent (for a physical bookstore) customer service in Portland.

There are simply far more methods of locating a desirable book online than there are in a physical bookstore and a much better likelihood of finding a book you will love online.

As one example, one word: Reviews.

Yes, some online book reviews are unreliable, but so are book reviews in newspapers and magazines. At least online, you are much more likely to be able to read more than one review by a single person, reflecting that single person’s class, education, preferences and biases.

Plus, on Amazon, in addition to seeing which books people are buying, Amazon Charts lets you see which books people are actually reading.

Hint for those purchasing gifts, particularly for young adults and children: Seven of the top Ten Most-Read Fiction Books when PG wrote this post were written by J.K. Rowling. The list of Most-Sold Fiction Books was much different.

Comparing the Top Ten Most-Read and Most-Sold Fiction Books, PG noted only two books that were on both lists:

The Four Winds by Kristin Hannah

and

The Midnight Library by Matt Haig

Does anyone working in a Barnes & Noble store at minimum wage (or the equivalent of minimum wage for a wealthier community) have that knowledge?

As they say in movies and on TV (but not that often in the courtroom) PG rests his case.

Businessman Charged with Running Elaborate Scheme to Defraud Amazon

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From The US Attorney’s Office, District of Rhode Island:

The former owner of an East Providence automobile transport company . . . was arrested and charged today with allegedly executing an elaborate scheme to defraud Amazon.

It is alleged in court documents that Michael Chaves, 40, former owner of CAT Inc., executed a scheme to defraud Amazon through fraudulent transactions and theft of inventory through falsely represented returns. It is alleged that Chaves ordered thousands of products from Amazon and replaced the original products with lesser value replacements, often items different than the ones he originally ordered, before returning the packages to Amazon for refunds.

According to court documents, since March 2017, Chaves has held approximately 30 Amazon customer accounts under various names and email addresses.  Over this time period, Chaves’ accounts placed approximately 10,795 orders totaling approximately $713,970.78, most of which have been refunded based on Chaves’ return of the items purchased. Chaves received a total of approximately $643,324.04 in concessions or refunds on approximately 7,450 orders, including nearly approximately 7,200 items that were physically returned to Amazon. Many of the returned items were sent back in the original packaging in an attempt to deceive Amazon’s incoming inspection process. Amazon’s standard inspection process flagged approximately 149 of the returned items as potentially fraudulent, valued at $23,872.89.

According to court documents, while investigating Chaves’ fraudulent activities associated with his now defunct automobile transport company, Internal Revenue Service Criminal Investigation Division and U.S. Department of Transportation Office of Inspector General agents executed a court-authorized search of Chaves’ home and business.  At the business location, agents observed many opened and unopened Amazon packages and packaging materials. The room containing these items appeared to be a packing area for Amazon returns. The room contained a wide-ranging variety of items such as televisions, incense, European wall plugs (some for phone chargers), computer parts, small electronics, and a significant quantity of auto parts. At a later date, a United Parcel Service (UPS) driver told investigators that he would stop at Chaves’ business location every day delivering Amazon packages and picking up returns, often times dropping off an Amazon package one day and picking up the same package the next day as a return back to Amazon. 

According to court documents, currently Chaves has six active Amazon accounts. The majority of Chaves’ purchases and returns consist of auto and commercial motor vehicle parts. Chaves also purchased and returned many other non-vehicle related items, including, but not limited to; electronics including cellular telephones and televisions, household items including chandeliers, closet organizers, lawn sheds, lawn mowers and vacuum cleaners. Most of these items were returned in an unsellable condition.

According to court documents, Chaves’ schemes would, at times, include replacing an original product purchased with a substitute product which, at first glance, appeared similar to the original purchase. Other returns were placed in boxes to represent the approximate weight of the original product. Among the examples cited in court documents of purchases and fraudulent returns include Chaves having ordered a commercial truck tire and sending back two pieces of wood; Chaves having ordered Apple Air Pod Pros and returning an unopened package of mini light bulbs; Chaves ordering a vehicle suspension joint and returning an oil filter wrench; and Chaves ordering a stabilizer bar link kit and returned in its place doggie treats.

Chaves was arrested today by U.S. Department of Transportation Office of Inspector General and Internal Revenue Service’s Criminal Investigations Division agents, with the assistance of East Providence Police, on a federal criminal complaint charging him with wire fraud and mail fraud.

Link to the rest at The US Attorney’s Office, District of Rhode Island

From Business Wire:

On Friday, March 12, The U.S. District Court of Rhode Island sentenced Michael Chaves to 30 months in federal prison for operating a fraudulent product return scheme and defrauding Amazon of more than $50,000, as well as other charges including bank fraud, wire fraud, falsification of records, aggravated identity theft, and tax evasion. Amazon supported the investigation, prosecution, and sentencing.

. . . .

Amazon has teams and systems in place to proactively detect, investigate, and stop suspicious behavior and prohibited activity. Amazon has an extensive history of protecting its customers from fraud and abuse.

Link to the rest at Business Wire

From The US Attorney’s Office, District of Rhode Island:

Chaves was sentenced on Wednesday by U.S. District Court Judge William E. Smith to 30 months in federal prison to be followed by three years of federal supervised release, announced Acting United States Attorney Richard B. Myrus Acting Special Agent in Charge of Internal Revenue Service Criminal Investigation Ramsey E. Covington, and Acting Special Agent-in-Charge Daniel Helzner, U.S. Department of Transportation Office of Inspector General, Northeast Region.

A restitution order will be forthcoming from the court. In addition to restitution to be paid in the fraud schemes connected to the operation of his auto transport company, the order will include restitution to be paid by Chaves to Amazon. It was alleged in court documents that Chaves defrauded Amazon through theft of inventory through falsely represented returns. It is alleged in court documents that Chaves ordered products from Amazon and, at times, replaced the original products with lesser value replacements, often items different than the ones he originally ordered, before returning the packages to Amazon for refunds.

Chaves’ alleged Amazon refund scams were discovered during the investigation by Internal Revenue Service Criminal Investigation and U.S. Department of Transportation Office of Inspector General into Chaves’ auto transport company.

Link to the rest at The US Attorney’s Office, District of Rhode Island

PG doesn’t know the background of this particular matter, but the message from Amazon is that it watches for scams of all sorts and is capable of persuading federal law enforcement officials, including Internal Revenue Service Criminal Investigation agents (who are likely to be interested in any claim of financial fraud because fraudsters typically don’t report the fruits of their labors on their tax returns) to take the matters Amazon brings to them seriously.

IRS involvement means that, if for any reason, the criminal fraud claims fall apart, federal prosecutors can prosecute criminal charges for violations of the Internal Revenue Code.

That potential 1-2 threat is enough to persuade a lot of bad guys to plead guilty, even if they’ve managed to cover up some of the evidence of their involvement in the underlying fraud.

Amazon publicizes such prosecutions and convictions to help spread the word that anyone who would like to enjoy a richer long-term lifestyle than can be supported by their lawful labors should probably consider pursuing a softer target than Amazon in their pursuit of their goal.

If Amazon develops a reputation for providing detailed evidence to support a criminal fraud prosecution with federal and state prosecutors, District Attorneys, etc., they’ll find that almost anyone will take their call and schedule a meeting to review what Amazon has located.

It is very common for companies the size of Amazon to hire former law enforcement officials (often at higher salaries than they earned while working for their former agencies) to do this sort of work. Such men and women have a good idea about what it takes to prove a case and how to collect evidence to support criminal charges and successful prosecution of those charges.

Additionally, PG doubts Amazon’s people (unlike a few citizens without such backgrounds) ever try to mislead law enforcement officials due, in part, to the fact that everybody involved has the same backgrounds, values and character traits. They’re brothers and sisters who gain a great deal of personal satisfaction from putting bad guys away.

Know thy reader

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From The Bookseller:

With the levelling off of e-book sales, many have begun to wonder whether the book publishing industry will be spared the kinds of disruption experienced by other sectors of the media industries. But the digital transformation of the book publishing industry was never fundamentally about e-books anyway: e-books turned out to be just another format by which publishers could deliver their content to readers, not the game-changer that many thought (or feared) it would be. The big question that the digital revolution posed to book publishers is just as pressing today as it was a decade ago: it’s the question of how publishers understand who their ‘customers’ are, and how they relate to and interact with them. 

For most of the 500-year history of the book publishing industry, publishers understood their customers to be retailers: publishers were a B2B business, selling books to retailers, and they knew very little about the ultimate customers of their books, the readers. The digital revolution has forced publishers to think again about this model and to consider whether there might be something to be gained by becoming more reader-centric. This fundamental shift in publishers’ self-understanding is likely to be one of the most significant and enduring consequences of the digital revolution in publishing. 

But how does a publisher actually become more reader-centric? Over the last decade or so, many publishers have come to realize that one of the most effective ways to make their businesses more reader-centric is to build their own dedicated databases of readers so that they can interact directly with readers via email. Building a customer database can be a slow and laborious process, but with focus and creativity, a publisher can grow a list remarkably quickly: one senior manager I interviewed at a large US trade publisher explained that they had decided to build a customer database in a particular area of their publishing programme and, using a combination of paid ads, partnerships and sweepstakes, they succeeded in getting half a million people to sign up in the first year alone.  Having these email addresses and customer information in your own database is much more effective than relying on social media and gives you much more control, as you are not reliant on the algorithms of social media companies to determine which posts get fed through to people’s news feeds. Moreover, with emails to readers, you can get a much higher level of engagement than with many other retail goods, in part because many readers have an emotional connection with authors whose books they enjoy and they want to know more about any new books written by their favourite authors.  The benchmark for email open rates is 20%, but the open rate for emails relating to books by brand-name authors can be as high as 60%.

But it’s not just mainstream pubishers who are using digital technologies to establish direct relationships with readers: some start-ups on the margins of the publishing field have taken this much further and are pioneering new kinds of publishing that integrate reader input into their decision-making processes. One example that will be familiar to many in the publishing world are the crowdfunding publishers, Unbound in the UK and Inkshares in the US.  While many people think of crowdfunding as an innovative way of raising capital (and it is), the real genius of crowdfunding is that it is an audience-building machine. The crowdfunding model means that every new author brings a few hundred new readers into the system – their friends and family members and the people who have a particular interest in the book they’re proposing to write, and the book goes ahead only when enough readers have pledged their support for the project. Crowdfunding models like Unbound and Inkshares are creating a new kind of relationship between authors and readers in which readers are not simply the buyers of books but, rather, their co-creators. At the same time, they are building networks of engaged readers that enable them to capture customer data rather than leaving it for Amazon to hoover up. By using crowdfunding to create a system of reader curation, they are turning the traditional model of publishing on its head.

. . . .

The real opportunity that the digital revolution opens up for publishers is that, for the first time in the long history of the book, it is now possible for publishers to do something they could never do before: build direct channels of communication with readers and do it at scale. This is a central feature of the digital transformation in publishing, and those publishers that succeed in making their businesses more reader-centric, learning not just how to market more effectively to readers but how to listen to them too, are likely to be the ones that will ride the wave of the digital revolution most successfully in the years to come.

Link to the rest at The Bookseller

Leveling off of ebook sales? Email lists? Reader-centric? Crowdfunding?

PG is certain that the author of the OP (and the book shown below), an Emeritus Professor of Sociology at the University of Cambridge is an intelligent and probably likeable guy, but PG was a bit surprised while reading the OP that The Bookseller (and, presumably, its readers) will think that anything described is actually new information or insight about the book business these days.

A bit of ebook history for those who may not know or remember it:

  • While ebooks predated Amazon ebooks, for all intents and purposes, as a meaningful segment of publishing, ebooks didn’t exist until Amazon started selling ebooks and inexpensive ebook readers. (Widespread adoption of small digital screens on phones definitely helped as well.)
  • As a classic example of Clayton Christensen’s Innovator’s Dilemma, the creative executives and companies that drove the dynamism, growth and profitability of print publishing, bookstores, newspapers and magazines during the second half of the twentieth century didn’t understand how important electronic media would become and how quickly electronics, including digital electronics and digital networks, would replace print as a means of written communication to audiences large and small.
  • Jeff Bezos moved to Bellevue, Washington, rented a house with a garage and became entranced with the potential of web commerce in 1995. He decided that books were a great product to sell online because of the large worldwide demand for literature, the low unit price for books, and the huge number of titles available in print. That decision started a business that would upend the business empires of the great publishers of New York, then move on to disrupt traditional bookselling and publishing around the developed world.
  • At the same time Amazon was going public in 1997, Barnes & Noble sued the company, claiming it wasn’t the the world’s largest bookstore, but was, instead, a book broker. Bezos settled out of court and kept going.
  • Barnes & Noble CEO Leonard Riggio would have been much smarter to use the money he paid his lawyers to buy Amazon stock because $100,000 invested in Amazon on the day it went public would have been worth more than $120 million as of May 2020.
  • Sometime in the summer of 2009, executives at the highest levels of Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster started meeting secretly in the private dining room of a Manhattan restaurant to develop a strategy to prevent Amazon and other ebook retailers selling their ebooks at a discount from list price.
  • At the time, these five publishers were producing 48% of the ebooks sold in the United States.
  • In December, 2009, Apple’s senior VP of Internet Software and Services contacted these New York publishers to set up secret meetings for the purpose of discussing ebook pricing.
  • Apple planned to unveil the iPad on January 27, 2010, and start shipping iPads in April. As part of the launch, Apple wanted to announce its new iBookstore that would include ebooks from the major publishers.
  • The Apple VP told the five publishers that Apple would sell the majority of e-books for prices between $9.99 and $14.99, with new releases being $12.99 to $14.99, substantially more than Amazon was charging.
  • Apple planned to use the same “agency” model which it used in its App Store for distribution of e-books. Apple would be a sales agent and the Publishers would control the price of their e-books in the iBookstore. Publishers would pay Apple a 30% commission on each sale.
  • Apple didn’t want Amazon to be able to sell ebooks at a lower price. The agreement between Apple and each of the big publishers would include a so-called “most-favored-nation” or “MFN” clause which allowed for Apple to sell e-book at its competitors’ lowest price. If the big publishers allowed Amazon to discount prices, Apple could discount them an equal amount and take its 30% commission from that price.
  • The Big Publishers concluded that, if Amazon didn’t play ball, their ebook customers would simply buy iPads and buy their ebooks at the iBookstore. Finally, there was a powerful enough tech company to take on Amazon in the ebook game.
  • On the day of the iPad launch and the announcement of the iBookstore, including an announcement of Apple’s ebook pricing, a Wall Street Journal reporter asked Apple CEO Steve Jobs why people would pay $14.99 for a book in the iBookstore when they could purchase it for $9.99 from Amazon. Jobs replied that “The price will be the same… Publishers are actually withholding their books from Amazon because they are not happy.”
  • This public statement expressed the terms of the agreement. The big publishers, acting in concert, would jointly force Amazon to increase its e-book prices with the threat to cut off Amazon’s ebook supply. If Amazon refused to increase prices, Apple would be the only place to buy ebooks from the major publishers that controlled most of the book marked. If Amazon knuckled under and raised its prices, Apple would face no price competition.
  • The United States Justice Department and 31 states filed suit against Apple and the five conspiring publishers for violating longstanding US antitrust laws. Three of the publishers settled the claims on the date the suit was filed, admitting they had violated the law. The other two publishers settled the case prior to trial, also admitting wrongdoing.
  • News reports stated that the publishing executives had not consulted their own attorneys about whether their actions were legal or not. (PG notes that any law student who had completed more than three weeks of a one-semester law school antitrust course would have known that this scheme was a clear-cut violation of the law. No legal gray areas available for this hot mess.)
  • After a trial, Apple was found to have wrongfully violated US antitrust laws. Apple appealed the decision as far as it could go and lost. Apple was forced to pay $450 million in damages for its wrongful actions.

And the OP describes ebooks as “the wave of digital revolution” as if this is new information.

PG believes that no one would dispute that Amazon is by far the largest outlet for independently-published ebooks anywhere in the world. Amazon does not break out indie ebook sales in its own accounting reports.

Veteran publishing consultant, Mike Shatzkin, estimated that, between 2011 and 2013, self-published books grew from nothing to almost 30% of the book units sold in the US. This growth coincided with a period during which ebook sales also increased rapidly.

The Alliance of Independent Authors estimated that in 2016, in the US, fewer than 1200 trade-published authors who debuted in the last ten years earned $25,000 a year or more, compared to over 1,600 indie authors who earned $25,000 per year or more.

In 2020, ALLi reported that 8% its members had sold more than 50,000 books in the prior two years.

An Enders Analysis in 2016 found that 40% of the top-selling ebooks on Amazon were self-published.

PG won’t say the ebook and indie revolutions are over, but will say that the trends of the last ten years have undeniably been moving towards more ebooks and more money for indie authors. Any industry statistics that limit themselves to ebooks sold by traditional publishers are missing the majority of the overall market.

PG further suggests that for most authors, indie or traditionally-published, a dozen legitimate positive reviews on Amazon are worth more than a signing at your local Barnes & Noble.

The author of the OP is promoting a book he recently published.

Amazon withholds its ebooks from libraries because it prefers you pay it instead

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From The Verge:

Amazon is withholding ebook and audiobook versions of works it publishes through its in-house publishing arms from US libraries, according to a new report from The Washington Post. In fact, Amazon is the only major publisher that’s doing this, the report states. It’s doing so because the company thinks the terms involved with selling digital versions of books to libraries, which in turn make them available to local residents for free through ebook lending platforms like Libby, are unfavorable.

“It’s not clear to us that current digital library lending models fairly balance the interests of authors and library patrons,” Mikyla Bruder, the global marketing chief at Amazon Publishing, told The Washington Post’s Geoffrey Fowler in an emailed statement. “We see this as an opportunity to invent a new approach to help expand readership and serve library patrons, while at the same time safeguarding author interests, including income and royalties.”

At the heart of the issue is a debate over whether libraries, which often pay far higher than retail price for physical and ebook copies of books, ultimately harm publisher sales by letting people check out copies for free. In the age of mobile apps and widespread Kindle usage, borrowing an ebook is now easier than ever — you need a library card and the Libby app, and you can then place holds and eventually check out ebooks that can be sent directly to your Kindle e-reader or app to access for a limited time.

Yet publishers, not authors, decide the fate of a book’s various distribution deals, and Amazon apparently does not want libraries lending its ebooks, at least not under whatever terms have been discussed. That means many of the authors the company has signed onto its publishing imprints — like Mindy Kaling, Trevor Noah, Andy Weir, and Michael Pollan — are available to read only if you pay the full retail price. That’s true when those same authors have expressed support for libraries and free book lending, as Pollan has to The Post.

Amazon is reportedly negotiating with a nonprofit, the Digital Public Library of America, to coordinate the selling of its ebooks to libraries, but The Post notes that the deal would not include any self-published works or Audible audiobooks. And making matters worse, Amazon is allegedly not negotiating — and hasn’t for years — a serious deal with OverDrive, the maker of the Libby app that’s used by many libraries around the country.

Instead, OverDrive CEO Steve Potash tells The Post the company and Amazon have an “ongoing dialogue” in which OverDerive has communicated its “willingness to innovate in an effort to support their business strategy.” Amazon did not immediately respond to a request for comment.

Link to the rest at The Verge and thanks to Carolyn for the tip.

As regular visitors to TPV already suspect, misinformation is rampant in the OP.

Here’s a bullet-point list:

  1. At present, OverDrive is the only effective way for ebooks to get into libraries, at least in the US.
  2. Amazon Publishing, Amazon’s counterpart to a traditional publisher (albeit with better royalty terms) is a small fry compared to traditional publishers. Book wholesalers that provide physical books to bookstores don’t carry Amazon Publishing books and, even if they did, a great many physical bookstores would refuse to carry Amazon Publishing’s books because Devil Bezos.
  3. PG believes that OverDrive’s prices, to the extent he understands them, are also higher than they need to be for an online service that is effectively a complete ebook lending system with, to the best of PG’s knowledge, no need to integrate with the various physical book management systems libraries may employ.
  4. To the best of PG’s knowledge, OverDrive doesn’t have any serious competition in ebook lending, at least in the United States, and charges libraries accordingly.
  5. OverDrive is owned by KKR, a major US-based private equity firm.
  6. Private equity firms typically acquire assets with a plan to sell them or take other steps to take cash out of their investments. One strategy that some private equity firms utilize is to load an acquired firm up with debt, putting the proceeds of such loans into the pockets of the owners of the private equity firms, then sell the debt-burdened companies to someone else. As with some other Wall Street financial types, private equity firms are often ready and willing to throw sharp elbows on their way to a profit. PG doesn’t know if KKR has done any of these things with OverDrive, however.
  7. Per an article in American Libraries from December 31, 2019, reporting on the sale of OverDrive to KKR,
    • “OverDrive holds the dominant market share as the leading provider of digital content to libraries, with more than 43,000 libraries subscribing to its content lending platform. The OverDrive catalog currently offers 4.5 million books and audiobooks from more than 25,000 publishers. More than 95% of public libraries in the US and Canada rely on it for digital lending and other services. Though public libraries represent the largest portion of OverDrive’s customers, the company also works with schools and corporate libraries.
    • “[T]he acquisition of OverDrive is a “financial investment,” in which the buyer, usually a private equity firm or other financial sponsor, expects to increase the value of the company over the short term, typically five to seven years. Financial investments by private equity firms typically take the form of leveraged buyouts, where the buyer contributes only a portion of the purchase price and secures loans from investment banks to meet the full amount negotiated with the seller. Financial buyers control the business strategies and operations of their portfolio companies via placement of representatives on their board of directors, usually in proportion to their ownership stake. The company itself is saddled with paying off the debts, but these transactions provide the company with new capital to fund business expansion and product development.
    • “KKR also owns RBmedia, one of the major suppliers of audiobooks to libraries. In a transaction announced in July 2018, KKR acquired RBmedia from Shamrock Capital Advisors. As with OverDrive, this investment was made through its KKR Americas XII Fund. KKR’s investments in RBmedia and OverDrive were shepherded by Richard Sarnoff, a veteran of the publishing industry and chairman of media, entertainment, and education for KKR.
    • “RBmedia offers a subscription service for consumers in addition to its library lending platform. The company, at the time known as Recorded Books, was acquired by Shamrock in August 2015. The previous month, Recorded Books acquired competing audiobook publisher Tantor Media and in May 2014 it acquired HighBridge Audio, partially consolidating the digital audiobook industry.
    • “Will OverDrive and RBmedia merge? Such a union would signal a major consolidation in the digital content industry for libraries and schools.
    • “Ebook lending occurs within a highly consolidated publishing industry dominated by the Big Five and Amazon. Some of these corporate forces perceive library lending as intrusive and are not motivated to offer favorable licensing terms. Pricing models that place restrictions on the number of copies available for lending, the number of circulations allowed before the title must be relicensed, and temporary embargos on front-list titles present significant challenges for libraries. OverDrive’s dominant market share in this area could add substantial clout to library interests in negotiating more favorable pricing and terms.
    • “KKR’s Christmas Eve announcement sounded many alarm bells in the library community. Concerns include the negative impact of private equity ownership and industry consolidation.
    • “The possibility of a merger between OverDrive and RBmedia into a new superpower is a more valid concern. In sectors involving the sale of products and services, fewer competitors lead to higher consumer prices. But in an arena where pricing is controlled more by publishers than distributors, a larger player could optimize library interests in future negotiations of prices and lending terms.
    • “As library investments in digital content continue to rise and spending on print stagnates or falls, the dynamics of this sector bring high-stakes ramifications for public libraries.”
  1. In PG’s electronically-driven humble opinion, traditional publishers overprice their ebooks to Amazon and everyone else. That’s good news for indie authors because they can make a lot of money for each ebook licensed/sold via Amazon while still offering their readers a lower purchase price than traditionally published books would cost.
  2. PG expects that Amazon’s lawyers are worried about antitrust problems, but he wishes that Amazon would develop its own system to support library ebook lending. PG has no doubt that Amazon’s system would work better than OverDrive does (PG uses OverDrive via his local library to borrow books from time to time and finds it to be clumsy and outdated. KKR hasn’t appeared to have put much money into improving the user experience of those who use OverDrive.)

PG has one final note – Jeff Bezos owns The Washington Post, which was the source for much of The Verge’s OP. When he acquired the paper, there was lots of Sturm und Drang among the Amazon-haters about how Bezos would ruin the Post and stifle the voices of opposition to Amazon represented by The New York Times, etc.

While PG believes the Post is fully-capable of ruining itself, it appears Bezos isn’t stifling the editorial side of the newspaper for Amazon’s benefit as predicted.

Amazon Recommendations and Also Boughts

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PG put a link to this article at the bottom of a prior post but then realized that it definitely deserved its own post.

From David Gaughran:

Amazon recommendations drive millions of dollars of book purchases every single day, and Also Boughts are central to this system, which can lead to panic when they periodically disappear.

Also Boughts play an important role in Amazon recommendations — that process of pairing books to readers like some literary version of Tinder — but the exact role in Amazon’s recommender system can be misunderstood.

So let’s break it all down today, and show you the exact role Also Boughts play in Amazon recommendations, and why you need to protect yours.

What Are Also Boughts?

Also Boughts reflect the other purchases your readers are making, and also influence which readers Amazon recommends books to next. As a result, Also Boughts have become the focus of attention among savvy self-publishers in recent years.

You can view them on any book’s product page on Amazon, where you may have noticed a strip of books usually placed underneath the product description, headlined with “Customers who bought this item also bought.” It looks like this:

Also Boughts example - customers who bought this item also bought

The Also Bought strip doesn’t update as frequently as some parts of the Kindle Store, but it usually refreshes twice a week, on Thursday and Sunday evenings, which means they are a relatively up-to-date indication of how Amazon’s system views your book.

Meaning that authors watch them very closely.

Amazon’s system is always trying to determine what kind of products each individual customer is most likely to purchase, so it can make more accurate recommendations. One thing which is super important in this process is the connection between products. People who buy printers tend to buy ink, for example, and recommending a printer-buyer some ink to purchase will elicit a lot of clicks.

But it’s not just obvious pairings like leathers and feathers, Amazon’s system is constantly analyzing what everyone purchases and then using that to predict what they will buy next, in its never-ending quest to maximize sales by crunching All The Data.

The net effect when it comes to authors is this: if your book appears in the Also Boughts of a book in your niche which is selling well, this can lead to a considerable spike in sales. Conversely, if something goes wrong with your Also Boughts, it can lead to a measurable dip.

It was understandable that authors would begin worrying when Amazon seemed to remove Also Boughts from book pages, with some speculating that Amazon would stop recommending books organically and only give visibility to those using Amazon Ads.

But that’s not how the recommender system works. And I can show you exactly what I mean.

How Amazon Recommendations Really Work

Amazon makes millions of book recommendations to readers every single day — both on-site in various slots around the Kindle Store, and by email as well. These recommendations take many different forms.

Some Amazon recommendations are very top-down, but most are either personalized for each individual reader, or contextual — based on what the reader is viewing at that moment, or the place they are in the Kindle Store, or an action they just performed. And all of this is completely unaffected by Also Boughts disappearing from book pages.

Let me give you an example.

During the research process for my book Amazon Decoded, I conducted a number of revealing experiments.

Have you ever noticed what happens when you buy a book in the Kindle Store? Specifically, have you noticed what happens on-screen afterwards? Amazon never misses a trick and as soon as you complete payment, a confirmation screen appears recommending more books.

Amazon is split-testing things all the time, so you may see this play out slightly differently each time you purchase a book, but, commonly, you will see Amazon push the book in the #1 Also Bought slot pretty hard.

(Unless there is an audiobook edition which is Whispersynced, then Amazon will often favor that recommendation instead. It can experiment with other approaches, such as a carousel of books, but this will also be heavily influenced by the Also Boughts of what you just purchased.)

If that #1 Also Bought is also the next book in the series, then Amazon will helpfully flag that it is indeed the next in the series – which can really drive that spillover when you are promoting Book 1, especially if you have also discounted Book 2.

(Assuming your Book 2 is that #1 Also Bought, of course, and that your series metadata is in perfect shape.)

This is the kind of thing that doesn’t happen so much on the other retailers, because they simply don’t have recommender systems quite as sophisticated as the one powering the millions of recommendations Amazon makes every day.

Other retailers do have rudimentary recommendation engines, but Amazon is quite literally years ahead of the competition, and it doesn’t feel like that gap is closing because fundamentally different philosophies are at work.

Link to the rest at David Gaughran

6 BookBub Ads Features You May Not Know About

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From BookBub Partners:

2. Browse “Related Authors” for your author targets

For many advertisers, choosing author targets is a critical part of creating successful ad campaigns. To help make it easier for advertisers to discover author targets with large audiences on BookBub, we added a tab to the author targeting module of the ad creation form to surface “Related Authors.”

BookBub Ads - Related Authors

After you select at least one author target for a campaign, we’ll generate a list of other authors who share readers with the author(s) you’ve already selected. Of course, you should always test your targets to determine which will be the most effective for your particular books and campaigns, but we hope this will help you find new audiences to test out!

3. View improved stats for individual author targets

When you’ve added more than one author target to a campaign, you can view the impressions, click-through rate (CTR), and cost-per-click for each target under the “Aggregate Stats” tab. These stats are now visible for each target as soon as your ad starts serving impressions.

BookBub Ads data

We recommend waiting to draw conclusions about an author target’s effectiveness until you have at least a few hundred impressions. The more data you have, the more reliable the results.

Note that many of our readers fall into the targetable ad audiences of multiple authors. If a reader who sees an impression of your ad falls into the audience of more than one of the authors your ad is targeting, we include the stats from that impression under each of those authors. This may help you collect data more efficiently than if you were to target each of those authors’ audiences with separate ad campaigns.

Link to the rest at BookBub Partners

PG notes that BookBub is not the only book promo service used by indie authors (there are quite a few).

However, PG included this excerpt because it highlights what can often be a useful principle for marketing and promoting a book (as well as a great many other things) – Watch what your competitors are doing to sell their books and try to determine if it’s working well or not.

One of the common things that advertising agencies do is to carefully monitor all the advertising and marketing activities undertaken by companies that are competitive with the agency’s clients. For example, Coke’s ad agency watches what Pepsi is doing for advertising and promotion and vice-versa.

Sometimes this practice results in copy-cat advertising, but more often, it may disclose something more subtle: the competitor has discovered a consumer segment (let’s use single women over 40 who have a reasonable amount of disposable income as an example) that responds positively to a certain type of message and has created advertisements that carry that message and is placing them in online locations that attract such visitors (or magazines focused on such readers or television programs with a high percentage of such viewers).

BookBub’s suggestion is the same. Very few readers only read books by a single author. One of the reasons that genres exist and are cultivated by publishers and bookstores is that the best way to sell more books to those types of readers.

We’ll take an example: Mystery and Crime Fiction (which are actually two genres, but are often lumped together):

Some basic sub-genres would be:

  1. Detective Novels (Agatha Christie, Raymond Chandler, Dashiell Hammett, and Sue Grafton are some well-known examples)
  2. Cozy Mysteries (Dorothy L. Sayers, Elizabeth Daly and sometimes, Dame Agatha again)
  3. Police Procedural (Ed McBain, P. D. James, and Bartholomew Gill)
  4. Caper Stories (W. R. Burnett, John Boland, Peter O’Donnell, and (sometimes) Michael Crichton)

So, if you write detective novels, you might want to see if you can successfully promote your book by targeting readers who like Sue Grafton’s books. In a crude way, you might use an advertising headline that reads, “If you like Sue Grafton books, you’ll really love mine!”

However, as an indie author who has complete control over your advertising and needs no one’s approval to spend some of your hard-earned royalties to generate more royalties, you can be much more sophisticated and cost effective. You can use the techniques described in the OP and also learn more about Amazon Recommendations and Also Boughts.

David Gaughran has written an excellent post on that very subject.