The Passive Voice

From Author Earnings:

It has been nearly half a year since we first pulled data for nearly every ranked ebook on Amazon.com’s thousands of category bestseller lists. This is our third quarterly report, and every data set tells us something new. With enough reports, we should be able to spot emerging trends in the world of digital publishing in order to help authors make the best decisions with their manuscripts.

As before, we are dividing the ebooks up by publication path while looking at the following four measures: the number of ranked titles, the number of unit sales, gross earnings, and authors’ earnings. Our primary focus at AuthorEarnings.com is the writer, so we pay special attention to the last of these measures.

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Of note here is that all of our graphs show remarkable consistency across data sets taken over the course of half a calendar year. And with our latest data set, we estimate that self-published authors now account for 31% of total daily ebook sales regardless of genre. This makes indie authors, as a cohort, the largest publisher of ebooks on Amazon.com in terms of market share.

Gross sales are where it begins to get interesting. Now we are factoring price into the equation. We know self-published ebooks cost less than ebooks from the Big 5, but how much less? Being able to see the combined effect of price and sales rank in a single graph for 120,000 ebooks is very powerful. A lot of small discrepancies begin to average out with such a massive sample size. And while indies have seen positive movement across all three quarters, it’s too soon to tell if this is a global or a seasonal trend. It could be that indies promote their books year-round while major publishers pull out all the stops around the Holidays. This time next year, we should be able to answer this question.

In February, we were able to announce that self-published authors are earning nearly as much as Big 5 authors combined when it comes to ebook sales on the Kindle Store. In the two quarters since, the earnings for Big 5 authors has shrunk while that for indies has grown. We can now say that self-published authors earn more in royalties than Big 5 authors, combined.

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It bears putting a number here and stressing what we are seeing: Self-published authors are now earning nearly 40% of all ebook royalties on the Kindle store. The days of looking at self-publishing as a last option are long gone. A lot has changed in six months.

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It wasn’t surprising to see that most Big 5 books employ DRM, but we were shocked to see that it is practically 100% of them. Indies, on the other hand, locked down roughly 50% of their titles. Since there isn’t any variation in the Big 5 books, we are forced to look at the self-published titles for any effect on sales, and indeed there is one. The 50% of non-DRM ebooks account for 64% of total unit sales.

Indie titles without DRM sell twice as many copies each, on average, as those with DRM.

We believe this is one of the most important graphs we have ever published. At a glance, we can see how each publishing path performs in the top genre categories, and we can also see how these genres compare to one another in both total revenue and market share by publishing path. This last distinction is crucial, because the old-time advice to “never self-publish” has now faded to the advice that “self-publishing only works in certain genres.”

The truth is that, regardless of which publishing path an author chooses, some genres of trade ebooks sell vastly better than others, period. Other genres languish. For Big 5 authors, Mystery, Thriller, & Suspense is by far the most lucrative genre. But you don’t hear many people assert that traditional publishing is only good for people writing sleuths. Another common refrain is that nonfiction and literary fiction are uncrackable genres for indies. But in non-fiction, self-published authors are earning 26% to the Big 5′s 35%.

It turns out that Big 5 publishers have nearly as small a portion of Romance earnings (18%) and Science Fiction & Fantasy earnings (29%) as indies have of Literary Fiction earnings (13%) and Nonfiction earnings (26%), respectively.

Self publishing isn’t just viable for Romance and Sci-Fi/Fantasy. While indie authors are absolutely dominating traditionally-published authors in those particular genres, indies have also taken significant market share inall genres, including Mystery/Thriller/Suspense and Non-fiction. The market for literary fiction is anemic for indie authors simply because it is an anemic segment of publishing overall.

In fact, Literary Fiction makes up only 2% of Amazon ebook unit sales and 3% of Amazon ebook dollar sales. More startling is the fact that 20% of that 3% belongs to a single aggressively-promoted title, The Goldfinch.

Link to the rest at Author Earnings.

From The Verge:

An unusual article recently appeared in the magazine of the Royal Statistical Society and American Statistical Association.

It featured web-like diagrams of lines connecting nodes, a hallmark of research that analyzes networks. But each node, rather than being a plain dot, was the head of a burly, red-bearded Viking sporting a horned hat, his tresses blowing in the wind.

This whimsical-seeming piece of scholarship went on to describe the social network of more than 1,500 characters in the Icelandic Sagas, epic tales about the colonization of Iceland around a thousand years ago that were first written down a few hundred years after that. It was the work of a pair of statistical physicists, Ralph Kenna of University of Coventry in the UK and his graduate student Pádraig Mac Carron, now at Oxford, who are applying the tools of their trade to works of epic literature, legend, and myth.

For this particular analysis, they painstakingly recorded the relationship of every settler in 18 sagas. The resulting web of interactions helped shed light on theories humanities scholars have been discussing for years, and even picked up on some previously unnoticed patterns.

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The story of how Kenna and Mac Carron got here begins with the Irish tale of the cattle-raid of Cooley, or the Táin Bó Cúailnge. That yarn tells how the warrior-queen Medb of Connacht rallies an army to steal a fine bull from Ulster, and how youthful Cúchulainn, an Ulster folk hero, stands against her. Complete with a maiden prophet with three pupils in each eye, wild chariot rides, and an enormous cast of characters, it’s a story to grip anyone’s imagination.

It’s a story that Kenna and Mac Carron, who are both Irish, have known since childhood.

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The Táin, which comes to us in pieces from many different manuscripts, the oldest nearly 1,000 years old, is considered literature rather than historical account. But it might still encode, in a way statistics can reveal, information about the society that produced it. Math might also help classify tales in a new way, quantitatively, in addition to the usual qualitative classifications.

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Siccing a pattern-finding program on a novel might uncover meaningless patterns, or ones so obvious that a high school freshman could see them. But Tim Tangherlini, a folklorist and professor at UCLA who hosted a 2010 National Endowment for the Humanities meeting on network analysis, sees potential. “There are a lot of latent patterns in this material that you can’t discern overtly. You can do it very well as a trained reader — by developing ways of thinking about the material that let us see latent patterns — but we have a very hard time articulating it.” Algorithms could help make those patterns visible. In the case of social networks, they can reveal which people are the most connected or powerful, as well as how densely connected the network is and the average distance between any two people, qualities that vary depending on the type of group.

For instance, research suggests that real social networks have different properties than fictional ones. The idea of seeing where epics — which are certainly not all fact, but perhaps not all fiction — fell on that spectrum appealed to Kenna.

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What Kenna and Mac Carron found was that the epics fell between the real networks and the fictional ones. The network in The Iliad is relatively realistic, and Beowulf’s also has realistic aspects, with the exception of the connections to Beowulf himself. That chimed with the idea from the humanities that he, unlike some others in the story, may not have existed. The Táin’s network was more artificial. Interestingly, however, they found that a lot of the Táin’s unreality was concentrated in just a few, grotesquely over-connected characters. When they theorized that some of those characters might actually be amalgams — for instance, that some of the times the queen of Connacht is said to speak to someone, it might be a messenger speaking for her instead — the network began to look more realistic.

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They had unwittingly stumbled onto patterns that tied into theories humanities scholars had been discussing for years. The sagas are thought to have been written using actual genealogical information, says Tangherlini — in fact, many of the Icelandic sagas are classified as “family sagas,” and they may have been written to cement a family’s glorious past — so it makes sense that their social networks are very realistic.

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At a broader level, comparing social networks in these old stories to those in more recent fiction may help reveal deeper truths about what literature has meant to people through the ages. “Great literature might have been more representative of society in the past,” says Birkett. “There’s a big difference between a realistic representation of social networks and a realistic representation of life, or the human condition … I don’t think you could write a modern novel that accurately represented social groups [the way the sagas do], because there would be too many characters.” Mac Carron echoes that sentiment. “Njal’s Saga has something like an average of four new characters every page,” he says. “Whereas in modern fiction, I think they do try to make sure you can keep track of everyone, with the exception of maybe Game of Thrones.” Even in Harry Potter and Lord of the Rings — which Mac Carron and Kenna analyzed to compare with the sagas — the networks are nowhere near as vast. That density of characters, and the realism of their networks, suggest a different purpose for literature than might be the case now — the creation of portraits of societies, rather than portraits of individuals.

Link to the rest at The Verge

I think I did pretty well, considering I started out with nothing but a bunch of blank paper.

Steve Martin

From The Chronicle of Higher Education:

The student was angry. Why hadn’t I mentioned there was a shorter version of the book I assigned for this week’s class? After brashly announcing she had unearthed an earlier article by the author (“Same thing, right?”), she instructed me that anything said in a book could be reduced to an article. The rest is just padding.

For some years, the amount of reading we assign university students has been shrinking. A book a week is now at best four or five for the semester; volumes give way to chapters or articles. Our motivation is often a last-ditch attempt to get students to actually read what’s on the syllabus. Other factors include the spiraling cost of textbooks and copyright limitations on how much we may post digitally.

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Are students even reading Milton or Thucydides or Wittgenstein these days? More fundamentally, are they studying the humanities, which are based on long-form reading?

There has been much talk of late about the humanities being in crisis. Undergraduates who once flocked to literature courses are now studying economics to prepare themselves for Wall Street. Graduate programs in the humanities are thinning out as students turn to “practical” advanced degrees with more certain employment prospects and, at least initially, higher salaries. The 2011 Freshman Survey from UCLA’s Higher Education Research Institute found that the top reason for attending college was “to be able to get a better job” (86 percent of respondents, up from 70 percent just five years earlier).

But there is another essential consideration affecting interest in humanistic inquiry: how we are doing our reading. I contend that the shift from reading in print to reading on digital devices is further reducing students’ pursuit of work in the humanities. Students (and the rest of us) have been reading on computers for many years. Besides searching for web pages, we’ve grown accustomed to reading journal articles online and mining documents in digital archives. However, with the coming of e-readers, tablets, and smartphones, reading styles underwent a sea change.

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But increasingly, e-books are causing a pedagogical reboot. Administrators and instructors, working with kindergartners through graduate programs, are progressively encouraging students to read on digital screens. Offering the promise of convenience and reduced cost, publishers are the main impetus behind the migration from print to e-books, although academics are buying into the transition with little thought for educational consequences.

What’s the problem? Not all reading works well on digital screens.

For the past five years, I’ve been examining the pros and cons of reading on-screen versus in print. The bottom line is that while digital devices may be fine for reading that we don’t intend to muse over or reread, text that requires what’s been called “deep reading” is nearly always better done in print.

Readers themselves have a keen sense of what kind of reading is best suited for which medium. My survey research with university students in the United States, Germany, and Japan reveals that if cost were the same, about 90 percent (at least in my sample) prefer hard copy for schoolwork. If a text is long, 92 percent would choose hard copy. For shorter texts, it’s a toss-up.

Digital reading also encourages distraction and invites multitasking. Among American and Japanese subjects, 92 percent reported it was easiest to concentrate when reading in hard copy. (The figure for Germany was 98 percent.) In this country, 26 percent indicated they were likely to multitask while reading in print, compared with 85 percent when reading on-screen. Imagine wrestling with Finnegan’s Wake while simultaneously juggling Facebook and booking a vacation flight. You get the point.

Link to the rest at The Chronicle of Higher Education and thanks to Matthew for the tip.

From The Atlantic:

Mary was 18 years old and spending her summer at the Villa Diodati at Lake Geneva with her stepsister Claire Clairmont and the writers Lord Byron and John William Polidori. Her future husband, Percy Shelley, was staying nearby. They had intended to spend the summer swimming and sunbathing, but a year earlier, Mount Tambora, a massive volcano in Indonesia, had erupted, dispersing nearly 1.5 million metric tons of dust into the atmosphere, blocking the sun, and sharply decreasing temperatures worldwide. It had such devastating effects on global weather patterns that 1816 came to be known as “The Year Without a Summer.”
Although the inclement weather foiled the group’s outdoor plans, the four of them contented themselves with indoor activities and took to reading scary stories, most notably from Fantasmagoriana, a French anthology of German ghost stories.

“It proved a wet, ungenial summer, and incessant rain often confined us for days to the house,” Mary Shelley wrote, in her introduction to the 1831 edition ofFrankenstein; Or the Modern Prometheus. “But,” she added, “Some volumes of ghost stories, translated from the German into French, fell into our hands.” On the suggestion of Lord Byron a few days later, the four of them decided to try their hand at writing their own scary stories.

Throughout the summer, while trying to write her tale, Shelley spent many evenings listening to Lord Byron and Percy Shelley discussing the spine-tingling findings of Erasmus Darwin (Charles’ grandfather). The elder Darwin had been experimenting with galvanism, and had shown that with the right use of electrical currents, a frog’s legs could be contracted at will. Rumors spread that electricity, which was widely not understood in 1816 (it wouldn’t be until 1882 that Thomas Edison harnessed electricity to create the first light bulb), could even be used to control and potentially reanimate humans.

With all the ghost stories and discussions of electrical reanimation swirling in her mind, Mary awoke on the 16th of June having had a nightmare, later writing, “I saw—with shut eyes, but acute mental vision—I saw the pale student of unhallowed arts kneeling beside the thing he had put together.”

It was a perfect storm of events: Shelley had lots of time to write due to the bad weather, she had inspiration from Fantasmagoriana and the talk of Erasmus Darwin’s electrical experiments, and she had great writers—Lord Byron and Percy (who she married in 1816)—by her side to bounce ideas off of. Two years later, Shelley published Frankenstein, launching the genre of science fiction. She was 20. As far as how to best access one’s creativity, Shelley appears to be a case study.

Shelley didn’t have much practice writing before that. So the fact that her masterpiece came so early in her life would imply that her skill was not something learned but an attribute she had always possessed. By this example, it would seem that you’re either creative or you’re not.

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In Old Masters and Young Geniuses, David Galenson, a professor of economics at the University of Chicago, proposed one of the most compelling theories on creativity of the modern age, a theory that explains the age discrepancy in successful creatives. He found that an artist’s success and how old she is when she attains it is a function not of the artist’s skill but of methodology.

There are, according to Galenson, two types of artists. There are “experimental artists,” who create their masterpieces at much older ages. Epitomized by Cézanne, the experimentalists “have ambitious but imprecise aesthetic goals, for they aim to present accurate accounts of the world as they see and experience it.” They “often see their work as unfinished” and thus tend not to create their masterpieces until much older.

Then there are the “conceptual artists.” Pablo Picasso, who launched the Cubism movement with “Les Demoiselles d’Avignon” as a 25-year-old, is the archetype. The purpose of these conceptual artists “can usually be stated precisely in advance of its production.” They tend to make many drafts of a single work—a painting, a novel—in their youth with a singular vision in mind. Because of this specific vision early on, successful conceptual artists are able to execute their chef d’oeuvres when they are so young that the rest of us are usually finishing up school or getting our first jobs.

Link to the rest at The Atlantic

From Cory Doctorow via Publishers Weekly:

I’ve just seen a letter sent to an author who has published books under Hachette’s imprints in some territories and with Tor Books and its sister companies in other territories (Tor is part of Macmillan). The letter, signed by Little, Brown U.K. CEO Ursula Mackenzie, explains to the author that Hachette has “acquired exclusive publication rights in our territories from you in good faith,” but warns that in other territories, Tor’s no-DRM policy “will make it difficult for the rights granted to us to be properly protected.” Hachette’s proposed solution: that the author insist Tor use DRM on these titles. “We look forward to hearing what action you propose taking.”

The letter also contains language that will apparently be included in future Hachette imprint contracts, language that would require authors to “ensure that any of his or her licensees of rights in territories not licensed under this agreement” will use DRM.

It’s hard to say what’s more shocking to me: the temerity of Hachette to attempt to dictate terms to its rivals on the use of anti-customer technology, or the evidence-free insistence that DRM has some nexus with improving the commercial fortunes of writers and their publishers. Let’s just say that Hachette has balls the size of Mars if it thinks it can dictate what other publishers do with titles in territories where it has no rights.

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The truth is that anyone who wants to avail herself of a Hachette e-book title without paying for it will have no problem doing so. DRM doesn’t stop people who scan books, or retype books. DRM doesn’t stop people who download widely available cracks that can remove all the DRM from an entire e-book collection. And DRM doesn’t stop people who are inclined to download the DRM-free pirate editions. All DRM does is punish legitimate users who had the misfortune to be so honest that they paid for the book, rather than taking it.

Hachette’s letter claims, “Improvements in retailer systems and e-book platforms has led to more flexible DRM which grants the consumer” (this being the odious term the letter uses in place of “the reader”) “greater flexibility in their use of purchased files, such as the ability to share across multiple devices.”

Devices, perhaps. But not across multiple platforms. With the exception of the Kindle Reader app, or the Nook app, available in Apple’s App Store and Google Play, there is no way to read e-books across platforms. And recently, we got a reminder as to what happens when Apple decides that an app is eating into its profits: out it goes. Just last week, Apple stopped bundling the YouTube player with its devices as part of its ongoing war with Google.

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Readers aren’t stupid. When they discover that paying for books results in locked, crippled editions, and downloading for free (simply by typing the title and “free e-book” into Google or Pirate Bay) gets them the same book, minus the offensive restrictions, they start to put two and two together. After all, DRM is not a selling point. There’s no one who’s ever bought a book because it had DRM. No one has ever clicked onto Amazon saying, “I wonder if there’s any way I can buy a book that offers less than the books I’ve been buying all my life.” People buy DRM e-books because they have no choice, or because they don’t care about it, or because they don’t know it’s there. But DRM never leads to a sale.

Link to the rest at Publishers Weekly and thanks to SMH for the tip.

From readwrite:

No one doubts anymore that Amazon Web Services is a big deal. But few appreciate just how unprecedented its growth has been. In fact, no other software business in history has grown as fast past the billion-dollar mark as AWS, as Businessweek’s Ashlee Vance points out.

Such growth is particularly astounding given the doubts Amazon has had to overcome relative to security, performance and more. Today those concerns seem puny compared to the overarching convenience AWS provides developers.

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Just How Big Is Amazon Web Services?

Rumors have swirled for years about AWS growth. Pacific Crest Securities now believes AWS will approach $5 billion in revenue in 2014, and top $6.7 billion in 2015.

That’s big, obviously, but the growth is even more impressive: Pacific Crest expects AWS revenue to increase 58% this year to nearly $5 billion from $3.1 billion in 2013, up from just $1.9 billion in 2012. For those doing the math at home, this means AWS revenue is doubling every two years.

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It’s also much faster than other explosive software businesses have managed.

Link to the rest at readwrite

So it’s not just about books.

From Cult of Mac:

One year after being found guilty of e-book price fixing, Apple has reached a conditional settlement with the U.S. State to pay $450 million for its role in the price fixing conspiracy that involved five major publishers.

Apple’s settlement could bring $400 million back to consumers’ wallets, reports Reuters, but the court documents filed on Wednesday reveal that the company isn’t quite ready to throw in the towel yet, with hopes that its appeal will shrink that fee down to just $70 million.

Link to the rest at Cult of Mac and thanks to Joshua for the tip.

UPDATE: Oops. Posted this late last night and was off the grid this morning. Latest report up above.

From Author Earnings:

In our most recent earnings report, one chart jumped out at us and begged for deeper analysis: It was a look at daily author earnings according to publication date, and it revealed the heavy reliance Big 5 publishers have on the sale of their backlist titles. The same chart showed, less surprisingly, that self-published authors are making the vast majority of their earnings on recently published works. In a single chart we were witness to the economic effects of new participants entering an industry in which they were formerly uncompetitive. The same chart made it apparent that the effects self-publishing will have on the trade book industry have only just begun.

Because of this chart, we began looking more deeply at authors from two different camps: those who debuted prior to the explosion of self-publishing and those who debuted after. Authors getting their start today will of course be joining the latter camp. And we believe those authors will want to know the following:

• Big-5 publishers are massively reliant on their most established authors to the tune of 63% of their e-book revenue.

• Roughly 46% of traditional publishing’s fiction dollars are coming from e-books.

• Very few authors who debut with major publishers make enough money to earn a living—and modern advances don’t cover the difference.

• In absolute numbers, more self-published authors are earning a living wage today than Big-5 authors.

• When comparing debut authors who have equal time on the market, the difference between self-published and Big-5 authors is even greater.

In this report, we will also reveal how e-book earnings represent roughly 64% of a traditionally published fiction author’s income, and therefore why authors should focus less on statistics geared toward publisher earnings and trade bookstore sales and consider their own incomes instead. Finally, we will tackle the difficult question of just how many authors are earning a living wage today. The results are sobering. I’ll spoil it for you and say that there aren’t many. But there are reasons to celebrate. Read on to see why.

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[We started] wondering how much of traditionally-published author revenue was coming from new releases by long-tenured authors, and how much of it was coming from debut authors. This is a crucial question for a new artist hoping to break into an entertainment sector. What we were hoping to discover is how many seats are left on the traditionally published bus. So we divided authors and books into “New” and “Old” using January 1, 2010 as a cutoff date, and checked.

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This final chart reveals a startling insight: If the Big 5 hadn’t signed a new author since 2009, and simply released new works from their long-established authors, they would still be making 63% of the e-book revenue that they are making today. Ownership of backlist and long-tenured authors is quite clearly big publishing’s most powerful commodity. This goes a long way toward explaining ever more restrictive reversion and non-compete clauses in publishing contracts. It also lends credence to rumors that some top-name authors are already receiving ebook royalties higher than 25% of net. Publishers rely heavily on these established authors and may be willing to violate their own most favored nation clauses in an attempt to retain them.

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This time, when comparing only the earnings of “New” authors who debuted after 2010, we see that below a tiny handful of mega-selling Big-5 debuts (like Veronica Roth), far more “New” indie authors are making a good living from their Kindle e-books than their “New” Big-5 peers. This is a logarithmic scale, which means a little separation signifies quite a difference in outcomes.

Some might argue that this comparison does not reveal the entire picture, because best-selling traditionally-published authors have a healthier complement of print sales than their indie counterparts. However, non-ebook revenue for traditional-published authors makes up a smaller percentage of their author earnings than you might think, and this is especially true for authors of fiction. To see this requires a digression, one that may be just as important for the aspiring author as our larger analysis in this report.

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While only 32% of the publishing industry’s gross revenue currently comes from e-books, nearly 64% of the average traditionally-published fiction author’s earnings is coming from their e-books. Earnings for the average genre-fiction author will skew even further toward their e-book sales. Perhaps an e-book-based comparison between publishing types is not so unfair a comparison after all. Especially when considering that the gain of 8% – 15% royalties on print sales means taking a massive cut in e-book royalties—from 70% of gross to 25% of net.

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[This data] neatly captures so much of what is going on in the e-book market today, mainly that there are far more indie debut authors from 2010, 2011, 2012, and 2013 who are now holding spots on the Amazon bestseller charts than Big-5 debut authors. Even more striking, the number of today’s bestsellers from these “New” indie debut authors increases steeply year-over-year, while the number of today’s bestsellers from “New” Big-5 debut authors stays flat. The number of today’s bestsellers from small to medium publisher debut authors is also growing year over year, although not at the same explosive rate with which indie debuts are grabbing and holding slots on the charts.

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After years and years of querying and jumping through gatekeeper hoops, it appears that even the less-than-1% who are lucky enough to land an agent and a Big-5 publishing contract can’t manage to quit their day jobs. (This is an observation in the data that matches what we have seen anecdotally in the publishing and bookselling trenches).

By contrast, we see over 700 Indie-published authors who debuted in 2010, 2011, 2012, and 2013 who are today earning more than $25,000/year from their Kindle e-books alone. For these authors, e-book sales on other platforms and POD print sales will add another 20%-30% on average to this total. It’s easy to see that, for the past 4 years, and even taking lost print sales into consideration, far more Indie authors than Big-5 authors are earning a living wage from their writing.

Link to the rest at Author Earnings

From veteran publishing consultant Mike Shatzkin:

Harvard Business Review published an article recently by Benjamin Edelman called “Mastering the Intermediaries” which gives advice to businesses trying to avoid some of the consequences of audience aggregation and control by an intermediary. The article was aimed at restaurants who don’t want their fate controlled by Open Table or travel companies who don’t want to be beholden to Expedia. The advice offered is, of course, scholarly and thoughtful. It seemed worth examining whether it might have any value to publishers suffering the growing consequences of so much of their customer base coming to themthrough a single online retailer.

The author presents four strategies to help businesses reduce their dependence on powerful platforms.

The first suggestion: exploit the platform’s need to be comprehensive.

The author cites the fact that American Airlines’ strong coverage of key routes made its presence on the travel website Kayak indispensable to Kayak’s value proposition. As a result, AA negotiated a better deal than Kayak offered others or than others could get.

Despite some suggestions in the late 1990s that publishers set up their own Amazon (which they subsequently half-heartedly tried to do with no success) and a couple of moves to cut Amazon off by minor publishers that were minimally dependent on trade sales, this tactic has never really been possible for publishers on the print side. Amazon began life by acquiring all its product from wholesalers — primarily Ingram and Baker & Taylor — before they switched some and ultimately most of its sourcing to publishers to get better margin. But the publishers can’t cut off the wholesalers without seriously damaging their business and their relationships with other accounts, and the wholesalers won’t cut off Amazon. So for printed books, still extremely important and until just a couple of years ago the dominant format, this strategy is not worth much to publishers.

However, the strategy was and is employable for ebooks, which are sold via contractual sufferance from agency publishers, even if the sourcing is (sometimes, not typically by Amazon) through an aggregator. That was the implied threat when Macmillan CEO John Sargent went to Seattle in the now-famous episode in 2010 to tell them that ebooks would only be available on agency terms. Amazon briefly expressed its displeasure by pulling the buy buttons off of Macmillan’s print books. (Publishers can’t cut them off from print availability, but they can cut publishers off from print sales!) In the meantime, Amazon’s share of the big publishers’ ebook sales has settled somewhat north of 60 percent, and those Kindle customers are very hard to access except through Amazon. This is considerably more share than Kayak had when American Airlines threatened their boycott.

In fact, it is likely that Amazon could live without any of the Big Five’s books for a period of time, except for Penguin Random House, which is about the size of the other four big publishers combined. The chances are that PRH’s size will prevent Amazon from treating them the way they are now treating Hachette. And the massive share that Amazon has of both print and ebook sales makes it extremely difficult for Hachette, or any other big house except PRH and possibly HarperCollins, to sustain an ebook boycott (with consequent print book sales reductions) for any significant length of time. In other words, for publishers dealing with Amazon, this horse has left the barn.

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Amazon is well on its way if not already past the point where they sell more than half of the books Americans buy (combining print and digital). Book consumers are highly influenced by the suggestions made and choices surfaced by their bookseller, whether physical or virtual. That is: the process of buying books is inextricably linked to the process of discovering books. So Amazon is getting a stranglehold on recommendations which for many consumers also means a stranglehold on marketing and promotion.

The “damage” to society that results from results being gamed in fiction is probably minimal, and restricted to Amazon promoting either its own published titles, its favorite self-published authors, and books from other publishers that have paid to play. But, with non-fiction, the consequences could be much more severe and of real public interest.

Imagine a persuasive book arguing that the government should sharply increase the minimum wage and let’s also imagine that Amazon corporately doesn’t like that idea. Is it really okay if they suppress the awareness of that book from half or more of the book-buying public?

This is the kind of an argument that can arouse the government which, so far, has shown scarcely more interest in Amazon’s dominance of book commerce than they would if they dominated the commerce in soft drinks or lawn fertilizer. Can they be awakened by publishers to this concern before dramatic cases affecting public awareness and policy are documented? We don’t know, but we do know that Hachette sent lawyers to Washington early in the Obama Administration to call attention to Amazon’s growing marketplace power and their willingness to use it. That apparently had no affect (unless, in some perverse way, it contributed to the government’s interest in pursuing the “collusion” case).

There could certainly be some consumer blowback to the gaming of search results by a platform, perhaps including Amazon. The Harvard article says Google changed algorithms that seemed to be burying Yelp because consumer sentiment, partly measurable in search queries, showed dissatisfaction among the public. But in the absence of an aroused government, it would seem unlikely that this suggestion will do publishers large or small much good.

. . . .

This is probably the 20th year in a row, dating from their start in 1995, that Amazon has gained market share for sales of books to consumers. And that’s because consumers are making what for them is the obvious choice for convenience, total selection, and competitive pricing, as well as getting tied into Amazon through their PRIME program. Unless one of the other two tech giants in the bookselling world — Apple or Google — decides to make a dedicated effort to take some of that market share away from Amazon in both print and digital (and neither of them is much interested in print), it is hard to see where a serious competitor can come from.

Link to the rest at The Shatzkin Files

As PG has opined before, those who accuse Amazon of a devious scheme to gain dominance with various strategies, then use that dominance to rule as an evil king are often engaging in psychological projection wherein they’re ascribing their own inner attributes to others. It’s one manifestation of Amazon Derangement Syndrome.

As with other discussions revealing the current state of tradpub’s thinking, the idea that only government intervention can save Big Publishing’s role in the future of books is, in PG’s mind, evidence the folks in New York are beginning to believe they’re toast in a competitive marketplace.