The Amazon Publishing Juggernaut

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From The Atlantic:

Have you read Victoria Helen Stone’s False Step? No? Surprising, given that it’s a best seller, and that you clicked on an article about books and publishing—I thought you were more widely read. Surely you’ve at least gotten through Loreth Anne White’s The Dark Bones? Julianne MacLean’s A Fire Sparkling? Claire McGowan’s What You Did?

No? Each of these books beat out Where the Crawdads Sing, then the No. 1 New York Times best-selling novel, on the Kindle Store best-seller chart in recent months. Each one is a bright star in the self-contained, lucrative universe of ebooks. And each one was published by Amazon Publishing, a subsidiary of the store we already buy everything else from.

Founded in 2009, Amazon Publishing is far from the tech giant’s best-known enterprise, but it is a quietly consequential piece of the company’s larger strategy to become a one-stop shop for all your consumer decisions. As Amazon Studios does with movies, Amazon Publishing feeds the content pipelines created by the tech giant’s online storefront and Amazon Prime membership program. At its most extreme, Amazon Publishing is a triumph of vertical engineering: If a reader buys one of its titles on a Kindle, Amazon receives a cut both as publisher and as bookseller—not to mention whatever markup it made on the device in the first place, as well as the amortized value of having created more content to draw people into its various book-subscription offerings. (One literary agent summed it up succinctly to The Wall Street Journal in January: “They aren’t gaming the system. They own the system.”)

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And Amazon Publishing is a culture-making juggernaut, even if the literati don’t much think about it. According to Peter Hildick-Smith, the CEO of the book-industry analysis firm the Codex Group, roughly 25.5 million U.S. households bought books in the past month, and fully a quarter of those households use Prime Reading, a feature of Amazon Prime that allows subscribers to borrow 10 items at a time from a catalog of 1,000 ebooks, magazines, and other media, including the tech giant’s originals.

Prime Reading is far from Amazon’s only reading subscription service. Kindle Unlimited, a similar program, costs an extra $9.99 and offers a wider selection of 1 million titles. The Prime Book Box for children includes a selection of age-appropriate books delivered regularly for $19.99. Amazon First Reads allows members to download a book a month earlier than the unsubscribed public for no extra cost. Often, First Reads are—you guessed it—Amazon Publishing titles, and they rocket up the Kindle best-seller charts as soon as they’re made available; A Fire Sparkling and What You Did both topped the charts in early July despite being due out August 1.

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Amazon Publishing is still a relatively small fry: According to Hildick-Smith, it puts out 1,100 titles a year, compared with the 1,500 to 2,000 a large publishing house such as Simon & Schuster might publish. Estimating sales for those 1,100 titles is difficult, according to experts, because the tech giant doesn’t disclose ebook sales numbers for its original books, and its proprietary methods of distribution obscure those figures from the third-party researchers who determine best-seller lists.Grace Doyle, the editor who oversees the Amazon Publishing mystery/thriller imprint, Thomas & Mercer, and the science fiction/fantasy label, 47North, says the subsidiary looks at three things when measuring the success of a title: the book’s sales, the number of people who actually read it (Amazon maintains a “most read” chart, measured by ebook pages turned), and whether the company can expect more books to come from its relationship with the author. She said again and again in our interview that her goal was to maintain partnerships with authors for as long as possible, which often results in publishing series, especially for the thrillers and mysteries that do so well with ebook readers.

Indeed, Amazon Publishing knows its readers and has pursued their appetites since its inception. Jeff Belle, the vice president of Amazon Publishing, acknowledged their tastes in a 2011 interview: “Our customers are voracious readers of genre fiction.”. . . .Many authors seem to love Amazon Publishing. Robert Dugoni, who has written 10 mystery and thriller novels for Amazon, inked a deal with the company in 2013, after becoming dissatisfied with the amount of advertising his previous publisher, Simon & Schuster, put behind his books. Amazon Publishing, he says, still promotes the opener of his ongoing mystery/thriller series, My Sister’s Grave, a six-year-old book, in Kindle Store promotions; Dugoni says he’s sold 1.5 million copies of that title and 5 million copies of all his books with Amazon Publishing since 2013. The “hunger” of Amazon Publishing’s employees, along with its reams of customer data and speedy editing process, impressed him, he says, to the point that he recently appeared in one of its marketing videos.

“They’re constantly reinventing marketing and promotion to keep my name and my books in front of readers,” Dugoni told me. “From an author’s perspective, that’s all I ever wanted: people to read my books.” Doyle called Amazon’s success with Dugoni—a reinvigoration of an established author who wasn’t selling well elsewhere—“emblematic of our goals.” In January, Mark Sullivan, an author who writes historical fiction and mysteries, relayed a similar story of a career revived by Amazon Publishing.

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Prime subscribers are so valuable to Amazon because they spend more in the long run: Jeff Bezos has said that people who stream videos on Amazon convert from free trials and renew their Prime subscriptions at higher rates than those who don’t. He put it bluntly in 2016: “When we win a Golden Globe, it helps us sell more shoes.”

Book readers are the same. Content is the hook; commerce is the goal. If users join Prime for early access to a new title by their favorite author, rather than buying a one-off copy of the book, they become much more likely to purchase other things on Amazon—couches, clothes, cutlery, etc.—to take advantage of the membership. Bezos said in 2015, “It’s how our whole model works. When someone joins Prime, the more they buy of everything we sell.” That is to say, when the Amazon Publishing original You Are (Not) Small won the 2015 Theodor Seuss Geisel Award, one of the most prestigious for children’s books, diaper sales presumably skyrocketed. (Amazon did not immediately respond to a request for comment on sales spikes correlated with awards.)

Link to the rest at The Atlantic and thanks to DM for the tip.

Although to the best of PG’s knowledge, Amazon hasn’t released any sort of detailed demographic data about its Prime members, PG would bet most members of this group comprise the principal target market for a large number of retailers.

Money to spend, convenience-oriented, well-educated, big digital fans are likely among the principal descriptors of Amazon Prime subscribers. A great many retailers, service providers and others would love, love, love to reach this demographic efficiently.

Again, PG is not aware of any publicly-available customer satisfaction data for Prime members, but he would also bet that it’s sky-high. This group likes to buy a lot of different things from Amazon because Amazon makes it easy for them to discover, select and receive the goods (and, increasingly, he predicts, more of the services) these customers want.

Obviously, PG would love to see a lot of proprietary information Amazon has, but one of the items he most covets is what a typical Prime member and a typical non-Prime Amazon shopper spend on Amazon in the 3-5 years after their first Amazon purchase.

See Amazon Prime: 20 benefits every member gets and 31 Best Amazon Prime Benefits to Use in 2019 for more of the reasons why a lot of people love Amazon Prime.