With the holidays almost over, and some cold-induced time on my hands, here’s my last rant before the New Year begins in earnest, in the light of the latest year-end developments. And particularly Amazon’s happy Christmas, which ought to have struck a chill into the flinty, Scroogelike hearts of the Big Publishing majors. After all, where does this leave their efforts to get around Amazon? Look at kids’ books alone. “The books read by kids in Amazon FreeTime this holiday season would reach Mt. Everest’s peak more than 10 times if put in a straight line in their physical form,” according to Amazon.
Let’s assume, for the sake of argument, that the Big Five publishers still regard Amazon as The Enemy, or at best, as an onerous fact of life that they still can’t live without. They’ve managed to shaft their share of the ebook market by taking back pricing control from Amazon – no matter how friendly pundits try to spin the story in their favor. They’re seeing Amazon grow ever more successfully competitive to them as a content creator – directly through Amazon Publishing, and indirectly through KDP and the self-publishing ecosystem. What can they do?
Well, why do they have Amazon to deal with in the first place? In the ebook world, it’s all about DRM, of course. Amazon fulfilled the role that iTunes performed in music by serving up a DRM system that Big Media could live with. And as David Rothman remarked earlier, it ought to have served as a deafening wake-up call to Big Publishing as far back as 2009 when Apple decided to ditch DRM on iTunes. But Amazon is there also because publishers often misunderstand the nature of their own business.
Publishers are manufacturers. Because they’re so up against the creative process, they may try to persuade themselves that they’re more like talent agencies, but the fact remains their business is about making things, not selling them. And industries (and economies) where the manufacturers are the predominant force tend to favor the interests and priorities of the producers over those of the consumers.
Retail, meanwhile, is all about the consumer. Selling things to people means the customer is always right, and you have to know your customers. The producers can try to carry on in blithe indifference to what the end user wants – think of the remainder book trade, for instance. The retailer doesn’t have that luxury.
This is why book trade veterans like Andrew Wylie are so wrong when they try to dismiss Amazon as just a distribution company, like an errand boy. And so right when they reveal, unwittingly, how strong a threat Amazon is to the traditional power structure in their business. Amazon represents a concentration of consumer power, a retail market reality check, served up in a way they can’t ignore. No wonder they resent it so much. Amazon is the mask over the customer’s face – and the publishers hate it.
Let’s be clear: this isn’t about public taste. Big Publishing is quite happy to debauch that. It’s about the power shift towards the consumer. Before Amazon and the internet came along, none of the big book chains had sufficient market power to significantly influence publisher decisions. And the smaller independent bookstores could just go whistle. Plus book returns and the remaindering system gave publishers a unique insulating layer between them and market reality.
Now that the customer has a proxy in the shape of Amazon, publishers are getting ever more cranky. Look how bent out of shape Big Publishing got when Amazon had the temerity to drive book pricing towards what people were prepared to pay, rather than what the publishers wanted to charge. Now they’ve got the pricing power they want – over a shrinking pie. But I guess that feeling of power and being in control still matters more. And you can see similar corporate behavior in, for instance, Japanese conglomerates that promote in-house standards and platforms regardless of consumer preference.
Thanks to Amazon, publishers have also woken up to how important it is to know their customer. Market intel, as much as direct sales, is what publisher-backed online franchise billboards like HarperCollins’s Narnia storefront, are all about. But the struggles that the likes of Simon & Schuster have with their social media efforts suggest that listening to readers just isn’t in their corporate DNA.
Of course, there is one way for big publishers to re-engage with their readerships and gain unique customer traction: that’s to become once again institutions that care about more than money and have loyal communities because of that. Penguin Books in the UK began under the stewardship of Allen Lane with a focus on educating the public as well as entertaining it. The UK’s Left Book Club, a highly successful book club in its own right and a key institution of left-wing British politics in the 1930s and 40s, was backed by publisher Victor Gollancz. But you only need look at the Zoella farce to see how much of the moral and cultural high ground Penguin has abdicated. And is it any wonder if the public doesn’t want to buy into institutions characterized by such cynical exploitation?
So I expect Big Publishing will continue its pointless and self-destructive war against its own audience into 2016, since 2015 saw it learning no better. Amazon meanwhile will continue to grow past the big publishers by leaps and bounds. You’d think they might learn something.