Shatzkin recapitulates the recent history between Amazon, the Big Six publishers, and the bookstore chains. Amazon is in the process of inspiring much fear and loathing in the publishing industry by luring away the big celebrity writers whose megahits subsidize less popular works. Meanwhile, it continues to be able to undercut physical bookstores like Barnes & Noble on price, gradually stealing away their business.

B&N’s decision seems to me like the right move for them. Most very regular bookstore customers aren’t really surprised if any particular store doesn’t have any particular book. Indeed, the impossibility of stocking everything anybody might ask for in a store is part of the reason that online bookselling is such a useful service. In this day and age, most people who want a particular book don’t go to a bookstore to buy it; they just order it online. They go to bookstores to browse and shop and choose from what is within the store. So, yes, there may be some disappointed customers if B&N doesn’t have a high-profile Amazon title, but I don’t think that disappointment will be widespread.

On the other hand, authors and agents who might have considered an Amazon publishing deal will have to think twice if they know very few bookstores will carry it. Amazon can do some remarkable things to sell books to their mammoth online customer base and that won’t change. But there is both a practical and a vanity aspect to getting store display that will still be seen as indispensible by many authors and agents who otherwise might have taken the leap to sign with the newest big checkbook in town.

He draws a parallel to Random House’s original decision not to join the agency pricing cartel—puzzling industry observers at the time. Shatzkin said then, as now, that Random House was essentially taking advantage of Amazon’s largesse to turn a short-term profit, while its competitors raised their prices and cut their royalties.

Whether the move was sensible or not, I expect Amazon will probably not be hurt too badly in the long term—especially if it decides to open a chain of boutique stores where it can hand-sell the books itself. Will more authors think twice about signing with Amazon, or will they figure that the giant e-tailer’s marketing clout will make up for the lack of physical store placement? We’ll just have to wait and see.

Amazon’s Kindle format 8 (KF8) relies on a completely separate process to create a fixed layout e-book than Apple’s version of fixed layout for titles that are design-led e-books. Both are based on XHTML, but there are important differences in how pages are laid out. With KF8, each page has to be specified as either portrait or landscape by the creator of the book, and one double page spread that you view in a fixed layout e-book on the Kindle Fire is one XHTML file. In iBooks fixed layout e-books, each of the two pages in a double page spread is a separate XHTML file, and individual pages can be rendered in both orientations. There are also various other notable technical limitations in the current version of KF8 for the Fire. You cannot currently play audio or video with KF8 e-books on the Kindle Fire, although you can do this on Kindle e-books within Kindle apps on the iPad and there is no support for read-along e-books. Finally, there is no pinch and zoom on a page. Instead, KF8 has a feature called ‘region magnification’ which allows the text to pop up when tapped to aid reading. There are advantages and disadvantages to each approach, but the feature is a further move away from a single standard.

Kobo follows similar specs to Apple, but doesn’t support embedded video. Barnes & Noble has developed its own separate tools for creating graphical content for Nooks so the actual format is “a bit of an enigma.”

These different formats pose a problem for publishers who want to create graphical and multimedia works such as picture books or children’s books—they could end up having to create the same book three or four different ways for three or four different platforms. That’s a lot of extra work.

I would add that even ordinary text e-books for which formats have been more or less standardized have their balkanization problems. The different DRM used by each provider, for one thing, and Amazon’s Mobi versus Apple’s and B&N’s EPUB formats for another. And the vested interest these e-book stores have in locking customers into their store only isn’t helping.

There’s a Books a Million store in Joplin, Missouri, and I stopped by it a few months ago. I wasn’t particularly impressed. Unlike Barnes & Noble, the store does not offer free wifi for its customers—you have to pay for it. (How last-decade.)

Meanwhile, Jason Calacanis reports hearing from “a very credible” (but anonymous) source that Amazon is going to launch its own brick and mortar retail stores. While the rumor has been around before, and on the face of it seems absolutely crazy, Jeff Bezos has done crazy things before and look at where he is today. And as the New York Times Bits blog points out, before 2001 the idea of Apple launching retail stores seemed far-fetched, but look at them now.

Jason throws out some ideas on what Amazon might do with the floor space—show you demonstration models then have you order the product from Amazon for shipping to your house, or perhaps provide a physical library for Amazon Prime subscribers in addition to the electronic ones. Whatever he does, it will probably have the same sort of unusual twist to it that has characterized a lot of Amazon’s new ventures.

The interesting thing to me is that, if this does happen, the big chain stores like Wal-Mart, Best Buy, and of course Barnes & Noble could find themselves hoist by their own petards. They have been campaigning to strip away Amazon’s tax-free advantage. Having physical property—their retail stores—in those states in addition to their on-line presence means chains like Best Buy or Barnes & Noble have to collect sales tax on physical items sold on-line. Amazon hasn’t had to do that until now except in states where it has distribution centers.

But if they succeed in making Amazon pay sales tax everywhere, suddenly the only reason for Amazon not to put physical stores everywhere vanishes—and so does the one big advantage that the brick and mortars have: instant gratification. I bought a Logitech K360 wireless keyboard at Best Buy today for $30, though I could have gotten it for $25 from Amazon. (Well, $24.99, so I would have had to add another item to qualify for free shipping.) But if I bought it from Amazon, I couldn’t use it right now.

If Amazon stocks even just its more popular items in physical inventory, and offers bennies to Prime subscribers and other Amazon regulars, it could start to draw more and more people away from those other stores for immediate purchases as well as the ones that can wait. And as a fringe benefit, it would provide a place for online-ordering customers to direct their packages to be sent to so they could pick them up instead of having to be home for delivery—as Wal-Mart and Best Buy already do. We already know Amazon has had package pickup on its mind, what with the locker kiosks it has been placing in convenience stores in various locations.

Oh, and it would also provide a place where people could go to buy those Amazon-published paper books in person—the ones that Barnes & Noble and Books a Million are declining to carry.

Of course, there’s still nothing to suggest that this is anything more than another unfounded anonymous rumor. But if it does come to pass, wow. Amazon could shake the brick and mortar landscape as thoroughly as it has shaken the e-commerce one.

(Found via GalleyCat.)

Mr. Lynn makes the case that Amazon’s dominance isn’t just a story of an industry disrupted by online commerce and digital upheaval, it’s about the abandoning of New Deal era protections of retailers in 1975 (promoted by backers as a means to fight inflation, says Mr. Lynn) and what he portrays as a shift in 1981 in the Justice Department’s interpretation of antitrust law based on “Chicago School” theories of efficiency and consumer welfare. The upshot appears to be that non-consumer markets (business-to-business markets and labor markets) are often insufficiently protected from monopolies.

Chicken growers are largely at the mercy of the poultry processors who buy their adult birds, who have a number of means to dictate the growers’ business practices. In Silicon Valley, Google and Apple had a private agreement not to poach each others’ employees. Even the 1,750 beer microbrewers in the US mostly sell through two distributors that control 90% of the market.

Meanwhile, Amazon has such tight control over the lion’s share of the book and e-book market that even the publishers who are the most vehemently outspoken against it will not go on record with their comments. It regularly throws its weight (and the weight of its $6 billion in capital) around, and publishers who do things it doesn’t like are prone to have their “buy” buttons removed for a while.

Amazon has such a big chunk of the market, the Authors Guild notes, that even the disappearance of Borders did not drive as much traffic to remaining brick-and-mortar bookstores as one might have expected:

To understand just how precarious things are, realize that last year’s Borders’ bankruptcy represented an enormous reduction in browsing space, shuttering 650 stores. (B&N has about 700 stores.) One benefit of the loss of Borders should have been a short-term lift to B&N’s 700 stores and the 1,500 or so remaining independent bookstores. B&N’s sales were indeed up in the nine weeks before Christmas, Ms. Bosman reports. How much? Borders’ collapse led to a bounce of just four percent, compared to the prior Christmas. That’s what’s passing for good news in brick-and-mortar bookselling at the moment.

The Authors Guild paints Barnes & Noble as the one bright spot in the market, which has managed to claw its way up to a 27% share of the e-book market over the last two years (roughly half Amazon’s current 60% share) and, the AG argues, largely out-engineered Amazon in developing usable e-reader and inexpensive tablet technology.

As a number of comments below the article point out, the Authors Guild is not exactly an unbiased source, and that does show through in the slant from which the article is written. (For example, a claim that “Amazon wanted to price every Macmillan e-book, and indeed every e-book of every publisher, at $9.99 or less” is demonstrably untrue.)

But still, Amazon’s market dominance ought to be a little worrying even to those who currently like the company. Competition keeps companies honest—if Amazon does manage to kill off all its competition, it doesn’t have to be so nice to consumers anymore.

(Found via eBookNewser.)

So, Carey said, if B&N customers want Amazon titles, they’ll just have to order them online at bn.com. Um, what?

Look, guys, if you’re going to take a principled stand, go all the way. Decline to carry the titles on your web store too. I’m sure there are plenty of books stocked in the web store that don’t end up in brick and mortar stores just for lack of space.

B&N is making a lot of noise, but then turning around and trying to have its cake and eat it too. I predict this principled stand will last only until Amazon comes out with a best-selling title that everyone wants to get their hands on. Then watch B&N turn around and carry Amazon titles after all, “bowing to overwhelming customer demand” or some such excuse.

The difference seems to be caused by fully 35% of Amazon’s titles being $1.99 or less, whereas none of B&N’s were. I wonder, though, whether this might be caused by Amazon counting free titles in its lists and B&N not? Or perhaps it’s not possible to list a book at $1.99 or less under B&N’s publishing system. B&N also seems to have a higher percentage of books on its best-seller list over $10 (40% as opposed to Amazon’s 27%).

Regardless, this seems to be another area where Amazon is out-competing B&N. Given how price-sensitive today’s consumers are, a place where you can get a bunch of books for $1.99 or less would seem very attractive.

Further research indicates that the RPAD is only $10 off what you could get it for on Amazon and has gotten two one-star reviews, the Coby Kyros is available at the same price new on Amazon as it is refurbished on Geeks (though it has gotten overall better reviews than the RPAD, averaging 3 stars), and the Pandigital Novel is only $30 more on Amazon new. And all three devices run older flavors of Android 2 (and if reviews on Amazon are to be believed, the “Pandigital Multimedia Novel 4GB 7” Touchscreen Tablet Android w/Barnes & Noble eBookstore & Stand” can no longer even access Barnes & Noble’s e-book store, because it’s limited to Android 2.0 and B&N now requires Android 2.2—which only the RPAD, out of all three devices, has).

Maybe it would be best to stick with Kindle, Nook, or Kobo Android tablets after all, huh?

Might be a good deal for anyone in the market for (or wanting to gift) an e-ink touchscreen reader, if you can get one before they sell out.

There has been speculation B&N might partner with the Waterstone’s chain, since having a print bookstore to work from would be beneficial to an e-reader. However, the company has also been getting involved with the publishing process with UK publishers.

[Horner] said: "There are a lot of conversations with publishers, a lot of partnerships going forward. ‘What are you capable of doing digitally?’ That’s not a conversation that would have happened two years ago." She added that the current challenge in terms of content was in finding the right non-fiction content to sell digitally, and that self-published content was a "monster conversation going on in the digital space" in the US at the moment. Ten per cent of titles on B&N’s digital bestselling lists are produced by its self-publishing programme, Pub-it.

However B&N does it, it seems that the Kindle will soon have a run for its money on the other side of the Big Pond.

A couple of my friends picked up this tablet back in the day when it was more expensive and were very happy with it (once they’d jailbroken it). I don’t have the disposable income to snag one myself right now, alas, but don’t let that stop you if you do.

(Found via The Digital Reader.)

Amusingly, one of its listed benefits is

No Annoying Ads

Reading time is your time and you don’t want to be interrupted. NOOK lets you immerse yourself in your books, magazines, and newspapers without being distracted by annoying ads that appear in other Readers.

On TVTropes, that’s what we call a “Take That”.

Meanwhile, Apple’s Black Friday circular has leaked a couple of days early, giving a glimpse at what Apple will have on offer. The deals are about the same as last year, though a little better on higher-end devices.

The deals on the Mac end cover the iMac, MacBook Air, and MacBook Pro, while the iPod nano and iPod touch are the discounted iPod offerings. The Macs will be $101 less, the iPads will go from $41-$61 discounts depending on capacity (16GB, 32GB, 64GB), the iPod nano will shave off $11 for both 8GB and 16GB storage sizes, the iPod touch will follow the iPad’s lead of bigger discounts for bigger capacities, ranging from $21-$41 discounts.

I’d be vaguely tempted if I had any money.

I’ll mention other e-reader deals if I see them.

Gizmodo checked with B&N and was told that the measure was intended to prevent customers from loading up their devices with lots of movies and music and then discovering that apps and magazines they wanted to buy wouldn’t fit. I guess it emphasizes the fact that, as far as B&N is concerned, they’re not selling you a tablet—they’re selling you a way to consume the media they also sell. (So is Amazon, of course, though it goes about it in a different way.)

It’s not exactly a new development, though—back in May, B&N revised its Nook Colors to feature the same 1-gig storage restriction. The Kindle Fire doesn’t have that restriction on its own 8 GB of storage, of course—but it doesn’t have an SD card slot, either, so 8 is all you get.

It’s just necessary to enable installation of apps from unknown sources on the Fire, then sideload the non-corporate app store GetJar (choosing another Android 2.3 device from its install options since the Kindle Fire isn’t listed). Then GetJar can install the Nook app. (Not all third-party GetJar apps will install successfully, but Nook is one that will.)

There’s not really anything new in this; one favorite activity of Nook Color jailbreakers has been to install the Kindle Android app onto their tablets. On the other hand, the Kindle Fire does have going for it the fact that you don’t have to jailbreak to do it. Of course, those who own third-party Android devices (or for that matter iOS devices) can put both Kindle and Nook apps on their devices without having to do anything out of the ordinary.

Regardless, this added e-book store flexibility may give the Kindle Fire that much more appeal to potential shoppers. It certainly would be a selling point for me.

(Found via Gizmodo.)

And speaking of Newsstand apps, ReadWriteWeb looks at the Kindle Fire Newsstand’s app as one of Amazon’s secret weapons in the war against the iPad. Offering over 400 full-color publications,  and including a free three-month trial of various Condé Nast magazines for those who subscribe before March 1, 2012, the app will compete with Apple’s own Newsstand. The Apple app reportedly accounted for a 268% jump in iPad sales for Condé Nast magazines after its launch.

Stand-alone magazine apps have had a notably spotty track record on the iPad, though judging from the Condé Nast sales jump it would seem Newspad may have fixed the worst issues. Those problems aside, it seems fairly obvious that color tablets will provide a better reading experience for glossy, full-color magazine pages than a black-and-white e-ink reader would. And people who already buy a lot of magazine subscriptions would likely have the sort of disposable income someone considering spending $200 on a tablet would need. (Barnes & Noble seems to be banking on this, too, as with the addition of Nook Newsstand to smartphone apps.)

Of course, it remains to be seen just how effective this secret weapon will be.

As originally reported by GalleyCat (and in a rather more balanced article on PaidContent), on September 30th Amazon’s bot mistook a free sample of the first few chapters of the book on Barnes & Noble for the whole thing, and thus marked Crawford’s $5.99 novel down to zero. By the time Crawford could get it straightened out, three weeks later, the book had been downloaded 6,111 times. And Amazon, shielded by the terms of its contract, said that it was sorry, but it was under no obligation to compensate Crawford for any “lost” royalties, which would theoretically have totaled just over $10,000 for that many real sales.

As novelist and publishing-industry commentator Kristine Kathryn Rusch points out, there’s no way to know how much Crawford actually “lost”, or indeed if he truly “lost” anything at all. It is doubtful any of those six thousand people would ever have known about his book if it hadn’t been given away for free, and thus featured on Amazon’s free e-book lists. For authors who have other books available for sale and are in a position to take advantage of the publicity (which Crawford apparently did not), giving a book away for free can boost sales of other titles (or, indeed, of the title itself after the giveaway stops, as the word of mouth from people who downloaded and liked it boosts its popularity among people who would be willing to pay for it).

Even though Amazon is at least somewhat apologetic about the affair, it is shielded by its contract from any financial obligation. Crawford notes in his blog that Amazon’s premier position in the e-self-publishing industry means that trying to take Amazon to court over it—or even complaining too loudly about it on the Internet—would be shooting himself in the foot. Under the terms of the contract with Kindle Desktop Publishing, Amazon can choose not to do business with him again for any reason (or no reason at all), thus locking him out of an estimated 80% of the e-book market.

(It doesn’t seem to have happened yet, however, but neither has Crawford gotten anything more than “a pat on the head for being helpful”.)

It’s a little ironic that this happened to Crawford, as he seems to be the finicky sort who prefers tighter control over what happens to his books—he even went with a 35% royalty rate rather than Amazon’s usual 70% because that would allow him to exempt the book from Amazon’s Kindle Lending program. Still, he is trying to be philosophical about it:

This experience has, as many people have pointed out, given me a level of exposure I wouldn’t have achieved otherwise. I am grateful for it, more than a little taken aback by it, and am determined to make the best of it. That being said, if you’d like a different take on the Zombie genre, buy the book from Smashwords. Tell your friends if you’ve read it and liked it.

And he’s gotten quite a bit of exposure indeed, in two important ways. First, those six thousand plus readers, at least some of whom actually read the book. Just looking at the book’s page on Amazon, Blood Soaked & Contagious has currently received 18 reviews, averaging four-and-a-fraction stars, and all but one of them date to after the giveaway happened.

And second, the story struck just the right chord to get a lot of blogs to carry it: evil e-publishing overlord Amazon stiffs hard-working self-published writer. Lots of people will be happy to spread that story, even if the accuracy of the version they spread (as Rusch points out) is somewhat questionable. And that in turn leads to more people checking out the books, and buying them if they like the premises.

From another point of view, another interesting aspect of the story is that, as far as I knew, Amazon doesn’t allow self-published authors to give their works available for free normally. As I noted in this story, one author who wanted to do that had to settle for pricing it at 99 cents instead. Does this represent a way to make an end-run around that policy, for writers who want to do it? Give it away for free elsewhere, then point that fact out to Amazon?

Regardless, Crawford is getting a good deal of exposure from the matter (including here). Hopefully he will find it improves his sales down the road. And I must admit, I already find myself intrigued by the premise of his other novel, Super Love! Kaiju, which involves a superhero dating service that must find a date for a Japanese giant monster. I might very well end up buying it if the price is low enough. And I never would have heard of the book if not for the fuss surrounding this inadvertent giveaway.