Is this what Macmillan et al. are “really” afraid of? Amazon as a publisher

‟And if I were that publisher don’t you think that one of the things I’d do was to do my best to undermine Amazon’s credibility among authors, or potential authors.″
Trying to undermine another company’s credibility when not based upon facts will only undermine your own credibility in the long run. Do you think that your customers would appreciate that kind of unethical behavior?

There’s a flip side to this. Amazon is also terrified of publishers, and really has no business publishing; it’s just that the directive to ‘go digital’ has gotten their feet into some quicksand here, and it’s rapidly sucking them deeper and deeper.

Under physical books, it was so much simpler: Amazon just wholesaled books, sold at competitive prices, built customer lists, and became profitable. And when Amazon got into digital music, the model of iTunes was already there, and all Amazon had to do was get the music labels onboard to offer no-DRM mp3 files, and Amazon could sell them very cheaply (I wonder whether Amazon guarantees the labels a price with music, or do they offer ‘agency model’ to them?)

With ebooks though, there was no successful model, and Amazon flailed about a bit, buying mobi, creating Kindle and a new file format with encryption. And then they found they couldn’t negotiate the book publishers as Steve Jobs had done to the record labels; the publishers resisted that magic $9.99 retail price, and Amazon, in order to achieve it, had to put up some of their own dough to reach the price.

Now Amazon is not only having to sell physical devices over the mail in order to defend a digital-downloads ebook market (and is getting ever deeper by now buying a new display tech company for future devices), it is also developing and maintaining software for other platforms like the iPhone and PC; and it is trying to offer publishing deals to promising writers.

This is really the wrong direction for the company to be going. Amazon has made some bad mistakes here, mistakes for they have led the company away from the original goal: to get in on the digital downloaded ebooks market as a hedge against future declining sales of physical books.

My best guess is that Amazon will come to its senses, and drop all this, when the losses mount up too high, and it becomes clear that what they should be doing is selling ebooks, and not designing and selling computer hardware.

And Amazon will figure out some way to get around the ‘agency model’ that publshers now insist on, and will be able to offer readers lower prices than we can find on other ebook platforms.

To do this, of course, Amazon will have to offer epub editions, or pdf’s, or some sort of universal standard as the publishers offer it.

We’ll see.

Amazon is probably too smart to go into publishing in any but a tiny way. Publishing is an expensive business with all kinds of costs and a low margin of profit, and the majority of the profit goes to the middleman distributor whose costs are much, much lower.

Why should Amazon, as the distributor, change that dynamic?

What Amazon is doing is the same thing that Barnes & Noble is doing with its publishing program. They are finding quality reprints where all the work is done except the printing. That’s hardly being a publisher.

And that author is being promoted by a huge company and as a bonus is making %70 off the eBook sales not a measly %25. Hmmm who will win?

Elliott published all but one of her first books in CreateSpace–i.e., she had already been captured by Amazon’s self-publishing module. (The one exception was published by Lee & Low, a small house focusing on children’s multicultural literature.) I think it would be presumptuous to assume that if Amazon cherry-picks three of its self-publishing clients a year to promote, it’s doing anything ot replace real publishers.

Yes, but…they still face the same problem: finding and backing books that people love and will buy. A lot of books are praised on blogs and used in schools. So what?

I also think that if a book is attractive enough to Amazon to want to publish it, the author knows he/she has a marketable property and can pitch it to multiple publishers and potentially get a better deal than the initial offer. If Amazon doesn’t know this, they’ll figure it out.

So no. I don’t think that’s publishing’s biggest problem. They have other things to worry about.

Yes, absolutely! THAT is what MacMillan fears.

Amazon is looking to the future and MacMillan and cronies are looking to the past. There is no doubt whatsoever that, in a few years, all of print media will be digitized and delivered on demand to cheap and ubiquitous reading devices.

As far as ebooks are concerned, as long as they don’t contain a lot of graphics or maps or charts, there is little need for a “publisher”. A half-way skilled author with a good word processing application can present Amazon with a ready to publish ebook.

The traditional publishers are just waking up to the fact that the digital age is not kind to middle-men. To survive they need to adapt. But it’s more likely they will cling to outmoded concepts until they die.

I wish I had found the publishing business so financially rewarding that I was worried about other people breaking in. At least in my experience, submitted books need editing. Sometimes a lot of editing. And editing is people-intensive. Now, if Amazon could crank up their algorithms to fix writing, that would be something. Seems like it would be easier to crank up their algorithms to write the whole story to me, though.

Rob Preece
Publisher

I think we need to be a little more dynamic in our thinking of Amazon as a publisher. Are Amazon about to dip their feet into the expensive waters of editing and marketing original material? No. Certainly they will continue to expand their AmazonEncore program, but where Amazon are really looking to is to the deals they have done with Paulo Coelho and Stephen Covey to sell ebook editions of their titles. Now, that is something to scar publishers.

You can bet every major publisher is revising their contracts with bestselling authors with particular attention to ebooks, a format greatly underestimated by them over the past few years.

If publishers perceive a threat from Amazon – it is less about Amazon becoming a publisher – more about authors deciding to cut publishers out of the equation when it comes to ebooks and deal directly with Amazon, ultimately that could also extend to paper formats.

@Paula B: The big publishers today offer deals that are much, much worse than what Amazon offers. The only part of it that’s an exception is the advance, and since the advance is against royalties, it only really “counts” if the book flops, i.e. royalties end up not paying back the advance.

I would not say that publishers are afraid of Amazon becoming a publisher specifically, but they are certainly worried that as ebooks become the dominant format, the Big 6 will lose their ability to dominate the industry. Amazon is only one of the challengers. Small epublishing companies are sprouting like mushrooms due to the low start-up costs. Self-publishing (not only through Amazon although they’re probably the biggest outlet) is also increasing. These trends are irreversible. The big publishers don’t want to dominate the ebook market because they know they can’t. They want to kill it, or at least slow it down, so they can go on dominating the hardcover industry, which is what they know and are built for.

Isn’t this more of “re-publish” and promote? The books were already self-published (using Amazon’s self-publishing arm), and gained a little momentum, so Amazon is going to push their visibility.

Ebooks and POD are bringing about a HUGE shift in what is POSSIBLE for an author who doesn’t want or can’t get into the traditional publishing model. Niche publications, especially, now suddenly become possible, and many books that would never have seen print have become available.

BUT. If this author’s experience is how Amazon intends to be a publisher, then what Amazon is doing is turning the vast reading public into its very own slush pile reader.

Traditional publication (with some exceptions) follows this course to the public:

1. Authors writes books and run them through friends/betas/no-one until s/he thinks it’s ready.

2. Ten thousand authors queries agents or submits to small amount of remaining publisher slush piles. Vast and time-expensive in-industry review process of reading those queries/slush piles and tossing 99.5% of it back, telling .4% “not bad but not for me” and accepting .1%.

3. The .1% are accepted, contracts are signed, money exchanges hands, usually a few months of editing and improving the book take place, along with the cover illustration commissioned, and the book designed.

4. Marketing happens. A tiny amount for some authors, rather a lot for others. Early review copies are sent out to reviewers ranging from the New York Times to some of the bigger-audience bloggers. Reviews happen.

5. Book comes out. Readers either pick it up cold off a bookstore shelf, pick it up after reading a review or seeing an ad, or pick it up thanks to word of mouth.

Publication how it would work (roughly) for authors following Zetta Elliott’s route:

1. Authors writes books and run them through friends/betas/no-one until s/he thinks it’s ready.

2. Author researches self-publication options, selects a self-publication option, and either does for his/herself or pays for: cover illustratration, book design, editing. [So the author is either paying thousands of dollars or developing a whole new skill set.]

3. Author presses ‘print’ and pays whatever fees the self-publisher has for making the book available to the rest of the world (varies from about $100 up). So far the author is out of pocket for whatever the publication costs are (and believe me those lovely cover illustrations don’t come cheap – unless you insanely decide to just grab a pic off the internet and hope no-one notices).

4. Author starts trying to get someone, anyone to buy their book. Or at least read and review it. Their success at this will vary depending on what the book is, how good the book is, and whether the author has any kind of ‘name’ which brings with it some kind of audience (ie. has a blog or webcomic with a big following). Remember that under the self-publishing route, not only the .1% that a publisher would select, and the .4% which are ‘good but perhaps not marketable’, there other 99.5% of would-be authors are putting out their books as well.

5. Amazon lets its vast customer-base ‘review’ those 10,000 books. Most will be lucky to be read by more than friends and family. Few will sell more than 100 copies. Some will sell 2 copies. .49% of them will garner a small following. .01% of them will be picked up by Amazon and ‘published’, except Amazon won’t be paying the author anything except a portion of each sale – no advance – I’m not even sure they’ll be covering the cost of the cover illustration, should they choose to create a new one.

Whatever else caused the recent kerfuffle, I don’t think fear of Amazon profiting even more from the tiny percentage of self-published works that garner some kind of success is behind it.

@Brian,

Actually, advances matter more than just if the books flops. When an editor sticks his/her neck out to give a big advance, they have a strong incentive to make sure that book is NOT a flop. So, if they’re dealing with a no-talent celebrity author, for example, they hire book doctors. If they’re dealing with a major author, they spend big bucks on advertising, buying special placement in bookstores, doing everything they can to make the book successful. No advance, no particular reason to spend. (I don’t pay advances so I’m unbiased on this).

Rob Preece
Publisher

Good discussion. While there is certainly the issue of Amazon trying to grab upcoming and promising authors away from the big publishing houses, the greater financial stakes are at the high end, I think.

There have been a series of stories recently about big-time authors like Ian McEwan wanting to re-issue their back lists with Amazon at much higher royalty rates than publishers have typically paid. Obviously, Amazon can afford to pay more because its costs are minimal — the books have already been written and edited and there are no publishing, distribution or retail return costs. And one can easily imagine powerful authors like Stephen King demanding separate deals for print and ebook rights at different royalty rates.

Here’s an article about it
http://www.nytimes.com/2009/12/13/business/media/13ebooks.html

And another speculating about recent royalty moves by Amazon, which includes agent Richard Curtis saying: “If anybody had any doubt that Amazon is going into the publishing business, they only have to look at this.”

http://online.wsj.com/article/SB10001424052748704320104575014653299582416.html

Aaron,

I suppose it’s naive of me to say this, but with regard to publishers saying, “It’s mine! It’s mine!,” you’d think a little generosity would go a long way. It wouldn’t kill them to split the e-rights with the authors. And they wonder why they have an adversarial relationship with their authors.

I am totally confused by all the above. I have had three novels published (Two by St. Martin’s Press, one by New American Library) and one current unpublished manuscript (a novel). Would Amazon be interested in any of the above. Excluding e-books.