About This Series

Things Publishers Fear is an occasional series about the realities of publishing in the modern era. For the record, survival is not guaranteed, nor is it always deserved.


4256200927_928c1e84ed_m.jpgNo 1 ~ AMAZON

Despite the seeming victory of Macmillan in its battle to force Amazon to accept the new “agency model” publishers have a sensible fear of Amazon. Like all businesses that sell their goods to consumers through intermediaries, publishers are forced to subject themselves and their products to the requests and “suggestions” of the retailer.

Amazon controls a large portion of the online consumer connection to books. They may not be the best at this, but they are surely the biggest. They have been on top of pretty much every trend in publishing for some time:

* They have exceptional efficiencies in terms of distribution and sales (both in terms of ebooks and print books), the kind of efficiencies that publishers could never equal. Operations, operations, operations. If you can ship faster and cheaper you have an advantage over your rivals. What publisher could afford to build out a Whispernet for ebook delivery?

* They are organised by category and could easily spin out niche based sales sites (and could afford to pay for content to go with that and attract attention) if they chose. If this doesn’t concern you ask yourself if Tor.com is viable if Amazon spins out a sales site with masses of author or for hire content built around the Sci-fi & Fantasy genres?

* They have a powerful presence in Print on Demand and Self Publishing. You think that’s not that amazing witness the small scale gold rush that has been emerging over the last six months as established publishers see future profit and less authorial and consumer concern in Self Publishing. Mick Rooney has an interesting Guest column addressing some of these points over at Irish Publishing News.

* With the launch in 2009 of Amazon Encore, Amazon is officially and finally a publisher. That Encore is currently modest hardly matters, they could easily scale that effort very rapidly if they chose and because it need not support the massive legacy costs that the bigger publishers need to, they require much more modest sales results per title and much less working capital per title. Oh and in 2010 they have already announced 9 titles all of which will be out by April 2010. I expect to see many more before the year is out.

So while a victory on the ebook pricing model seems like a step forward for publishers in may ways it represents a funny one. The “Agency Model” actually means Amazon will now profit from each sale whereas up until now, for new releases, it was losing money. So Amazon stands to make more money per unit of a new release sold, but less for backlist titles and non-new releases. But it moves the goal posts by removing the key selling point for the Kindle, the $9.99 new release price point.

This makes it much less attractive for Amazon to deal with publishers rather than cutting them out of the equation and dealing directly with authors or even with agents. After all, they were using ebooks to sell high priced devices and even if they make more money per ebook sold it won’t compensate them for selling fewer units of the Kindle. The battle for publishers now is to retain control of that crucial relationship, the author-publisher relationship. Having already surrendered the publisher-reader relationship and knowing how difficult it will be to regain traction in that arena, to allow Amazon to insert itself between the author and the publisher would be fatal.

So, from their perspective, publishers’ fears of amazon are rational and justified. Amazon threatens to disintermediate the publishing industry using the talent the industry has nurtured and the content the industry has edited, developed, marketed and grown. That hardly seems fair does it? But then “Deserve got nuthin’ to do with it.” – Snoop

Editor’s Note: This series is reprinted, with permission, from The Green Lamp Media Blog. PB


  1. I wouldn’t go so far as to suggest that Amazon stands to replace publishers… after all, they provide no service to authors other than distribution.

    However, the fact that Amazon is essentially a distributor, and nothing more, should be a hint to publishers of what they should be doing. In fact, no publisher needs a Whispernet in order to be an effective digital distributor. Sure, setting up a website in order to distribute their books would be a chore… but that’s what they invented contractors for, and the benefit would be direct sales and cutting out the Amazon distributorship. In fact, the money being pumped into their physical distribution lines should cover the costs of developing their own distribution site. Why any publisher is not thinking along those lines is beyond me.

    In short, the only publishers who should fear Amazon are those who are too afraid of cutting the cord and doing their own distributing.

  2. The problem with publishers doing their own distributing is that I, at least, don’t want to create accounts with every publisher just to buy their books. There is the Apple Five plus Random House for the major books, so there are six accounts I need. Then there are all the other publisher each requiring their own account. I don’t want so many accounts.

    And how will I find the books? Random House isn’t going to show me books from other publishers. There needs to be a central location to discover the books and a way to link to the publisher’s web site. Maybe libraries will start that new service, but all libraries aren’t created equal in all parts of the country. Sure, it can be done, but why should I jump hoops just to buy directly? Amazon or Barnes and Noble provide easy one stop shopping. Because I more likely to buy an ebook from an unknown author or small publisher if it is just there, ready to buy.

    If I have to go to a new site, create an account, provide a payment method, I might just decide to buy something else where I have an existing account.

  3. An account isn’t necessary just to buy a book. It’s good for a pub’s customer-tracking purposes… and to control DRM… but other than that, purely optional. (You can buy from my site without needing an account. A CC or a PayPal account does the job nicely.)

    I agree that a central portal/hub is needed to get people to the books. But if the portal isn’t actually selling the books (possibly making a profit from referrals, or just from advertising), but only wants to facilitate traffic to all publishers, it has little or no influence on the product, keeping prices down and opening up trade with more distributors.

    That would be a better situation than operating under a draconian distributor with geographic restrictions and high prices and that doesn’t carry all publishers or all books…

  4. Greg M. is right. Most customers don’t want to deal with a different publisher for every book they buy. They want the sort of one-stop shopping that Amazon offers.

    For ebooks, publishers would do better to have a distributor between them and Amazon. Even a distributor with limited features provides a buffer between Amazon and publishers (as well as self-publishing authors). Amazon can bully individual publishers, even large ones, one at a time. That’s what it has been trying to do. But it can’t bully the six largest ebook publishers and a thousand smaller ones if they’re banded together. And if a larger distributor is offering Amazon the same contract every other online retailer can get, Amazon can’t coerce special privileges that allow it to beat its competitors.

    Even better would be a full-featured distributor who would pass along sales data to publishers. RIght now, if I buy volume one of a new trilogy from Amazon, only Amazon knows that and can send me an email when volume two comes out. (The same is true of books on similar topics.) The publisher and author are kept out of the loop. But a full-featured distributor could be the actual distributor, registering the sale, as well as actually sending out the files and letting publishers know who is buying their books. (This also ensures that Amazon doesn’t sell 1,000 digital copies, but only pay for 800.)

    The advantage would be that while customers are shopping at the online retail store of their choice, they’re also entering a relationship with the book’s author and publisher. Amazon isn’t going to permit that. But a distributor who is a loyal client of authors and publishers would. It’s primary purpose would be to serve their interest and not those of Amazon.

    I might add that, to be popular with customers, this distributor would need to offer the sorts of services ebook buyers like, including Whispersync-like book syncing across platforms, as well as backup and replacement copies of titles customers have bought in multiple formats as hardware and technology changes.

    Publishers and authors can beat Amazon. But they can only do so if they begin to hold more of the cards. They’ve been lazy, leaving the technological implementation to Amazon. That has to change.

  5. Uh, Mr Jordan: Amazon is nothing but a distributor?

    Am I the only person getting regular Amazon promo emails; “As somebody who bought…” (And boy, do they know how to push my buttons! Good thing I can keep items in the checkout cart for months as a cooldown. 😉 )
    Am I the only one who checks Amazon customer reviews before I buy from an unknown author? Or who lines up multiple books from different authors to comparison shop when looking into non-fiction?

    The amazon site offers discussion forums, comparative shopping, and wide-ranging review databases. Even free samples.

    Those aren’t the functions of a mere distributor/retailer; those are *marketting* functions, that frankly, should be performed by the publishers and *AREN’T*. Not the BPHs, not generally. (Yes, the usual suspects–Baen, Harlequin, etc–do some of the above. Tor is inching into it. But the BPHs, as a rule, long ago abdicated to retailers any meaningful promotion efforts for anything but their million-dollar babies.

    The publishers *can* take over from Amazon…
    …a week *after* they draw comparable traffic to their storefronts with similar features.

    THE BPHs have ignored all the publishing/distribution/marketting revolutions to come our way for 50 years; it’s a bit much to expect those clueless folks to suddenly catch up overnight with 15 years of technology, infrastructure, and brand loyalty. How many consumers of bestseller fiction know or even care who publishes them? And those folks are going to abandon Amazon, Borders, or B&N to go fishing for new books? Sorry, I don’t think that’s happening soon.

    Things will only get worse for them before they get any better.

  6. Greg M. is right. Most customers don’t want to deal with a different publisher for every book they buy. They want the sort of one-stop shopping that Amazon offers.

    Well, then, since Amazon is providing just that, authors, publishers and consumers have absolutely no reason to be upset with the way they do things, eh? And they should stop complaining and accept Amazon’s business practices, prices, content limitations, DRM and market restrictions.


    They should accept that the convenience (aka laziness) of one-stop shopping isn’t worth those things, and do it themselves.

    It’s pretty much up to consumers, authors and publishers to make that decision. But saying “We hate them, but they’re so damned convenient” is just pointless. I’d prefer to see people either take action, or stop whining about the bed they’re lying in.

  7. I ain’t afraid of no Amazon. The fact that I removed their links from my site should be a signal that you can’t get everything in one place. Even though my books are on Amazon, I sell them for less than Amazon, and bend over backward to sell them on the international market direct through my site, something I cannot do with Amazon. I distribute my own books direct to the customer, and offer them PayPal and a mail order form. The customer can be assured that I will respond to every order email I receive, as opposed to Amazon, which ignores them most of the time. As to the customers’ laziness, I can’t help that and it’s up to them to look for the real bargains.

  8. The only thing to fear from the Big A is fairness itself.
    A fair exchange is no robbery. I wouldn’t call a
    50 -60% cut fair.
    Waterstones plays with far less.
    The Big A deals through Gardners/Bertrams anyway
    -at a far better percentage to me.
    “Out of Stock” = it was never in.But I still get the orders.
    The ‘Advantage’ was all to A.
    Just as I was thinking of ‘Marketplace’ they move the goalposts – equality of pricing.
    Where’s the competition? There is a difference between a Distributor and a Dictator -it’s just sometimes difficult to tell between the two.
    I’m with Theresa – Come & Buy from the Small Fry:


    (you know it makes sense)

  9. There are thousands of underpaid editors out there right now looking at e-books as a viable money making option.

    There are only two things needed for a good book: a good writer and a good editor. Everything else is ephemera.

    So all these good editors, many of whom left publishing after being screwed yet again with low wages, no bonuses and no commissions despite acquiring and bringing great works out into the world will be setting up shop as e-book publishers.

    They’ll find the writers, create their own series and hire writers, contact every writer they ever knew and offer editing for royalties and zero advance and this will absolutely hollow out the publishing industry.

    An author will take an editor they trust over a publishing company any day. Even if there is no advance involved and they are sharing Amazon’s 70% royalty – still a better deal for the author.

    The publishing industry had distribution – gone.
    They had marketing – gone, especially given that in-house editors write most of it anyway.
    They had sales – unnecessary when anyone can upload.
    They had graphic designers – plenty of freelancer out in the world.

    They had editorial, the ability to take a good manuscript and make it great – gone, replaced by the editor out in the world.

    The smartest thing publishers can do is start hiring editors whose job it is to acquire books, edit them and then publish online en masse. Pay these editors a percentage of sales plus a base wage so they stay at Penguin, Harper Collins, etc, rather than working freelance and slicing Penguin into little pieces.

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