The Shatzkin Files


Amazon’s news of hiring Kirshbaum is a helluva start for BEA


Amazon dropped a shoe last week when they announced their new mystery imprint, Thomas & Mercer Books, and started signing authors, including self-publishing evangelist, Joe Konrath.

Last night they dropped the other shoe, which turned out to be a very heavy boot. They signed former Time Warner Publishing (the company that is now Hachette Book Group) CEO Larry Kirshbaum to head up a new general trade imprint for them.

The next thing to drop will be a few pennies as the industry wakes up to a very new day.

Konrath complained in a blog post over the weekend that independent bookstores planned to boycott the Thomas & Mercer imprint. It would appear Konrath (who, in his pre-ebook-evangelist days worked hard to promote through independents) took very personally what was meant to be resistance to Amazon.

One would suspect that the books Kirshbaum is going to acquire will be very hard for any bookseller that wants to serve and keep her customers to avoid stocking. In other words, the Kirshbaum signing might have cured Konrath’s concern.

Where did this arise before? Many times, many places. Borders stopped buying Sterling books when the independent publishers was acquired by B&N. The relationship between Sterling and Amazon is more complicated, but it would be safe to say that sales of Sterling books were not Amazon’s highest priority and sales through B&N’s biggest competitor were not Sterling’s.

Amazon briefly (for a couple of days) turned off Macmillan’s buy buttons in January 2010 in an fleeting and unsuccessful attempt to persuade the big houses not to go to agency pricing.

When Barnes & Noble bought Sterling, they stated clearly that they did not intend to publish precisely the kind of books Kirshbaum is now going after: “non-fiction and literary fiction.” Although things have changed in what has been nearly a decade since that acquisition, Sterling was a “category” publisher when B&N acquired them and have never stepped aggressively into the high-advance, agented arena that is Kirshbaum’s natural milieu.

I’d say one of the pennies dropping might be at B&N, where they are probably reconsidering their title acquisition strategy. If their biggest retail competitor is going after the biggest authors directly, can they afford not to?

Five years ago we lived in a world where every book that mattered sold more copies at brick stores than it did online. Five years from now every book that matters will sell more copies online than it does in a brick store. The Amazon decision may mark the commercial turning point of that massive shift.

The edge in maximizing online sales revenues will go to the publisher that can manage online pricing and marketing most effectively. That not only means raising and lowering prices dynamically to get the most possible revenue, it might also mean experimenting with free sample sizes to see what delivers the best rate of conversion to a sale. It certainly also means having the best list of potential readers to alert to a book’s publication.

Publishers have a steep hill to climb to develop skills in that regard that Amazon has been honing for years. The announcement of Bookish, a community and information site for readers, seems like a weak counterweight to this Amazon announcement. I would imagine Kirshbaum will have signed away a few books the Big Six publishers wanted before Bookish even opens its doors.

Agents, who have just gotten a big new bidder to drive up the prices of everything valuable they have to sell, are having a very good day. Publishers, as they say: not so much.

I hope I’ll see you at either the memorial celebration of Ruth Cavin’s life tomorrow (Tuesday) afternoon at 5:30 at the Salmagundi Club at 5th Avenue and 11th Street or at our “eBooks Go Global” conference at Javits all day on Wednesday, where the topic of this blogpost will surely arise!

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  • Pturner108

    Kirshbaum's move points to what will be a new publishing maxim: “Follow the customers.”

    • /blog Mike Shatzkin

      You're right. Owning the customers is everything. In the halcyon days of

      yesteryear, publishers owned the customers. But the customers then were the

      re-sellers.

      Mike

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  • http://www.facebook.com/michael.n.marcus Michael N. Marcus

    It's very simple. Evolve or become extinct.

    • /blog Mike Shatzkin

      Everybody is trying to acknowledge that reality. Some more

      successfully than others.

      Mike

  • ClaudeNougat

    You're so right: this is the turning point. Amazon seems to have found the “sweet spot” with readers that has eluded traditional publishers for so long…mainly because they focussed on such things as using “genre” as a marketing tool instead of doing some solid market research to understand exactly what readers want to read and at what price and in what form…

    Something that Amazon knows better than anyone precisely because they're an online bookstore and have set up readers fora, a system for readers ratings of books etc for a very long time now…They're ahead of the game and it's going to be hard for others to catch up. I believe Bookish is a smart move although it might have come a little bit late…

    • /blog Mike Shatzkin

      Yes, Amazon knows about how consumers react to price. But let's remember

      that they have two missions when they price things. One of them is to get

      money. The other is to monopolize customers. Sometimes those two objectives

      are at odds. The best price for Amazon is not *necessarily *the best price

      to maximize revenue for the book.

      Mike

  • gous

    One could see this coming from a long way off. I'm afraid that the big publishers have been too reactive and too timid for many a year now.

    For this patient to survive radical surgery is needed.

    Think big! Like, say Bertelsmann putting in an offer for B&N. Sounds crazy? Desperate times calls for desperate remedies. When people sympathising with you start speculating that 50% of publishers might vanish… Well you'd better start thinking outside the box otherwise you will be buried in it.

    • /blog Mike Shatzkin

      I see your point, but for a publisher to buy into a dying brick bookstore

      business is a bit counterintuitive. It's a high price to pay for Nook.

      Mike

  • Julia Barrett

    All I can say is….wow.  Your post is so prescient that I'm blown away.

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  • http://wowgu.ru Marazm Z

    Something that Amazon knows better than anyone precisely because they're an online bookstore and have set up readers fora, a system for readers ratings of books etc for a very long time now…They're ahead of the game and it's going to be hard for others to catch up. I believe Bookish is a smart move although it might have come a little bit late..

    • /blog Mike Shatzkin

      I'm going to need to know more about Bookish to have an opinion about

      whether it is a smart move or not. Certainly, publishers working together to

      create discovery for books that are losing their outlet in bookstores is

      smart, but an opinon as to whether this answer is going to work awaits more

      information.

      Mike

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