The Shatzkin Files


Another wake-up call from Amazon as they serve author interests better than publishers have


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The Authors Guild and its allies have recently appealed to the Department of Justice to investigate Amazon’s possible monopoly control of the book business. It is hard to quarrel with the fact that Amazon delivers more of the publishing output to consumers than any single account ever has and that they are, inevitably, changing the economics of the business as a result.

Although those fighting Amazon can and will point to what they consider to be situations where Amazon takes unfair advantage of its marketplace position, there are two aspects of what has transpired over the past 20 years that the critics who plead for government intervention will almost certainly ignore.

Most of Amazon’s success is due to their own stellar performance: innovating, investing, executing, and having a vision of what could happen as they grew.

Most of what Amazon has done to build their business — almost all of what they’ve done until the past few years of Kindle dominance — benefited most publishers and helped them grow their sales and their profitability. (In fact, book publishing uniquely among media businesses didn’t fall off a cliff in the decade surrounding the millenium and a strong case could be made that Amazon actually saved them.)

This has not stopped. The most recent example was announced yesterday. Amazon is now enabling readers to sign up on their favorite authors’ pages for notification of forthcoming books. This once again demonstrates Amazon’s willingness to innovate. And by doing this they also will deliver benefits to the publishers — an increase in out-of-the-box sales of new books to the authors’ sign-up lists. But the chances are that authors will be more appreciative than publishers will. That aspect of this initiative then feeds into the meme that “Amazon is taking over!”

In our digital marketing business, we often point out to publishers and authors that creating a robust and complete author page at Amazon should be a key element of any author’s digital footprint. It gets seen by a lot of people and it gets crawled by Google, enhancing Google’s understanding of who an author is and increasing the likelihood that they’ll be found through search, even searches that don’t include their name or their book titles. Looking at things from the publishers’ perspective as we tend to do on this blog, we’ve made the point that publishers need to encourage — or create — competent and well-SEOd author websites or risk having the Amazon author page. or even the book’s Amazon title page, become the highest-ranking return for a search for that author’s name.

When we talk about author websites, we stress the importance of building the fan base in size and intensity. Among the big literary agencies investing in helping authors with their digital presence (and many are), we helped one figure out the techniques to teach to help their authors gather mailing list names (or what Seth Godin called “permissions” for the first time about two decades ago when he was among the first to see the value in building email lists).

Now Amazon has, in their typical way (simple and self-serving) made this incredibly easy. We’ve met publishers who wonder why an author would need a website of their own rather than just a page on the publisher’s site. There are a lot of reasons that might be true, including many publishers’ apparent reluctance to “promote” the books an author has done with a prior publisher. But now publishers might hear authors asking the question a different way. Why do they need any author page on the Web besides the one they get from Amazon?

This topic is not new. Goodreads, which was bought by Amazon, has enabled fans to sign up with authors for years, a feature that was recently updated. So have some publishers, but too seldom in an effective way. They often put their author pages in silos — like a “catalogue” — that won’t get much traffic and less engagement. The author pages are incomplete. They don’t promote interactivity.

So there is still an answer to the author’s question: what else might they need? What Amazon has created doesn’t deliver true direct connection between authors and fans. In effect, the fans are signing up with Amazon — through the author’s branded page — for notifications that will come from Amazon. There is scant indication that there will be any further sharing of that author mailing list, or any other opportunities created for the author and the fan base to communicate (although “invited authors” may be able to create a personalized message to go with the announcement). But the single most important thing an author would want to tell his/her fans is “I’ve got a new book coming” and Amazon has handled that.

And in so doing, they have increased the control they have of the book marketplace and highlighted once again that part of the ground they take is ground the publishers simply cede to them. Any publisher that is not helping authors engage with their readers and actively create their own email lists to alert the interested to new books is put on notice now that they are quite late. But one thing is still true: better late than never.

Helping authors with their digital footprint needs to move up every publisher’s priority list.

An unrelated topic but another one in the news that is important is that the German ebook market seems to be going DRM-free. The latest announcement is that Holtzbrinck will take DRM off their ebooks in Germany. The last big holdout in that market is Random House, but one wonders for how much longer. Since two of the Big Five — Macmillan and Random House — are German-owned, it is fair to ask how long it will be before the experience there is reflected in what happens here. We’ll be watching closely to see whether there is any noticeable impact on sales as a result of DRM’s removal. Although Amazon permits DRM-free distribution to those who want it, we probably won’t see them pushing this option. There’s a case to be made that one of the principal effects of DRM today is that it protects Amazon’s ability to monopolize sales to the Kindle ecosystem they created.

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  • Robotech_Master

    Wow, you said something nice about Amazon. Are you sure you’re feeling all right? 🙂

    In all seriousness, I doubt Amazon would make a big deal out of the DRM-free thing. I’ve concluded that the vendor lock-in fuss over DRM is really a red herring.

    It’s not really the DRM that locks people in. Amazon could remove DRM from every book in its catalog tomorrow and people would still keep right on buying from them because it’s easy. The average e-book buyer doesn’t even know what DRM is, but he knows how easy it is to buy books from Amazon. After well over ten years in business, Baen ended up having to make major changes to its own store so it could get its e-books on Amazon where more people would buy them. Too many people kept asking them why their (DRM-free, multi-format) books “aren’t on Kindle yet.”

    Of course, Amazon probably wouldn’t “push” it in any event—it’s extra work they don’t need to do. But I don’t think they’d be terribly bothered if Holtzbrinck wanted to go to the extra effort itself.

    • My position on Amazon has been consistent for many years. Go back and read the posts from years ago and you’ll see that. I never denied them the credit they are due. That doesn’t mean that their control of the market isn’t a problem, even if they got it through their own good strategy and execution.

      You’re right about Amazon making it easy. But if there were no DRM, it could be made just as easy from other venues and platforms. DRM is what prevents others from making it easy to put a book into the Kindle ecosystem. I am not suggesting they’d suddenly plummet, but it is a near-certainty that it would cost them Kindle business. On the other hand, it would also make it easy for Amazon to sell epub and put content onto Nook or Kobo devices as well.

      • Robotech_Master

        See, that’s the thing. I don’t think most customers WANT to move books over from other platforms.

        Furthermore, it could NEVER be “just as easy from other venues and platforms” as it is from Amazon. Baen was about the closest thing possible to that—you could simply fill in your email address and click a link on their website to have the book sent directly to your Kindle—but even that was too hard for all the people who kept demanding to know why Baen e-books “aren’t on Kindle” yet where they could buy them with one click.

        Seems to me that the vast majority of e-book customers could no more side-load a DRM-free title to their e-reader than they could fly to the moon. Baen basically proved that. I suspect major publishers going DRM-free would cost Amazon less business than a lot of people think.

      • You may well be right. I certainly wouldn’t expect it to be earthshaking. I have always thought that DRM mattered much less to the average consumer than it did to the digerati. And, of course, anybody *vending *ebooks would like the barrier removed. It will be important to watch the German experience not just for what the impact is on piracy or “sharing”, but also for what it is on sales and platform migration. I would say that on balance, DRM is a net plus for Amazon but not a very big one.

      • Robotech_Master

        Sure. I wouldn’t argue with that. I think lots of companies vending e-books would like the barrier removed. I just think they’re probably overestimating the effect it would have on their sales.

        After working years in tech support and seeing how difficult it was for ordinary people to do what I would have considered even the simplest thing, I’ve come to have new appreciation for just how HARD technology is. Even technology that you or I might personally understand and think is dead simple will seem impossible to someone who lacks that context. That’s an epiphany most people don’t have.

        Now, back in the Palm Pilot days when most people who bothered with e-books HAD to be tech-savvy, then publishers dumping DRM might have made a difference. (And this is where Baen’s e-book policy stood it in such good stead at the time, serving more as promotional material for its print books than a profit engine on its own.) But Amazon won the e-book market precisely because it was so good at making it so that people didn’t HAVE to be tech-savvy to buy e-books. And so here we are.

        Anyway, it will be interesting to see if this does have any effect in the long run. I’m doubtful, but certainly willing to be convinced.

  • Dave Bricker

    When everyone got CD burners and hard drives, the recording industry refused to acknowledge that music had become software – entirely separable from the medium that contained it. Instead of innovating, they sued Napster, accomplished nothing, and handed off a business that had earned them trillions. Apple is now the world’s biggest music seller, and of course, Amazon is a major player. And who can you blame other than the recording industry?

    We’ve seen the same behavior from the publishing industry. Their loyalty to outdated supply chain models allowed Amazon to walk away with the book business. Amazon’s success is the result of profound blindness on the part of publishers.

    As a populist, I don’t like to see to see too much business concentrated in one place, but much of the cry against Amazon is sour grapes. As an indie-publisher, Amazon doesn’t weigh my search rankings any higher or lower than big publishers’ rankings. I have an author page with an RSS feed from my blog on Amazon. Amazon has even discounted my books at times to a point where it’s cheaper for me to order from Prime than wholesale from LightningSource. As you point out in your article, Amazon has built their position by doing business better. They recovered a clumsy fumble and knew what direction to run with the ball.

    If the publishing industry wants its pie back, it had better start innovating. Amazon is far from perfect, but publishers would rather gripe than seize opportunities.

    Dave Bricker
    http://theworldsgreatestbook.com

    • Dave, Amazon DID weigh your KOLL loans as *sales *for their bestseller list, which gamed things in their direction. But I don’t find that shocking. If you control the rankings, favoring your own stuff is kinda natural. Google seems to do it.

      The fact is that there was really very little the publishers could have done or could do today that would change the trajectory of things much. Anybody living entirely inside the book world can’t really compete in a world where many of the most important players have a much broader base. That actually makes Ingram’s story all the more amazing.

      There are enormous differences between books and music which I’ve written about in the past. I’m sure there are lessons to be applied from one to the other, but the disparities in the way content is selected and consumed are vast.

      • Robotech_Master

        It’s kind of hard to know what might have been if the publishers had done something different early in the history of e-books, but I do know that people who worked in the e-book industry at the time felt that the publishers had effectively sabotaged it.

        All of this is to say that the publishers effectively sabotaged the e-book market from day one. The DRM, the pricing, the general treatment as second-class citizens, it all added up to an insurmountable drag on a budding industry. Without some minimum level of buy-in from content owners, there was simply no way to break through to the mainstream, no way to ever sell enough copies of those popular novels to recoup a large up-front fee, and no way to persuade content owners to allow the most desirable best-sellers to be sold in e-book form.

        Even as late as the Apple anti-trust trial, Penguin’s filing outright admitted to being “not very focused on e-books.” So Amazon was able to come along, take advantage of their distraction with Google Books’s scanning project, and effectively yank the e-book market out from under them like a tablecloth from under fine china.

        Who knows; maybe if they had focused on e-books from the start, and tried to make it work rather than try to protect their print side at all costs, things could have been different.

      • Publishers could never “make” the ebook market; it had to be done by an aggregator. At the turn of the century, there were PDFs, Microsoft Reader, and Palm Digital ebook formats. PDFs were impossible, of course. MS Reader tried to be available through retail. Palm decided that they’d control all the content sales themselves. B&N was trying to sell ebooks; they could only sell MS Reader and PDF. But most of the sales were Palm. Then along came Mobi, a format that could work for either Palm or MS Reader. That was the opportunity for a retailer to sell to all the ebook customers. What happened? Amazon bought Mobi and took it off the market. Shortly thereafter, B&N gave up selling ebooks because there was really almost no market for the formats they could sell.

        Then Palm created their own reader and format, selling through their own store. And that set things up for when Kindle made the market in 2007. When Amazon had decided enough pieces were in place to make it really work.
        The publishers made lots of ebooks at the turn of the century, stopped doing as many when the formats were fragmented and the sales were low, and then started again immediately for Amazon when they created Kindle. The publishers were not, for the most part, resistant. But they were not capable of creating the market. B&N might have if they had bought Mobi. Somebody else might have sooner if THEY had Mobi. But Amazon strategically took the flexible format off the market until THEY were good and ready. And then they did what was necessary to create the market.

        “Blaming” the publishers is as erroneous as denying fair credit to Amazon.

      • Robotech_Master

        1997 (approx) – Peanut Press founded (later known as eReader and Palm Digital Reader). Launches with a reader app for the Palm, but within a couple of years expands to cover most available platforms.

        2000 – Fictionwise founded; sells e-books in multiple cross-platform formats

        2000 – MobiPocket founded

        2001 – Palm buys Peanut, renames it Palm Digital Media

        2004 – Palm spins off Palm Digital Media; it becomes eReader

        2005 – Amazon buys MobiPocket

        2007 – Amazon launches Kindle

        2008 – Fictionwise buys eReader; continues to sell in multiple cross-platform formats

        2009 – Barnes & Noble buys Fictionwise/eReader, makes Nook (though bases the Nook on EPUB, but with eReader DRM)

        There were a number of years when readers for multiple platforms were available. Mobi was far from the only one. Indeed, eReader, as the oldest commercial e-book vendor, had been established for a couple of years before Mobi even came on the market—and it was around for a couple more years after the Kindle launched before Barnes & Noble finally bought it out.

        eReader and Fictionwise were the very biggest names in e-book selling before Amazon came along—and they kept encountering publisher apathy at every turn. (See the article I quoted in my above post, in which a veteran of those early years expresses the frustration they experienced with publishers who seemed to regard e-books as a minor curiosity that would never amount to anything.)

        (The above doesn’t even count lesser known multi-platform formats like iSilo that were just as good for reading e-books but never had a big company behind them.)

        Even when Amazon came along, the publishers were too focused on Google Books to pay much attention beyond offering them the same minor-curiosity-style wholesale contract they gave Peanut and Fictionwise.

        I suppose it just wasn’t in publishers’ culture to be able to look beyond the print media that made up all but a fraction of a percent of their business at the time. Still, I wonder what the publishing industry might have looked like in the end if they had.

      • Blaming publisher apathy for the lack of an eBook market is backwards. There was a surge of digitization in the early part of the decade. No sales. As soon as Amazon created a market, there was plenty of interest in digitization. You’ve mixed up the causes and effects.

      • A few observations:

        1) About that “veteran of those early years [who] expresses the frustration they experienced with publishers who seemed to regard e-books as a minor curiosity”; I’m guessing you’ve heard of Alexander Graham Bell. Bell didn’t want to start Bell Telephone; instead, he wanted to license the telephone to a company in the industry he figured would have a natural interest: telegraphy. The telegraph companies, however, also regarded the telephone as a minor curiosity and said no. Much the same happened to the guy who invented xerography; in the late ’50s he tried to license it to IBM, which at least had the smarts to ask McKinsey & Co. to look at the potential market for xerography’s contribution to photocopying technology. McKinsey’s report told IBM the only real market was the federal government — and that it would sell them no more than half a dozen machines. So IBM said no. And possibly you’ve heard of Xerox’s Palo Alto Research Center, where the modern PC graphical user interface, Ethernet, and the laser printer were invented. If you have heard of Xerox PARC you probably also know that Xerox, incredibly, failed to cash in on any of these milestone innovations in technology — despite the reality its own researchers developed them.

        2) It isn’t hard to see why otherwise intelligent business people don’t see the promise of a revolutionary technology. Mike is absolutely right when he says that “Amazon created a market”, but what your timeline leaves out (and Mike doesn’t address) is the painful gestation period for all facets of ereader technology — a gestation period that didn’t just involve competing ereader file formats but the gradual evolution of displays, such as E Ink, that people needed before they’d be comfortable reading an ebook and a delivery method, cellular wireless, that Amazon realized would make buying ebooks even simpler than Apple had made downloading music to an iPod. (It’s easy to forget that the original Kindle had no WiFi capabilities at all; its sole means of downloading an ebook purchase was via AT&T’s 3G wireless network.) In short, there were a hell of a lot of moving parts that had to come together to make ebooks and ereaders as second nature to consumers as telephones or Xerox machines. Since Amazon’s success as a retailer has nothing to do with book publishing and everything to do with technology, it’s hardly a surprise it beat book publishers to a successful ebook platform and delivery method. And, in a way, it’s just as unsurprising that Amazon has never had much success as a traditional general book publisher. That’s a mature offline business whose need for conventional offline distribution channels — bookstores and other brick-and-mortar retailers — make it largely immune to Amazon’s disruptive retail thinking, which is always focused online.

        3) I worked for Barnes & Noble.com when it introduced the Nook ereader and then the Nook tablet. As pieces of technology, these were not second-class devices. (Indeed, Barnes & Noble.com’s Nook tablet beat Amazon’s Kindle Fire to market by nearly a year.) So why did Barnes & Noble fail in the ereader market? It had less to do with Amazon’s technological headstart than with B&N’s core market, which was smaller, older, and less technologically inclined than Amazon’s. B&N failed to convince the outside world it was a technology company (they’d already failed to convince the outside world they were in the online retail book business — that they were actually competing online with Amazon), so the outside world paid little attention to it. I bring this up because the traditional book publishing industry was far more aligned with Barnes & Noble vis a vis ebooks than it ever was with Amazon, and B&N’s failure in the ebook/ereader/tablet business could very well have been the traditional book publishing industry’s failure had *it* decided to take ebooks as seriously as you seem to wish it had — and as seriously as B&N eventually did. Of course, since you think book publishing industry visionaries could have come out with a Kindle-like device *before* Amazon, I give you the Sony Reader, which actually did. Since I didn’t work at Sony I can only speculate why *its* Reader failed against the Kindle, but there isn’t much doubt a core reason was Sony’s lack of commitment — to building a true universe of ebooks, to making it easy to shop for them, and to make it easier to buy and download them.

        Long story short: Sony was early but didn’t commit, Amazon cobbled together an E Ink reader, rolled out its own proprietary ebook format, and made a *momentous* deal with AT&T to deliver book purchases wirelessly, and B&N was late but fully committed, made some very nice devices, but couldn’t convince the market to take it seriously.

        Which is a longwinded way of saying that even if the Big 5 (or, back then, the Big 6) had been interested in ebooks from the get go, it’s hardly obvious from Sony and B&N’s failures that the publishers could have beaten Amazon to the punch — or survived Amazon’s eventual challenge if they had.

      • I think this is a really useful summary and set of observations. You’re not only right that Amazon had to wait for a bunch of tech developments to come together to deliver what Kindle 1 made possible, but it is also true that they deliberately slowed down the business *until *all those things came together. Who knows how things might have developed in B&N got Mobi and was able to sell ebooks to both Palm and MS Reader formats a couple of years before Kindle.

        But I think the one thing *you *leave out from the B&N-Amazon competition is that B&N is restricted to the book business; Amazon probably does about 5 percent of their turnover selling book content in any form. Therefore, Amazon could afford to invest and take risks in 2007 to build a market — or even to see if one was there. Then Amazon cleaned B&N’s clock when the DoJ crushed agency price-setting, taking all the margin out of the ebook sales. That was a game B&N could simply not afford to play. Although over time we may learn they couldn’t afford *not *to play…

      • Absolutely, Mike. B&N has tried to play in the nonbook sandbox — selling stationery, toys, games, CDs, DVDs, and, online, a surprsing array of stuff (art supplies?!?) most people probably have no idea they can find on bn.com (a problem in itself for B&N!) — but they’re doomed by Amazon’s constantly evolving advantages in price, selection, searchability, fast delivery, and so on. And yes, the DoJ didn’t help. Neither did the collapse of 2008, which for years made the average book consumer more price sensitive than ever … sending them straight to Amazon instead of getting in their car, with $4 gas, to visit the B&N superstore at the local mall.

  • InklingBooks

    Quote: “Most of Amazon’s success is due to their own stellar performance: innovating, investing, executing, and having a vision of what could happen as they grew.”

    You’re joking aren’t you? Amazon’s vision is for ebook formatting so feature poor, they recently bragged that ebooks could now have real dropcaps. That’s roughly the equivalent of GM bragging that their 2015 cars now come with a AM/FM radio.

    And how about the most important area of all—how well authors are paid. Apple pays 70% of retail at all prices. Amazon pays a miserly 35% for all ebooks outside a narrow $2.99-9.99 window. And it charges a download fee on ebooks inside that window that’s about three times what a cell company charges for cellular data. That often knocks another 10% off an author’s royalties.

    Sadly, Amazon’s “stellular performance” lies in deceiving less-than-bright authors into thinking that the company’s treating them well. It isn’t. That check Amazon sends the is bigger simply because Amazon owns 70% of the market. If it owned 30% instead, they’d be earning more money.

    Follow the news and you’ll see that ebooks sales are flattening or even declining. One reason for that is Amazon’s responsibility. The public is picking up on the fact the ebooks are dull-appearing and (because of that dreadful download fee), don’t take advantage of the full-color images the media could offer.

    • Well, I see Inkling is still doubling down on the idea that just-to-be-read ebooks just won’t work and the world needs something much more complicated. Actually: NOT. Although as you and others have proven, there is lots of venture capital available to pursue that idea, no matter how many times it is demonstrated not to be true.

      Ebook sales for big publishers may be declining but they’re being replaced by indie sales at lower prices (their USP) at Amazon. And they’re certainly NOT being replaced with sales of ebooks that are less “dull-appearing”, whatever that means. Full-color images are not the key to the ebook future.

    • Agree with you, Inkling books. Indie authors are drinking the Kool-Aid.

      • Smart Debut Author

        No, Deborah. We’re drinking a 1997 Chateau Lafite Rothschild bought with your former profits 😉 while we build up our own email lists and backlists for a future independent of both retailers like Amazon and predatory wannabe-middlemen like you.

  • PenguinBradshaw

    Amazon didn’t get my children’s books (which I wrote and illustrated) into school libraries and classrooms. Amazon didn’t get them on state reading lists. Amazon didn’t get them into foreign markets and 8 different languages. Amazon didn’t pay for me to hang out at the Texas Library Association conference and sign books. Amazon didn’t arrange for me to speak at IRA’s international conference. Amazon isn’t helping set up bookstore and library visits for my new book.
    No question for me: My publishers do a better job promoting my books and me, than Amazon does. And I’m not even the top of their list.

    • Delighted to hear that. You’re right that Amazon’s marketplace control is niched, not across-the-board. If I had any kind of illustrated book, I wouldn’t be comfortable having it published by Amazon. And they’re weaker with institutions as well.

  • William Ash

    Amazon has had lots of good effects. But those are not universal. I can’t use Amazon simply because they take too big a slice of the pie for me to make a profit and they have pushed prices so low, it means I can’t compensate on price. I am a small publisher and I don’t have the economies large outfits do. Good for Random House Penguin is not good for me. So today’s economy has worked out well for the large players, but has not given the small ones much air.

    • Amazon is definitely able to squeeze the smaller publishers harder than the larger ones. But only publishers who aren’t going for a general market can live without them. I’d suspect you fall into that category.

    • What William said. Ditto. Amazon is effectively crushing the small publishers–even though we have made considerable money for the monster. Amazon takes more and more from us in terms of discount points and accessibility to decent promotions, while favoring its own imprints and Kindle authors. We’re helping to foot the bill while giving up more pieces of our ever-shrinking profits.

  • Sanford Gray Thatcher

    I was alienated by Amazon when, after it bought BookSurge, it then demanded that publishers use it exclusively for POD on threat of Amazon’s de-listing the books of any publisher that refused. As director of a small university press (Penn State), I could hardly afford to sacrifice the 30% of our sales that were then coming from Amazon, so I had no choice but to comply with this demand, but I still think it was an outrageous tactic to this day and will myself buy nothing from Amazon.

    • I couldn’t agree with your sentiments about your commercial experience more than I do. Amazon is not a warm and fuzzy company by any means. There is nothing “likable” about them, and they are totally unsentimental in the way they do business. They also don’t really give a damn about the book business per se, which most of the rest of us in it do. And your post spells out an underreported part of the story, which is how effectively they squeeze the less-than-major publishers, since all the focus is on the battles with the big boys.

    • Elizabeth K. Burton

      Amazon required authors sign with what is now Createspace in order to avoid their having to order books from Lightning Source. Instead, by having a contract directly with the author (or publisher), they are able to print single copies sold in certain of their distribution centers. This allows them to ship within 24 hours and make more money on each sale.

      Amazon’s public relations department is apparently staffed by lawyers. It’s the only reason I can think of for their appalling inability to simply explain the rationale behind the things they do, no matter how simple. In what appears to be their effort to avoid lawsuits, they almost invariably open themselves up to same.

      • I don’t buy the “justification” for Create Space. It is about *margin*, not *service*. Lightning can deliver the books plenty fast enough.

        Mike

  • carmen webster buxton

    As someone who is on her 6th Kindle, I can attest to the fact that Amazon grasped the key element of ebook transition– make it dead easy for the user to buy and read the books. And as you say, as an online retailer of books, they were in a unique position to solve the chicken and egg problem. Before the Kindle, publishers didn’t want to bother with ebooks because no one was buying with them, and no one was buying them partly because there was no selection.

    The Kindle caught on, but publishers didn’t. With a few exceptions, such as O’Reilly Technical books, they didn’t see that insisting on DRM meant users HAD to buy from Amazon. It’s actually pretty easy to put a non-Amazon book on a Kindle; I get more blogs hits for people searching on how to do that than any other search. When I buy an O’Reilly book, they email it straight to my Kindle. That means they not onky get my money, they know who I am and what I bought. That’s not true for any other publisher (now that Fictionwise is gone).

    Amazon knows not only what I bought, they know what books I have actually read and even how long it took me to read the book. If publishers had seen the light, they could have been in a much better position by now. They dragged their feet instead of seizing their chance.

    Which is not to say Amazon is a white knight. They are out to make money, like every other business, but they do seem to understand the idea that long term planning is better than short term reacting.

    • Your compliment for Amazon is accurate. But the failure prior was not the publishers. It was the other potential retailers: Borders and Barnes & Noble. The market was always going to be made by an aggregator, not by publishers. And DRM had nothing to do with it. O’Reilly’s output and market aren’t comparable.

  • robertgottlieb

    Both Amazon and publishers serve author’s interest in varying ways. Sometimes they over lap. Amazon has an advantage in the e-commerce space while publishers have the advantage in the print space. Working in the trenches as Trident does every day the key to success is knowing how to work with both Amazon and traditional publishers to benefit authors.

    Robert Gottlieb
    Chairman
    Trident Media Group, Ltd.
    http://www.tridentmediagroup.com

    • I’m sure you’re right. The objective for authors, and therefore for agents, is to optimize both.

    • Shellie Blum

      I am struggling a bit with the print publishing side Robert. Perhaps you could help me see my way. I’m ready to publish my book and think I have a very good shot at decent ebook sells on my own because of my book platform, but I’ll need help getting my bestseller in stores.

    • Steven Zacharius

      You said it very well Robert. Amazon is an amazing retailer and they’ve done wonderful things for consumers and publishers as well. The problem arises when and if an account becomes so big that it can demand certain terms from their suppliers; and this isn’t in any way just limited to Amazon. The bigger any account gets the more they can afford to compete with an unfair advantage; such as being able to sell books at or below cost without it having any real detriment to their bottomline in the long run.

      Steven Zacharius
      President and CEO
      Kensington Publishing Corp.

  • Thomas Greanias

    Terrific analysis as always, Mike. And here, unfortunately for publishers, the past is a good predictor of the future in terms of innovation: Even if every Big 5 publisher goes full-bore into direct-to-consumer sales or streaming, unless they are also willing to sell every other publisher’s books alongside their own they cannot hope to compete with a true market aggregrator like Amazon.

    • Thanks, Thomas. I don’t think under any circumstances that a publisher can “compete” with Amazon, even if they sell every book in the universe. That doesn’t mean they shouldn’t sometimes sell direct, but they shouldn’t have any unrealistic ambitions. On the other hand, maintaining direct contact with fans and readers doesn’t necessarily require transacting for the content to be beneficial. And serving authors better doesn’t require it at all!

      • Thomas Greanias

        Absolutely!

  • Dale

    At least insofar as new release e-mails go, they’ve offered that feature since early to mid 2013, but it wasn’t via a big Follow button until recently. They had it over on the right side of author profiles in a section called Stay Up To Date, with a plain link reading, “E-mail me when there are new releases by [Author]”.

    My hope is that the notifications will be a bit more timely now. It’s not uncommon for Amazon to notify me of new releases a month after they’ve dropped, often after I’ve already bought them.

  • Smart Debut Author

    Bravo.

    Smart authors want Amazon’s author page to be the *second* entry returned in a search.

    Your very own author website — with your own single-author email list sign-up — should come up first.

  • The cute bells and whistles are window-dressing to distract from the reality–Amazon giveth, but Amazon also keepeth, and Amazon taketh away on the slightest whim. While the company has offered substantial opportunities to small presses and indie authors, it has also cornered a huge chunk of their market and made it very difficult for them to sell a reasonable number of books elsewhere. Amazon has driven down prices, devalued books, has held indie authors and small presses to the fire while constantly chipping away at their autonomy and their profits, and, in short, has created a system that benefits Amazon far, far more than it benefits its ‘vendors,’ which is how the A thinks of content producers, aka authors and publishers. I’ve done business with the big A for many years on both the wholesale and the retail side. The service, opportunities and terms have only gotten steadily WORSE. The manipulative and competition-killing Amazon system should be a top focus of the DOJ–if we still had a country where corporations weren’t allowed to eat the citizenry alive.

    • Thanks for your informed take, Deborah. I think smaller publishers are more bullyable which is all the explanation necessary.

    • Elizabeth Burton

      In what way has Amazon interferred with small publisher’ ability to market elsewhere? We list our titles with all the major channels AND sell direct. That the bulk of our sales are Amazonia is a testimony to their careful market research before the Kindle debuted.

  • Edward Smith

    I am not sure you are entirely correct that multimedia eBooks will never have a place in the world of reading. I say this for a couple of reasons. One, no one has yet handled multimedia properly – they have produced what are called ‘enhanced’ eBooks. Enhancing a finished book is a mistake. Multimedia needs to be integral to the experience, not an after thought. Secondly, this sort of experience, part reading, part visual part auditory – sensual in short has to be marketed differently than the pure reading experience. This type of ebook must be regarded in the way art is handled, as a sensual encounter. Thirdly, I teach undergraduate college level students in online distance courses – not done like those dreadful MOOCs, but through a system that blends text, videos, photographs, sound and links in an immersive and sensual experience of learning. Students flock to these courses – though I admit I do not know if they flock for that reason primarily – but they do recommend those I teach to other students.
    I am, myself, experimenting as a self publisher with this type of eBook – and so far I have had every aspect I list above satisfied with Apple’s iBook Author program. I don’t mind that this limits potential buyers or ‘audience’ as I would hazard a guess that this will be at best a niche market for years if not decades to come. But I do think it will become a regular niche market.

    • Edward, people have been looking for the multiple-media, transmedia, etc. formula for 30 years! Voyager Expanded Books was doing this in 1990. The consumers don’t buy, at least not in any numbers. “Successes” have been isolated one-offs. I have been ridiculing the idea for three decades and haven’t been proven wrong yet. Someday I may be, I suppose. But in the meantime I will stick to the notion that the straight reading form is extremely hard to improve upon from a commercial perspective. It is both what people actually want AND vastly cheaper to both produce and distribute (smaller file sizes). Good luck with your experimentation, but I hope you enjoy the process because “success” is very unlikely.

      • Edward Smith

        Hi Mike :
        I agree with you actually. I understand that your business is advising publishers, especially in the difficult world of eBooks and the disruption caused by the digital revolution. All I am saying is that multimedia books (with the exception of college textbooks), are not really ‘books’ at all. I think the chances of earning money are virtually nil – that multimedia eBooks are more akin to works of art than books to be read. I can imagine a world where the sort of agent who represents a painter also handles multimedia eBooks and you find them in art shows and galleries, not bookstores, electronic or bricks and mortar. The exception of textbooks is where I do not understand what is happening, or rather not happening. I teach History and freshman sophomore textbooks are already and have been for many years print versions of multimedia – photographs, textboxes, text, footnotes, links. Columbia University Press and the American Historical Society teamed up to produce multimedia eBooks, but they were stupidly expensive to produce and to sell, which I do not understand. One of my projects is to produce such a book, using Apple’s free software. There you might see me, someday.

      • Complex media can make complete sense for teaching purposes. They just don’t have much mass commercial appeal.

  • Steven W. Booth

    As a small press publisher, I think this article overlooks a big problem with Amazon that the EU is NOT overlooking. That is the Most Favored Nation clause of the Amazon Kindle contract, which is the same contract self-publishing authors and publishers too small to negotiate with Amazon get. The Most Favored Nation language can be found at the Amazon Kindle FAQ page (https://kdp.amazon.com/help?topicId=A30F3VI2TH1FR8#1-5_Who_determines_price) which reads, in part: “We may offer your book at a price below your list price if, for example, the price at which a competitor sells your book, or the price at which we sell a physical edition of your book is lower than your list price.” This means that Amazon can and will lower your price to one at or below anyone who competes with them on price. This happened to my company regarding my best selling title. Google Play lowered that title’s price without my permission, and Amazon lowered the price in retaliation. Google sold 3 copies, and Amazon sold hundreds. And the author and I saw our revenues severely cut because of this price war. As soon as I figured out what the problem was, I pulled my books from Google Play, and even though I would like to go back, because Amazon is the bulk of my sales, I can’t afford to let them snipe at each other with the price of my book. I now only use ebook retailers who promise to respect the price I set, which is Nook and Kobo. Of all the other hundreds of ebook retailers, I cannot sell my books there because I can’t afford to start a war with Amazon. I am hurt by this, my author is hurt, and the readers are hurt. Amazon is not hurt. This is what the DOJ should investigate, the chiling affect of Amazon’s market domination on the content producer’s ability to reach other markets. The Author’s Guild is way off target. This is what matters.

    • What you say makes complete sense to me. It is what the publishers were attacking with the Agency concept in the first place, trying for uniform pricing across retailers. But the problem now is that the amount of product available at super-cheap prices is vast and, with publisher promotion, now even branded product is available cheap. It is going to get harder and harder to keep prices up, even if agency is made to stick. That may be what publishers are now learning.

      • Steven W. Booth

        Mike, thanks for the response. And I’m sure that’s the point of Agency. But what I’d be happier with is wholesale, like in print. I sell you my book at a discount from the cover price I set. I get paid the same for each copy sold, and you as the retailer are free to sell the thing for as much or as little as you can get people to pay. Wholesale discounts are what? 40%? 55%? More? Amazon offered us little guys 70%, and we went nuts. But what they didn’t offer US is Agency. At best, it’s kind of a hybrid that looks like we have control, and as long as we keep our noses clean (by not selling at a retailer who will undercut them on price), we get 70% of the cover price we set. We get CONTROL, for whatever that’s worth. I’d like to see what it would be like where I give Amazon something like 40% rather than 30%, but they don’t punish me for selling elsewhere. How big is that audience? I don’t know. It’s too expensive to find out.

        However, as Elizabeth points out above, Jeff Bezos didn’t get where he is today by being stupid or working with bad data. He’s been smart all along, adopting and adapting existing boilerplate and giving the readers what they want. He knows the customers very well. And as a customer, I adore Amazon. I would love to be their biggest fan. Unfortunately, in my role as a content provider, they have a very big club over my head. If they were to take away the club, I’d be a MUCH bigger proponent of their policies.

    • Elizabeth Burton

      I have been selling ebooks for the last 15 years, and I have never signed a vendor contract that didn’t include that same language regarding prices. It was considered necessary because small publishers were listing titles at lower prices on direct sales from their websites, undercutting the vendors. So, again, as is the case with a good deal of what Amazon gets pilloried for, they simply adopted existing procedures.

      Amazon became an ebook behemoth because they did they did their homework. Years before they launched Kindle, they had staff on ebook discussion groups taking notes on what established ebook readers wanted. I am willing to wager that was the governing factor behind their initial ten dollar price point. They knew that people who had been reading ebooks regularly for the previous decade were not going to pay trade paperback prices for an ebook, much less the hardcover prices traditional publishers wanted to charge.

      That research was what gave them their advantage, and the rest of the pack still have no clue how to sell ebooks.

      • Steven Zacharius

        Amazon/Kindle sells millions of books above $9.99. Most of the major bestsellers are $12.99 and up. I just looked at the NYT Kindle list. My favorite however is Grey for only $.99. How can any other retailer afford to sell enormous quantities at that price? It’s $7.99 on iBooks and $9.99 on Nook.