Implications of ebooks to the Long Tail

KenJackson · 12-20-2010, 02:05 PM

It's been the exploitation of the Long Tail that has made Amazon.com so prosperous. That is, they stock or otherwise sell a very large number of very low volume books that brick and mortar bookstores, even big ones, just can't afford to give any shelf space and storage space to.

So what's the implication of ebook sales to the shelf space issue of the long tail? It takes the same amount of shelf space and storage space to store one copy of a thousand-per-day seller as it does for a one-per-year seller in the digital world.

If I start up a new web site--Ken's Book Store--selling ebooks online, it would have to invest some money to get the website up and get contracts with publishers. But would I have to get a contract per book? Or a blanket contract per publisher? I don't know, but I would guess it's the latter. So with just a few contracts my warehouse is full. Suddenly I've got more books for sale than the average mega-bookstore.

I only started giving any thought at all to ebooks a few months ago. But boy, oh boy, this seems to be a game changer. No wonder Amazon's trying to rope everybody in to exclusive relationships via their Kindle.

HarryT · 12-20-2010, 03:21 PM

Quote:

Originally Posted by KenJackson

No wonder Amazon's trying to rope everybody in to exclusive relationships via their Kindle.

They aren't. Amazon's digital publishing platform is specifically NON-exclusive.

queentess · 12-20-2010, 04:14 PM

Quote:

Originally Posted by HarryT

They aren't. Amazon's digital publishing platform is specifically NON-exclusive.

I think he's talking about this sort of thing

KenJackson · 12-20-2010, 04:21 PM

Quote:

Originally Posted by HarryT

They aren't. Amazon's digital publishing platform is specifically NON-exclusive.

Is it non-exclusive for DRM ebooks?

If I understand correctly, a Kindle can't be used to read a DRM-corrupted ebook sold by any other store. That is, if you buy a Kindle, you have given Amazon a monopoly on supplying you with DRM-corrupted ebooks (unless you also buy a non-Kindle ereader too--an expense and a bother).

I'm merely suggesting that their advance understanding of the implication of the sale of ebooks, and it's potentially liberating effect is what has motivated them to not sell ebooks that can be read on any other ereader than the one they sell and control, and to not enable the Kindle to read DRM-corrupted ebooks sold anywhere else.

This of course ignores non-corrupted ebooks, but it would be difficult to exert control over them and there's less money there. Also it might be possible to spin it as magnanimous to allow reading them on their ereaders from any source.

KenJackson · 12-20-2010, 04:29 PM

Quote:

Originally Posted by queentess

I think he's talking about this sort of thing

Ah! I wasn't aware of Warren Adler's Kindle-exclusive deal or any other like it, but that does indeed fit perfectly in with the modus operandi I've noted.

If someone is shopping for an ereader, Amazon wants them to think of the Kindle as expanding their options--not limiting them.

Baldrake · 12-20-2010, 04:29 PM

Amazon has a lot of value in their infrastructure beyond their publishing deals. Their massive database of user reviews and their recommender system are themselves sufficient to draw people to their site over "Ken's bookstore".

queentess · 12-20-2010, 04:39 PM

Quote:

Originally Posted by KenJackson

Is it non-exclusive for DRM ebooks?

If I understand correctly, a Kindle can't be used to read a DRM-corrupted ebook sold by any other store. That is, if you buy a Kindle, you have given Amazon a monopoly on supplying you with DRM-corrupted ebooks (unless you also buy a non-Kindle ereader too--an expense and a bother).

This is only partially true: Kindle can't read non-Amazon DRM, but it does read plenty of non-DRM'ed files, so there is no lock-in to Amazon. FYI, this is not a Kindle issue, it is a DRM issue. For example, Sony's hardware doesn't let me read Amazon DRM either.

Quote:

Originally Posted by KenJackson

I'm merely suggesting that their advance understanding of the implication of the sale of ebooks, and it's potentially liberating effect is what has motivated them to not sell ebooks that can be read on any other ereader than the one they sell and control, and to not enable the Kindle to read DRM-corrupted ebooks sold anywhere else.

What?

KenJackson · 12-20-2010, 04:58 PM

Quote:

Originally Posted by queentess

This is only partially true: Kindle can't read non-Amazon DRM, but it does read plenty of non-DRM'ed files, so there is no lock-in to Amazon. FYI, this is not a Kindle issue, it is a DRM issue. For example, Sony's hardware doesn't let me read Amazon DRM either.

Yes, DRM is the issue. But I gave three reasons why I ignored non-DRM ebooks.

There are a number of online books stores that sell Adobe adept corrupted ebooks, which say they support Sony. Sony doesn't control them. If anyone does, it's Adobe, but I don't think that would be accurate.

Quote:

Originally Posted by queentess

What?

I thought the paragraph that you what-ed was well written and cogent. The point here is the implication of ebooks on the long tail. Amazon figured out years ago what I just started thinking about a few months ago. They've taken action to make it difficult for a startup to easily liberate a bunch of their customers.

KenJackson · 12-20-2010, 05:08 PM

Quote:

Originally Posted by Baldrake

Amazon has a lot of value in their infrastructure beyond their publishing deals. Their massive database of user reviews and their recommender system are themselves sufficient to draw people to their site over "Ken's bookstore".

You're absolutely right. That's why Amazon had been my favorite bookstore--and perhaps my favorite website to buy anything--for a number of years.

But suppose the hypothetical Ken's Book Store routinely surveyed their site and set all my prices 5 cents cheaper? Enough people would checkout the book over there and then come to my place to buy books that I would earn lots of profit real fast.

But they've made it rough for Kindle customers to be unfaithful. They've added an spoiler beyond the long tail.

Jack Tingle · 12-20-2010, 05:09 PM

WRT original poster:

You'd go broke. Fictionwise, the most successful pioneer in this area, got bought out by B&N. That might have been the best thing for its founders, who hopefully are taking cash, not equity in B&N. Second best pioneer, Mobipocket, who got bought out by Amazon. If any little guy could survive the coming bookpocalypse, it would have been them. They're both gone.

It's a business (dry-goods retailing, of a sort) with almost no barrier to entry, and paper thin margins. Unless you have deep pockets, big ad budgets, wicked-pissah skills and a recognizable name, like Amazon, B&N, Kroger or Scott Tissue, you go broke.

Amazon, et. al., are trying to arrange things so their margins are made of thicker paper than the next guy. That way they survive longer. It's a non-trivial business management problem.

Regards,
Jack Tingle

KenJackson · 12-20-2010, 05:17 PM

Quote:

Originally Posted by Jack Tingle

Amazon, et. al., are trying to arrange things so their margins are made of thicker paper than the next guy. That way they survive longer. It's a non-trivial business management problem.

You're absolutely right. And a big part Amazon's arrangement is it's sales limitations and Kindle restrictions.

Kali Yuga · 12-20-2010, 05:46 PM

Quote:

Originally Posted by KenJackson

It's been the exploitation of the Long Tail that has made Amazon.com so prosperous.

Not really, that's just one factor among many.

Others include hyper-efficiency with inventory management; eschewing physical retail space; aggressive pricing; a focus on customer service and a big heaping of good luck.

Quote:

Originally Posted by KenJackson

So what's the implication of ebook sales to the shelf space issue of the long tail?

Not much that we don't already know about.

Translating all of that back catalog into digital is going to take years. Multiple retailers and vendors are going to get into the game. But otherwise, by now the shift to digital won't change these buying habits much.

Quote:

Originally Posted by KenJackson

If I start up a new web site--Ken's Book Store--selling ebooks online, it would have to invest some money to get the website up and get contracts with publishers. But would I have to get a contract per book? Or a blanket contract per publisher? I don't know, but I would guess it's the latter.

You don't know how retailing ebooks is done, and you think you can give Amazon a run for its money?

Actually the most likely thing at this point is you'd partner with Google. Otherwise you will need to develop relationships with hundreds, if not thousands, of publishers. I'm not even sure there is any sort of middle-man/distributor/clearinghouse that is an equivalent to say Ingram or B&T for digital.

If there is, they'll take a slice, which makes your costs higher than Amazon's. I'm sure that'll work out great in your favor.

Quote:

Originally Posted by KenJackson

So with just a few contracts my warehouse is full. Suddenly I've got more books for sale than the average mega-bookstore.

Yeah, no.

It's gonna take a little more work than just setting up a web server in Vanuatu.

Established companies like B&N, Sony and Borders are throwing millions at their efforts and not necessarily gaining much traction. Your bookstore won't stand much of a chance unless you manage to exploit some totally unexplored aspect of ebooks -- that a major player can't adopt immediately.

KenJackson · 12-20-2010, 06:15 PM

Hi Kali Yuga,
Your title, Professional Contrarian, is extremely apt.

Please don't think I'm starting a real business. This is a hypothetical exercise. I'm not swayed by your confidence and dismissals. But you broached an interesting twist.

I went looking for a bar graph or chart of annual book sales vs publisher but couldn't find one. It would be interesting to see if the tail is as long on that graph as you suggest.

And yes, some totally unexplored aspect of ebooks could give excellent traction, and that would be an effect. And since ebook sales are so new, I'm sure there are some of those to be found.

pwalker8 · 12-20-2010, 06:28 PM

I could see someone setting up a specialty ebook store and doing well if they added value. For example, an e-book store just for SF that did author interviews, reviews, a good upcoming books section, cleaned up the book lists a bit, had a good recommendation engine, etc... It would take some work, of course. The real key is doing something that provided enough value to keep people coming back. There are a lot of things that Amazon simply can't do because of the sheer volume of merchandise.

Jack Tingle · 12-21-2010, 04:48 PM

Quote:

Originally Posted by pwalker8

I could see someone setting up a specialty ebook store and doing well if they added value. For example, an e-book store just for SF that did author interviews, reviews, a good upcoming books section, cleaned up the book lists a bit, had a good recommendation engine, etc... It would take some work, of course. The real key is doing something that provided enough value to keep people coming back. There are a lot of things that Amazon simply can't do because of the sheer volume of merchandise.

Um, the last time I checked, Amazon does all of the things you listed. The author interviews are more author pages, but the effect is similar. I think you need a little more research.

Regards,
Jack Tingle

12-20-2010, 02:05 PM	#1
KenJackson Addict Posts: 256 Karma: 112042 Join Date: Oct 2010 Location: Maryland, USA Device: Sony PRS-650	Implications of ebooks to the Long Tail It's been the exploitation of the Long Tail that has made Amazon.com so prosperous. That is, they stock or otherwise sell a very large number of very low volume books that brick and mortar bookstores, even big ones, just can't afford to give any shelf space and storage space to. So what's the implication of ebook sales to the shelf space issue of the long tail? It takes the same amount of shelf space and storage space to store one copy of a thousand-per-day seller as it does for a one-per-year seller in the digital world. If I start up a new web site--Ken's Book Store--selling ebooks online, it would have to invest some money to get the website up and get contracts with publishers. But would I have to get a contract per book? Or a blanket contract per publisher? I don't know, but I would guess it's the latter. So with just a few contracts my warehouse is full. Suddenly I've got more books for sale than the average mega-bookstore. I only started giving any thought at all to ebooks a few months ago. But boy, oh boy, this seems to be a game changer. No wonder Amazon's trying to rope everybody in to exclusive relationships via their Kindle.

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12-20-2010, 04:29 PM	#6
Baldrake Connoisseur Posts: 90 Karma: 1792 Join Date: Mar 2009 Device: Kindle 3, HTC Mozart	Amazon has a lot of value in their infrastructure beyond their publishing deals. Their massive database of user reviews and their recommender system are themselves sufficient to draw people to their site over "Ken's bookstore".

12-20-2010, 05:09 PM	#10
Jack Tingle Punctuation Fetishist Posts: 557 Karma: 1070000 Join Date: Nov 2008 Location: The Bluest Commonwealth In East America Device: Kindle PW, Nexus 7 (2013), Galaxy S5 phone, Galaxy Tab 4 8.0	WRT original poster: You'd go broke. Fictionwise, the most successful pioneer in this area, got bought out by B&N. That might have been the best thing for its founders, who hopefully are taking cash, not equity in B&N. Second best pioneer, Mobipocket, who got bought out by Amazon. If any little guy could survive the coming bookpocalypse, it would have been them. They're both gone. It's a business (dry-goods retailing, of a sort) with almost no barrier to entry, and paper thin margins. Unless you have deep pockets, big ad budgets, wicked-pissah skills and a recognizable name, like Amazon, B&N, Kroger or Scott Tissue, you go broke. Amazon, et. al., are trying to arrange things so their margins are made of thicker paper than the next guy. That way they survive longer. It's a non-trivial business management problem. Regards, Jack Tingle

12-20-2010, 06:15 PM	#13
KenJackson Addict Posts: 256 Karma: 112042 Join Date: Oct 2010 Location: Maryland, USA Device: Sony PRS-650	Hi Kali Yuga, Your title, Professional Contrarian, is extremely apt. Please don't think I'm starting a real business. This is a hypothetical exercise. I'm not swayed by your confidence and dismissals. But you broached an interesting twist. I went looking for a bar graph or chart of annual book sales vs publisher but couldn't find one. It would be interesting to see if the tail is as long on that graph as you suggest. And yes, some totally unexplored aspect of ebooks could give excellent traction, and that would be an effect. And since ebook sales are so new, I'm sure there are some of those to be found.

12-20-2010, 06:28 PM	#14
pwalker8 Grand Sorcerer Posts: 7,196 Karma: 70314280 Join Date: Dec 2006 Location: Atlanta, GA Device: iPad Pro, iPad mini, Kobo Aura, Amazon paperwhite, Sony PRS-T2	I could see someone setting up a specialty ebook store and doing well if they added value. For example, an e-book store just for SF that did author interviews, reviews, a good upcoming books section, cleaned up the book lists a bit, had a good recommendation engine, etc... It would take some work, of course. The real key is doing something that provided enough value to keep people coming back. There are a lot of things that Amazon simply can't do because of the sheer volume of merchandise.