Amazon setting itself up to lose

[Penforhire]

I buy lots of things from Amazon. My use of that company's services will continue regardless of what happens in the publishing industry. This means they have a built-in advantage in the market. I don't want to cruise six or more publisher sites for books, just one. I value their review system (admittedly more for my physical goods than e-things but it has to be a factor for many).

Seems to me the only visible threat to Amazon is self-promotion, which suffers an even larger "too many sites to buy from" issue.

[murraypaul]

Originally Posted by carld

Oh yeah there is. The Price Fix Six were making more money with Amazon's $9.99 model than they are with their inflated agency pricing. That didn't stop them from shoving it through anyway. It was all about Amazon devaluing the book, rather than the amount of money they were making, or so they claimed.

The idea that the big publishers would freeze out Amazon and set up their own web stores in order to charge less for books than now has to be the funniest thing I've heard all day.

[typhoon5ht]

I doubt big publishers could freeze out Amazon unless they team with another company that has the online infrastructure to match Amazon. So, unless they team with Apple, Google, or Microsoft, they can try to compete directly, but they'll just offer an inferior product.

[wodin]

Originally Posted by Giggleton

We won't need the web to acquire ebooks in a few years.

Oh? How does that work?

[cfrizz]

Amazon is a one stop shop, this is what makes it so popular. Anything you want, you can usually find it on Amazon.

When I'm looking to purchase ANYTHING, the first place I go is Amazon!

I'm not about to start going to every publisher under the sun, providing I even know who the publisher is to get a book. With Amazon all I have to do is click on books, type in the name of the book & up it pops.

So if they decide to stop using Amazon to sell their books, it will simply further speed up their eventual collapse.

[stonetools]

This might add something to the debate. From Mike Shatzkin-big-time publishing consultant:

Amazon, which had previously established imprints for author-direct publishing and for translations of foreign works and had created a relationship with Houghton Harcourt to address their prior inability to get brick store distribution for books they owned, announced a new romance imprint called Montlake Romances. (Personally, I thought it was a bit strange that they announced it with just one book coming this Fall, rather than 10 books coming next week!) That put them squarely into the publishing business in a new way, and one could only imagine that the mystery shoe and thriller shoe and sci-fi shoe will be soon to drop.

In the same vein, Barnes & Noble has a program called Pub It! to enable authors to by-pass publishers and earn bigger royalties. They also still own Sterling, which gives them in-house the distribution capabilities that Amazon had to team with Houghton Harcourt to get. And with Sterling they also have the entire infrastructure in place to deal with authors and their care and feeding which could constitute competitive advantage when the gloves come off chasing brand-name authors.

So both of the giant retailers are looking more and more like publishers.

But it turns out the publishers were cooking something up too. On Friday, we learned about a new business called Bookish, which will be the “new digital destination for readers.” In its announcement release, Bookish promises to use content and software tools to promote discussion and discovery around books and to answer the reader’s question: “what book should I read next?”

What was most eye-catching about Bookish was its backing by three of the Big Six: Hachette, Penguin, and Simon & Schuster, who have apparently been planning this move for quite some time.

What was downplayed, but perhaps most significant, is that Bookish is trying to straddle the same fence that Google, and, to a lesser extent, Kobo are: being an ally of existing retailers while selling direct to consumers itself.

ARTICLE

Looks like the publishers are trying their hand at marketing directly to the customers, while the booksellers are getting into publishing. Everyone is hedging their bets. Dunno how it will turn out.

[tubemonkey]

Originally Posted by murraypaul

As long as Amazon can maintain the dominance of the Kindle platform and be the only access for the DRM for that platform, the publishers have no choice but to sell through them or abandon those customers.

This

[SensualPoet]

No one has mentioned another group of folks. If the Agency 6 decided to set up their own co-op website and refuse Amazon access to the titles, I kinda suspect James Patterson, Nora Roberts, JK Rowling, Danielle Steele, Dean Koontz, Stephen King, John Grisham and, one or two other somewhat well-known authors, might voice some "concerns" at being removed from Amazon.

Amazon will be a dominant player for some time to come; but they aren't the only distribution point. Publishers and agents and authors will sort something out ... but it's unlikely to exclude Amazon.

[Giggleton]

Originally Posted by wodin

Oh? How does that work?

We'll use the network interface in our readers, and connections within our books to acquire more books.

There's really nothing to this except to wait and see, Amazon might be undercut or some such thing, happens all the time.

[Rizla]

It is possible that publishers could dis-intermediate(!!!) Amazon. Setting up e-stores is not expensive. The main issue would be the delivery platform. The Kindle is the best at this. Publishers would either adopt off the shelf hardware (Nook?) or develop their own. The Ipad is the single biggest competitor to the Kindle and it is no coincidence that Amazon is releasing a tablet. The Amazon way of distributing e-books is user-friendly. That would be hard to emulate without huge investment. Maybe that will change with technology.

[Worldwalker]

Originally Posted by leebase

That's pretty much the role the publishers already play. Getting a publisher is, in effect, hiring editors, cover artists, marketers, advertisers and the like.

But consider the price: In exchange for the editing, artistic, and marketing services -- all pretty much a one-time thing -- the author surrenders his rights to the book, and 80% or more of the book's revenue, for years -- often for the profitable lifetime of the book.

When authors don't have any other way of getting those books on to the table at the front of the bookstore, or getting them printed at all, for that matter, they don't have much of a choice with it. But when that isn't an issue anymore, then those authors are going to wonder why they're paying a publisher so much for services they can obtain a la carte for a much cheaper price -- which then enables them to sell their book for a lower price, which induces more people to buy that book, which increases their total sales, which increases the profits that go into their pocket.

People want to read the new J. Bigname Author book, not the new Random House book. They couldn't care less who the publisher is. That's why, if and when ebooks become the dominant form of publishing, the publishers won't dare tick off Amazon: people will buy that book by J. Bigname Author from Amazon no matter who publishes it, and Amazon can provide the same services (and, given their diversification and their much leaner corporate structure, probably at a significantly lower price) that the publishers provide today. If push comes to shove, some authors will stay with their publishers (especially those contractually obligated to do so) -- but some will decide that if it comes down to having Amazon as a publisher or one or more of the Cabal 6 as a bookstore, they'd rather go with the famous bookstore, and with the money, and leave their former publisher in the lurch. Given how heavily the publishers depend on those big names -- and the extent to which they've dried up their own well of up-and-coming authors -- it wouldn't take very many author defections to badly, even fatally, cripple a publisher.

Also, publishers have laid off a lot of employees over the past decade or so. Some of those people have started their own companies, some are in publishing-related fields, and some are busing tables. The existing publishers don't have a lock on the talent, either; if Amazon wants to get serious about publishing, they've got all those former employees of big houses to hire and cubic dollars to hire them with; they could set up a full-scale publishing operation in a matter of months.

Publishers keep trying to force the market to sustain the business model they found profitable in the past. Amazon looks at current conditions and figures out how to profit from them. Right now, they own the digital storefront, and if the publishers' "Big 6" cabal threatens that storefront, those publishers may find themselves with a Bigger 7th on their hands, lean, hungry, and ready to eat their lunch. I don't think they dare risk having that happen.

[anamardoll]

I don't like having to keep track of 30+ sites for buying my ebooks, and I suspect other people feel the same way. Inkmesh has helped a LOT in that regard, but in order for me to really end up at a non-"single source site" (Amazon, B&N, Koby, Sony, whatever flavor you prefer), there would have to be some other draw. There are a lot of things to consider...

1. Availability. Obviously, if you can't buy the book at a single-source site, you have to buy it at the publisher. But this is a huge loss of sales for the publisher - a HUGE amount of what I buy I first learn about through Amazon Recommends and similar "purchase history" algorithms.

2. Reviews. Amazon got to where it is today in part because it because THE go-to place to read customer reviews on books and really understand if it's something you like. Sure, you can get these elsewhere, but again, single source is important. Furthermore, I'm skeptical that reviews on a publisher site will be considered as unbiased as ones on a "distributor" site like Amazon.

3. Pricing. If a book I already want is cheaper at the publisher site, then it might be worth buying there instead of at my single source. But how is this model going to work? Are the publishers going to undercut their own books at their own site? (I.e., a book is $10 at Amazon, $10 at B&N, and.... $7.50 at the publisher site.) Won't this just fuel customer rage and Kindle bombs on the single source sites?

4. Infrastructure. If the publishers want to cut out the middleman, it's going to take a lot more than some guy designing a website. Not only will they need a decent Customer Service department, they'll need to stand out from the single-source suppliers who currently hold some trust value in the sense that they are a known commodity. (For example, I used the Borders ebook site ONCE before immediately quitting. I had run into a problem getting a free ebook that was featured here, and my email to CS was answered in a very annoyingly idiotic fashion. I wasn't going to stick around for that when I know I can get slightly better service elsewhere.)

It seems like really this boils down to an OPEC problem - the only way this would work to "undercut" Amazon would be if ALL the big publishers agreed to do it at once and didn't try to double-cross each other. And... for what? The relationship between Amazon and publishers may be contentious at times, but it's still a VERY profitable relationship for the publishers. Even the $10 thing sold more ebooks - the publishers just didn't like the cut into their pbook profits, AFAIK.

[leebase]

Originally Posted by stonetools

Looks like the publishers are trying their hand at marketing directly to the customers, while the booksellers are getting into publishing. Everyone is hedging their bets. Dunno how it will turn out.

Guess I don't look so crazy after all.

Lee

[DiapDealer]

Guess I don't look so crazy after all.

It's not really a new concept. I've purchased several ebooks directly from Penguin Books in the past--preKindle days. But the landscape has changed a lot since then.

[abookreader]

Originally Posted by leebase

Guess I don't look so crazy after all.

Lee

Crazy is not selling through your own retail website.

Crazy is selling only through your own retail website and not listing your books at Amazon, Barnes, Kobo and all the other POS opportunities.