Yet another mostly anti-Amazon article in the New Yorker

[fjtorres]

Actually, pretty soon the beancounters at BPH HQ will run the numbers and realize the way to achieve the best profit margin is to fire 99.99% of the staff and milk the backlist until those 100-year copyrights expire. Why invest in risky new content when they own tens of thousands of proven sellers?
That's what happened with MGM, UNITED ARTISTS, RKO RADIO, REPUBLIC, ETC.

[HarryT]

That has its attractions. There's an awful lot of backlist stuff I'd love to see published as ebooks!

[hardcastle]

Originally Posted by bgalbrecht

The problem is that the publishers are not interested in stocking the older backlist unless it's a best selling classic. The backlist is a distraction from their brand new spiffy bestseller wannabee for which they've just shelled out $50k or more for author advance, preprint preparation (editing, etc.), and the fewer alternatives available to readers, the better. For example, does it make economic sense for Tor to sell Isaac Asimov books from the 1940s/50s as $10 ebooks ($1 more than most of their recent live author ebooks) except that they're selling a trade paperback for $16, and they want people to think that *all* ebooks should be priced like a brand new book?

Amazon doesn't really care if these backlist books sell for $4 or $10, but the publishers do, and they want them to sell for $10.

Publishers would have to be incredibly foolish to think that a consumer is only looking at just their supply of books. A consumer doesn't only look at Tor books unless they're a fan of Tor, and you only make a fan of someone with your backlog.

But even if it didn't make sense from a publisher's standpoint, I still think that publisher backlogs should be entirely available anyway. It should always be a compromise between the consumers, distributors, publishers, and authors.

Actually, pretty soon the beancounters at BPH HQ will run the numbers and realize the way to achieve the best profit margin is to fire 99.99% of the staff and milk the backlist until those 100-year copyrights expire. Why invest in risky new content when they own tens of thousands of proven sellers?
That's what happened with MGM, UNITED ARTISTS, RKO RADIO, REPUBLIC, ETC.

Not much in the way of growth, though. Risk-reward. Movies have the benefit of format shifting constantly; books are in the middle of the only format shift they might ever see.

[bgalbrecht]

Originally Posted by hardcastle

Publishers would have to be incredibly foolish to think that a consumer is only looking at just their supply of books. A consumer doesn't only look at Tor books unless they're a fan of Tor, and you only make a fan of someone with your backlog.

The BPH are used to dealing with the competition being a couple thousand books in print, not millions. There's no good reason for them to volunteer to bring more of that competition against their own new books. Authors are far more concerned about keeping their backlist in print, especially for a series than publishers ever are, especially if any of the backlist was originally published elsewhere.

[hardcastle]

Originally Posted by bgalbrecht

The BPH are used to dealing with the competition being a couple thousand books in print, not millions. There's no good reason for them to volunteer to bring more of that competition against their own new books. Authors are far more concerned about keeping their backlist in print, especially for a series than publishers ever are, especially if any of the backlist was originally published elsewhere.

In digital, though, there's literally so much book competition that throwing any more books into the market will just be white noise for all but the customer that is looking for that ONE BOOK they've been trying to hunt down. If that backlist has a pretty decent profit margin on it, and if it doesn't cost much to digitize, why not throw it into the pile for the occasional sale? Of course if digitization is actually fairly pricey, then it's not really worth the risk.

But I'm not convinced that internal competition is such a problem when publishers have to fend off literally every form of media created by human kind since the dawn of time to get somebody to buy a book. The competition isn't just in the thousands anymore, not in our networked easy-to-access world.

[SteveEisenberg]

Originally Posted by pwalker8

There is actually very little barrier to entry for starting up an ebook store.

My first reaction, as a computer programmer, when reading such claims, has been that there is far more work in programming a truly competitive eCommerce site than in establishing physical stores.

The New Yorker article documents a whole other kind of barrier to entry. Amazon requires publishers to effectively sell them their books more cheaply than the price that would be granted to a new store:

Each category within Amazon’s Books division had to collect co-op fees, and revenue targets rose steeply. In 1999, the company received $3,621,250 in co-op fees; the goal for 2000 was set at $9.25 million. . . . Judgments about which books should be featured on the site were increasingly driven by promotional fees.

Originally Posted by tubemonkey

My favorite gatekeepers are public libraries.

Me too. However, acquisitions librarians do not read the books before buying. Instead they rely on other gatekeepers. If Penguin Random House publishes a new biography of Chiang Kai-shek, they will buy it. If Harvard University Press releases a new biography of Chiang Kai-shek, they may buy it. But they are quite unlikely to buy a new biography of Chiang Kai-shek coming out via Amazon Direct Publishing.

I'm not sure if this is because the libraries pay attention to who the publisher is, or if it is because of superior big-publisher structural editing, or if it is because Penguin Random House biographies tend to be praised by mainstream media professional reviewers. Most likely it is a combination.

[fjtorres]

Originally Posted by hardcastle

Not much in the way of growth, though. Risk-reward. Movies have the benefit of format shifting constantly; books are in the middle of the only format shift they might ever see.

No, there is no growth there.
(You did notice all those studios are gone, right?)

But then there isn't much long term growth in the old predatory system; that's where the margers are coming from.
Consolidation via merger and downsizing followed by back-catalog exploitation isn't a growth strategy, it's an exit strategy for those unwilling to play by new rules. Adapt or leave.

This has happened before. It will happen again.

Sadly, this kind of move is no surprise:
http://www.mhpbooks.com/penguin-rand...on-warehouses/

And, equally sad, there is plenty more like that coming.

[bgalbrecht]

Originally Posted by fjtorres

Sadly, this kind of move is no surprise:
http://www.mhpbooks.com/penguin-rand...on-warehouses/

And, equally sad, there is plenty more like that coming.

I'm sure some of this is because merger of two companies always causes some duplication of resources that can be downsized without affecting overall performance (sucks to be downsized though). I also wonder if some of this is motivated by the tax consequences of publishers maintaining book inventories, and that they might be using this merger as an excuse to shrink the inventories.

[fjtorres]

Originally Posted by bgalbrecht

I'm sure some of this is because merger of two companies always causes some duplication of resources that can be downsized without affecting overall performance (sucks to be downsized though). I also wonder if some of this is motivated by the tax consequences of publishers maintaining book inventories, and that they might be using this merger as an excuse to shrink the inventories.

They are shrinking inventories, yes.
They are shrinking staff, they are shrinking advances, they are shrinking print runs. (Also, odds are the Penguin facilities were larger, older, and more expensive to run than the RH warehouses they are keeping. Expect most of the downsizing to come from the Penguin side.)

By the time they are done consolidating Penguin and Random House, the Randy Penguin will be about the size of the pre-merger RH in everything except catalog. And if the other four haven't combined and downsized into comparable players by then, the Randy Penguin will look to consume another of them.

Right now, they are publishing more "bestsellers" than the other four combined and swamping them. Between that, the declining trade pbook market, and the dirty little secret of 2014 (less new authors are showing up trying to get published by the BPHs) the smaller BPHs need to either eat or be eaten. Pearson had the right idea in getting out of trade publishing when they did; by the time the dust settles in BPH-land (circa 2020) there will be at most three and more likely two NYC trade publishing houses worthy of the BPH name.

That is how industry consolidations play out under tech disruptions.
And since trade publishing really is not a special snowflake there is no reason to expect anything different. It happened to Hollywood during the collapse of the classic studio system, it happened to cars, mainframes, technical workstations, radio, and department stores. Different industries, same outcome.

Edit: Check this:
http://www.huffingtonpost.com/penny-...&rid=241005533

That such a headline can be seriously floated this early in the disruption speaks wonders of the speed at which change is coming.

The problem in the industry, and I would say that this is the biggest problem, is that so many still don't get it. Donald Maass wrote a piece for Writer Unboxed last week that illuminates this point with stunning clarity: the industry does not get it. They see this as a class issue (at some point in his piece Maass refers to the self-published group as "Freight class") (http://writerunboxed.com/2014/02/05/...-class-system/). It was infuriating and frightening at the same time. Frightening because despite this self-publishing revolution, no one wants publishers to go away. We do, however, want them to get it. The revolution has arrived, it's knocking on their door and no matter how long they decide to bury their heads in the sand or write blogs about the class distinction and other outdated notions, it is taking over and changing the way we see the industry.

Pearson got it and got out; RH thinks they get it and ate Penguin to survive. The other four show little signs of getting it. And the NYC "literary" establishment is in outright denial.

[pwalker8]

Originally Posted by SteveEisenberg

My first reaction, as a computer programmer, when reading such claims, has been that there is far more work in programming a truly competitive eCommerce site than in establishing physical stores.

The New Yorker article documents a whole other kind of barrier to entry. Amazon requires publishers to effectively sell them their books more cheaply than the price that would be granted to a new store:

...

Not really. I do very high traffic web pages for big companies and have been doing it for the past 15 years. Sure, it's not something that you are going to run out of your basement via your consumer quality 10 mbps internet connection, but the barrier to entry for a purely ebook store really isn't all that big. There are literally thousands of reasonably high traffic web stores out there. The issue is more of business (how do I make money at it) and creative (why would someone come to me rather than amazon) than a technical one.

Getting the needed contracts in place from the various rights holders is, of course, the big issue, but hardly a barrier.

[barutanseijin]

I think the "elitist New York lit establishment" vs. "populist" Amazon rubric misses the point. By a long shot. It's dangerous to let one firm sitting on a key node to have that much power. It's pretty easy to imagine Amazon abusing its position in the same way that Hollywood, AT&T, IBM, M$ or NBC did. We've been down this road before. Why are we doing it again?

I also think Packer misses with the gatekeepers vs. tsunami of crap schematic. The Gatekeepers were fine with loads of crap piled ever deeper. Meanwhile, Joyce had to get a dinky little bookshop in Paris print Ulysses. Virginia Woolf self-published.

[bgalbrecht]

Originally Posted by barutanseijin

I think the "elitist New York lit establishment" vs. "populist" Amazon rubric misses the point. By a long shot. It's dangerous to let one firm sitting on a key node to have that much power. It's pretty easy to imagine Amazon abusing its position in the same way that Hollywood, AT&T, IBM, M$ or NBC did. We've been down this road before. Why are we doing it again?

When it comes to ebooks, it's because the publishers, in their infinite wisdom, chose not to require a standardized ebook format, with a standard DRM if required. After it became obvious that Amazon had a natural monopoly because they had a good ereader, an even better retail store and integrated delivery system, the publishers guaranteed the monopoly by requiring DRM and a uniform price everywhere. If you've already got an Amazon capable device, there's no reason to go anywhere else if it's never cheaper elsewhere, and anything you'd buy elsewhere can't be read on your Amazon device anyway and it would be a pain to get it on your ereader to boot.

In reality, the agency pricing was never about diminishing Amazon's dominance in (e)book retailing, it was about controlling ebook prices so that they wouldn't cannibalize the hardcover sales. Anyone who looks at the DOJ anti-trust lawsuit and claims that the publishers had to do it because of Amazon's ebook dominance and that the DOJ should really be investigating Amazon has bought into the misdirection by Apple and the publishers.

[barutanseijin]

Amazon may have been and may even still be a progressive force in publishing & distribution, but then again, many of the monopolies & cartels of yesteryear started out that way, too. If they had had nothing to offer, they would never have become monopolies. The Hollywood moguls cracked the Edison monopoly. Hooray. But once Zukor, Fox et al. became dominant, they did all they could to hold on to their power & profits, often at the price of art & the public interest. The Hollywood studios censored films. NBC relentlessly commercialized radio & then TV. I would expect no less from Amazon.

Ultimately, i think the biggest flaw in Packer's piece is his limited vision. Big Six no make that Five or Amazon? Pathetic. Surely there are other possibilities.

[HarryT]

There are lots of successful independent publishers around still - the key to success is finding the right market in which to achieve success. Eg the British publisher "Constable and Robinson", which specialises in crime fiction, has been around since 1795.

[lol.systema]

The dude that made that article is seriously upset at Amazon. He might've ordered something from Amazon and had bad service, since the article is mostly biased.

Some books have it rough, I agree. For example, Montessori's Absorbent Mind in the Kindle section has some flaws. There is also this uncut gem:
http://www.amazon.com/Freud-Richard-...ud+philosopher

Freud + Philosopher = top lel

I'm sure there are other "books" such as this fine piece of pseudo-intellectual crap, yet in general, it does give good options for those who want to read and have an easy, mainstream, accessible source.

Originally Posted by DiapDealer

Yes, but without them, do you not think you would easily adapt? You would still have your favorite authors, you would still have the classics, and you would still have an active word-of-mouth (and online review/recommendation) system that anyone new and noteworthy would surely still bubble up through to get your attention. People will always hype what they think are good books... whether it's readers or publishers doing so.

People buy from traditional publishers because they have always bought from traditional publishers.

Sometimes the publishers have really good editors/translators. I remember buiying a book from this 3-star publisher. The book seemed ok but then I was given another copy from another publisher. Right off the bat I thought something was wrong because both books were considerably different, both physical size and wording. The first book was quite slimmer than the other, and it had choppy editing. The second was a more robust, clean shaped book.
I later found out that the second book was from this argentine-based publisher that has a reputation of providing the best books: translations are nearly flawless and on-spot with the original transcript, editing was clean and loyal to the original, and everything was just round-up better looking.

It really depends on how you look at it. Specially when it comes to translated books, publishers are REALLY needed.