“We’re in Amazon’s Sights and They’re Going to Kill Us”

[xg4bx]

i welcome amazon. it'll be nice to get some "fresh eyes" into the process and they, better than anybody, would know what customers actually want. "hey, we're selling a lot of indie sci-fi". bam, two of their first signings to the 47 north imprint were indie sci-fi authors. is there an agency pub that even touches sci-fi besides star wars novels anymore? they're too busy telling me i want twilight novels.

if i'm an amazon fanboy so be it, i've never been anything but pleased with all of my transactions and dealings with them. they have what i want at prices i want to pay, period.

[darryl]

It's very clear to me that Amazon is doing it far better than anyone else as far as both books and ebooks are concerned. Strong evidence of this is to be found in agency pricing which is essentially a response to Amazon's success. Amazon alone are not going to kill existing publishers, but a failure by those publishers to adapt to the new business conditions and technology may well do so. They must adapt or perish.

I think the new business model which emerges may well be much better for authors. I quite often see authors lamenting the piracy of their books, and I certainly have some sympathy on that score. However, Piracy is a convenient scapegoat, a handy reason to point to why authors are not making money. Publishers love to make high estimates of the number of books pirated and then calculate revenue lost on the assumption that every one was in lieu of a retail purchase. It is probably impossible to know what the true figure is, though I suspect that the actual number of sales lost is quite small, especially amongst less well known authors and books. Some people boast of libraries of thousands of ebooks, few of which have or will ever be read. It is sheer fantasy to suggest that these people would pay to purchase each of these books. And of course, for each book not sold it is the publisher, not the author, who is usually the loser. In fact, logic would suggest that for most of the 70% of published books where the advance is not "earned out" (ie; royalties on books sold are sufficient to pay back the advance), the author loses nothing. Only in those cases where lost sales would have brought total sales over that required to earn out any advance could the author be said to have borne the piracy loss. I am not suggesting that it is morally or legally right or okay for the publisher to bear this loss. However, I must confess to having little sympathy for many of them given the business practices adopted over the years.

It should also be noted that only a tiny percentage of those writing can even make a decent living at it, and only a miniscule number become wealthy. It is an industry based on hope, the hope that you may be the next J.K. Rowling or Stephen King, or perhaps even the more modest hope that you can at least make a decent living out of what you love to do. My admittedly brief research seems to indicate that the trend is to offer ebook authors a much higher royalty than was standard. Amazon, for instance, offers 35% and in some cases 70% royalties to those participating in their Kindle Direct Publishing (KDP) Program (see https://kdp.amazon.com/self-publishi...-1_participate). Lulu is another interesting example. One can only speculate what may happen as more big name authors come off contract, and new "indie" authors become popular and are sought out by the large publishers.

I think there is reason to at least hope that the future may leave room for many more authors to make a reasonable living from their writing, at the expense mainly of "publishers" fulfilling a different and narrower role in return for a much lesser slice of the pie. Other interesting links bearing on this are:

http://www.brandewyne.com/writingtips/authorspaid.html

http://darkerotica.blogspot.com.au/2...27f02b8cea3b12

http://brendacoulter.blogspot.com.au...why-write.html

[Kali Yuga]

Although the anonymous emailer is a bit histrionic, there's little doubt that Amazon is getting into publishing to put pressure on the publishers. It's just business as usual.

I have to ask, though: How exactly will it be an improvement, to go from 5 big publishers cranking out Snookie memoirs, to one big company that publishes, markets and retails Snookie memoirs?

Small and medium publishers won't benefit, because it's only a matter of time before Amazon either pushes them around, or starts to eat their lunch as well.

This is not to say the world will keel over if Amazon gains yet more leverage in the book biz. Just be careful what you wish for...

[GlenBarrington]

Originally Posted by franYo

Not sure if this has been discussed yet. It's a very interesting article about the future of traditional publishing based on the views of an industry insider.

http://pandodaily.com/2012/01/17/con...ng-to-kill-us/

In short, he thinks Amazon is going to destroy them all.

Any moron can publish a book now. All it takes is a desire to do so. All Amazon does is make it even easier and lend an artificial air of institutional approval.

The truth is, they can't afford million dollar advances because they have lost the keys to the kingdom. People just aren't using the toll gates any more, they just walk on in from wherever they happen to be.

How typical of the publishing industry to think their rival is 'A' when the real threat comes from 'U'

[Angst]

From the link:

So rather than getting a 30% of an ebook (with the other 70% being split between the publisher and author), they’ll be getting a 70% cut (with the other 30% going right to the author). Funny thing is that it’s actually better for authors.

WTF? The agency 6 are already getting 70% for their ebooks under their new rules. The only difference is that they are not paying the authors 30%. Of course the authors will move to Amazon. A slow moving freight train indeed!

[Andrew H.]

Originally Posted by cjr72

We've seen this movie before in other industries, most recently Kodak in the face of digital photography. When there's technological upheaval in an industry the established players would rather dig in their heels and close their eyes to reality (and try to get laws passed to stop what's inevitable). When it comes to adapting, very few established players are willing to gore their own ox in time before new companies that understand the new landscape do it for them.

Sorry, but this is hopelessly naive.

It's *easy* to see change coming. It's really hard to actually do something about it. Not because you don't see it coming, but because it's really hard to actually execute the change successfully. "Change" means switching to something you are probably not good at. And if you are not good at it, you won't succeed.

Livery stables and horse breeders saw the automobile revolution coming. But they had zero institutional knowledge of mechanical engineering and so there was really nothing they could do about it.

Kodak was basically a chemical company that focused on selling and processing film, with a small (by the 70's) sideline in lower end cameras. When 90% of your business becomes obsolete - even if you can see it coming - there's not much you can do to suddenly change your business because you have no expertise in the new field. Kodak did make digital cameras, but they weren't able to leverage their expertise in chemistry to make the cameras any better - and so their cameras didn't offer anything that cameras from existing camera companies couldn't offer(Canon, Olympus), or that companies leveraging electronics expertise could bring (Sony, Panasonic). It is notable that the predigital top-of-of-the-line 35mm camera manufacturers (Canon and Nikon) are still the top DSLR manufacturers. But that's because digital cameras didn't replace lenses (what Canon and Nikon really produce) or cameras. They replaced film...and I don't think that there was anything film companies could have done about it, no matter how long they knew the train was coming.

WRT e-books, I don't think that publishers are going to necessarily go the way of Kodak. IMO, we will still need people to find good authors and produce and edit their books...and publishers have this expertise. (But there's nothing that paper producers, like film producers, can do - they can't suddenly become e-ink manufacturerers).

But if we did move to a world in which authors do all of the work and sell their books themselves, well...then there's nothing that publishers can really do. But music didn't move to that model, and movies haven't either. So I'm not convinced that books will in general. Although there will be *some* people who are able to succeed without publishers.

[ProfCrash]

Publishers have seen the music, tv, and video industry deal with this transition. Publishers have been watching this transition for the last five years. Publishers have had more then enough time to try and come up with a new path but have failed miserably. Outside of the Romance genre, I am having trouble with coming up with Publishers or genre specific branches of Publishers that have done anything innovative regarding e-books.

Romance Publishers have at least made an effort to change with the times. There have been some successes and some failures. Why the rest of the Publishing industry is failing to look there and adjust their behavior baffles me.

[sbroome]

I just feel like none of these big companies ever innovate, then they wonder why they get left behind as they force customers into a "them or us" situation. Retailers are often the same. If Borders and Barnes and Nobles had "put their money" early on into their online facet, wouldn't they have dominated online book sales and the ereader market? Probably, but they didn't, so somebody else took from them.

[Andrew H.]

Originally Posted by sbroome

I just feel like none of these big companies ever innovate, then they wonder why they get left behind as they force customers into a "them or us" situation. Retailers are often the same. If Borders and Barnes and Nobles had "put their money" early on into their online facet, wouldn't they have dominated online book sales and the ereader market? Probably, but they didn't, so somebody else took from them.

Both borders and B&n tried to compete with Amazon fairly early on and failed. As I said in my earlier post, it's not enough to just have the idea; you have to be able to execute almost perfectly. They weren't able to - not because it didn't occur to them, or because they were lazy, but because what Amazon does is really hard.

On the other, B&N has done a great job with e-books, and moved pretty quickly once Amazon demonstrated that it was a mainstream market. They undercut the Kindle on price (initially), and quickly surpassed Sony to be the #2 e-book retailer in the US and have been able - in a fairly short time - to offer substantially the same books as Amazon. (They have probably also benefitted from the Agency plan).

They beat Amazon to market with a 7" tablet by a year, (although they are hampered by not having Amazon's video infrastructure).

I think their larger structural problems have been caused by the fact that they significantly overbuilt in the 90's and early 2000's - it remains to be seen whether Borders' failure will give them breathing room in the still dominant paper book market.

[SteveEisenberg]

Originally Posted by sbroome

I just feel like none of these big companies ever innovate

The only publishing innovation I care about is a new title improved by an editor who challenged the author to make the book better. If you can believe the acknowledgments found in the back of most non-fiction books written in the last couple decades, few weren't improved by an editor, or, maybe, agent.

Originally Posted by Andrew H.

. . . there will be *some* people who are able to succeed without publishers.

Excellent post AKA I agree with it

[sabredog]

Originally Posted by ProfCrash

Publishers have seen the music, tv, and video industry deal with this transition. Publishers have been watching this transition for the last five years. Publishers have had more then enough time to try and come up with a new path but have failed miserably...

...Why the rest of the Publishing industry is failing to look there and adjust their behavior baffles me.

As I mentioned earlier. Publishers have FAILED to evolve.

In the wild, species that do not evolve, do not survive.

[HappyMartin]

Its not like it would be murder if they are killed by Amazon. More like euthanasia. The putting down of a suffering dog.

[darryl]

In one way it's an exciting time and very interesting to see what will evolve. I too don't see authors doing everything themselves. Editing will in my view still be very valuable and necessary, and though one scenario is freelance editors, the reality would seem to be that this is a service which will probably be offered by "gatekeepers", like Amazon, offering those services which publishers now provide which remain desirable. Some of these "gatekeepers" will offer one very valuable service to all of us, that of quality control. With everyone able to produce a book easily and cheaply and make it available for download, we will likely be drowned in rubbish. Some "gatekeeper" sites may take all comers. For instance, it seems that Amazon's current KDP program does not reject books except on technical grounds. I think this quality control aspect will become increasingly important.

I believe that Amazon, barring catastrophe, have a big lead and will remain a major player. Some of the existing large publishers are still in with a chance, but as another poster pointed out, sometimes they can see the slow moving freight train coming, and want to get off the tracks, but don't know how. Lulu established themselves early with a good electronic variation of vanity publishing, and seem to be doing well, and may also be a chance. And of course perhaps the next startup none of us have yet heard of.

[sbroome]

Originally Posted by HappyMartin

Its not like it would be murder if they are killed by Amazon. More like euthanasia. The putting down of a suffering dog.

Not necessarily. When I've had a long day I like to go to a store and be around books, find something new without reading about it ahead of time, sit down for a while, and decide to buy it, then come home and start reading. I don't want EVERYTHING in my life to be done on the internet.

[darryl]

Originally Posted by sbroome

Not necessarily. When I've had a long day I like to go to a store and be around books, find something new without reading about it ahead of time, sit down for a while, and decide to buy it, then come home and start reading. I don't want EVERYTHING in my life to be done on the internet.

I understand and sympathise. I hope there will always be a place for written books, but there is no doubt that in the longer term they are an endangered species.