Amazon destroys the book industry again

[BearMountainBooks]

Originally Posted by fjtorres

You and the Feds both. They've made that pretty clear and Amazon is painfully aware of it.

People keep forgetting that it is *not* illegal to acquire a dominant market position or even an outright monopoly. (And again: market share is usually a poor metric of market domination.) What *is* illegal is to abuse dominant market power to the detriment of *consumers*.

Suppliers and competitors are *not* directly protected by US antitrust law, but rather only indirectly, to the extent that their continued participation benefits consumers.

And since antitrust law is *reactive* not proactive, Amazon is legally above reproach until they actually do harm to consumers. Which is why all the anti-Amazon whining achieves nothing.

Exactly. As a supplier, if they decide to say, "Only those in our exclusive program get 70 percent" or "We've just decided to lower commissions for everyone..." Once they have even 60 percent of the ebook market, your book has to be there to garner any kind of sales. They are a huge machine with eyeballs there every day. Even now, a lot of authors report that 80 to 100 percent of sales come from Amazon. THAT'S scary to me as a supplier even without all the rest of the stuff going on.

It's the same sort of thing Amazon is already doing with small publishers--changing contracts to pay a lower percentage of list price.

(In case people haven't seen these articles: http://seattletimes.nwsource.com/htm...yndication=rss)

Who knows how long before contracts for direct upload suddenly change?

[ProfCrash]

Walmart is not predatory? Tell that to all of the small businesses that go out of business when a Walmart moves in. You don't think that part of their business plan is to buy large enough quantity of a good to be able to sell it a low enough price, without losing money, to knock out the local competition so that they can have a dominant position in the local market?

Do you think Walmart has low prices because they are nice people?

Walmart, like every business in the US is in it to make a profit. Walmart, like Amazon, does this by buying large quantities of a good so that they can drive down prices. One side effect is that they can undercut smaller businesses because Walmart and Amazon can afford to charge less, they bought the good for less, then the other businesses.

Toss in the fact that both companies have poor labor histories and a series of complaints ranging from not hiring people full time and giving them benefits, to using temporary workers in warehouses so that they don't have to provide benefits, to firing people for trying to join a union, and the list goes on. They do these things to keep costs down. No benefits = less money paid out = more money for buying stuff = more profit.

People can complain about Amazon all that they want. They are not a perfect company, they are not a good company in many ways, but they are a business. They are there to make a profit and they are going to do whatever they can to maximize that profit. They do so following the law, bending it where they can get away with it, and do what they can to change laws to their benefit.

Just like every other business out there. BN and Borders did the exact same thing. Airlines do the same thing. Restaurants do the same thing. For gods sake, there is no Metro out to Dulles Airport because small business did not want the Metro stopping at Tysons Corner, potentially making it easier for people to shop at the mall and abandon local Mom and Pop shops, and the Taxi cabs did not want to lose fairs from DC to Dulles. They are finally building the Metro out to Dulles and the local stores and taxis are pissed.

Capitalist economies run on the principal that business maximize their profit. To complain when there is one company more successful at that then the others is ignoring the whole premise of the economic foundation for the US and most of Europe.

I want competition but I am not going to blame Amazon for being successful. I am going to blame BN for being stupid and still not selling books that are available (and not exclusive) in e-book format that Amazon sells. I am going to blame BN for not finding a way to sell e-books for the Kindle and losing that entire market. I am going to blame the Publishers for being twits in how they are dealing with the emerging e-book market. Make the books DRM free so that BN can sell Mobi books that can be read on a freaking Kindle and give them a chance to snag some of that market.

But I am not going to blame Amazon for doing what it did to become the dominant player. Without the Kindle, there is no Nook and there is no Kobo. Sony was not lighting the world on fire with its e-reader. I had never heard of it. I learned about the e-reader when I looked at Amazons website and then when I saw one in a bookstore. I know I saw the Sony but I had no clue it was a Sony and not a Kindle, it was so well advertised at the store that I could not remember the brand when I told my then boyfriend about it. I did remember the Kindle from Amazons webpage.

It was the aggressive marketing of the Kindle and e-book prices on Amazons webpage that really got the e-reader ball rolling. Once Amazon demonstrated that it could work, other players jumped into the market.

At least, that is how I view the history. My view could be wrong, or at least partially wrong.

Since BN entry it has managed to keep pace device wise, heck at times it led (Sony had a touch screen first but once again, most people had no clue of the Sony device. Nook was the first touch screen that most people would identify with). But it still is behind in times of the bookstore, marketing, and international sales. Blame that and not the fact that Amazon continues to be the dominant player.

I follow the Chicago Cubs. For the most part, they suck. It is not because the Yankees and Red Sox spend far too much on their teams (I follow the Red Sox as well) but because the management for the Cubs is simply awful and cannot put together a decent team or find a way to coach the team so that they can finally win a freaking World Series. I can hate the Yankees (and I do) because they are arrogant, annoying, and spend an obscene amount of money. I can acknowledge that the Red Sox fan in me is a hypocrite because, well, the Red Sox spend an obscene amount of money and god knows most of the fans are annoying (not me of course) but they are not the reason the Cubs suck. The Cubs suck because they need better ownership and better coaching and a better developmental system.

Amazon is arrogant and annoying but that is not why BN is in trouble or the Pubishing companies. They are in trouble because of their own poor decisions and not keeping up with the times.

[BeccaPrice]

Originally Posted by stonetools

That's number 6 on my list. I almost forgot to put it in. Thanks for highlighting it.

ah. sorry - I skimmed over your list too fast. <runs to get more coffee>

[rhadin]

Originally Posted by Kali Yuga

Ultimately the book market was B&N's to lose, and they lost it. And I'm fairly confident if they hadn't, you'd be kvetching as much about the Bully B&N as you do Amazon.

I think you are right. I am not against Amazon as a fair competitor; I am against Amazon's bullying of the publishing market. Substitute B&N for Amazon and it would be B&N I'm against.

I only care that B&N survive because in the absence of B&N and Kobo, Amazon would have little to no effective competition in ebooks. Apple is really indifferent to ebooks and if it does not make enough profit with ebooks, will not hesitate to drop its ebookstore. In this sense, it is as nimble as Google .

[rhadin]

Originally Posted by BearMountainBooks

(In case people haven't seen these articles: http://seattletimes.nwsource.com/htm...yndication=rss)

If you haven't read the linked Seattle Times article, you should.

[BearMountainBooks]

I've seen several articles on it. I think I read the Seattle times one this morning. Some have more detail than others, but they make the same point. One of the most disturbing things is the mass email type of thing rather than dealing with the companies as business partners.

[J. Strnad]

ProfCrash makes a good point regarding labor practices, etc.

The thing is, corporations like Walmart and Amazon, despite a horribly misguided Supreme Court ruling, are NOT PEOPLE. They are corporations, which are soulless and amoral. The very concepts of good and evil do not apply to them, any more than they apply to a jaguar hunting a gazelle.

Amazon is currently at the top of the food chain, where B&N and Waterstone's used to be. Now Waterstone's is whining that they aren't the top predator anymore. Boo-frigging-hoo. They had their day, and now it's over.

Amazon's labor practices are abhorrent, as are Walmart's, as are FoxConn's (Apple's Chinese manufacturer). People don't care as long as they get their cheap goods. When people start caring, things will change. Until then, they won't.

[Kali Yuga]

Originally Posted by BearMountainBooks

I've seen several articles on it. I think I read the Seattle times one this morning. Some have more detail than others, but they make the same point. One of the most disturbing things is the mass email type of thing rather than dealing with the companies as business partners.

Y'know, I don't entirely agree with this reading of the circumstances.

Amazon has 25% of the US book market. That is a long way off from monopolistic levels, which are typically around 70%.

AFAIK the typical wholesaler discount is 50-55%, whereas McFarland is only giving Amazon a 20% discount -- the same they offer every other retailer on any transaction. Apparently Amazon isn't that important to them, or big enough volume for them to treat them any differently than a distributor or single indie bookstore.

Many of their books listed on Amazon are very expensive. Most of their books $25-$35, including paperbacks. This is because they're mostly short-run, low-volume reference titles.

We have no idea how much revenue McFarland generates for Amazon. We do know that many of their titles are ranked somewhat low -- e.g. sales ranks of 160,000 or 200,000. Amazon generated $48 billion in sales last year; if McFarland generated $1 million in sales for Amazon, that would be 0.02% of Amazon's business.

Amazon definitely was impersonal and brusque in their treatment of McFarland by demanding changes on short notice and only communicating via email. But the real upshot is that McFarland is being reminded in no uncertain terms that to Amazon they are chump change, and don't have the leverage to demand that Amazon takes less than half the typical wholesale discount on a $35 book.

It does make sense for small publishers to discuss this publicly, since they aren't getting much headway with Amazon and thus don't have much to lose. I'd also think that while McFarland is very small, Amazon ought to have a few reps to manage minuscule pubs like them. That doesn't mean that we have to be a bunch of saps who can be emotionally manipulated by the small pubs and the press, who know that people tend to root for the underdog.

And of course, let's not forget that Amazon didn't exist 20 years ago, was itself an underdog 10 years ago. B&N was the Big Bad who had billions in revenue, lots of cash, access to plenty of credit, lots of stores, the biggest brand, put indie stores on the ropes, tried to merge with Ingram, and got busted for anti-competitive acts like collaborating with distributors to get lower wholesale prices on books. Where are they now? And why do you imagine that any company, even Amazon, is invulnerable to the exact same process?

[elcreative]

Originally Posted by J. Strnad

ProfCrash makes a good point regarding labor practices, etc.

The thing is, corporations like Walmart and Amazon, despite a horribly misguided Supreme Court ruling, are NOT PEOPLE. They are corporations, which are soulless and amoral. The very concepts of good and evil do not apply to them, any more than they apply to a jaguar hunting a gazelle.

Amazon is currently at the top of the food chain, where B&N and Waterstone's used to be. Now Waterstone's is whining that they aren't the top predator anymore. Boo-frigging-hoo. They had their day, and now it's over.

Amazon's labor practices are abhorrent, as are Walmart's, as are FoxConn's (Apple's Chinese manufacturer). People don't care as long as they get their cheap goods. When people start caring, things will change. Until then, they won't.

Thing is (as I pointed out earlier in the thread), Tim Waterstone isn't a Corporation, he's a person BUT he has nothing to do with Waterstones the COMPANY as he sold it many years ago... what he may feel/say is his own personal opinion and not representative of a company that he has no current connection to... and I wouldn't be quite so hasty as to right off B&M retailing yet, the internet is on the rise and has a lot going for it but still isn't the dominant way of purchasing things and there are a lot of things that people still like to physically see and handle before purchasing...

As for books themselves, apart from fiction, ebooks in many areas still have a way to go before they are the equal of actual print...

[vxf]

Sore losers..

I grew up in Italy, where it was all about small stores, enjoying local monopolies that protected them from 'evil corporations'. Always under-stocked - if you wanted something, you had to order, wait, hope it would get there. The 'personal-touch' meant that the owner was a strongly catholic bigot who would refuse to sell you anything that he judged 'immoral'. So no Umberto Eco's 'Nome della Rosa', because that was offending the Church. No bio of Che Guevara, because that was communist. No Hemingway, because, in his mind, the only thing worse than communists were Americans.

Long live the big, impersonal, cheap, over-stocked big store.

[SeaKing]

If the suppliers, authors, or authors and their publishers, can't make it or are unhappy with what Amazon offers, then in this new "online" world it will be easy to set up a different sales pipeline. We are not talking about lots of brick and mortar stores. The old B&N, Borders, BaM, etc. ran most of those out of business long ago.

Of course those suppliers, authors and publishers will have to have something that will compete will Amazon's offerings that people will want to buy.

[sabredog]

This truly reminds me of all the whining several Australian retail multi-millionaires have been doing over the growth of online shopping. They are now demanding the Federal Government protect them from online shopping.

Gerry Harvey leads the charge. His most famous lines being online shopping is a fad that will never last and that online shopping was un-Australian. Australians should pay more he says, for the country.

He is a perfect example of a retail dinosaur who made his money by destroying smaller businesses and selling items with huge mark-ups and credit deals. Now, the consumer has better options that provide for better prices and deals.

Because those companies who did not innovate, such as Gerry Harvey's Harvey Norman retail stores, B&N, Waterstones and the late Borders chain of stores, they need to transfer the blame for their lack of foresight, lack of vision and failure to sense change to a company that HAS innovated.

Well dinosaurs, Amazon, with all the flaws included, is here to stay and that includes online retail sales. If you cannot innovate, fail to evolve, then you are extinct.

[xg4bx]

Originally Posted by ProfCrash

Walmart is not predatory? Tell that to all of the small businesses that go out of business when a Walmart moves in. You don't think that part of their business plan is to buy large enough quantity of a good to be able to sell it a low enough price, without losing money, to knock out the local competition so that they can have a dominant position in the local market?

Do you think Walmart has low prices because they are nice people?

Walmart, like every business in the US is in it to make a profit. Walmart, like Amazon, does this by buying large quantities of a good so that they can drive down prices. One side effect is that they can undercut smaller businesses because Walmart and Amazon can afford to charge less, they bought the good for less, then the other businesses.

amazon, like walmart, wouldn't hold any sway if people didn't shop there. walmart can undercut prices all day long but in the end the customer who would rather save a nickel on a dish sponge by buying it at walmart than their local mom&pop is ultimately to blame.

i've been in walmart numerous times. their prices really aren't that good. i've found comparable items cheaper at other stores.

[BearMountainBooks]

Originally Posted by SeaKing

If the suppliers, authors, or authors and their publishers, can't make it or are unhappy with what Amazon offers, then in this new "online" world it will be easy to set up a different sales pipeline. We are not talking about lots of brick and mortar stores. The old B&N, Borders, BaM, etc. ran most of those out of business long ago.

Of course those suppliers, authors and publishers will have to have something that will compete will Amazon's offerings that people will want to buy.

It's easy to set up a pipeline, but not easy to get customers to it. This is one of the reasons I don't understand why large publishers aren't selling direct. They could have they eyeballs--based on a few big name authors, they could attract a lot of customers/shoppers. Me? I can set up a cart (and actually intend to for various reasons). But how would anyone find me? I would imagine more people would still ACCIDENTALLY find my book on Amazon because they are already there. That's the beauty of hebought/shebought and the other lists and whatnot that are all over Amazon.

B&N does it as well, but they don't have the eyeballs online. They still get a lot of eyeballs in the stores, so there's mixed results.

[BearMountainBooks]

Originally Posted by Kali Yuga

Y'know, I don't entirely agree with this reading of the circumstances.

Amazon has 25% of the US book market. That is a long way off from monopolistic levels, which are typically around 70%.

AFAIK the typical wholesaler discount is 50-55%, whereas McFarland is only giving Amazon a 20% discount -- the same they offer every other retailer on any transaction. Apparently Amazon isn't that important to them, or big enough volume for them to treat them any differently than a distributor or single indie bookstore.

Many of their books listed on Amazon are very expensive. Most of their books $25-$35, including paperbacks. This is because they're mostly short-run, low-volume reference titles.

We have no idea how much revenue McFarland generates for Amazon. We do know that many of their titles are ranked somewhat low -- e.g. sales ranks of 160,000 or 200,000. Amazon generated $48 billion in sales last year; if McFarland generated $1 million in sales for Amazon, that would be 0.02% of Amazon's business.

Amazon definitely was impersonal and brusque in their treatment of McFarland by demanding changes on short notice and only communicating via email. But the real upshot is that McFarland is being reminded in no uncertain terms that to Amazon they are chump change, and don't have the leverage to demand that Amazon takes less than half the typical wholesale discount on a $35 book.

It does make sense for small publishers to discuss this publicly, since they aren't getting much headway with Amazon and thus don't have much to lose. I'd also think that while McFarland is very small, Amazon ought to have a few reps to manage minuscule pubs like them. That doesn't mean that we have to be a bunch of saps who can be emotionally manipulated by the small pubs and the press, who know that people tend to root for the underdog.

And of course, let's not forget that Amazon didn't exist 20 years ago, was itself an underdog 10 years ago. B&N was the Big Bad who had billions in revenue, lots of cash, access to plenty of credit, lots of stores, the biggest brand, put indie stores on the ropes, tried to merge with Ingram, and got busted for anti-competitive acts like collaborating with distributors to get lower wholesale prices on books. Where are they now? And why do you imagine that any company, even Amazon, is invulnerable to the exact same process?

I'm not sure exactly what you disagree with...but my own point of view is colored by what market share Amazon sells FOR ME. So for me, them being a monopoly is closer than even a small publisher.

Also, I don't imagine that Amazon will take a different path ultimately and end up out-marketed by some new upstart. Again, the problem is my self-centered view. They could dominate for 20 years and that means dealing with them and whatever they decide to pay authors (or in the article case, how much they demand). I don't like being boxed in anymore than anyone else.

But you are quite correct if your point is to be more nimble. It is my job (as it is for any publisher) to figure out the best way around the situation. Small fish or nay, we have to keep swimming.