MIND MELD: Amazon’s Effect On Publishing
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Rumors surfaced recently that Amazon is contemplating opening a small brick and mortar store in Seattle to sell their ebook readers and their Amazon branded books. Couple this with Amazon’s recent foray into SF/F publishing and that got us to wondering:
It’s a difficult one to answer. I think Amazon is often seen as being responsible for the change in how books are sold/published, while it would be more accurate to see it as a product of that change. That it is currently the biggest, most successful model does not mean it would be one ten or twenty years from now, nor will it be the only major player.
I think there is plenty of room for traditional publishers, even while they struggle with the changing landscape of bookselling. That we are facing a shrinking presence of physical bookshops is undeniable – the question is where the next big online presence will come from.
I suspect we’ll be seeing partly the emergence of boutique sellers – in genre we can see the buds of such a move with specialist shops like Wizard’s Tower Books and Weightless Books – and at the same time the rise of other giant retail outlets like Amazon. Certainly big publishes are all backed by major corporate players, so we might see something from that direction.
The market is changing so rapidly, I think it’s pretty much everyone’s field at the moment – perhaps already being put into action in someone’s basement – or, alternatively, a boardroom.
I must confess to real nostalgia for the time when Amazon seemed like the best thing that could possibly happen to readers, writers, and everyone else involved in the process. I was so enamored of a place in which I could find EVERY BOOK EVER PUBLISHED, particularly those obscure tomes that only geeks like me could ever care about. Everything about Amazon seemed benevolent.
But then Amazon grew and changed, and the publishing business turned into a chaotic place, and Amazon set out on a quest to control everything.
Sounds like the back story of some terrible fantasy novel, doesn’t it? If you listen carefully, you can almost hear the maniacal laughter issuing from Seattle.
We live in interesting times, not least where publishing is concerned. Each of the major players in this industry must take its turn as the villain; Amazon, because it is large and vertically integrated and continuing to grow even while brick-and-mortar stores falter, spends more time wearing the black hat than most. But if Amazon is a cruel competitor to brick-and-mortar stores, so are the big-box stores like Wal-Mart and Costco. And if Amazon puts terrible pressures on publishers, so too do publishers put terrible pressures on authors. This is a very difficult industry in which to make money. All of the major players are trying to take what meager share of the available profit they can from the others.
Corporations have no souls, no matter how they may attempt to persuade the public to the contrary. Individuals in the business have aspirations to serve books and readers and writers, but corporations by their natures serve very different goals. The vast majority of them exist solely to make money. It’s easy to hate Amazon this week, partially because the other players are doing a better job of swaying public sentiment. But Amazon is just doing what corporations do: trying to maximize its profits. They’ve done a very perceptive job of building a highly vertical business, which allows them to capture as much profit as possible. But that only partially shields them from the pressures of this difficult business. Shipping is eating a huge hole in their profit model. E-readers have become commodity products, driving margins on what had been one of their most promising business areas to the bone. The truth all of us in this business must adapt to is that content, not books or widgets, is the only thing that has any real hope of operating sustainably—and only if it can be radically uncoupled from the expenses of distribution. Personally, I’m still working on that problem.
So what will be the impact of Amazon’s publishing efforts and their planned brick-and-mortar stores? Anecdotal evidence, rumor and past behavior suggest stores are just one of the many experiments Amazon will run in the next few years. Informed sources would have us believe that the main focus of those stores will be selling e-readers and Amazon’s own books published under its various imprints. It’s an experiment worth trying: bookstores are still the best way for readers to discover books. But I don’t imagine it cannibalizing independent bookstores, particularly since the wares the Amazon stores will carry are being so thoroughly shunned by the independent bookstore community. (And by Barnes & Noble, who this week would like us to think of them as little guys, too. But those of us with longer memories recall them wearing the villain’s hat, not so long ago…)
I am incurable romantic, which is why I run a small press. I am hopeful that these stores will improve discoverability for independent authors who use Amazon’s facilities to get their works out to the world. Goodness knows those authors aren’t going to get any joy out of independent bookstores or bookstore chains, no matter what happens in the current tussle. But I suspect the Amazon stores will bear less resemblance to Apple stores than to the Gateway Computer stores some of us may remember from the ’90s; I would be surprised if they turned out to be a profitable venture. If Amazon continues operating them long-term, it will be for marketing rather than profit-center reasons.
As for 47North and other Amazon imprints: My money is on them following in the tracks of B&N’s in-house imprints. They will be part of an ever-growing and increasingly bewildering array of options for writers trying to market their work; and as with B&N’s publishing lines, I suspect their products will have great difficulty getting beyond Amazon’s walls, brick and mortar or electronic. As a writer I would think twice about selling into those markets, knowing how the industry will close ranks against them—from other bookstores right on through publishing- industry press. But there are a couple hundred different markets buying SF/F these days. 47North is far from the only one that seems destined for distribution problems.
I suspect Amazon represents a real danger to the margins of major publishers and bookstores of all sizes–but not because of either of these new ventures. Whether those of us working in the industry like them or not, the fact that they reliably serve what the consumer market wants guarantees them a central role in the business for the foreseeable future. But I don’t worry about them becoming the monopoly so many seem to fear. There’s too much chaos in this market for that.
Amazon make their money on a high volume and low margin business model. Which works – and has worked when they’re selling general shit on the internet. There are few overheads involved compared to a physical chain – which is why we’ve seen the collapse of bookchains across the US and UK. How can they compete on volume in this way? And we readers can hardly justifiably lament this, because we’re the ones who have been throwing our cash at Amazon each month.
But I’m skeptical about the success of them entering successfully into retail, though I’m sure they’d put up with it being some kind of loss-leader – and let’s face it, they’d never give us stats to evaluate any success. Physical is not really their business model (and I’m almost sure it’s not the first time we’ve heard of it). But even without this, and even without their own imprint Amazon has slowly been monopolising the book industry on a retail level, and that’s where they become ‘dangerous’ – though I say this purely on a corporate platform. It means they’ve got the buying power to make or break careers, to make publishers offer better margins on stock, and to charge publishers a fortune to promote authors – because where else is there for publishers to go?
All of this reinforces the fact that success for many authors comes with money, which is not what we hoped the Internet would bring us. I do strongly believe that we’ll see bookstores continue to flounder on the high street – apart from those ones who are getting their shit together by building a fantastic and loyal book community. If anything, that’s going to be the physical business model for the future: loyal, local readerships, events, reading groups and so on. Amazon can’t do this. Indies can, and certainly in the UK (that’s where the main chains have shot themselves in the foot – they’ve not gone about building community). So on a more boutique level, there’s room for optimism.
It’s very difficult to comment on the effects of the Kindle, because most of the stats pushed around seem to have been plucked out of thin air for the most part, but as long as people read, that’s the important thing. My only concern is, yet again, most people seem duped into thinking it’s liberating for all new authors or self-published authors, when in reality it’s paying for marketing campaigns on Amazon that will – by and large – generate success from the mid-list to the bestsellers. Whether or not we think spending money to buy readerships is a good thing, I’ll not comment. But it certainly isn’t new – it’s only going to be amplified in the future.
But, you know, the book industry is always evolving and never predictable, and for the past decade or so, Amazon have played a big part in that. I’ll be delighted however it works out as long as variety is maintained, and more people are buying books. Especially SF and Fantasy novels. Especially mine.
CERTAIN DOOM, of course. Well, not really, because it comes with an opportunity.
The proposed Amazon retail model is small boutiques (a la Apple stores) that sell and service Kindles, and feature only Amazon-published stock, mostly in response to Barnes & Noble refusing to carry Amazon Exclusive titles. I don’t expect many people entering Amazon stores to buy physical books, barring an exclusive Amazon publishing deal with an author at the level of J.K. Rowling. Amazon boutique stores are unlikely to impact most of the SF/F field or printed books in general. At best, the boutiques will further Kindle’s dominance of the ereader market.
The publishing arm of Amazon will have a much larger impact on the field. SF/F writers without an established “brand” competing against the Amazon Exclusive list will have great difficulty getting enough brick-and-mortar presence or online promotion to compete with Amazon’s own publishing house. Amazon is obviously going to push their own publications and distribution network hardest.
So long as Amazon dominates e-readers and distribution, we will see the continuing trend of mid-list and new writers at other publishing houses having greater difficulty growing a base audience for their work. (This resembles promising new SF/F series premiering on major networks that are yanked after three episodes for a lack of instantaneous success, even when they were not appropriately marketed through no fault of their own.)
A string of these “failures” could significantly reduce the depth and breadth of works published in our field, because there will be fewer chances taken on new writers and writers creating “less commercial” work, unless we can figure out a way to drive sales in direct competition with Amazon’s publishing arm. This is no easy feat.
Some things could happen to change this trend. Barnes & Noble could increase their market share and pose greater competition for Amazon. Independent bookstores could flourish. Publishers could work with libraries to expand their audience.
I like that idea the best, being a librarian. Here’s why.
Our recommendation algorithms are not based solely on what is already popular. We aren’t trying to corner a particular market, or crush competitors. Our audience is hard-core readers. We love books of all kinds, and want a variety to exist for our readers. We have a built-in, trusted distribution system. Yes, we give away free samples, but our users buy more books in all formats.
In other words, I’ve got a way to get the word out to readers, and level the publishing playing field with Amazon right here. It could be a beautiful friendship, if we trust one another a little and build it well.
My sense is Amazon has a lot of money to throw around, and by entering into publishing it’s putting competitive pressure on the Big Six in a whole range of areas. Amazon is diversified in its products, unlike traditional publishers (although a couple of the latter—Random House and HarperCollins—are components of larger media corporations, of course). I would think that gives Amazon a lot of buying power that the other publishers just can’t match. Selling your own products direct, whether from your own webstore or brick-and-mortar boutique—what’s more profitable than that? And if they have good editors working for them, with that profit they can contract some great authors, some of whom will be SF/F writers. Or some of whom are, I should say. (I’ve personally been eyeing that upcoming Chris Roberson title.)
The speculated boutiques will obviously get even more ebook-reading platforms into readers’ hands. This, of course, further weakens the position of the brick-and-mortar bookstores and the pressure mounts, putting strain on the already stressed distributors and wholesalers. Still, you can already buy Kindles at places like Best Buy and Target, so I guess it’s possible the speculated boutiques might be more of a marketing outreach than something that will yield substantial direct sales. I don’t pretend to know how it will turn out in the end.
Despite being passionate about print books, I’ve been actively reading ebooks since 2002 when there was an almost universal disparagement of ebooks by the general readership. Back then I used to naively rattle off all the pros of ebooks—instant availability, changeable font size, portability, and so on—to just about anyone who would listen, but I can recall maybe one or two among all the people I spoke with who agreed with me. Most expressed their utter loathing for reading on a screen, which was a fair enough view then. The main thing that was lacking in a good ebook reader, I used to say at the time, was ridulian crystal, and of course today we more or less have it in E Ink. Now I see droves of folks on the social medias leading the pro-ebook charge like they’re evangelizing some kind of moral argument, even some bitter writers who want to see the Big Six publishers and the bricks-and-mortar stores die agonizing but quick deaths because they feel they’ve been unfairly treated by the old-guard gatekeepers. A weird, somewhat self-destructive thought, I think, since many of these writers are getting lost amid the recent deluge of self-published ebooks. How to separate the wheat from the chaff? I’m not sure, but I do miss the days of doing a quick search on Amazon and instantly finding the professionally edited books was looking for. And yet I can still walk into my local independent bookstore and pick a random book off the shelf with the confidence that its been edited and formatted with some kind of competence. That’s at least one powerful thing the brick-and-mortars have over Amazon…at least until the latter gets its own physical store down the block.
Sometimes I think of a quote from Edward Abbey: “Growth for the sake of growth is the ideology of the cancer cell.” Amazon has become a kind of cancer. I say that as someone with an Amazon credit card and a Kindle — I’m as much a part of the problem as anybody. Amazon makes consumption more convenient and inexpensive than other businesses do, and its fiercely monopolistic practices only add to the convenience. As someone who lives in rural America, in a place where there were never many choices for well-stocked independent bookstores even in the best of times, part of me is really grateful to Amazon for making my mailbox so much more exciting than it would be otherwise. And I love my Kindle, a fact that surprises and somewhat unsettles me, because I resisted ereaders for quite a while.
It makes sense for Amazon to get into publishing, as disturbing as that thought is for those of us who’d prefer not to have One Corporation To Rule Them All. Corporate publishing has so conglomerated at this point that I find it hard to get into high dudgeon about it, though.
The situation for small press publishers and independent bookstores remains difficult and sometimes dire. But I have great faith in the creativity of both institutions. Random House and Barnes & Noble are definitely in competition with Amazon, but things like Subteranean Press and McNally-Jackson Books are somewhat less so, because Subterranean specializes in limited editions mostly aimed at collectors and McNally-Jackson (in Manhattan) is so much more fun to visit than any store Amazon could ever dream up. It’s got knowledgeable staff with quirky tastes, a good café, a phenomenal series of events, and a fiction section arranged by geography (or at least it was last time I visited). Online beats bricks and mortar for convenience, and Amazon is rich and powerful enough to beat publishers that are aiming for general, mass audiences. So the solution for other publishers and booksellers is to offer something more than convenience and general mass culture. Be unique or offer really great services and Amazon won’t be able to touch you. Or maybe they’ll just buy you up, like they did with the Internet Movie Database, Abebooks, Woot, Audible, The Book Depository…
The move into publishing makes sense for Amazon because they’re already a distributor, so they can up their profits by taking a percentage of a sale in just about every way imaginable: they pay themselves to distribute their own books, even if the books are used copies. Nobody else will stock them, but I doubt Amazon cares much. Indeed, they might even be grateful, because then they have an absolute monopoly on that product. The only thing they need to do now is buy a logging company, a papermill, and a recycling plant and they’ll have control of the whole system!
The retail store idea makes some sense if it is, as they seem to be saying, a kind of showroom for their own products. This is especially useful for things like Kindles, which people may be more likely to buy if they can take them out for a test read. Look at how successful the Apple Stores have been, after all.
It’s not Amazon’s move into publishing or retail that bothers me. I’m much more disturbed by their union-busting activities, their recent obnoxious attempt to get people to go into retail stores and report on prices via their smartphones, their sometimes Wal-Mart-like insistence on keeping prices low at the expense of publishers, a tactic that causes some small presses to make almost no money on Amazon sales. I wish they were better at playing nice with others, and I wish they used their power and position to share their wealth more equally with the people who create that wealth. But hey, this is America in 2012, and whether we’re talking about Amazon or big box stores or universities, we love us some cheap labor and insanely wealthy, autocratic management.
I don’t know if any of this has anything to do with SF in particular, and I don’t know of any trends that have been specific to SF. Maybe we could all get together and offer some speculations. Mine would be that in 2013, Newt Gingrich will join the board and come up with plans for the company to fund a lunar colony in which they create a millionaire’s harem of inflatable wives in a project he calls Amazon’s Women on the Moon.
Filed under: Mind Meld
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