Amazon vs. the Publishers

By David Marshall

For decades, authors have been playing the branding game. Knowing their next peanut butter sandwich depends on enough readers buying their next book, they’ve carefully put their names “out there” as “top authors.” Today, this means working at all the social networking sites, writing blog entries on a regular basis, and turning up at conventions and other events, say organized by local bookstores. They need to keep the fan base loyal.

Now ask whether those same loyal fans know who publishes their heroes’ books. Consumer surveys consistently find only about 10% of readers can name the publishers and the imprint. The other 90% buy based on their authors’ names. Amazon has realized this and is now working to cut the publisher out of the equation.

This ever-lovable online store is seducing “top authors” away from their publishers, packaging many of the services provided by agents, reviewers, and marketing departments. Amazon gives their chosen books high visibility. When you use the site, the search engine displays the results of key word searches, there are recommendations, there are emails and newsletters, people post reviews on the site, and so on. Naturally, Amazon charges publishers for giving their authors this exposure. Because the rates rise fast, this makes authors less profitable to the publishers.

So now, Amazon Publishing is offering full contracts. It started with the self-published authors and now spreads to established authors. With the launch of 47North, Amazon lays down the gauntlet in publishing science fiction, fantasy and horror titles from both new and established writers. Because it’s undercutting the established bookstores, more people will turn to Amazon to buy. With greater volume comes the power to offer more competitive royalty rates, particularly on e-books. The traditional publishing industry offers 25% for digital rights, which Amazon can easily beat. The publishers will have to rethink their royalty structure should Amazon extend the list of titles it publishes.

In all this, the most interesting questions are whether Amazon will go for full distribution of their titles, and will the brick-and-mortar bookstores display them on their shelves? Amazon can probably afford to not distribute. This will further undermine the traditional stores if they cannot sell desirable titles. In all this, Amazon is acting like a monopolist, trying to dominate the market in both publishing and book retailing. If it can cut out the publishers and drive the bookstores into bankruptcy, all it needs are authors.

About David Marshall

He’s one of these guys who’s always made a living from words, written and spoken. He started off conventional. Training as an attorney, he combined tenure as a professor with some private practice. Except, in moments when no one was watching, he was broadcasting, acting and writing, always under stage names and pseudonyms so his two worlds wouldn’t meet up. Later, he set up his own business consultancy and ran a small press. Now he’s retired, he can look back on a life misspent, always doing stuff that was interesting and never getting too caught up in the career development rut. Except he’s just as busy. He still picks up consultancy work when something interesting comes along, he’s paid for about a million words of fiction and nonfiction a year, and continues writing for his own amusement. Someone told him staying active keeps the brain going longer. So this is his plan for immortality. He’s very conscientious. If he plans enough work to last him into next year, he’ll be around to do it. His blog.