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You thought the Big Five were bad for Publishing?
They were just Big Business. Big Business has no conscience. It only has hunger ... for more.
Chuck Wendig, author and blogger, had an interesting article:
http://terribleminds.com/ramble/2014/03/04/diversify-your-publishing-why-amazons-acx-royalty-change-matters/
DIVERSIFY YOUR PUBLISHING: WHY AMAZON'S ACX ROYALTY CHANGE MATTERS
Once upon a time, the Big Six had a monopoly of sorts.
Amazon came along with Kindle and KDP and the Big Five no longer had us by the throats.
B&N came up with the Nook and Apple with its iPad. We had places to go with our ebooks.
Amazon commenced to do what it does best: crush its competition.
Now, the Nook is almost a ghost. Apple is but a shadow of its former self.
With Audible's exclusive contract with Audible, ACX is basically a monopoly for audiobooks ...
Hence, ACX now gobbles 60% of the royalties which really are but fees they charge for distribution.
Ah, where are you going to go with your audiobooks now? Nowhere.
Unless you want to invest $3000, that because of Whispersync you will never earn back, your audiobook days are over.
Oh, well, you weren't going to do audiobooks anyway.
As I wrote:
Nook is almost a ghost. Apple's ebook store is a shadow of its former self and is harder to get into than KDP.
And we bragged so much about Amazon, Kindles are dirt cheap and most ereaders do their reading on Kindles.
People with Kindles find it hard to use them on any other platform.
KDP gave only 35% to authors when it was the only game in town.
Then, a week before the iPad came out, it gave authors 70%.
Now, to get that, you must make your book EXCLUSIVE to KDP.
Amazon is floating the idea of raising the price for Amazon Prime to $119. Ouch. You'd have to order 17 things a year from them just to have that price make sense.
Amazon is grumbling publically about its profit margins. In trying to undercut Apple's iPad and other competitors, Amazon has not made much profit over these past five years.
That has to change for it to remain solvent.
Rather than angering their entire Amazon Prime stable of users,
Amazon would much rather just undercut self-publishers. I mean where would we go?
And in a few years, we may not be given a choice ... just the boot.
Amazon wants to rival, then crush Netflix and Apple.
It wants to be the only game in town so that it can prune and weed its inventory and merely have Large Names with their Large Profits.
As Chuck so quaintly put it:
Amazon no es tu amigo.
Amazon bought Goodreads — for the member list, not to sell them books.
If a company does well coming up with some other ease of use approach to e-books, Amazon will either try to buy it or wipe it out of existence.
Amazon is steadily squeezing publishers for all sorts of fees and increases in their share of the monies,
the smaller presses the worst because Amazon is a bigger part of their sales.
For a smaller house, Amazon’s total discount can go as high as sixty per cent, which cuts deeply into already slim profit margins.
Author publishers were good advertising for the Kindle.
As for the Kindle, the issue isn’t whether Kindle customers can buy titles from elsewhere, but will they bother.
The Kindle’s success is based on ease of use, which has been Amazon’s advantage.
Now that Amazon is moving on from e-readers to numerous fronts into the tech and media worlds, e-books are already in the back seat of their attention.
By 2010, Amazon controlled ninety per cent of the market in digital books—a dominance that almost no company, in any industry, could claim.
Now, after the Apple reversal in court, it has a 65% dominance and climbing back up.
Mr. Bezos originally thought of calling his company Relentless.com—
that U.R.L. still takes you to Amazon’s site—before adopting the name of the world’s largest river by volume.
It seems preposterous now, but Amazon began as a bookstore.
In 1994, at the age of thirty, Mr. Bezos, a Princeton graduate, quit his job at a Manhattan hedge fund and moved to Seattle
to found a company that could ride the exponential growth of the early commercial Internet.
(Mr. Bezos calculated that, in 1993, usage climbed by two hundred and thirty thousand per cent.)
Books are easy to ship and hard to break, and there was a major distribution warehouse in Oregon.
Mr. Bezos saw Amazon selling books as a way of gathering data on affluent, educated shoppers.
The books would be priced close to cost, in order to increase sales volume.
After collecting data on millions of customers, Amazon could figure out how to sell everything else dirt cheap on the Internet.
Before Google, and long before Facebook, Mr. Bezos realized that the greatest value of an online company lay in the consumer data it collected.
Two decades later, Amazon sells a bewildering array of products.
Book publishers’ dependence on Amazon, however unwilling, keeps growing.
Amazon constitutes a third of one major house’s retail sales on a given week, with the growth chart pointing toward fifty per cent.
Amazon is a venue.
Venues raise their rent.
Be prepared.
None of this should surprise anyone.
ReplyDeleteITunes still dominates for music, and the iBookstore is where I go first for my books.
Amazon dominates E-books because Amazon invented E-books. The invention of the Kindle opened the door for many new authors that were being held back and shut out by the Big Six New York gatekeepers of what we were allowed to read.
ReplyDeleteIs it bad that Amazon still dominates E-books, and expanded in to other online product sales? No. Exceptionalism should be rewarded. Amazon does it better.
Alex:
ReplyDeleteA monopoly in business always leads to grief in some way. Sigh.
Walter:
It is not inherently bad that Amazon dominates a market they helped create. The dysfunction arises when they become thugs in their dealings with those with no power to defend themselves.
Many publishers have come to regard Amazon as a heavy in khakis and oxford shirts.
In its drive for profitability, Amazon did not raise retail prices; it simply squeezed its suppliers harder, much as Walmart had done with manufacturers.
Amazon demanded ever-larger co-op fees and better shipping terms; publishers knew that they would stop being favored by the site’s recommendation algorithms if they didn’t comply.
Eventually, they all did. (Few customers realize that the results generated by Amazon’s search engine are partly determined by promotional fees.)
One Amazon campaign was to pressure the most vulnerable publishers for better terms:
Internally, it was known as the Gazelle Project, after Bezos suggested “that Amazon should approach these small publishers the way a cheetah would pursue a sickly gazelle.”
(Company lawyers later changed the name to the Small Publisher Negotiation Program.)
"The Gazelle Project—that was me,” Dennis Johnson, a co-owner of Melville House, a small publisher with offices on the Brooklyn waterfront, has written.
Amazon wanted a payment without having to reveal how many Melville House books were sold on the site. (Amazon rarely makes its sales figures public, using bar graphs without numbers in presentations.)
"No way!" replied Johnson.
By the next day, the BUY buttons had disappeared from Melville House’s titles on Amazon.com.
Not long afterward, the Book Expo was held at the Javits Center, in Manhattan.
Two young men in suits approached Melville House’s booth and pointed fingers at Johnson. “When are you going to get with the program?” they asked. The men were wearing Amazon nametags.
Before the impasse, Amazon had represented eight per cent of Melville House’s sales, more than Johnson could afford to lose. So he capitulated.
“I paid that bribe and the books reappeared.”
That "Russian Mob" style is what is bad.
Ebooks were around long before Amazon started selling them.
ReplyDeleteAmazon offered a sweet deal and many people took it, including the exclusitivity. They intended to dominate and crush opposition. Then, once that had the lion's share and author roped into their services, the deal would go sour. There's always a danger when you rely on one source of income. I've seen that coming from Amazon for years.
And the 70% is still available even if you don't select KDP Select - just certain countries require it. (I believe 5 of the 11 Amazon is in offer only 35% if you don't opt in for KDP Select.)
L. Diane:
ReplyDeleteI couldn't get 70% in America for DEATH IN THE HOUSE OF LIFE without going KDP select -- America is the country where I sell the most. Sigh.
I didn't want to argue with Walter about who invented eBooks -- besides since Kindle dominates in today's market it is a moot point, right? :-)
I understand why Amazon is utilizing their ability as a monopoly -- but their thug-ish behavior with smaller presses and their other venders is distasteful to me. But then, I am not overly fond of Wal-Mart's squeezing of their vendors either.
Amazon is just so big and crushes those who object that not very many voice any opposition or disapproval of their methods.
The Father did not spare me from cancer to be cowardly, so I speak up -- and chance getting crushed if Mr. Bezos hears of me.
I admire your own bravery and integrity, Diane. Have a great Sunday.
Amazon realized traditional publishers weren't playing fair and stepped in with an alternative, offering sweet deals to get content for the Kindle. Frankly, I don't feel sorry for the legacy publishers. They are responsible for where they are because they refused to change in a changing world, and their sense of entitlement came back to bite them. Small publishers have long struggled against the big five (six, seven). Is Amazon really any more of a threat?
ReplyDeleteIn the end, it really doesn't matter if Amazon "wins," because either way, readers and writers will lose. For example, if a publisher were asked to choose between publishing a brilliant first novel or an instruction book by Miley Cyrus on tweaking, who do you think would get the 500k advance?
VR Barkowski
VR:
ReplyDeleteAmazon acting like the Russian Mob will soon or late bring the Federal Authorities in, causing no end of grief to everyone involved.
Readers will lose because as you say, publishers will have less income to gamble on independents -- hence children books written by Miley Cyrus! MS. TONGUE GOES TO TOWN.
Don't tell me Al Gore invented eBooks.
ReplyDeletePutting a book on your computer and trying to sell it is not inventing eBooks. There are some lawsuits involving who invented eBooks and eReaders, but they're going nowhere.
Amazon created the eBook market by being first, and they deserve reward for their effort and innovation.
I've made a lot of money from Amazon Kindle. If it was not for Amazon, I would have shut out. I'd have made nothing, and would not have been allowed to be a published author. Most small presses would not be viable without Amazon. Self published authors would not be self published except by going through a vanity press, but they would be ripped off and would not have a market for their books. Amazon made the difference.
Amazon is acting like the Russian Mafia you say? Has Amazon invaded New York City? No. Others can still do business. The Big Five still have their monopoly on paper book distribution stores, a market I'm still shut out of. You are too.
Walter:
ReplyDeleteLOL.
Actually, the first man who intellectually conceived of the eBook was Bob Brown, writing such a book in 1930.
In 1949, the Spanish teacher, Angela Ruiz, patented the electronic book.
In 1971, Michael Hart used the computer at the University of Illinois to record the Declaration of Independence in it, giving birth to PROJECT GUTENBERG.
But the eBook could truly said to have become mainstream in 1992. Sony launched the Data Discman, an electronic book reader that could read e-books that were stored on CDs.
The Rocket eBook and several others were introduced around 1998.
Electronic paper was incorporated first into the Sony Librie (released in 2004) and Sony Reader (2006), followed by the Amazon Kindle, a device which, upon its release in 2007, sold out within five hours.
Amazon has become a giant through the use of intelligence, planning, and decisive action, enduring loss of profits initially to gain its distant goals.
But like Wal-Mart, it is now behaving in a thuggish manner to those it has placed in a position where defense is impossible. Sad really.
I am glad your ebooks are doing so well. I hope your sales soar even higher!