Amazon’s Publishing Ploy

The latest buzz in the publishing world is Amazon.com’s new ploy to insist that all publishers who use Print-On-Demand (POD) technology use their BookSurge POD printer if they want to sell their books on amazon.com. Already several titles, while still showing on their website, have lost the “buy now” button.

POD does not mean vanity publishing or self-publishing, although this is the printing choice most vanity and self-publishers take. However, a lot of small press, traditional publishers use this technology in order to spare themselves warehouse expenses. Also, I believe some of the bigger publishing houses use it for their less popular but still selling titles. This move by Amazon has big consequences.

For Amazon, it makes financial sense–if everyone goes along with it. They now get paid for printing the books as well as selling them. However, as you’ll see below, a lot of small press publishers are not going to give in to Amazon’s “blackmail.”

For small publishers, it’s a problem. It’s not just the principal of the thing, as I understand it; “retooling” their old titles to match BookSurge’s needs and meeting BookSurge’s prices is cost-prohibitive for a lot of publishers. They may end up going on their own or going out of business.

For authors like me, it could affect sales. Two of the three fiction publishers I contract with use POD; if Amazon goes through with its plans, my books will not be available for sales on Amazon, which of course is the most common sales venue outside of brick-and-mortar stores. Amazon already demands a big discount in order to have your book on their website, and that eats into royalties; now, they want an even bigger cut.

For readers, it means that if you like unusual books–the kind that don’t grace the shelves of B&N–you’re going to have a harder time finding them, at least until some other company rises to take Amazon’s place. Ditto if you like shopping on-line.

As you can read below, small press publishers are taking action. What can you do? Write to amazon.com and express your displeasure at their new policy.

In the meantime, here’s what publishers are doing:

(This from the Authors Guild, forwarded to me from another writing group.)

Last week Amazon announced that it would be requiring that all books
that it sells that are produced through on-demand means be printed by
BookSurge, their in-house on-demand printer/publisher. Amazon pitched
this as a customer service matter, a means for more speedily
delivering print-on-demand books and allowing for the bundling of
shipments with other items purchased at the same time from Amazon. It
also put a bit of an environmental spin on the move — claiming less
transportation fuel is used (this is unlikely, but that’s another
story) when all items are shipped directly from Amazon.

We, and many others, think something else is afoot. Ingram Industries’
Lightning Source is currently the dominant printer for on-demand
titles, and they appear to be quite efficient at their task. They ship
on-demand titles shortly after they are ordered through Amazon
directly to the customer. It’s a nice business for Ingram, since they
get a percentage of the sales and a printing fee for every on-demand
book they ship. Amazon would be foolish not to covet that business.

What’s the rub? Once Amazon owns the supply chain, it has effective
control of much of the “long tail” of publishing — the enormous
number of titles that sell in low volumes but which, in aggregate,
make a lot of money for the aggregator. Since Amazon has a firm grip
on the retailing of these books (it’s uneconomic for physical book
stores to stock many of these titles), owning the supply chain would
allow it to easily increase its profit margins on these books: it need
only insist on buying at a deeper discount — or it can choose to
charge more for its printing of the books — to increase its profits.
Most publishers could do little but grumble and comply.

We suspect this maneuver by Amazon is far more about profit margin
than it is about customer service or fossil fuels. The potential big
losers (other than Ingram) if Amazon does impose greater discounts on
the industry, are authors — since many are paid for on-demand sales
based on the publisher’s gross revenues — and publishers.

We’re reviewing the antitrust and other legal implications of Amazon’s
bold move. If you have any information on this matter that you think
could be helpful to us, please call us at (212) 563-5904 and ask for
the legal services department, or send an e-mail to
staff@authorsguild.org.

Feel free to post or forward this message in its entirety.

———————–

Copyright 2008, The Authors Guild. The Authors Guild
(www.authorsguild.org) is the nation’s largest society of published
book authors.

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