BIG, RICH AMAZON NOW GOUGING INDEPENDENT PUBLISHERS — AND WRITERS, MOST OF ALL

The American Society of Journalists and Authors, the nation’s trade association for freelance nonfiction writers, is disgusted with Amazon’s announced move requiring that all print-on-demand (POD) books sold on Amazon’s site be printed by their own print-on-demand house, BookSurge.

As of April 1, Amazon is requiring small publishers to sign a contract agreeing to such demands.

At first, Amazon representatives denied they were threatening small booksellers with having the “buy it” buttons for their books turned off if they didn’t sign on the dotted line. Later this week, Amazon admitted the move, as reported in Writer’s Weekly and The Wall Street Journal. The contract being offered to print-on-demand publishers, which ASJA officers have seen, also includes a confidentiality clause forbidding disclosure of not just specific contract terms, as is typical, but any discussion at all. Thus, small publishers who have signed the contract may not say so, much less reveal the pressure they were under.

In addition, Amazon is punishing publishers who sell their books at a discount from cover price directly on their publisher’s websites. It is taking that discounted price as the book’s “cover price” and then applying their own discounts accordingly.

“We applauded when Jeff Bezos and Amazon gave small publishers and even writers who self-published a way to get their books before the public,” observed ASJA President Russell Wild. “With these grabby, strong-arm tactics, Amazon negates all that — and the years of goodwill it has built up with writers, who ultimately will bear the brunt of any price increases in the printing of independently published books.”

ASJA joins PMA, the independent book publishers association, which also has spoken out against Amazon’s move to forcibly get business for its own BookSurge subsidiary. The writer’s group also will urge the Washington state attorney general’s office to investigate whether Amazon’s move constitutes restraint of trade or otherwise violates anti-trust laws.

Russell Wild, ASJA president, 610-530-0078
Salley Shannon, ASJA vice president, 301-740-2819

Time to Sue Amazon?
Organizations are lining up to complain about Amazon’s recent move to require POD publishers to use Booksurge if they want their product sold directly by the e-tailer as in-stock merchandise. The Authors Guild says in a statement “we’re reviewing the antitrust and other legal implications of Amazon’s bold move.” And the ASJA says it “will urge the Washington state attorney general’s office to investigate whether Amazon’s move constitutes restraint of trade or otherwise violates anti-trust laws.”

I have seen person upon person ask about these emails they are getting in their boxes about Amazon taking over the world, and they just don't get it. Change is good unless you are on the wrong side of it, and ill management has left you unready for the inevitable.

Let me direct you to an interview with Jerry Simmons, a former VP at the Time Warner Book Group, who talked about Amazon’s strategic move.

Simmons was asked the question: “How do you predict the long-term effects of this as it relates to the small author and publisher?”

His answer: “The long-term effects for the author and publisher are devastating. With Amazon strengthening and securing their place in the distribution and sales channel, they can do anything they want. The next move will be to squeeze these small authors and publishers for placement fees, advertising fees, and eventually higher discounts. When you give in once, it never stops, this is the way of the publishing world and booksellers. It will get to the point where they start to lose money on each book sold. Only then will Amazon back off, but you can bet they are going to push authors and publishers to the wall and take every possible nickel out of the equation.”

I have seen person upon person ask about these emails they are getting in their boxes about Amazon taking over the world, and they just don’t get it. Change is good unless you are on the wrong side of it, and ill management has left you unready for the inevitable. Hey, if you can’t plan for the future, hire someone else to do it for you?
All Amazon is saying is “sure you can still sell books here, but you need to use our press for POD because we now own a press and it is a MASSIVE conflict of interest to sell your books here and not use our press. Honestly, I don’t see a thing wrong with that aside from maybe people who should have been investing in their own companies are going to lose money.
And not for nothing but the “little presses” should have seen this coming back in 2005. It’s not like they didn’t have time to do something about it rather than ride along on Amazon’s coattails. Buy your own press and sell as a reseller. DUH?

BookSurge is hiring a sh*tload of people on every job site out there including myspace, are expanding and that is a good thing for the economy. Real people getting real jobs. (can’t believe you played the economy card, grrr)
So yeah, this might cut into your profits, but your still getting the benefit of big Amazon traffic getting your books out there, which you are still able to make a profit on. Trim the fat.
Most publishers, little and big, tell their authors; self promote, have websites and blogs, get the word out, join groups, write blogs, etc etc.
Well if you have to do that anyway, why not just fork over the 1300 and have Amazon/BS do it for you for your 40% profit, and when people buy through your links you get up to 50%. Just before this was announced they are letting authors keep another 10%… Talk about genius.
Let’s see. 50% profits or 20-30% and 7% from a small publishers?
Isn’t that what your all afraid of? Authors can just do it themselves and they don’t really need your little vanity press?
That Amazon is going to better deal you and make it easier and more profitable for writers to just go through them, with the same or less effort.
They have built an empire as the “Microsoft of books”, they let everyone use it for years as they pleased. You guys all saw this coming for years.
Now you are going to be up in arms?
Uh, ok.
Why don’t all you little publishers get together and start your own Amazon? Buy your own presses, print the books that are sold as they are purchased and just do it that way? Because its a lot of trouble? Can I get a boo hoo here?
(passes tissues around)

Vertical integration is about cost and control. Companies who vertically integrate are trying to assert greater control over their business. The obvious benefit is that they can capture the profit margins at each step along the chain. They can also make it harder for competitors if they can gain access to a scarce resource.

If we stand by and let Amazon do this, it is just the first step.

You’re absolutely right on this, Maya. Amazon’s actions affect more than just writers. It’s a ripple effect through out the entire economy. Maybe not at first glance or immediately, but over a period of time it impacts everyone and eventually comes full circle. Put a small press or writer out of business and you affect all the people that small press or writer went to for services or items. When those vendors/service providers lose money, they have to cut back. That in turn affects others. It’s that six degrees of separation thing. I understand Amazon’s desire to make more money, to grow their business, but they’d do better to build a partnership with small press than cut them off at the knees. It wouldn’t be that hard to court small press with incentives.

I’ve said repeatedly on my blog that the large publishers are at enormous risk in a digital world. They are no longer the sole owners of the means of production, which means they are no longer the only game in town. And Amazon is very cleverly moving to take over that game.

I think this whole thing is about Amazon positioning itself vertically, making it the dominant power in the publishing industry.

Vertical integration means owning pieces of all parts of the chain. Amazon started out as a retailer. Then it moved into wholesaling others’ products. And finally into manufacturing (BookSurge). Not content to own a part of the manufacturing business, it is now using its retail clout to make its publishing arm more dominant. This is a case where the sum of all parts is worth far more than the individual parts alone.

Amazon now owns pieces of all parts of the chain leading to the consumer:

Manufacturer => Wholesaler => Retailer => Consumer

Vertical integration is about cost and control. Companies who vertically integrate are trying to assert greater control over their business. The obvious benefit is that they can capture the profit margins at each step along the chain. They can also make it harder for competitors if they can gain access to a scarce resource.

If we stand by and let Amazon do this, it is just the first step.

I’ve been so frustrated by the willful blindness of writers, who brush this off as “a POD issue.” The smug contempt of the commenters on Lee Goldberg’s Writer’s Life made me want to scream. Sure, they are not impacted today. But, give Amazon a bit more time and then see what happens.

Also, yesterday’s Publishers Weekly reported Ingram’s has made a deal with On Demand Books, the manufacturer of the Espresso Book Machine, the machine that can print and bind a book in 15 minutes.

What do you want to bet Amazon knew that deal was pending?

He is asked: “How do you predict the long-term effects of this as it relates to the small author and publisher?”

His answer: “The long-term effects for the author and publisher are devastating. With Amazon strengthening and securing their place in the distribution and sales channel, they can do anything they want. The next move will be to squeeze these small authors and publishers for placement fees, advertising fees, and eventually higher discounts. When you give in once, it never stops, this is the way of the publishing world and booksellers. It will get to the point where they start to lose money on each book sold. Only then will Amazon back off, but you can bet they are going to push authors and publishers to the wall and take every possible nickel out of the equation.”

You can read the entire interview here.

Another question we’ve seen: Do I need to switch completely to having my POD titles printed at Amazon?

No, there is no request for exclusivity. Any publisher can use Amazon’s POD service just for those units that ship from Amazon and continue to use a different POD service provider for distribution through other channels.

Alternatively, you can use a different POD service provider for all your units. In that case, we ask that you pre-produce a small number of copies of each title (typically five copies), and send those to us in advance (Amazon Advantage Program-successfully used by thousands of big and small publishers). We will inventory those copies. That small cache of inventory allows us to provide the same rapid fulfillment capability to our customers that we would have if we were printing the titles ourselves on POD printing machines located inside our fulfillment centers. Unlike POD, this alternative is not completely “inventoryless.” However, as a practical matter, five copies is a small enough quantity that it is economically close to an inventoryless model.

I am slightly mollified by this–if it’s not just lipservice. Even if it’s just a way for them to save face now that everyone’s all pissed off…

I love how Amazon keeps reiterating that these changes are being implemented for the sake of “the customer”.

*G* me, too.

I'm all for customer service but…this is bull. They can spin it all they want but they are doing this for the sake of Amazon.

That’s my take, too.

http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-printondemand

Random House Audio recently hired a firm to watermark all the eMusic audiobook files and then hired a watchdog service to report on whenever illegal pirated copies showed up on file-sharing sites.

Their intent was not to find out whether piracy happens but instead whether there was any correlation between DRM-free distribution and an increased piracy rate.

They did not find a single incident of the watermarked titles being distributed illegally. This find was consistent with the results the rest of the music industry has found during the past six months.

The music industry is moving toward DRM-free distribution. That is likely to impact the e-book industry’s approach.

Am I saying that no one ever illegally shares an e-book? Of course not. But what if that sharing creates a new fan who will buy books in the future?

I know that I only buy used books when I’m wanting to try out a new author and don’t want to spend $22 on an unknown. But once I decide I like that author, I buy their books new from then on.

If I had to guess, I’d say we’re moving toward less restrictions, not more, but with value added in some other way.

There’s an interesting group called The Institute for the Future of the Book funded by two very large foundations (MacArthur and Mellon) out at the University of Southern California. They have a project called Sophie that is actually a plan to reinvent the book.

Not limited to an electronic book that can be read on a computer screen, Sophie is a social engineering experiment as well. Recognizing the success of such websites as My Space, Sophie is an attempt to create documents that could live and breathe on the Internet and where readers could interact with each other and with the author.

The business models are changing along with the technology.

As I live neither in the UK nor the USA, I had to do my sales the “No Amazon” way for the last couple of months. Means: I sell my work almost exclusively through my website, and it’s a lot of work. Really, really a lot of work, and I know that I would sell far more books if people could simply click that little button over on Amazon. I also had to learn that one automatically loses a lot of credibility if one can’t tell readers and reviewers “my book is available on Amazon”. Availability is often equalled with quality.

As I never expected to sell half a million books, this way of doing business still works for me. But I can’t see “doing it all myself” as a general alternative for authors. I wouldn’t know who could compete with Amazon. A very annoying, very disappointing and very frustrating situation.

Won’t this keep the little guys doing what they do best–giving new authors a shot at the bottom of the totem pole? Established authors can just do their own publishing, and hire promoters.
Plus with e-pubs taking maybe 4% of all submissions, won’t BookSurge up the number of new and crazy idea authors getting their stuff out there and making more money?

I don’t know if this will fix everything that I had noticed to be seriously wrong with the system. If you can’t “trade” music legally, how can you trade books? That is still cutting out all of the people who make fun literature possible. If it takes riding on Amazon’s coattails to get this snafu addressed, because they have the money to do it, what is wrong with that?
People should not be able to sell books in new condition without a license. People should not be able to profit from used books, without at least some of the proceeds going to the rights holders. Of course you run into that whole library sale issue, but it only benefits everyone to raise money for libraries. Many libraries are failing and suffering, isn’t raising the price of what books are worth, a good thing? For all?
Is this not the law of the Verse, good profit=good product, less profit=inferior product?
And not for nothing, but it really steams-ma-beans when I see something someone poured their heart and soul into selling for one cent, and the author is a hair away from eating Ramen noodles and losing their home. There is a lot of growth and time needed, and when they aren’t seeing much of a profit, why should they keep fighting a losing battle?
A writer knows one thing, they must write.
(Hands out tissues)

Wasn’t that fond of Amazon after the whole Kindle thing–as a Canadian, I think I’ll keep my online business exclusively with Chapters Indigo or Powells from now on.

And to Helen–I’m guessing your first print run on your very first book was considerably less than 175 000. From what I gather, most midlist authors have significantly smaller runs than that–if they didn’t the whole industry would have tanked long ago under a mountain of returned covers and pulped pages.