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?