Has everyone conceded the US ebook market to Amazon?
Let’s try, just for a minute, to stop cheerleading. In the recent weeks, it’s seemed like publishing has become an all or nothing sporting event and that we all have to pick sides. You have to cheer for self publishing versus traditional publishing versus some other path. But that type of thinking is short sighted and obstructive. A self publishing “win” is a vibrant and robust publishing community that has both publishing houses and avenues for business minded authors to advance on their own.
The downfall of traditional publishing would only hurt self published authors along with readers because it would result in a huge contraction of the market for books. I’m a firm believer in the saying “a rising tide lifts all boats.” The more robust the publishing industry is, the more readers are brought to the table and that helps every author and every publisher. According to one poll, over a quarter of Americans hadn’t read a book in 2013.
In the data that has been scraped, the most transparent information reveals that Amazon is doing a spectacular job of selling its own books. If you look on any Amazon tablet or Android Amazon App, you’ll see a parade of Amazon titles promoted in its Kindle Select 25. If you look on the Kindle bestseller list, on any given day there are at least 3 or 4 titles in the top 25 that are Amazon published titles. I believe that the scraped data revealed that at least a quarter of the top 100 are Amazon published titles from 47 North, Thomas & Mercer, Montlake, Amazon Encore, and the like.
Amazon pushes its own books on the Kindle devices through front page, full screen ads. It allows additional free downloads of books (referred to as borrows) of its books in exchange for reviews. Each “borrow” counts as a sale which is why you see so many pre order books at $4.99 at the top of the charts. Those are Amazon titles that Amazon promotes through special programs, coupons, discounts, and marketing campaigns.
Why is this important?
Sony has announced that it is closing its US Reader store and it has stopped introducing new ereaders to the US Market. Barnes & Noble has reduced the funding for Nook by 74%. Kobo, which is supposed to take over all the US Sony accounts has announced it is withdrawing funding for promotion within the US.
Kobo has since stopped investing in marketing in the US, closed its office in Chicago and is focusing on other markets. Its market share and revenues are now negligible there.
For Sony and Kobo (owned by rival Japanese companies), the market share they are looking to conquer is international. B&N has no clear digital future.
That leaves Google and Apple. As the market for Android devices becomes larger, both in the US and in other regions, Apple will lag farther behind in the content department. It has evinced no desire to allow its apps and content on any device other than the iOS systems. Thus, Apple’s marketshare in books extends only as far as its marketshare in devices which is still dominant but still fading (although losing ground in non US markets rapidly).
The most recent data from IDC shows that for Q3 of 2013 Android made up 81 percent of devices shipped. You read that right—four out of every five smartphones shipped in Q3 were built on Android. Meanwhile, Apple’s iOS scraped by with a sad and distant second place figure of only 12.9 percent.
While Google is interested in scanning books in furtherance of search engine dominance, it has shown less interest in moving content. There is little advertising or promotion of the actual book content (as opposed to say the Nexus phone).
The effect of this is that new and emerging authors have decreased visibility as the dominant marketing spaces of these digital marketplaces will be devoted to proven sellers. It will be harder for new authors or lesser known authors to break out because there won’t be any individuals assigned at these digital marketplaces to help readers discover new books and new authors. The same sellers will appear on the front pages of these digital marketers over and over. It’s already happening. As you know, I visit about four to five retailer sites every morning to look for Deals to include and the same titles are discounted and the same titles are promoted on the front pages without much variation.
A couple of weeks ago a well known British author wrote an ill advised piece for Huffington Post asking JK Rowling to quit writing because she’s sucking all the air from the publishing media. (There were also aspersions cast about young adult and middle grade novels) But Lynn Shepherd isn’t wrong to some extent. There’s only so much media that can be devoted to books and visibility shrinks as the market gets smaller.
The reason that it took so long for Borders to reach its expected end was because publishers had a vested interest in keeping it in business. It had far less to do with ensuring that there was a viable competitor to Amazon and far more to do with creating opportunities for discovery. With shelf space decreased, print runs languished and digital discovery for those books also were reduced. We know that showrooming is an important tool for discoverability. Showrooming, where customers go to a physical retail store and then buy online, is an increasing problem:
Among the people on its panel who reported buying items on Amazon after looking at the same item in physical stores, Placed found that Bed Bath and Beyond, PetSmart and Toys ‘R’ Us were the retailers that Amazon showroomers visited the most, with Amazon showroomers 27 percent, 25 percent and 21 percent more likely to visit the three stores, respectively, than the average consumer.
In store placement has a direct effect on online purchasing and this is as true for books as it is for toasters. When books have both digital and print, digital sales often decline if there is no visibility in stores. (Obviously this has no effect on self published authors who have no print presence).
Recently Amazon announced that it was reducing the royalty rates of self published audio books. For any new self published audio books, the royalty earned off every sale has been reduced from 50-90% to a flat 40%. Under the old system, with every increased sale you received a higher royalty. Amazon can do this because with the purchase of Audible, Amazon represents the primary path of audio book delivery. Even iTunes has Audible integration. In other words, there is no real competition for Amazon.
In sum, an Amazon dominant marketplace results in two things:
- Reduced visibility for all books.
- Reduce profitability for all authors.
Now I know that some who read this will complain that I took a strong and active stance against Agency Pricing. That’s true and I’d do it again. Competition based on price is singularly focused and requires huge volume in order to make up those whisper thin margins. Amazon is not competing solely on price and never has. It offers amazing customer service, selection, and a robust feature set.
And apparently the digital marketers have folded up their tents and left the US marketplace to Amazon. It may be in four years there will be a new competitor that we cannot foresee. Let’s hope so because an Amazon dominated landscape isn’t good for anyone. Not readers, authors or publishers.
I was wondering what was going on with B&N. I was so excited when I saw that they FINALLY updated their app only to realize that they took everything ebook off of it. It’s like they don’t want me to buy from them. I have a physical Nook and use the Nook app but also read on the Kindle app. Because I have a Nook, I’d prefer to buy from B&N but Amazon makes it so much easier. Sure I can’t buy from their app either, but at least I can see the book and add it to my wish list. And I can buy ebooks easier from links on Twitter with Amazon vs. B&N.
This makes me sad. I admit it: I read almost exclusively on my Kindle, so I buy most of my books from Amazon. Last week I bought 28 books from Kobo, because of that insane 90% coupon, but rather than reading most of them on my Kobo reader, I’ll use Calibre to put them on my Kindle instead. I know quite a few readers who use Nooks, Kobos and Sony readers, and who shop around using deals and coupons to get books cheaper — we’re a voracious bunch. But if retailers other than Amazon are pulling out of the book market, I do fear Amazon will get too much control.
Toys R Us should be crying the blues but not over showrooming. Their shipping program is ridiculous. You can’t have it shipped to your home. You have to go to the store and only the person who ordered it can pick it up. They can’t change the order so another parent can pick it up.
I understand that kids could technically go pick it up themselves and ruin Christmas but parents are busy and crazy enough around Christmas.
And I’ve almost quit shopping at PetsMart over their poor customer service. Not to mention, I brought home moths in a bag of cat food I purchased from there. It was horrible.
I think the times, they are a-changing which means volatility . In the past decade we’ve only scraped the surface of e-readers. Any company that decides to focus on one product, and thinks it has the market cornered will ultimately fail. Any industry that fights the tide of change instead of embracing it will have the same problem (vinyl and tape > CDs >I-Tunes?).
I don’t see why we can’t embrace the entirety of publishing: self – indy – mainstream. The industry will change. It always would have. If it had not been the internet and Amazon it would have been something else. It will change in the future. There is apparently a new way of reading that will advance the way we read tremendously, coming down the pike. It’s an app that runs single words past you and increases reading speed and comprehension by 100% in about five minutes. I, for one, can’t wait.
I have a Sony reader and when I replace it I plan to go with a Kobo. Most of the books I buy are from Kobo and ARe, but I do buy at Amazon and convert to load onto my reader. Count me as one o the people shopping around for thee best price. I love Kobo coupons and it definitely influences my choice of where t buy. But, here’s the problem, most of their coupons these days can’t be used on the books I want. In most cases, the best price ends up being at Amazon.
Kobo had a multiple use coupon good on all books, no matter the publisher, last year and I went crazy using it. The prices were lower than Amazon using the coupon and I could buy agency books. That was a huge win for me. Maybe if they stopped limiting the books the coupons are good for or lowered the price on these books (like Amazon does) to match the paper version they would gain market share.
I have refused from Day One to buy a Kindle. I refuse to let my reading life be dictated to by Amazon, it’s as easy as that. I have a Kobo – it’s my 3rd actually – I do love to upgrade my tech toys. *LOL* – and the last place I buy books is Amazon. I buy my ebooks from the small publishers directly, I buy from ARe, I buy from the self-pubbed authors that I trust, and I buy from Kobo. I download a few of the free offerings from Amazon and convert them, using Calibre, to epub for my Kobo ereader, but I’ve never paid for an Amazon ebook and I hope never to have to. With just a little extra work on my part, I don’t need to buy from Amazon and I have absolutely no hesitation about putting those few minutes of extra in if it means I’m not an Amazon Thrall.
Wow, I had no idea how prevalent it had become in the US. I’m kind of surprised that Kobo has nearly dropped out of the race, but given the fact that they built up in other English-language markets first and they’re struggling to support the customers they do have, it’s probably a good thing. I’m jealous of the coupon codes y’all get. Ours are so limited.
One of my biggest concerns is authors who limit themselves to exclusive Amazon book deals. That’s the reason I got the Kindle app. I don’t understand why they are signing these deals, because it would definitely have pros/cons internationally. But if you only care about the US market, I guess it could work until there’s a more viable competitor.
I’ve never bought from Amazon – I never liked the idea of their proprietary format and never will. Not being in the US I also never felt the need/push to buy from Amazon. Quite simply I never liked how you couldn’t download simply an Amazon ebook and had to have a Kindle to push it into Calibre or your computer. Most of my library comes from Kobo, Are, Sony. I am very curious when the Sony to Kobo migration happens what will happen to my Sony e-books because some books I both through Sony because they weren’t available in Kobo and still aren’t. Needless to say they are backed up through Calibre now.
I also use my iPad to read more and more thus using the reading apps more BUT I still diligently download my books and put them in Calibre. I have never bought Apple e-books ‘cuz I never really figured out how to drop the file into Calibre nor do I care to. I still feel that if I buy it, I want to read it any which way I want to; be it through an app, an ereader, a mobile device. I find also that I tend to more wary of pushing the buy button especially because more and more books are available electronically for borrowing through Overdrive now. It may take some doing but there are other options out there other than Amazon – you just have to look for them and get a bit creative. Only advice I can give anyone… back up, back up and back up again.
I was showrooming B&N and Borders well before there was even an Internet. I’d note what titles looked good, jot them in my Palm PDA, and then look them up at the NY Public Library to read for free.
There was a time when publishers could have helped to save Borders, but they chose not to. Borders shot itself in the head years before they died. They had the Sony Reader and never did anything with it.
Really, how many tears must be wasted on packs of incompetents who can’t — or in Kobo’s case from the Canadian filing — *won’t* compete? I’m sick of it. I don’t like the idea of Amazon — or any company — dominating anything. But I just can’t be sad that companies that are suicidal eventually kill themselves.
As for device lock-in, I still have hopes that eventually we will — here in America — get a government that sees lock-in is not in the best interests of the public. (It’s also not in the best interests of any damn company either, but they all refuse to see that now.)
Thanks for a most realistic, if dismal, assessment of the U.S ebook market. I’d add some comments:
First, we can assume that if Amazon is able to virtually own the ebook market in the U.S., the result will be bad for authors for several reasons:
1. As you point out, Amazon just slashed royalties on self-published audiobooks. That’s a warning what it intends to do with ebooks once authors feel they have no option but Amazon.
2. Amazon already makes as much or more, per sale, than any other ebook retailer. That’s a combination of two things:
a. Its deceptively labeled and grossly inflated download fees (over three times what cellular companies charge for data service and one-hundred times (10,000%) more than Amazon’s own web services charge for data downloads. For books that include pictures, that typically knocks the royalties down to a sub-standard 50-55%. If you know an aggressive lawyer, there is very, very, very ample ground for a class-action lawsuit there, particularly Amazon’s use of deceptive language.
b. Amazon pays 70% royalties only over a narrow $2.99-9.99 price range. For any other price, it only pays 35%. That means for that textbook a student buys that costs $50, Amazon is pocketing $33.50 (for merely processing a credit card), while the author and publisher are only getting $17.50 for all the work of creating that book. That’s hideously greedy, with the author sacrificing to fatten Amazon’s income and students paying far more than they should.
My rough calculations suggest that, taking into account the fact that there are some costs, Amazon is pocketing twice as much profit per ebook sales as Apple. And since the retail price is the same, all that money coming out of the pockets of authors and publishers. And yes, Apple is being quite stupid here. That added income enables Amazon to subsidize the sales of Kindles, thus hurting Apple’s iPad sales.
Second, Amazon has the world-view of a bully. A bully has two modes:
1. As coward, pandering to every whim. That’s Amazon attitude toward customers, who can desert it at any time.
2. As a bully, insisting that things be done its way and under its conditions. That’s why I’m much happier publishing with Apple, which treats me well, than with Amazon, who treats me as a zero. Amazon clearly regards the typical author and publisher as a serf, necessary to get the fields harvested (i.e. books written and published), but to be only paid the barest of living incomes. Those slashes in audiobook royalty hint what Amazon really wants, which is an author/publisher royalty in the 40% range. If you’re making $10,000 from your writing now, Amazon wants to see that drop into the $6,000 range. And that’s what will happen if it gets on top. Remember, that’s already what’s happening with audiobook authors.
There are things authors can do:
1. Build direct relationships with readers. Use that to steer them to alternative sources for ebooks: perhaps Apple and perhaps a download service of your own. Make clear to your readers that, although they are paying the same price, they’ll help you more and give you the resources to write more books, if they buy from anyone but Amazon.
2. If you’re fortunate enough to have fans who eagerly await your next book, consider delaying the Amazon release for a few weeks to steer most of their sales elsewhere. And yes, I know it is frustrating that Apple takes a week or more to approve an ebook, but some sacrifices are necessary. Use a controlled by you download service and you’ll not only get more per sale, you’ll have that ebook available almost instantly after you upload it. Try to steer ALL your ebook sales there. And yes, I know that probably means you lose DRM, so they can load it into any app, but DRM is trivial to break anyway.
3. Adopt and encourage your friends to adopt a different online shopping policy. Flip how Amazon is treated. Use Amazon and its user reviews for the browsing and selection phase, and then buy elsewhere, including directly from Amazon’s supplier. I can give two recent examples:
* I wanted a bulk food item that I couldn’t find locally. Amazon had it, but I skipped past Amazon and went directly to its supplier, where I was able to get what I wanted, all shipping paid, for the same price. And if I had combined that bulk order with orders for friends, I’d have actually saved money.
* I wanted a pair of safety glasses. I found them on Amazon at a price that meant also paying shipping. A few minutes with Google, and I found those same glasses at the same price with free shipping.
4. If you’re like me, you have things you want to buy as soon as the price is right. Get on the mailing lists or visit the websites of various deal tracking websites (i.e. Dealmac.com, Woot.com). Ignore those Orwellian, we-know-what-you-want emails from Amazon offering deals that often aren’t deals. Instead, get genuine discounts from other online retailers. Yes, take advantage of those Amazon reviews, but spread your spending around.
And keep in mind what’s really going on here. In the 1950s, when GM dominated auto sales in the U.S. it deliberately didn’t let its marketshare grow above 60%, lest the feds intervene. Amazon’s ebook marketshare was about 90% when the Obama administration DOJ intervened to go after, would you believe, Apple, which at the time of its alleged price-fixing had 0% of the ebook market and was selling ebooks that could only be read on pricey devices. There’s something very suspicious going on there.
I will offer one cherry note. J. R. R. Tolkien’s publisher made some blunders that technically meant that his The Lord of the Rings wasn’t covered by a U.S. copyright. In the 1960s, one mass market paperback company decided to take advantage of that to publish an unauthorized U.S. edition.
Tolkien fought back by doing the 1960s equivalent of blog postings. When he answered fan mail in the U.S., he included a note about that unauthorized publication. News soon spread among Tolkien fans, and the publisher got so much flack, it agreed to end publication and pay Tolkien something in lieu of those unpaid royalties.
And no, don’t even think of releasing your own unauthorized edition. Circa 2003, I knew the Tolkien estate’s lawyer and he was quite proud that his firm had gotten that copyright back in effect.
Do the same with your ebooks. Let your friends know that buying from other vendors means more income for you and thus perhaps more books for them to read.
I think the concept of stealing air is absolute nonsense. You write a good book, you deserve your success. What scares me is the idea that in the future it won’t matter in the slightest if you write a good book or not. Not from a storytelling, writing, plot, character or mechanics perspective. None of those things will matter anymore. Only gaining visibility by any underhand means necessary will matter – and I think eventually that will be completely down to who is willing to to do business with Amazon. It seems now that the freest choice is to self-publish. But everyone seems to forget that you’re still in bed with a major corporation. And basically, once the competition is dead they can do whatever they want. They can cut royalty rates, hide certain books, remove books, funnel books into their various programs, start only accepting certain books etc.
All of which traditional publishing did to a certain extent, before self-publishing. The only difference is: if your book wasn’t marketed well by traditional publishing or it is was rejected or they try to downsize your contract or whatever else, you had options. Especially when self publishing began. You had lots of options. But if things go this way…you won’t. There is no way you can switch to someone else who offers better royalty rates. Amazon will be the only royalty rate. You might not even have a contract with them that guarantees a certain royalty rate for the life of the book or for your next three books.
They want to switch, they can do it with a click of their fingers. They want to remove your book: done. Nothing you can do about it. Think it was bad before when trad publishing didn’t bother or couldn’t get you a nice print run into stores? Wait and see what it’s like when this is the end game. Wait and see what it’s like when every single book in the slush pile is published and no one can see a thing anywhere apart from the stuff Amazon wants you to see.
We are so screwed, and the scariest thing is: almost no one seems able to see it. You bring stuff like this up, even the most previously reasonable people think you’re envious or elitist or anti-self publishing or old fashioned or just trying to rain on everyone’s parade or scaremongering. It’s like watching everyone gorge on a feast, excited to get the kind of food they’ve always wanted, while behind them Amazon locks the doors. People don’t even realize the doors might be there! They think self-publishing = something I am doing on my own free of publisher oppression. They barely see Amazon in the equation.
And if you think I’m crazy, just stop for a second and consider how you would view all of this if it was one of the Big Five doing it instead of Amazon. If HarperCollins slowly maneuvered themselves into a position where they hold all the cards, don’t have to contract, don’t have to promise anything, don’t have to do any work, don’t have to worry about the competition, can charge what they want, can do what they want…does that sound as good?
I know I am in the minority, but I rarely buy books from Amazon. I only get the freebies there if they are unavailable anywhere else. And I refuse to buy KDP Select books (or whatever it is called when the book is only for sale at Amazon). There are some authors who have made their backlists available only at Amazon, but I won’t be getting these titles until I can buy them at Kobo, ARe, or even B&N. Being that I am in the minority it obviously doesn’t matter to the authors who use Amazon only.
I have my Sony650 which I still love and read a lot of my Nexus 7 via the Mantano app and Calibre Companion. But even though I know how to buy books at Amazon and convert them to ePub I don’t want to.
I will miss the Sony store. It never screwed up the formatting of its books the way some Kobo books are. Thankfully, Kobo stopped doing that and so I will continue to shop primarily at Kobo. I love their coupons. And their customer service has been good the past year or so on the rare times I’ve had to use it.
Amazon is only really valuable for ease of access and discoverability, not necessarily in the order. I know very few authors who offer their books for sale from their websites. I don’t have to depend on Amazon to make my books available for sale, but Amazon makes it so I, Author, don’t have to try to shout any louder than I already do, and so I, Reader, don’t have to go all over creation to find each author’s shopping cart.
That said, if each author actually had a shopping cart (no, it’s not complicated), and linked to that directly, it might train consumers to buy direct instead.
But whether it does or not, having the option to sell from your own website is valuable.
As to Apple: I resent like hell that you have to have a Mac (or Hackintosh, in my case) to publish in the iBooks store (independent of Smashwords and/or ARe). If that’s treating authors well, I’ll take Amazon on their worst day. I have zero respect for Apple at this point, and I wasn’t starting out with much to begin with.
I’m in total agreement that there are dangerous waters ahead if Amazon is allowed to dominate ebooks —
Look at the history of Amazon’s behavior — tightening the screws on its weaker suppliers and, for example, delisting all of a major publisher’s books (print and ebooks) when the publisher balked at some new business terms.
I can foresee lower royalties, demands of exclusivity (for example, in many of the new stores for each country, you MUST be a KDP exclusive to get the 70% royalty rate regardless of price), forced co-op to get placement on the site or show up in search rankings (just as major publishers now are forced to pay marketing “tribute” to Amazon).
Amazon has dominated by serving readers well…and for the time being at least, serving author’s well. If they continue to serve author’s well, everyone wins.
But one of the reason’s Amazon dominates is simply be being better than the competition. B&N’s Nook site is just a trainwreck, Kobo’s is not much better. All of them require their proprietary apps.
Readers and authors have the chance to encourage other retailers — personally, I adore Smashwords, WeightlessBooks and DriveThruFiction.
I know Smashwords gets a lot of static for its “meatgrinder,” but as a reader, I LOVE the fact that I can just buy a book and directly download it to my PC or other device, in any format, with no need for a proprietary app, no DRM, no hassles.
Gumroad.com has perhaps the easiest system if you want to sell books direct — and they do hosting and fulfillment so selling through them is as simple as getting a link (or using a link shortener service).
One major issue is that readers, authors and websites will need to start directing readers to these alternatives.
Amazon dominates the U,S. market for electronic books currently, even moreso the UK IMHO, but they by no means dominate the market for devices. Kindle went from ~90% of all handhelds sold in 2008 to 6% in 2013. And that figure is still dropping following a disastrous marketing scheme over the Christmas holiday.
More interestingly, on non-Amazon devices, the Kindle reader app has become crippleware, making it extremely difficult to load content from other sources. That may boost amazon’s sales in the short-term, but long run it means a lot of people are going to get used to the FBReader interface (or any of the other free reader apps that have had tens of millions of downloads in google play.)
I don’t want to denigrate the success of self-publishers with Amazon, though of late a few have gotten so cultish you feel like you’ve stumbled upon the transcript of an Amway meeting, but their success via Amazon comes with a bit of an asterisk. We know that Amazon, by censoring, has shown itself perfectly willing to deny its customers what they do want in certain circumstances; it’s probable, in the wake of the John Locke debacle, that Amazon is also pushing out titles its customers don’t want.
The solution for publishers is not to rely on somewhat-disinterested middlemen like Google or Apple, it’s to sell directly to owners of the 94% of tablets that don’t run Amazon’s operating system. We’ve been talking about publishers selling direct for years, and it hasn’t really happened among the majors, but if you look at recent developments, like Dominique Raccah at Sourcebooks paying $10 mil. for a viable DTC platform, or what HarperCollins (easily the most technically proficient major) is up to, people are figuring out how they can survive and even thrive selling ebooks without the folks in Seattle.
Every mistake Amazon is making now was made previously by Sony and, for that matter, Gemstar.
I tried to avoid Amazon initially. I bought a CyBook Opus (which cost more than a Kindle) and I bought all my books from Fictionwise. Then agency pricing happened and almost all the books I wanted disappeared from Fictionwise, and then of course Fictionwise closed down and I pretty much lost hundreds of books because I can no longer their DRM for a new reader. So that left me with a choice: roll the dice on another small player or give in and start buying my eBooks from Amazon. I chose the latter. I still wish I felt like I had a viable option, but given the recent news, I just can’t see that I do.
@Mike Perry: Your comment was doing fine till you started casting Apple as the underdog with a heart of gold. Seriously?
stock price of Amazon today: $372.06
stock price of Apple today: $530.44
revenue of Amazon last year: $74,452,000 in thousands
revenue of Apple last year: $170,910,000 in thousands
source: http://finance.yahoo.com/q/is?s=AMZN&annual & http://finance.yahoo.com/q/is?s=AAPL&annual
It’s good to hear Apple treats you well, but it doesn’t treat everyone else well. It treats people like Amazon treats people: walking bags of money.
Yeah, there is. That paragraph is complete hogwash. Fact check: http://www.the-digital-reader.com/2013/07/06/revisionist-history-salon-amazons-evil-ebook-motives/
Also, why is it necessary to modify DOJ with Obama administration…?
Let’s not forget that this happened in 2012: http://www.thedominoproject.com/2012/02/who-decides.html Apple rejected an ebook because it contained links to Amazon. Apple eventually backed down due to outrage on the internet, but contemplate how differently history would have gone if this news stayed under the radar.
My point: criticize Amazon, but please criticize it without glorifying Apple in the process. It undermine your criticisms otherwise. Apple has as much things to be guilty of as Amazon.
Great post, Jane. I was looking at the most recent Pew report on reading and ebooks and two pieces of info struck me: (1) The number of people reading on tablets and smartphones is rising (especially tablets); and (2) readers who read on ereaders are power readers, more than tablet and smartphone readers. Oh, and (3) a lot of people seem to have received ereaders this past Christmas.
This good for ebook authors, but there are a couple of warning signs (required caveat that the subsamples in the Pew study are small). First, tablet readers (the fastest growing category) are more likely to be casual readers, and these are the people we want to convert into power readers but who have other forms of entertainment on the same device that they read from. Second, younger (under-30) people are reading, but the power readers come from the older end of the spectrum. If you want people to be reading ebooks in 10 and 20 years, the younger people have to be converted into power readers.
The rise of tablet/smartphone reading provides a great opening for competition to Amazon, in my opinion. Set up an app that doesn’t DRM the books and is truly cross-platform (i.e., iOS, Android, Windows phone and Blackberry) and offer the same syncing capabilities the Kindle & its apps do, and it could be very attractive. Basically it would be Fictionwise with a cross-platform app. Of course, this would require the Big5 and Harlequin to stop DRMing their books. I’m not holding my breath.
@Isobel Carr: I did the same thing. Started with a Palm PDA and then bought a Sony as my first dedicated ereader. I avoided Amazon as much as possible. But we are now a Kindle family. I vastly preferred the Nook Glow but the store sucked and the books were always expensive.
I managed to convert all my DRM’d Fictionwise and (Palm) eReader Store books and didn’t lose any, but it took quite a while, and that was despite the fact that I had converted over half of them before the announcement of the store shutdown.
We are a multi device household, I have ithings, my husband has android. We both have kindles and there have been other e readers. As somene who doesn’t live in the US, none of the other ebook stores seem particularly competent either.
We buy from baen and sourcebooks but the vast majority of purchases come from the US kindle store ( because in the Aussie one amazon is maintaining the status quo pricing )
I would like options but the publishing industry failed to pay attention to the lessons that the music and film industry offered.
“Of course, this would require the Big5 and Harlequin to stop DRMing their books. I’m not holding my breath. ”
I live in Poland and the funny thing is, Polish ebooks are predominantly DRM free… because of Amazon. You see, the ebook market here was a regular ‘Adobe DRM is the king’ type of market, but then it turned out that Kindle is the most popular ereader among Polish readers and that despite the fact that there was no Polish branch of Amazon. Add to that the fear that such a branch might actually open and trample local competition and… somehow, slowly, most ebooks stores replaced Adobe DRM with a hassle free watermark on their epubs and mobis, plus in some stores you can use a send-to-kindle function, so there’s no need to sideload books via USB (I think ARe has this function now as well).
If American publishers and bookstores are so afraid of Amazon, I really don’t get why they don’t go the DRM free route. It is possible. I’ve seen it happen.
@Expy: Oooh, I’m so glad I’m not the only one whose hackles rose at the Preaching of the Gospel of Apple.
@reader: I have wondered that (quietly and aloud) for years. The easiest way to stop Amazon having dominance is to break the link between their devices and their books. Anyone can sell a mobi (or azw) format book. I don’t get why more publishers and bookstores don’t do this as a matter of course.
For instance, I buy quite a lot of Mills and Boon books. They sell them on their website a month before they are available on Amazon. But because they only sell pdf and epub, I mostly wait for the books to come up on Amazon and buy them there because it’s easy. If they had the mobi format available, I’d buy direct from them. Occasionally I still do, but then I have to faff about stripping DRM and converting before I can upload the book to the kindle, so mostly I don’t bother.
I agree that publishers would benefit immensely from selling direct. The problems are:
1) Marketing — they have to get the readers to their sites and that takes some work. It can be done, obviously, but a lot of big publishers just don’t seem to get it.
2) They have to lose their infatuation with DRM. Nobody but nobody is going to put up with Adobe or any other DRM scheme in addition to the inconvenience of not being able to buy everything at one store.
Readers who are comfortably inside the Amazon eco-system generally don’t notice or even know about DRM…but once you try to get readers to try an alternate avenue, you need to make it as seamless and easy as possible for them to support you.
If they simply don’t offer books on Amazon (and try to force readers to go to B&N, Kobo or Apple), that will only lead to increased piracy and a huge backlash.
I think the only way to win this game is to offer direct downloads that are DRM-free. And that, I think, is something the big publishers, for the most part, will never accept until it is too late.
Smaller publishers like Baen, Angry Robot and Tor have already proven that selling direct and DRM-free can work really well. Lots of the boutique publishers like Prime, Solaris, etc. sell through Weightless and other DRM-free stores, apparently with some success.
Charlie Stross did an excellent piece on this issue a while ago:
I think the “social DRM” (watermarks) are a solution that most reasonable people would accept without any outrage. I see a lot of hue and cry about it on a few message boards, but I think most readers would accept it…and it does allow publishers to track down who shared/pirated a book.
The problem with Epubs is that since you can crack them open after changing the extension to .zip, it seems like it would be trivially easy to remove a watermark from an Epub file for someone who was committed to do so.
Harlequin’s insistence on DRM surprises me, because isn’t Carina Press DRM free?
Btw, while there’s no Polish branch of Amazon, there’s certainly a Polish branch of Harlequin and you can buy their books DRM free… Here’s an example, Liz Fielding’s “A Wedding at Leopard Tree Lodge”:
As you can see, there are epub and mobi versions available. So again, it really is possible :/
@reader: Now that you mention it, I think Harlequin issued their books in different formats when they first started selling ebooks back in the mid-2000s. I think I accidentally bought the wrong version once or twice. Eventually they switched to ePub only.
I agree that they *could* do this, and it’s great that they have where you buy books. It’s totally up to them and it’s nice to have it reiterated that it’s a choice, not a necessity for these publishers.
The DRM issue is often one of author services. There are many authors who believe DRM reduces piracy and there are self published authors who turn it “on” when given the option.
Amazon’s dominance will be broken when some other company offers better/cheaper/easier service. It’s that simple. Consumers don’t usually become attached to stores like sports teams. I don’t know anyone wearing Amazon shirts like team jerseys but I know a ton of people who buy from them because they are the easiest, most reliable with excellent customer service and good prices.
It’s a cyclical dog eat dog world. Not many years ago Borders Books and B&N helped drive pretty much every other bookstore chain and independent book store out of business, at least in my state. I watched the demise of Lauriat’s books and all their derivatives, Paperback booksmiths and Waldenbooks plus scads of smaller independent stores including romance and mystery specific stores.
Perhaps technology will change again the way it did ending the Blockbuster chain and Amazon will be driven out by the book versions of Netflix and Redbox. Who can say? I, like most consumers will make the smartest choice for myself based on price and convenience.
Funny thing is, back in ’08 the Pendergrasts were saying the same thing. People were dumping Kindles in favor of the iPhone.
Of course, nowadays Kindles are a bit more mature, and the Kindle iPhone app is no longer permitted to act as a catalog, too.
I must admit, I’m bemused by all the hate Amazon gets. Seems like people hate them because they’re so damned successful.
The weird thing is, this is kind of like a David and Goliath story. And Amazon is David. I mean, how much bigger is Apple’s market cap than Amazon’s? A quick Google turns up: Amazon, 170.87 billion dollars; Apple, 473.39 billion dollars.
Do you really think, if Apple gave a rip, they couldn’t run Amazon into the ground using Amazon’s exact same strategy thanks to their superior monetization? If Apple started its own bookstore, and extended its platform to non-Apple devices, don’t you think they have the money to run Amazon into the ground?
But they don’t want to. That’s not Apple’s strategy. Apple’s all about the hardware. Everything they do is secondary to that consideration. They don’t want their e-books available on non-Apple platforms. They don’t even want self-publishers who don’t have Apple computers to make their e-books on. Yeah, fine, Apple, whatever. Plug your fancy, overpriced hardware…while Android does a Windows on you all over again.
The funny thing is, before Agency Pricing, I didn’t give a damn about buying e-books from Amazon. I bought them from Fictionwise, because I was a member of their Buywise discount club. But agency pricing killed Buywise, and subsequently effectively killed Fictionwise. Which turned my attention to how nice Amazon’s prices were (and how crackable their DRM was).
The sad thing is, the publishers don’t really want to compete with Amazon. If they did, they’d open competing stores to sell their own e-books low priced and DRM-free. (Kind of like, say, Baen does?) I mean, if they cut out the half of the price that they’re willing to cede to Amazon in wholesale, they could undercut or at least approach Amazon’s prices easily. If they dropped DRM (like the music labels did when they wanted Amazon to undercut Apple’s monopoly on music…oh, the irony is palpable), there wouldn’t be any worry about platform compatibility. (And it’s not like the DRM is doing anything except locking people into their stores anyway. Calibre and Uncle Alf can crack it with no problem. Pirates can share anything they buy.)
When you get right down to it, Amazon made a great e-reader, they made reading apps available for every platform so you didn’t have to pay $400 for an e-reader to take advantage, and then they sold e-books at a great (and perfectly legal!) price. Maybe the publishers didn’t like their loss leaders, but I’m pretty sure they knew damned good and well they were perfectly legal. If they thought Amazon was breaking the law, they could have told the DoJ. (Just as Amazon told the DoJ when they broke it.) Amazon didn’t break the law…they didn’t have to. They just made their platform irresistible.
Apple’s response? Make a great e-reader, limit their e-reading app specifically to that platform only, then illegally conspire with the publishers to make everyone raise their prices. Yeah, that’s going to work.
I suppose you could say that the publishers’ problem was that they strictly concerned themselves with how to sell to bookstores, assuming that a bookstore was a bookstore and they would all have a more or less equal share of the customers’ hearts and minds. Then Amazon figured out how to win more of the customers’ hearts and minds…and the publishers had no idea how to react.
Whether you like it or not, most consumers are happy with Amazon. You can’t change that. Amazon’s done too good a job of wooing them. It’s a fact of life, and they like their savings enough that they’re likely to see any attack on Amazon as an attack against them. If the publishers are going to win consumers back, they’re going to need to do it with a carrot, not a stick. Honey, not vinegar.
But it may already be too late for that.
Yes, this. Exactly this.
I was unaware of this. People with Amazon Prime can borrow a small number of books (IIRC, one) per month. But they are not obliged to leave reviews in return. I don’t know any other means by which one can borrow books from Amazon. (You can lend books you’ve paid for to friends, IF the publisher allows it, but that’s not the same thing.)
However, it sounds like a good deal. Can you point out where to sign up for it on Amazon’s website?
Amazon Prime borrows do not count as sales (they are compensated, but not at the sale price) and you can’t borrow a book which has not been published, so I’m not sure how this works. Can you explain further?
I’m sorry, my quotes got et. The first and third paragraphs of that post are quotations from the article.
Argh. First and FOURTH.
“It allows additional free downloads of books (referred to as borrows) of its books in exchange for reviews.”
No. It does not.
Borrows are allowed on books that AUTHORS put in KDP Select and no review is asked for or required. If you know this little about how Amazon works, I can safely dismiss everything you say.
In Canada (or at least my part of Canada) our libraries only have epub and pdf format for books and they don’t support kindles. That’s what helped me make the decision to buy a Sony e-reader (which I love!). I can’t afford to buy all my books and I use the library alot. However, like many, I buy amazon books and convert them in Calibre (using the drm removal tool, thanks Jane!). I probably would buy them from itunes if I could get them on my e-reader, but with most of them having a non-removable drm, that’s a no-go for me since I don’t like to read on my ipod. The last few times that I’ve bought books at Kobo there has been a problem with them – no download button, or wrong content and I’ve ended up having to contact customer service and return them, then gone to Amazon to buy the book after all. So Amazon is my major source for purchased books “sigh”.
@J. R. Tomlin: Actually it does. It’s called Amazon’s First Look program and it’s designed to allow extra borrows to Kindle device owners who ordinarily can only have one borrow through the Kindle Owner’s Lending Library. It is used to promote Amazon published titles and not self publishing titles.
But feel free to disregard anything I’ve said. It doesn’t hurt my feelings at all.
Oops, sorry, it’s called Kindle First –> http://www.amazon.com/gp/digital/kindle/botm
Choose one of the four Editors’ Picks today for $1.99. Or join Prime and get it for FREE.
There is another program that you can review a book and then get another code for a free download. I’d have to search through my emails to find that.
@Marc Cabot: In the Amazon rankings, a borrow is considered a sale and moves a book up/down the lists. So if you have 100 borrows and 0 sales, Amazon considers that a “sale” for the purposes of the algorithm. Authors have reported that their ranking gets lower with borrows even if they have few sales.
@Chris Meadows: That was definitely true once, but the gap has narrowed considerably. Back in the old days, when hardware WAS everything, anyone could write programs for Macs. Now iTunes and the iOS ecosystem are huge parts of Apple’s revenue and probably the only parts that are still growing at a fast clip. Almost all developers go through the iTunes and/or App stores. This article has some older facts and figures, and remember that the iPhone sales’ rate of growth has slowed somewhat since then.
I wrote about Apple’s reasons for going to a walled garden a couple of years ago. This isn’t new news.
My household has multiple Kindles, I’m an Amazon Prime member, I buy all my mp3s from Amazon, and I’ve owned Apple computers for about 15 years. I’ve also owned iPods since the first (2001) version. This isn’t about emotions like hatred. It’s about understanding market decisions.
Thought-provoking indeed. I use an iPad for most of my reading, and I use the Kindle store as well as Scribd to read ebooks. I’ve bought ebooks from my local indie store before, but it feels a little unnatural.
What do you think about ebook subscription services? Do you think they will disrupt the ereading economy for the better?
This is a great analysis of the situation, and I completely agree with your conclusion. Wherever there is a monopoly, people lose out, in this case it will be authors, and possibly readers.
I have to admit, I am rather disappointed that Apple hasn’t upped their game and really tried to expand their ebook market share to compete against Amazon. It might have something to do with the legal issues surrounding their deals with publishers, but I feel if they really improved their store layout, search function, and backend for authors they could have a good shot at being one of the big players, probably rivalling Kobo for #2.
With that said, Kobo is a great company, but I can understand their troubles in the US. There were already more established ereaders, offered by more well-known companies, when they entered the market, and they had no big retailer support, whereas in many of the international markets where they’ve gained a substantial following they were partnered with a major bookstore chain and arrived before the Kindle was available.
While it would reduce the number of ebook sellers, it might be smart for Nook to cut its losses and try to make a deal with Kobo instead of trying to push their own solution that only really has a small following in the US.
It seems to me that the way forward is a complete change in the publishing industry. It will be slower to come given Amazon’s dominance, but the trad publishers have shown little ability or interest in changing with the times.
I’d think that some creative endeavors, like perhaps editors having shops within an e-bookstore, for a commission would help discovery. I’d pay 10% for someone to read the slush pile and guarantee me a decent read. My guess is if they were good at it, they’d earn more than their current salaries.
While I think this article is fair and accurate, I get annoyed at Big, Bad Amazon rants, such as some of the commenters. I have a Kindle because it was the best option and I just spent a weekend trying to buy books from B&N and, frankly, the experience left me swearing.
As for showrooming, if B&N didn’t have a book, they’d offer to order it for me and I could pick it up at the store in 2 weeks, but I knew, I’d have it within one, to my doorstep from Amazon. Guess what I did?
I don’t know about Poland, but the Kindle is popular in Russia because “Books for the Kindle are free.” Few Russians have heard of Amazon and no one sells Kindle DRMd Russian books. I know people are going to moan about piracy, but the real problem in Russia is that the technology comes, is embraced, but no one’s set up a legal market and dealt with all the trademarks, copyrights, and patents deals that involves, so black markets spring up. Russians have had iPhones and MP3 players for years, but only now are there serious talks about how to sell music legally (aside from a few ventures, which often have selection limited to the top US hits and sometimes no Russian music.)
“It allows additional free downloads of books (referred to as borrows) of its books in exchange for reviews.”
This statement is untrue. “Borrows” are only available to Amazon Prime members, and then only at the rate of one a month. I have never, ever been encouraged to write a review as a result of a borrow. Yes, there is a message at the end of the book asking me to write a review, but it is that way for ALL books, not just borrows.
@Jane: I’m not sure the self-published authors who are turning on DRM are all doing it by *choice*. Most of the uploading interfaces set DRM *on* by default, which means you have to deliberately choose not to have it if you don’t want it. I accidentally DRM’d my permafree book on Amazon thanks to this behavior, and there’s no way to unDRM it there except by unpublishing it altogether and starting over.
I’d bet many, many self-published authors don’t even really understand what DRM is, and hence, because it’s the default setting, they simply assume it’s the “right” one.
@Paris Marx: I don’t think Apple’s really interested in competing against Amazon. It saw the iBooks store as a way to make iPads more attractive, and colluded with the publishers as a way to make it so they wouldn’t have to compete with Amazon on price. Anyway, the iPad’s got plenty of other applications to make it an attractive purchase, including the iOS Kindle app, so it’s not like it’s a huge priority for them.
If they really cared about selling e-books, they’ve had literally years in which they could have released e-book reading apps for other platforms. They’ve got Quicktime and iTunes for Windows, but no iBooks for Windows. And as previous commentors have noted, you can’t even self-publish through iBooks without an OS X computer.
Many thanks. Interesting and to the point.
Total Boox has created a true alternative to Amazon, with a very favorable value proposition. There is no charge to downloading books, readers can download books and build their libraries at no cost, and eventually pay only for the portions they actually read.
Its very tough to beat Amazon at its own game. But coming with an alternative approach, and providing a service that encompasses all the advantages afforded by the digital space – may work.
It’s never good to have a monopoly, but the simple fact is that Amazon’s competition has been inept. Amazon has not really done anything evil. They invest in cutting-edge technology and dominate the ecommerce space–but not because they are doing anything underhanded. They actually seem to do research and figure out what their customers want–and deliver again and again.
That’s why I don’t really get the cries of “Oh, Amazon is evil!” (Just as background, I’ve worked with a division of Amazon in my day job, and while I wouldn’t want to work there, those people do not mess around. They know what they are supposed to deliver, and by God, they will deliver.)
Publishing, on the other hand, is completely clueless about technology or data, and is floundering (or foundering, as the case may be) around, while whining that Amazon is unfair and mean. Technology doesn’t even seem to be on its radar, and don’t even get me started on the fact that the books published through traditional publishing don’t tend to be representative of what the US (or world) looks like today.
I think alternatives to Amazon will pop up, although they will probably never be as big. But publishing has no one to blame but itself. Apple is the best positioned to do something (despite having a tiny market share), but they don’t seem to be motivated. Perhaps something will spring up in the Android universe? We’ll see.
People are forgetting why the latecomer Kindle triumphed over the early entrant Sony Reader. The kindle wasn’t just a device, it was a *service*. Click, buy, BOOM! On your device. No futzing around with cables or a scary PC. Now tablets and phones can generally do that too. But the thing is, Kindle buyers use the Kindle *app*, so it’s still basically a service. You know where your book will wind up: the Kindle app. With ePub, where does the book wind up? You can gripe about how poor the Kindle app is, but the general public doesn’t want to have to hop from reading app to reading app as they leapfrog one another with “better” features. Also, remember: Kindle is a *service*. Your books are always in your Cloud Library. That’s ONE Cloud library. Who wants to have to recall what Cloud PUBLISHER LIBRARY your purchased eBook resides in? As far as most people are concerned, The Da Vinci code was “published” by Dan Brown. There’s much more to solving this puzzle of liberating readers from Amazon than meets the eye.
Good news! At Left Coast Crime 2014 this past weekend, I asked Christine Munroe of Kobo Writing Life about the statement & link in this post that Kobo is pulling out of the US market. NOT TRUE! On the contrary, Kobo continues to compete aggressively with Amazon & also, particularly, to support US independent bookstores. If you sign up for a Kobo account at your favorite local bookshop, every e-book you buy counts as a purchase from that store.
So don’t support Amazon by spreading this rumor any further — & rebut it wherever you find it!
@Olympia Press: OK, I’m just being nosy, but what happened with Kindles at Christmas? And what has Amazon done in the form of censorship? I haven’t read anything about that, but then again I didn’t even think to look.
You should revisit or update this article. B&N is clearly still relevant and NOOK appears to play a major role in the future of digital. Check it out: http://www.engadget.com/2014/06/05/barnes-and-noble-teams-up-with-samsung-for-its-newest-nook-tablet/