Why the Lack of a Jeff Bezos Dooms Mainstream Publishing
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Alternatively, I suppose you could title this piece How Jeff Bezos Pwned Publishing. A few weeks ago, a number of mainstream publishers attended SXSW, a festival of music and media culture. SXSW is peopled with macbooks and iphones and music fans. SXSW started out as a musical festival and has grown to include seminars on new media. SXSW held a publishing panel called New Think for Old Publishers. The publishing panel did not go well as the panelists were idea bereft and turned the seminar into a mini focus group.
What struck me most out of the controvery that erupted wasn’t the lack of new think for old publishers but that the publishers were seeking new ideas outside it’s corporate structure. In other words, it doesn’t seem that there are forward thinking individuals at the helm of mainstream publishing. Jeff Bezos, on the other hand, is a long range, innovative planner. Say what you want about Amazon being an evil empire (and they are and can be) but Bezos is a visionary and he has created an internet retail empire in just over 15 years.
The following is the Bezos timeline (edited to exclude some acquisitions).
- 1994: Amazon opens its door.
- May 15, 1997: Amazon goes public.
- 1997: Amazon submits patent application entitled “A Method and System for Placing a Purchase Order Via a Communications Network.”
- April 1998: Bookpages.com. Largest online bookseller in Great Britain. Telebooks.com. Largest online bookseller in Germany. Internet Movie Database. Largest online resource for movies.
- August 4, 1998: Planet All: a web-based address book, calendar and reminder service and Junglee Corp, a web-based database technology that assists shoppers to find products for sale on the internet.
- April 1999: Bibliofind.com, Online servicing for finding used, rare and out of print books.
- September 28, 1999: Amazon granted “1-Click” patent which “describes an online system allowing customers to enter their credit card number and address information just once so that on follow up visits to the website all it takes is a single mouse-click to make a purchase from their website.”
- Fourth quarter 2001: Amazon shows first net profit.
- August 19, 2004: joyo.com.At the time of its acquisition, Joyo.com was the largest online retailer of books, music and videos in China. It became known as amazon.cn.
- Feb 2005: 43 Things. A website funded by Amazon that gathers information about consumers. Secretly (well, not so secretly as it is all over the Internet that Amazon funds this site).
- April 4, 2005: BookSurge LLC. Amazon buys a print on demand fulfillment company. Later, Amazon would prevent other POD books to be sold through Amazon’s online retail store. Booklocker has sued.
- April 16, 2005: Mobipocket. Mobipocket was (and might still be) one of the leading ebook formats out there. Amazon would later use the Mobipocket format as the platform for it’s own Kindle format to be used with its Kindle eink reading device.
- July 6, 2005: CustomFlix. Customflix is a DVD on demand production company.
- Fall 2006: Unbox. Amazon unveils its own movie/tv download center. Later partners with TIVO so TIVO users can download Amazon purchases using TIVO recorders.
- May 14, 2007: DPReview. The largest and most trusted review site for digital cameras.
- August 6, 2007: Amie Street: Amazon invests in small independent social music retailer.
- September 2007: Amazon MP3. Amazon opens its digital music store.
- October 16, 2007: TextPayMe. TextPayMe becomes Amazon payments. It was originally designed to allow payments to be sent and received through your mobile phone.
- December 7, 2007: Wikia. A wiki service for individuals, Wikia was created by wikipedia founder, Jimmy Wales. (Probably designed, like 43 Things, to obtain consumer information).
- January 17, 2008: Withoutabox: Indie film site for Amazon owned IMBD.com.
- February 4, 2008: LoveiFilm. Amazon becomes major shareholder in one of Europe’s largest online rental service for DVDs.
- June 24, 2008: Twitter. Bezos personally invests in Twitter.
- June 9, 2008: Fabric.com. (Crafty getting bigger? Amazon becomes one stop shopping for fabric, yarn, and other textiles)
- July 2008: An Social Gaming Network. Bezos invests in a company that produces casual games for social networking platforms like facebook. (He has also invested in Atomic Moguls, another startup company designed to bring casual gaming programs to social networks).
- October 21, 2008: Reflexive Entertainment. Reflexive is a “casusal games developer”
- January 31, 2008: Audible.com. Largest online retailer of digital audio books.
- August 24, 2008: Shelfari.com. Social networking for book readers.
- October 24, 2008: Oprah endorses the Kindle.
- December 2, 2008: AbeBooks.com. Largest online bookseller of used books. Also a 40% stakeholder in LibraryThing.com.
- Fiscal Year 2008: Amazon outsells all other major retailers in the books, music, DVDs area doing $5.35 billion for North America and $5.73 billion internationally.
In the 10 years since Amazon has gone public, it has become a retailing powerhouse in the publishing industry. Piece by piece, it has bought into or bought up companies that will advance its position primarily by buying people. It seems clear that Amazon believes in buying platforms where the people are.
Mainstream publishing is focused more on creating the market through one hit wonders. Mainstream publishing spends millions on trying to find the next Brown, Rowling, Meyer, or Roberts where as Amazon spends millions on getting the consumers to its webstore. This isn’t to say that I think that publishers should have acquired Fabric.com but it does make sense for them to have acquired companies and technologies for more vertical integration. To have invested in a company like Goodreads.com or a Librarything.com; to have invested in a the secondary book market; to have bought an ereading platform.
I believe Amazon is angling to become a publisher itself. It already has Booksurge, a print on demand fulfillment service. Through its acquisition of Booksurge, Amazon provides several tiers of self publishing services including editorial services.
In its second year, Amazon is participating in the Amazon literary search with Penguin called the Amazon Breakthrough Novel Award. While fronting the prize money, Amazon uses the editorial staff of Penguin and the readership of Amazon to sort through a slush pile, find the qualitative “Best” work, and then publish it. At this point, it doesn’t matter if Amazon is losing money on this promotion. It’s creating a brand for itself of being a publisher of great works.
Bezos made it onto Oprah with his Kindle. I wouldn’t be surprised if the next appearance he has is publisher of an Oprah Winfrey Book Pick. This would, of course, cement Amazon’s reputation as a publisher and open the door for Bezos to partner directly with authors to publish and distribute its books nationwide. It’s dabbled in exclusives such as the Stephen King Kindle only ebook. I doubt Bezos would be at all ruffled to see an Amazon published book at Borders or Barnes and Noble. Perhaps Amazon will test its market power by offering up Amazon print exclusives.
For authors, particularly those like King, Rowling and Roberts, the profits would have to be better than the deal that they are getting now with a publisher because one barrier between them and the customer paying the money is being removed. At some point, I believe that Amazon will be a premiere publishing, housing the biggest names in the industry who will share with Amazon some amount of the net profit from the sale of their books in excess of the current amount. Extrapolating this out further, every author becomes a POD author with some having a greater ability to pay for placement on Amazon’s internet retail store than others. Amazon laughs its way to the bank because it gets paid on both ends – from the author wanting to publish the book to the reader who pays for the end product.
Amazon is thinking about 2020. Mainstream publishing is thinking about how to survive 2009.