Dispatches from the Digital Revolution

What’s next, Amazon?

In light of the DOJ lawsuit against five major publishers and Apple, Amazon has been granted a huge win (and they know it.) We already know low ebook prices are here to stay. What else is next for the e-tailer giant?

Amazon has long been villainized as traditional publishing’s greatest opponent, but the company’s “evil” status was raised to a whole new level when they landed Larry Kirshbaum (whom the Businessweek article aptly named “Amazon’s hit man.”) Booksellers, authors, and readers collectively looked to Barnes & Noble as the potential hero that would save the industry from Amazon CEO Jeff Bezos’ grasp.

But as we all know, the battle is far from over. And with the publishing industry currently inside out thanks to the legal troubles over the agency model, Amazon has seized this opportunity to reposition itself not as villain, but as ally to independent authors.

In his letter to shareholders released on April 13, Bezos emphasizes the success of Amazon Web Services by letting a few of Amazon’s satisfied clients do the talking. (Note that the included link will take you to the downloadable PDF available on Amazon’s Investor Relations page.) The overall goal is clear: Bezos aims to show that traditional publishing channels are a superfluous and prohibitive step in the authoring process. Here are a few of the comments (bold emphasis is mine):

“Because of Kindle Direct Publishing, I earn more royalties in one month than I ever did in a year of writing for a traditional house. I have gone from worrying about if I will be able to pay the bills—and there were many months when I couldn’t—to finally having real savings, even thinking about a vacation; something I haven’t done in years… Amazon has allowed me to really spread my wings. Prior, I was boxed into a genre, yet I had all of these other books I wanted to write. Now I can do just that. I manage my career. I feel as if I finally have a partner in Amazon. They understand this business and have changed the face of publishing for the good of the writer and the reader, putting choices back into our hands.” That’s A. K. Alexander, author of Daddy’s Home, one of the top 100 best-selling Kindle books in March.

This featured blurb calls attention to substantially higher royalties and the flexibility to write whatever in whichever genre the author chooses. But wait, there’s more.

“The ability to write full time, to be home with my family, and to write exactly what I want without the input of a legacy publisher marketing committee wanting to have a say in every detail of my writing, has made me a stronger writer, a more prolific writer, and most importantly a far happier one…. Amazon and KDP are literally enabling creativity in the publishing world and giving writers like me a shot at their dream, and for that I am forever grateful.” That’s Blake Crouch, author of several thrillers, including the Kindle best seller Run.

Ouch. And how about this one?

“I leveraged KDP’s technology to blow through all the traditional gatekeepers. Can you imagine how that feels, after struggling so hard, for so long, for every … single … reader? Now, inspirational fiction lovers I never would have reached are enjoying Nobody and my other two novels from the Kindle Store at $2.99. I’ve always wanted to write a Cinderella story. Now I have. And, thanks to Prince Charming (KDP), there will be more to come…” Creston Mapes is the author of the Kindle best seller Nobody.

After highlighting these blurbs (and others), Bezos points out that even well-intentioned publishers can slow innovation. Then he brings out the numbers, sure to tug at the heartstrings of any hungry writer:

Authors who use KDP get to keep their copyrights, keep their derivative rights, get to publish on their schedule—a typical delay in traditional publishing can be a year or more from the time the book is finished—and … saving the best for last … KDP authors can get paid royalties of 70%. The largest traditional publishers pay royalties of only 17.5% on ebooks (they pay 25% of 70% of the selling price which works out to be 17.5% of the selling price).

And there you have it.  Amazon is making a major appeal to authors, readers, shareholders, and anyone who will listen: they do not see themselves as the bad guys in this fight. Others, of course, would still disagree.

Now, I’ve read a lot of coverage on this lawsuit over the past week, and the scariest thing for me is the divided, yet equally passionate, response from readers. There are many commentators who waste no time in saying “get rid of publishers,” deeming them useless and outdated. But as Leah Thompson demonstrated in a previous post on Appazoogle, there is a lot that is misunderstood about the agency model, and I’m concerned that many are not listening to the full story. I don’t think anyone needs to be vanquished from the playing field, though I do agree that outdated legacy models need to change in order to address today’s rapidly changing environment. Amazon is creating a lot of disruption, but traditional publishing still has its place in this equation and can accomplish much that Amazon cannot.

And, as bullish as Amazon can seem, they’re still powerful partners, and publishers still need them to sell books. On the other side of things, despite what Bezos may lead you to believe in his letter, Amazon still needs publishers. Otherwise, they’d have limited books to sell.

For what it’s worth, I am not against the self-publishing model, which Bezos touts heavily in his letter. The numerous channels that exist today for writers is exciting and refreshing; I certainly agree that a traditional publishing contract many not be the best route for all writers. A lot of genre writers are taking advantage of these channels and do all of the heavy lifting themselves. I admire them for their hard work, and I’m glad that these options are becoming less stigmatized for those who are successful at it.

But remember, this letter from Amazon is still a carefully calculated hop on the chess board, and Amazon will continue to do what’s best for Amazon. (And as an aside, there’s still a lot of content-farming drivel slipping through the cracks and cluttering Amazon’s virtual shelves, prompting Fortune to nickname the company Spamazon. But who needs gatekeepers, right?)

I believe that publishing houses are more than just “middlemen,” which is an argument I’m hearing a lot of these days. When you go to see a movie, as a viewer, you’re not supposed to see all of the special effects, staging, and direction that took place behind the scenes. You’re supposed to suspend belief and enjoy the moment. And if you don’t, then someone didn’t do his or her job very well. I believe the same is true for publishing staff. Just because you don’t see it doesn’t mean it isn’t there.

But when it’s gone? People will notice.

One comment on “What’s next, Amazon?

  1. Pingback: Is publishing broken? « appazoogle

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This entry was posted on April 18, 2012 by in News, Opinion and tagged , , , .

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