#ContactForm1 { display: none ! important; }

Thursday, March 28, 2013

Amazon Gobbles The Market

On one hand you have to admire Amazon's long term planning abilities. They went from being an online retailer who provide used video games and second hand geegaws to being a major market force. They sell everything from fondue to diapers, and now they own most of the publishing world.

It was a beautifully executed take over worthy of any black-hearted villain. It's a scam of monumental scope. Amazon is making money hand over fist and being paid for the privilege of destroying the publishing industry as it was.

Amazon first entered publishing with the used book and online retail stuff. Pretty normal. Nothing to fuss about. Sure, they made it easier to find used books but so does half.com, Ebay, and half a dozen other online retailers.

And then came the ebooks.

Oh, the ebook. The devilishly wonderful wicked witch of publishing. A book with almost no overhead. Publisher only need to pay an advance for an author, the editor, the cover artist, and the marketing team. There's no shipping charges, no store rooms full of books, no cost for paper, printers, or ink. It was beautiful!

And Amazon looked at that little ebook and money signs glowed in their greedy eyes. Why waste all that money on overhead? Why not make the down-on-their-luck authors do it themselves? Weren't those silly creative types always whining about the Gatekeepers? Yes, they were.

Amazon stepped in with the perfect solution for anyone shut out of Big 6 publishing: Self-publishing. For a modest fee Amazon would allow an author to publish their work on Amazon, say 30-70%? That's still more than you'll make with a Big 6 publishing deal.

The authors dove in happy as pigs in muck. We all did, never once questioning why we were paying Amazon a percentage at all. What service did Amazon offer? That's right, a well known web domain. Never mind that nearly every author publishing with Amazon has their own web domain. Never mind that any author could set it up so their books sell directly from an author-run website. No, we believed we needed Amazon.

Amazon ranks became more important than hitting the New York Time's list. After all, the NYT was for fuddy duddy lit authors and those who "sold out" or "violated their artist integrity" by working with a New York publishing house. It was the Amazon ranks that meant dollars in the self-published authors pocket.

Which kicked off phase two of Amazon's bid for world publishing domination: the cheap e-book.

Traditional publishing can't win a price war with Amazon because Amazon is spending $0 on publishing. There is no advance, editor, cover artist, or quality control of any kind. Big 6 needs to pay their editors, they don't pay much, but enough that the editors don't starve. Big 6 pays an author advance, usually it isn't huge but it's not nothing. Big 6 pays people to create unique art for their covers, print books, ship things... Amazon lets the authors do that.

And you know what? People like cheap books. People who shop at Amazon and have a free Kindle app on their phone don't mind paying 99cents for a random book from an unknown author. Sure, there's no guarantee that the book's been edited but who cares?

For a year Amazon was awash with Kindle Millionaires. Young authors ready to buy the dream flocked to self-publishing and happily offered their hard work for pennies. Big name authors ditched traditional publishing for the greener pastures of 70% royalties. Brick and mortar stores started closing. Champions of New Publishing sang dirges to the Gatekeepers.

And the market shifted.

Amazon used the greed of the authors to kill their competition.

All this time people wondered how Amazon could possibly make money with the affiliate programs, referrals, and free ebooks. What they didn't realize is that every penny paid to Amazon in royalties was pure profit. With no overhead Amazon could afford to undercut their competition until they bled and died. And once the competition was dead Amazon turned.

Suddenly self-published books weren't getting the same weight in the algorithms that picked bestsellers and recommended books to buyers. It's no coincidence that this move came as Big 6 publishers lost the right to set the price over their own books. Amazon owns that right. Amazon can price John Grisham novels at $1.99.

Then Amazon cut the affiliate program. Free ebooks no longer climbed in ranks. Authors were heart-broken and confused. Their champion had turned and was laughing at their stupidity. Why would Amazon continue to support the pitiful, unedited, unwanted authors rejected by the Big 6 when Amazon could now use the Big 6 names as it's free meal?

Now Amazon has bought GoodReads, the major review site for books and one of the few places where authors can review each other. Amazon doesn't allow authors to write reviews - a reaction to the scandal that revealed Kindle Millionaires were buying reviews  - and there's no promise that authors will be allowed to continue writing reviews on GoodReads.

Why buy GoodReads? Because now Amazon controls not only the price a book is sold out but who is allowed to sell, who is allowed to write, who is allowed to review, and which books are allowed to be seen by the buying public.

Amazon has used authors, readers, and their competition as pawns in a scheme to corner the market.

And you can bet dollars to milkshakes that Amazon is going to do everything within its power to ensure that books remain an overhead free commodity. They'll let authors write for free and continue to skim money right, left, and center.

If you want to fight back try finding a brick-and-mortar store and go buy your books there. Check out IndieBound (there's a big button on the left side of my page), buy your books from a real business not a monster.

1 comment: