Publishers: What are you doing while Amazon eats your lunch?

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Amazon started out as a book retailer, a company that was arguably a friend to book publishers, since it expanded the market for many of their books. But increasingly, the web giant is becoming a competitor to those traditional publishers, as the New York Times details in a recent article and as we have noted a number of times. Just as it did with book retailing, Amazon has its sights set on lowering the barriers between authors and readers, both via the Kindle and through its own publishing deals — and in many cases, the biggest barrier between authors and readers is a traditional publisher. Until that changes, Amazon will continue to win.

Although some are just beginning to see the company as a publishing competitor, Amazon has been marshalling its forces for some time now. As GigaOM Pro analyst Mike Wolf has described in a number of posts, the company has been putting together the pieces of a “book industry in a box” for the better part of a year — launching new imprints of its own for various different genres, including one devoted to popular thrillers. Then in May, it hired publishing-industry veteran Larry Kirshbaum, former CEO of the Time Warner Book Group, and opened a New York office.

In the months since then, Amazon has signed deals with a number of prominent authors, including one with popular writer Tim Ferriss, whose books — such as The 4-Hour Workweek and The 4-Hour Body — have sold millions of copies. The terms of the deal with Ferriss weren’t released, but the author said “The opportunity to partner with a technology company that is embracing publishing is very different than partnering with a publisher embracing technology.” Amazon also signed thriller writer Barry Eisler, who gained attention earlier this year when he turned down a $500,000 two-book deal with a traditional publishing house and said he planned to self-publish instead.

It’s not just about the money

Why are authors signing these kinds of deals? In some cases it could be about the money (a deal with former TV star Penny Marshall was reportedly for $800,000 according to the New York Times), but in many cases it seems to be mostly about getting past some of the legacy processes that are typical with traditional publishers, and expanding the potential market for a book. The core of the problem confronting the industry is summed up in a comment by Amazon executive Russell Grandinetii in the NYT piece, in which he says:

The only really necessary people in the publishing process now are the writer and reader. Everyone who stands between those two has both risk and opportunity.

If you look at the comments made by Barry Eisler about why he decided to take a deal with Amazon instead of self-publishing, he says virtually nothing about the money, or about other factors that traditional publishers are used to focusing on. It’s the other terms of the deal that he was swayed by: for example, the fact that Amazon was going to come out with an e-book version within a matter of days after the book was finished, and then follow that quickly with a paperback — and that both were going to be sold at a cheaper price, instead of the traditional industry’s approach of trying to charge print prices for electronic books.

What I care about is readers, because without readers I can’t make a living [and] I want people to read a lot. To that end, if I can find a way to get readers books that cost less and are delivered better and faster, I want that.

Just part of a wave of disruption

And as we’ve described before, Amazon signing deals to publish authors is just part of the bigger wave of disruption that is sweeping through the industry: self-publishing via the Kindle is becoming a larger and larger phenomenon, thanks in part to advocates such as JA Konrath and the kind of success that writers like Amanda Hocking have had by publishing their own books. Authors such as John Locke have shown that selling a million copies of a self-published book is not only possible but entirely feasible — and the fact that he and other writers who do so get to keep 70 percent of the proceeds is yet another wakeup call for the traditional industry.

And what kind of response have mainstream publishers had to all of this? Most have just continued to offer the old deals they are used to — deals that serve the publisher’s needs, but not necessarily those of the author. And in some cases, they have tried to punish authors who try to meet those needs themselves: the NYT piece describes how Hawaiian writer Kiana Davenport, who signed a book deal with Penguin last year, was threatened by the publisher after she packaged some of her short stories into a Kindle e-book. Penguin wanted all copies of the book removed from the internet; when the author refused, the publisher cancelled the deal and is now suing her for breach of contract.

Here’s a hint for book publishers: take a lesson from the music industry, and don’t spend all your time suing people for misusing what you believe is your content — think instead about why they are doing this, and what it says about how your business is changing, and then try to adapt to that. Amazon is giving authors what they want, and as long as it continues to do so, you will be at a disadvantage. Wake up and smell the disruption.

Post and thumbnail photos courtesy of Flickr users Umberto Salvagnin and Marcus Hansson

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