Monday, March 31, 2008

Amazon -- eBooks, POD & Killing the Competition

amazon logo If you have been paying attention, you probably figured out long ago that Amazon has a pretty simple business strategy:  to become the biggest and most complete publishing and books distribution company in the world. 

In the ideal Amazon world, an author can upload their completed manuscript to Amazon's digital content management system.  By doing so they grant Amazon the right to sell this content on demand as a physical object (hardback/paperback book)  or digital file (eBook or AudioBook).  They agree to let Amazon set price and margins in return for utilizing the biggest book distribution and marketing channel in the world.

Over the last 3 years Amazon has been very busy -- they have acquired Mobipocket for eBooks, BookSurge to print books and Audible for audio books. 

In the eBook world, they acquired Mobipocket and for months nothing happened.  Amazon continued to use Ingram's eBook service to sell eBooks in PDF, MS-Reader and Palm formats.  The Mobipocket site continued to live in it's own little world pretty much untouched by Amazon.  Same primitive website with no big changes.

Then one day in July, 2006 Amazon notified Ingram (who notified the rest of us) that  " has decided to discontinue its use of Ingram’s e-Book delivery services effective mid-July for new e-Book sales and the end of August for prior e-Book sales."  And poof -- the only way to buy eBooks on Amazon was to be redirected to the Mobi site. 

eBook authors and publishers were outraged and the blogosphere hummed with indignation and vague threats against Amazon.  But outrage only lasts a little while and soon authors and publishers got to work setting up their own sites, finding other eBook distributors and getting on with life.

Last week, Amazon turned it's sites on Print On Demand (POD) publishers.  These are the guys who print, bind and ship very small quantities of books.  POD is a strictly just in time system where the printing is done as needed on an order by order basis:  from one book to hundreds of books.

Very quietly they started to remove the Add to Shopping Cart Button with the See all Buying Options button on selected books.


Everything else is unchanged,  you sill see the cover, book information and both editorial and reader reviews.  Just no quick shipment or shipping discounts available;  you will have to find the book in the Amazon Marketplace. 

The selected books just happened to be books from a prominent POD publisher -- Publish America with over 30,000 titles listed on Amazon.  A day later Whiskey Creek Press was similarly turned off.  I suspect Lulu will be next.  

Evidently, Amazon has a new policy for writers -- if you want to publish your print on demand title and sell it directly on Amazon you must go through BookSurge. 

Predictably authors and POD publishers are outraged and the blogosphere is humming with indignation and vague threats against Amazon.  But outrage only lasts a little while and soon publishers will get to work and set up their own sites, find other distribution channels and get on with life.

Obviously, Jeff Bezos and the management team at Amazon believe that slashing and burning the competition is a viable business strategy.  In the short term they might even be right. 

Over the long term it looks less likely.  Slash and Burn techniques hurt both the general publishing/bookselling market and Amazon.  Amazon stands to loose the goodwill and cooperation of publishers, distributors, authors and a portion of the buying public.  And that will hurt over time.

History shows us that when you make enough people mad because you are a monolithic, monopolistic business eventually they fight back. The result is that the company is either weakened or seriously injured. 

The good news is that right now there are individuals and businesses out there who are highly motivated to develop new competitive strategies.  They are looking for new ideas and advantages and their focus is aimed directly at Amazon. Tags: ,,,,,

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