Amazon’s POD grab draws ire of Authors Guild
Amazon, as we’ve noted, wants to be the Standard Oil of the book trade, whether it’s E, P or POD. Here’s a copy of a statement the Author Guild has just released.
Last week Amazon announced that it would be requiring that all books that it sells that are produced through on-demand means be printed by BookSurge, their in-house on-demand printer/publisher. Amazon pitched this as a customer service matter, a means for more speedily delivering print-on-demand books and allowing for the bundling of shipments with other items purchased at the same time from Amazon. It also put a bit of environmental spin on the move, claiming less transportation fuel is used (this is unlikely, but that’s another story) when all items are shipped directly from Amazon.
We, and many others, think something else is afoot. Ingram Industries’ Lightning Source is currently the dominant printer for on-demand titles, and appears to be quite efficient at its task. They ship on-demand titles shortly after they are ordered through Amazon directly to the customer. It’s a nice business for Ingram, since they get a percentage of the sales and a printing fee for every on-demand book they ship. Amazon would be foolish not to covet that business.
What’s the rub? Once Amazon owns the supply chain, it has effective control of much of the “long tail” of publishing — the enormous number of titles that sell in low volumes but which, in aggregate, make a lot of money for the aggregator. Since Amazon has a firm grip on the retailing of these books (it’s uneconomic for physical book stores to stock many of these titles), owning the supply chain would allow it to easily increase its profit margins on these books: it need only insist on buying at a deeper discount — or it can choose to charge more for its printing of the books — to increase its profits. Most publishers could do little but grumble and comply.
We suspect this maneuver by Amazon is far more about profit margin than it is about customer service or fossil fuels. The potential big losers (other than Ingram) if Amazon does impose greater discounts on the industry, are authors — since many are paid for on-demand sales based on the publisher’s gross revenues — and publishers.
We’re reviewing the antitrust and other legal implications of Amazon’s bold move. If you have any information on this matter that you think could be helpful to us, please call us at (212) 563-5904 and ask for the legal services department, or send an e-mail to [ mailto: staff@authorsguild.org?subject=RE: Request for Information: Amazon Moves to Seize the Long Tail ]legalservices@authorsguild.org.
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Copyright 2008, The Authors Guild. The Authors Guild is the nation’s largest society of published book authors.
April 12th, 2008 at 5:30 am
Something that I meant to ask before, but forgot in all the uproar over Amazon’s heavy-handed tactics.
I understand that it is typical for the book-seller (like Amazon) to get a 55% discount off of the list price of a book. So, assuming that the book sells for list price, the book-seller makes a nice 55% profit. Why is it that the entity that only sells the book makes more profit than the author, the publisher, or anyone else? Afterall, the author worked on that book for many weeks, months or years. The publisher may have spent considerable time and money in the editing and production of the book. The seller spent a few minutes making the sale. Does this sound upside down to anyone else?
I’m sure there is some crazy historical reason for this practice, but even if that reason was valid long ago, it is still valid?