Friday, June 25, 2010

Amazon As Producer - Repost

Originally posted May 14, 2009

Amazon sells a lot of books but like any retailer they want to sell more. Reliance on publishers to produce the right books, or support the books in the right way, is so old school, and Amazon has determined that in some cases they can do a better job than a traditional publisher. From their press release:
AmazonEncore is a new program whereby Amazon uses information such as customer reviews on Amazon websites to identify exceptional, overlooked books and authors that show potential for greater sales. Amazon then partners with the authors to re-introduce their books to readers through marketing support and distribution into multiple channels and formats, such as the Amazon Books Store, Amazon Kindle Store, Audible.com, and national and independent bookstores via third-party wholesalers. This summer "Legacy" will be revised by the author and re-issued as an AmazonEncore edition in print on Amazon websites around the world, in physical bookstores, as a digital download from the Kindle Store in less than 60 seconds, and via spoken-word audio download on Audible.com.
It was really only a matter of time before Amazon entered the acquisitions segment of the publishing value chain and they follow Barnes & Noble and Borders in this respect, but the danger (or opportunity) in the Amazon case is more acute given their market power. Amazon is likely to go about this program in a far more aggressive manner than the other retailers, and the strategy looks like another element of their 'platform' play. Soon it may be the case where traditional book content - once 'generic' in terms of its' availability in all retail outlets - becomes somehow proprietary on the Kindle, in audio and perhaps in print. Amazon has such retail selling power that any publisher selected into the Encore program would have few qualms agreeing to an 'exclusive' sales arrangement. 'Exclusive' since few non-Amazon retailers would be likely to carry the title.

The self-publishing market has long seemed to me to be one of the best things that has happened to the acquisitions editor. The market represents a test bed of potential new authors and book projects. While the number of winners is always going to be small, the work of sifting through this material, which historically would have been done by reading the stacks of manuscript submissions, now takes place in the minor leagues of publishing. Here, there is a ready market of readers and reviewers who en mass can do the job of many AE's; but, Amazon is spoiling all the fun. With their superior data analysis capability, Amazon will be able to select these sleeper hits far in advance of any publisher and this Encore program will conspire to erode a publishers ability to source new books.

On the other hand, publishers will continue to publish authors who have not gone the self-publishing route and will not initially be available to Amazon. Many of these titles don't sell well even though they are good titles. Amazon are telling publishers that they are prepared to step in and help out if they determine that with a little more coaxing the title could indeed find an audience. The question will be on what terms this arrangement will be based.

Amazon as producer is a subtle but important change in the operations of the largest retailer. I often mull what would happen to some of the largest publishers if they lost their top two or three authors to Google or Amazon. It may be that the Amazon Encore program sets the stage for a much larger program by Amazon to establish their own publishing and media production operation - their content supply - that feeds their retail presence. There may be further ramifications from this seemingly innocuous press release.

4 comments:

Ted Hill said...

This reminds me of the progression BN went through with their own publishing operations. First buying in bulk to supply Marborough, their direct mail catalog. Then reprinting for Marborough. Once they started producing and ownining their own inventory, the rest was inevitable.

Anonymous said...

"Amazon has such retail selling power that any publisher selected into the Encore program would have few qualms agreeing to an 'exclusive' sales arrangement."

No. Not at all. I work at a major publishing company that recently passed on a project because it had a focus on Amazon that could lead to trouble getting that book placed in other retailers. Amazon is not big enough to make giving up the rest of the bookselling world a smart choice.

And no publisher of any reasonable size will be willing to sell a contract to Amazon; the point of this program is clearly to snap up self-published books that have potential. (And the major publishing houses already do that, of course.)

PersonaNonData said...

Anon, you are correct of course my point should have been qualified as you note. No one big would do this but to a small publisher or a self-publisher the offer maybe too good to refuse.

Julieta Lionetti said...

@Anonymous
How many big publishers are able to email the readers who follow one of their best-selling writers, not to say those who could like and buy the first novel of someone unknown?