Friday, April 04, 2008

Victoria Strauss -- The Authors Guild on Amazon/BookSurge

I received this email from the Authors Guild today, with permission to re-post.

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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 an 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 they appear to be quite efficient at their 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 staff@authorsguild.org.

11 comments:

Diana Castilleja said...

All I have to say is thank GOD someone is looking into this. Whether they are in their legal rights or not (my opinion is my own that they aren't entirely) I do hope they realize the really bad judgement call they have made, forcing small press and authors to capitulate to this.

BuffySquirrel said...

Amazon force ebook sellers to use their proprietary format when selling through them. Is the Authors Guild looking into that? Or are ebook authors and publishers some kind of inferior species? No, on second thoughts, don't answer that.

paul maurice martin said...

Just read your two articles, which tie together the situation - LSI sent us an email that first advised us, and we've been trying to figure out what to do ever since.

We were all set to go, having received the first printed book from LSI to inspect, which was flawless. Now we're grappling with a situation that was break-even for us as it was - we didn't want to overprice the book and discourage readership.

We just can't afford to lose dollars per book by deep discounting.

As always, and along with, no doubt, a large and growing number of others, I appreciate your reliable, disinterested perspective. You're a wonderful presence on the web.

Anonymous said...

Illegal monopolization!
Please go get them and let them see authors and publishers can't be pushed around.

Victoria Strauss said...

And I appreciate someone who can use "disinterested" correctly. Sorry to be frivolous, but that's a pet peeve of mine, along with using "beg the question" to mean "beg that the question be asked."

I'm sorry for your dilemma, Paul. I wish there was an easy answer--but again, I really don't think Amazon will back away from this, and while I'm glad the Authors Guild is looking into the situation, I doubt there's anything they can do. I'm reminded of the used book sales issue that produced a similar flurry of outrage a couple of years ago; the AG went head to head with Amazon on that one and couldn't get it to budge.

Victoria Strauss said...

The ASJA has issued a press release and member alert, posted on WritersWeekly.

Buried in the press release is this alarming statement:

In addition, Amazon is punishing publishers who sell their books at a discount from cover price directly on their publisher's websites. It is taking that discounted price as the book's "cover price" and then applying their own discounts accordingly.

Sounds as if it's a worldwide move, doesn't it? But so far, I've seen no reporting to indicate that this news (also reported by Angela Hoy with a link to an article in the UK's Publishing News) applies to publishers beyond the UK.

Consumer Advocate said...

Legal redress is great, but can take years. Think of how long it took to break up the Ma Bell monopoly. And now AT&T is scooping it all up again.

While a massive consumer protest against Amazon might help, it would have greater impact if a protest against the vendors doing business through them was launched, as well.

Let those vendors know what you think of Amazon's latest grab. And let them know that as long as they continue to use Amazon as a portal, you will do business elsewhere.

I suspect that if enough of their big vendors like Target start giving them grief about this, they might reconsider.

Kristi Holl said...

Oh I do hope someone can do something about this. I buy so much from Amazon, and I have a hard time believing they really need a bigger cut of anything. Just curious--does B & N online do this? Maybe everyone should make a switch!

Jill Elaine Hughes said...

The only folks who could get Amazon to budge would be the feds. The Federal Trade Commission would have to bring the antitrust charges, and only the feds would get Amazon's attention. I doubt the AG would have any clout in that regard. On the other hand, there are several members of Congress who are also members of the AG who might be able to put pressure on the feds.

On another note, anybody know why AbsoluteWrite's site is down?

michaelcapo said...

Are there any members of Congress who are PublishAmerica authors? ;-)

Anonymous said...

Hi Victoria, just finished my 3rd novel, have used Lulu for my last two, thinking about going with someone else. Do you or anyone else reading this recommened a publishing company? Lulu can not be contacted, EVER. But, they are the cheapest. They are printers, not publishers, lol. Anyways, been reading your articles and love them. Firefighter Tim Andrew, Naugatuck, Ct. my face book: Tim Andrew email: pilotfire@sbcglobal.net