Decrying the Evil Empire of publishing while piloting one of its battle cruisers?

Amazon, it appears, is the Death Star, the evil empire, that is devouring the publishing universe.  At least according to a lot of people who are publicly proclaiming it.  That makes Jeff Bezos the Emperor and, hmm, let’s pick Jon Fine, as Darth Vader, because he’s always out there at writers’ events representing Amazon.  Behind that long hair and charming smile, lies his true, twisted face.  We won’t even get into where he hides his light saber.

The recent Amazon purchase of Goodreads has rattled all these ‘rebels’ out of the encampments and have them polishing up their swords and powering up their own light sabers to . . .

Uh wait.  Actually, when you check, you find that most, if not all, of these people, whether they be authors or work for publishers, have books on Amazon for sale.  Huh?  Are they then not part of Amazon?  I mean, Amazon has to sell something.  Right?  And if these same people are supplying that product and making money off it, aren’t they either Imperial Storm Troopers (the little ones, you know, let’s say a midlist author at a trad publisher who generates probably 60-80% of her eBook royalties and 35% of her print royalties via Amazon) or piloting an Imperial Battle Cruiser (let’s say a Big 6 Publisher that sells a considerable number of books through Amazon, both digital and print, and oh yeah, audio).

How can both be true?  How can Scott Turow use his bully pulpit as president of the Authors Guild to decry Amazon over and over again, yet still sell his books on Amazon?  I think there’s a word for that.

Hypocritical?

I understand that its Scott’s publisher who sends the book metadata to be sold on Amazon and not Scott himself, but if Amazon is truly the Death Star, why is everyone feeding it?

I’m all for everyone having an opinion.  I remember Barnes & Noble when it was the Evil Empire destroying indie bookstores.  I also remember B&N when it was one store on 18th in New York City that I visited on Sundays growing up in da’ Bronx.  I remember in 1994 when there wasn’t an Amazon.  I remember the early part of the last decade as the music business imploded because of digital and NY blithely stuck to business as usual.  Now it’s imploding and people are crying FOUL!  Not preparing for the future isn’t your competition being unfair, it’s running your business poorly.

And how is Amazon your competition as a publisher?  Your goal is to sell books.  CORRECTION.  And here is where people have to start wrapping their brains around some fundamental changes in publishing.  We don’t sell books.  We sell stories and ideas.

Authors create stories and ideas.

Readers consume stories and ideas.

Everyone in between the two has to add value to that.

Amazon is doing that.  The Authors Guild isn’t.  Most traditional publishers are still so rooted in the past, their royalty system is exactly on the same schedule it was before computers were used.  Really.  I know.  My first book came out in 1991.  Before Amazon.  Before computers were widely used.  They are still rooted in a business model focused on distributing books, not selling story.

I sell story.  When I was traditionally published, to get to my reader, I had to go through the “gatekeepers”:  agent, editor, editorial panel, publisher, sales force, book-buyer (misnomer as bookstores are consignment stores) racked in bookstore some place, and finally, whew, the reader.

I’ve done ten times better, at least, without all those people in between.  So were they gatekeepers or a wall?  Was the toll they charged to get through the gate inordinately high and very inefficient?  Even at the .99 price point, I make almost as much as I used to make on a mass market paperback.  Oh yeah, remember publishers and traditional authors decrying ‘free’ as destroying the value of books?  Didn’t I just see some publisher offer DaVinci Code for FREE to get a sample of Dan Brown’s next book?  It seems that all the practices indie authors have been using for years now and been slammed for, are now gaining acceptance in NY.  Welcome to the real world.

Here’s the thing for all the storm-troopers and battle cruiser captains to keep in mind.  Your goal is to sell story.  Amazon helps you do that.  I sat with a senior Amazon rep, aka Darth Vader, in the lobby of a hotel two weeks ago for an hour chatting.  No one in traditional publishing at that level gave me that in 20 years because I was a replaceable cog in their machine and really not valued.  He said Amazon views authors as customers too.  We provide them with the product they need to sell.  They value us.  Oh yes, I know, like Mao and “letting a hundred flowers blossom” we’re all being set up for the big sting, when Amazon gets a monopoly on publishing and decides . . .

What exactly?

I’m sure there will be plenty who will provide me with that answer and tell me I will eat my words, but I sell my words.  They’re tasty.  But seriously, what is going to happen as the less viable business models implode, if they even do, which I doubt, because some are adapting.

Anyway.

It’s very simple to get Amazon out of the publishing business or at least put a serious crimp in their business.  Stop giving them product.  If the Big 6 stopped using Amazon to sell books, then, well, I think Amazon would have a problem, losing a lot of titles. I’m all for it, because it would make it less crowded for my books. And just to keep things straight, lets remember that I have all my books on many platforms (Amazon, B&N, Kobo, Apple, All Romance…) so I’m not just all about Amazon, though I am all about selling stories and ideas to my readers, period.

But wait. That might mean collusion and we’ve already been through that with Agency pricing, which no one seemed to get very upset about, even though the DOJ said some people did a bad thing with, essentially, price fixing.  How as that good for the reader?  Our customer?  We can’t keep screwing over our customer and expect them to stay loyal.

And let me be clear.  I am very grateful to NY publishing.  I actually started out with Novato, CA publishing, but most of my livelihood came from NY for 20 years.  But they did let me go.  I understand.  It was business.  But now I really understand business.  More than happy to help out, which I’ve been offering for two years.

We all have choices.  We all make them.  But when we make a choice to use a platform to sell our product, yet bad mouth that platform at the same time, we might want to take a long, hard look in the mirror and look what’s lurking underneath our own mask.

About Bob Mayer

West Point Graduate, former Green Beret and NY Times bestselling author Bob Mayer has had over 50 books published. He has sold over five million books, and is in demand as a team-building, life-changing, and leadership speaker and consultant for his Who Dares Wins concept. He's been on bestseller lists in thriller, science fiction, suspense, action, war, historical fiction and is the only male author on the Romance Writers of America Honor Roll.

Bob blogs at Write on the River, and he has graciously allowed me to repost this editorial.

18 thoughts on “Decrying the Evil Empire of publishing while piloting one of its battle cruisers?

  1. I always thought of Bezos as more of a Bondian style villain, but Mr. Mayer’s analogy is much better.

    The whole point of his article is well done & well taken.

  2. The objection to Amazon on the print book side is purely that they price books so low that others can’t compete – websites or stores. They can only do this by making zero profit as a business, even after almost 2 decades. See this table from the economist: http://static6.businessinsider.com/image/50ba121a6bb3f7452b00000a-960/facebook-google-amazon-apple-cash.png

    But Wall Street keeps pouring money in on the promise of jam tomorrow. Jeff Bezos knows how to play the markets.

    Btw. If you include print books, you could add ‘furniture’ to ‘stories’ and ‘ideas’. Coffee table books and beautiful cookbooks are just that. People can get good photos or recipes anywhere, but they want nice objects for their home.

  3. Great article. From the customer’s perspective, Amazon has always been about the customer which is what good businesses do. Book customers clearly are price conscious (all customers are) and Amazon responded to that. When authors saw indie publishing as a way around the traditional wall, Amazon, like a good business, responded to that too, offering low cost publishing. It’s a win all the way around for customers, authors, and Amazon and that’s how the free market works.

    Amazon only looks like the “evil empire” to people who can’t seem to reinvent their business model to accommodate modern technology, same as the wagon wheel makers of yore. What DID all those monks do when the printing press came out? Poor things.

    Thanks to ebooks and Amazon, I read even more than before (which should be impossible) and I’ve been exposed to far more different authors, books, and genres that in the past, including several of Bob Mayer’s books which I thoroughly enjoyed. He’s now on my Must Be Read list of authors from whom I automatically get each new book that comes out. I’m able to do that because he prices his books as $2.99 or $4.99 and I don’t have to fork out $20 bucks or more for a new book.

    The nucleus of the free market is a voluntary transaction between the seller and the buyer for a price that both agree on. I think Amazon is in tune with that more than any other business.

  4. The problem for the “Amazon sells at a loss” myth is that:
    1- The DOJ looked at Amazon’s finances and found that Amazon has never lost money selling ebooks. Their ebook operation runs in the black.
    2- Amazon’s retail operations and other businesses generate over a billion dollars a year in net profit. They have been doingg so for someting like 5 years, now. Those profits don’t show up on the bottom line because at the same time they are spending hundreds of millions buying companies (online diaper stores, ebook communities, warehouse robot manfacturers, TTS software vendors, etc) and building massive warehouses by the hundred all over the planet.
    Wall street keeps bidding up their stock because they understand that instead of boozing those profits, Bezos is reinventing them in making Amazon bigger and more powerful.
    He is using today’s profits to make tomorrow’s Amazon scarier.
    So if you don’t like what you see today, start building a bomb shelter: they will only get scarier tomorrow.

    1. You have “sales” and “profit” mixed up. Amazon generates massive amounts of sales, but turns little to no profit because they are indeed selling at below cost.

      “Cost” isn’t just the wholesale price that you pay, it also includes the marginal price increase required to run your business. So anytime Amazon has a negative quarter (which they do – a lot) they are selling their products below “cost”.

      1. Actually, that’s more supposition than actual fact. Here’s some real facts. When Amazon claimed it’s Kindle was ‘sold-out’ what it didn’t tell people was that it had stopped production of the Kindle in order to retool for the next model, something intelligent business people who look up facts realized. So instead of actually being ‘sold-out’ in the sense that most people use it (i.e. demand exceeding supply production) what was really happening was that it was running out its existing stock because it was no longer producing it while preparing for the next version, unlike Apple who couldn’t keep up with demand because no matter how many iPads they produced. That’s real ‘sold-out.’

        Another fact. There is only one company that provides the special screens for E-Ink readers and it’s located in Taiwan. Amazon misjudged how well it’s E-Ink readers would do and had to contact the Taiwan company to cancel the orders for the next quarter, because sales for them had tanked so badly that they had more than enough on hand to meet the much lower anticipated demand. Those negative numbers are really negative, not because they are selling at below cost.

  5. fjtorres, I don’t think they sell ebooks at a loss, I think they sell print books at break even or a slight loss, which book stores can’t afford to do.

    I actually think the’ve done a great job with Kindle for flowing ePub2 ebooks. They basically created the whole market. Although I bet part of the reason the DoJ found they had made decent profits on ebooks was the agency model keeping prices close to print list prices.

    1. The pbooks? Those are mostly wholesale model, no?
      My understanding is Amazon sells many of those straight out of the distributor’s warehouse…
      Why the concern? The free shipping, maybe?

      As for ebook pricing, I agree that the Agency books were a windfall for Amazon but before Agency it was common to see ebook prices fluctuate so that on some ebooks Amazon had the lowest price and on other ebooks Fictionwise or Books on Board had lower prices. At that time Amazon was in the aggregate cheaper but there was no guarantee they would be cheaper on every book. The few post-agency reports I’ve seen suggest things have returned to the status quo ante.

      Too much is made of Amazon pricing and too little attention gets paid to the ways they are simply a low-overhead operator. They are a cheapskate company that is also very efficient at reducing their operating costs by turning their cost centers into profit centers. (AWS, their billing system, their warehouses and fulfillment centers…)

      Their whole business model is predicated on high volume and low margins so low prices are a *necessity*. Without them, they would lose volume and with it their reason for existing. So anybody asking Amazon to raise prices is basically asking them to go out of business.
      The odds of that happening approach zero.

  6. When I was a child, we had milk delivered to our house every day. It was reasonably common at that time to get your milk from the milk man. Home milk delivery almost completely disappeared because chain grocery stores sell milk below cost. There is nothing wrong with this. It is just the way the system works.

    Bookstores will go the way of the milk man as we move from book distribution to selling stories. As the father of teen age twin sons, I wish I could get my milk from the milk man instead of going to the store ever other day. But I don’t expect that to happen. But maybe Amazon will start delivering milk to my door.

  7. Love the article, Bob. It reminds me of something I came up with while watching “The Men Who Built America” on the History Channel. Edison/Morgan and Tesla/Westinghouse only competed against each other to the extent that they neglected the true competition: Rockefeller. They thought they were in the business of selling electricity. Ultimately, Morgan and Rockefeller understood that what they were really selling was artificial light. HUGE difference.

    Great blog, love your ideas. Keep up the great work!

    DJ

    1. Oops–forgot the payoff. We’re not in the “ebook” business or “paper book” business. Like you say, we’re in the story and idea business. Whichever medium allows me to reach the most readers with the most profit is the one I will pursue. At present, that’s going indie and focusing on ebooks. It might change in the future, but that’s the beautiful thing about this business–nothing’s set in stone.

  8. Seriously. Are you for real?

    How can someone use Amazon yet bash it and not be a hypocrite. Well…let me see. Like you keep saying throughout this article. It’s business. Of course they have to sell their books on Amazon. They don’t have a choice. No, they don’t. Amazon has made it impossible to succeed without using their online selling services. Does that mean that these people like it? Or agree with it? No, no, no, NO! It’s business and its survival. They might have to use Amazon’s services because they have no choice, but they’re not about to stay quiet about what Amazon is doing to this industry. Because I can see how putting other companies out of business, actually INCREASES competition. Oh yeah, in Amazon-omics, fewer competitors means more competition. And 1 – 3 = 2

  9. Great article and loved this especially – what exactly is the Author’s Guild doing?

    “Everyone in between the two has to add value to that.

    Amazon is doing that. The Authors Guild isn’t. “

  10. Traditionally pubbed authors and their publishers are making money off the Evil Empire by selling digital versions of their print books. Those who bash the Empire or its Darth Vader Bezos are being hypocritical, but those who aren’t are probably trying to make a living. Which makes me wonder, Bob, why haven’t bookstores taken advantage of Amazon’s legions and eye for content and sell books from its imprints? Amazon isn’t going away, and as far as many authors and readers are concerned it’s the greatest things that’s happened to and for books since Gutenburg. Bookstores are hastening their own demise if they boycott Amazon; they should take advantage of what it has to offer instead.

  11. Thank you, thank you, thank you Bob. This hypocrisy among established and proud Luddite authors just drives me nuts. I hear them say: “Amazon is evil!” and “I always only support my local bookseller” to which I say if you really feel this strongly put a clause in your contract forbidding your publisher from selling via Amazon. “Geez, I love your passion but do you realize Amazon sells 35% of all the volumes of your print titles sold?” Go ahead…ask your publisher for more detail behind that royalty check. Take a stand! Fight back. You have the power. Just use it. ” Yeah…right. Dream on.

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