Kobo President Tamblyn Espouses an Anti-Amazon Domino Theory in a 31 Tweet Manifesto

exec_miketamblyn3[1]Over the past 5 months many people have put forward arguments why everyone in publishing should side with Hachette against Amazon: some were good, some were bad, and some were frankly ludicrous.And then there are the arguments which have already been debunked before they have even been made.

Michael Tamblyn, President of Kobo, weighed in earlier today with his take on why indies should side with Hachette. In a 31 tweet manifesto (found via The Bookseller), he lays down what I am going to call Tamblyn's Domino Theory.

What's the TDT, you ask?

You can read all 31 tweets at the end of this post, but the short version is that indies should support Hachette because they are the first domino to fall. According to Tamblyn, after Amazon crushes Hachette, it will proceed to bend the remaining major publishers to its will. Next on the list are the medium sized publishers, and then smaller and smaller publishers, and finally indies.

Hence the name Tamblyn's Domino Theory.

It's an interesting theory, and I am sure that the usual pundits in indie publishing are working on posts that debunk it, so I am going to save them the effort.

I don't know if anyone else noticed, but the TDT is very similar to an argument I proposed in June of this year. Tamblyn's manifesto is more detailed and more elaborate, but the general thrust is the same: that indies have a financial incentive to side with the big boys because after the big boys go down the indies will be next.

My argument was thoroughly eviscerated in a matter of hours. It was debunked from multiple different angles, and while that was painful at the time it is going to prove useful today.

The comment section of that post offers multiple reasons why Tamblyn's Domino Theory is wrong, and I invite anyone who wishes to respond to pick your favorite comment and elaborate on it.

You're welcome.

***

  1. Indie authors take note: Amazon is, among other things, a machine designed to optimize product prices in order to gain share and sales.
  2. Amazon, like every retailer that reaches a certain size, turns to its suppliers to grow profitability by demanding more favorable terms.
  3. The Hachette-Amazon fight is an especially public manifestation of that Big Retail process. Nothing new there (Walmart, Target, B&N et al)
  4. Some vocal traditionally published authors (but not all) support Hachette and criticize Amazon and…
  5. Some vocal independent authors (but not all) support Amazon and criticize Hachette…
  6. Defense of Amazon by indie authors makes sense on one level. For them, Amazon is the well-spring, where the self-pub revolution started.
  7. But it seems like self-published authors believe they are protected somehow – that what is happening to Hachette won’t happen to them.
  8. Some indie authors even muse that the best possible strategy is exclusivity with Amazon, leaving readers on other platforms behind.
  9. In the long run, I don’t think that Amazon makes a big distinction between a publisher and an indy author – they are both suppliers.
  10. Hachette and the rest of the big 5 sit at the top of a list of suppliers to be “improved” from Amazon’s perspective.
  11. Hachette is first because one negotiation with a big publisher makes a lot of bestselling books more profitable. That’s efficient.
  12. I don’t think anyone believes that Amazon will stop with Hachette. With a successful conclusion, all pubs will go through the same thing.
  13. They will move down the list. Midsized or smaller publishers come next. (Assuming this all isn’t being pursued quietly in parallel.)
  14. From Amazon’s perspective, how is an independent author any different than a publisher? Still a supplier, to be made more profitable.
  15. The indie author’s situation is most tenuous of all. If >80% of sales come from Amazon, *no leverage when it’s your turn to be “optimized”
  16. An indie author, like any publisher, can take her books away if in conflict with Amazon. But it hurts the author *way more than Amazon.
  17. A reasonable author response to the Amazon threat wdb: “they won’t need to do that to us. Our prices are already where they need to be.”
  18. (Indy authors on Amazon are penalized if their books are too expensive, so that’s largely true.)
  19. But that assumes that the Amazon battle is about price. It’s not. It’s about profit. And _any_ supplier can be made more profitable.
  20. If indie authors are 20% of Amazon’s total sales, then it’s hard to imagine that indie authors aren’t on that list to be improved.
  21. But if the Amazon battle extends to indie authors, authors will have less leverage. Especially if they are exclusive.
  22. The mechanisms for the Amazon squeeze are in place, agreements allow it. Self-pub inclusion in Select, Unlimited, KOLL are early examples.
  23. Selling other publishers and authors, Amazon can survive without Hachette, but uncomfortably and less profitably.
  24. With a diverse base of retailers, Hachette can survive without Amazon, also uncomfortably and less profitably.
  25. Both parties having other options is why this dispute wasn’t over in a week or a month.
  26. The litmus test for an indie author: could your income survive a conflict with Amazon? If not, it’s worth thinking about how you could.
  27. To paraphrase: “First they came for the big New York publishers, but I wasn’t published by a big New York Publisher…”
  28. Then they came for the mid-sized publishers, but I wasn’t published by a mid-sized publisher…
  29. Then they came for the academic presses…
  30. Then they came for the literary presses…
  31. Then they came for me.

About Nate Hoffelder (11585 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

26 Comments on Kobo President Tamblyn Espouses an Anti-Amazon Domino Theory in a 31 Tweet Manifesto

  1. I realize that Twitter is a medium were we should give most posters a break because it’s so difficult to convey tone. However, I thought Tamblyn struck what a patronizing tone. He responded to my tweet to say he did not intend that tone.

    What I find distressing and annoying is the widespread assumption that indie authors have no business sense and that we need to be informed for our own good. For women, who are, in fact, the majority of successful, savvy indie authors, it’s beyond tiresome. These women are routinely ignored in the media and in publishing by male voices who are interviewing the same male voices.

    So here’s a truth. These women have no illusions about Amazon’s good will. We recognize Amazon is a business and as such is unlikely to be benevolent. We constantly discuss strategies to future proof our writing careers with diversification strategies. Allow me to point you in the direction of Barbara Freethy’s deal with Ingram, or Courtney Milan’s enhanced eBook versions.

    The people, and they’re almost always men, who take it upon themselves to explain publishing to people, mostly women, who actually understand it quite well, might want to take a moment to think about what New Publishing looks like and then think about what indie authors are doing right not that publishers are not. Vendors like Barnes & Noble, Kobo, Apple, Google and others might also want to consider that indie publishers are their customers, too and it might be wise to implement policies that make them a competitive environment for indies. In other words, give us a little credit. Tamblyn’s manifesto did not do that.

    Or, publishers can place the bet that indies won’t adapt and adjust to a changed environment. Up to them.

    • I would guess that there are at least two kinds of indies: those who wrote a book and put it up on Amazon because they always wanted to write a book; and those who wrote a book, did their homework, think like they are running a business, and are looking for ways to improve their own bottom line. The first camp will indeed be in trouble if Amazon does what all the Hatchette supporters threaten, and whine that no one told them it would be this hard. The second camp will shrug, promote one of the other portals they already set up, and go about their business. It’s like any other type of enterprise, adapt or close.

      My husband’s books are in as many ebook formats as possible, from a wide variety of distributors, and we actively encourage people to buy from places other than Amazon. That’s what business people do: they don’t limit themselves to one distributor, and they don’t expect any distributor to be “friends”.

    • “Vendors like Barnes & Noble, Kobo, Apple, Google and others might also want to consider that indie publishers are their customers, too and it might be wise to implement policies that make them a for indies.”

      is Apple’s policy of paying 70% across the board regardless of list price or here sold, not a fine example of the other vendors offering a competitive environment?

      The problem the other vendors face is that most indies are focussed on just one geographical market and one sales platform, egged on by the constant barrage of misleading data from the Amazon shillers.

      Amazon enforces its pernicious MFN clause threatening indie authors with having their account closed if they list at a lower price than on Amazon.

      Its hardly a level playing field for indies, of whatever gender.

  2. I really wish Mr. Tamblyn would spend more time fixing the problems at Kobo (crappy search engine, infamous customer service, too high prices, missing downloadable ePubs, lack of adult filter which resulted in the ridiculous Kobogeddon) and less time doing stuff like this.

    He should also leave the Holocaust out of it.

    • Yes, and interestingly, for Amazon to be able to turn and attack indies at some future date, we have to assume that Kobo will continue to suck in the future and thus not provide a possible alternative.

      Given this post, that much, at least, seems likely to happen.

      • I don’t often find comments which I like more than my post, but this is one.

        • I have a good working relationship with Kobo. I like their upload and their customer support for authors. I have emailed/worked with several men and women at Kobo and never felt I was talked down to or in any way mistreated. I’ve worked with a lot of men in the publishing industry–including agents, publishers, editors, customer support, engineers, etc. I don’t see a bias against women (this is in response to the first post, not Nate’s comments here.) I certainly don’t think this article is a bias against women, either.

          Does Kobo have bugs (some of which are infamous?) Yes. Did some of those bugs actually help consumers? Yes. The coupon bugs allowed a lot of buying of books that shouldn’t have been couponable. Some great prices too.

          They are a business like any other. They aren’t perfect and perhaps their CS isn’t up to Amazon’s standards. They do have some awesome readers, have been open about supporting indie works–they carry our stuff and we aren’t in a ghetto.

          Let’s hope Amazon’s CS standards hold up if they are the last ones standing. Because in the world of business, you either get better or you get out of business. Kobo has struggles ahead, no doubt. But so does Smashwords, and so does Amazon. I guarantee you that we indies are going to continue to have struggles as well.

          I don’t think indies need to take sides at all. The person who can most help an indie is: Readers and the indie.

          The rest are just retailers and they will have an agenda of their own.

  3. How kind of Tamblyn to tell Indie authors what to think, all out of the kindness of his heart with no ulterior motives. How stupid do these guys think people are?

    He missed the fact that in 2010 he gave a presentation that Kobo’s own internal data showed the same thing that Amazon said, there were much more sales at $9.99 then above and there wasn’t as much room to increase the price as the publishers would like. I recall that he referred to the pricing above $9.99 as the land of publisher’s wishful thinking. Somehow Kobo accidently deleted the video of the presentation. http://www.huffingtonpost.com/david-colbert/kobos-a-year-in-the-life_b_547984.html

    I also missed where he clarified the distinction between Amazon and Kobo. I suppose that indie authors should also take the publishers side in any negotiations against Kobo too for the exact same reason. The character limitation in Twitter must have dropped that point.

    • “How kind of Tamblyn to tell Indie authors what to think, all out of the kindness of his heart with no ulterior motives.”

      Just following the fine example set by the likes of Konrath, Howey and the Amazon-affiliate blogs.

      • No, just following the example of Mike Shatzkin and Mark Croker by trying to muzzle indie authors. “We like the fairy tales and speculative fiction being presented in the media. Quit spoiling the narrative by spouting facts.”

      • + 1 for Konrath, which may well be the most disrespectful guy alive. And I’ve read his articles, but he has brought disrespect to a level unknown of mankind those last weeks, it’s so insane (in the mental sense) that it turns out plain disgusting to imagine human beings can be like him.

  4. @ Bob W

    You can still find the video online

    http://www.booknetcanada.ca/lessons-learned-from-short/

    Its a great presentation!

    • Thanks Hayden! It was interesting to watch that again. The quote was actually “The barren rocky plains of publisher wishful thinking” at the 17:50 mark.

      It was also interesting to see the whole section on agency starting at 43:20 in light of what’s happened since and how it’s been spun.
      – “What if consumers didn’t have a choice about how much they paid”
      – “This is the first time a media industry has raised the price across the board on an existing format” There’s a reason for that, it’s illegal. One of the reasons antitrust laws were created is so that “industries” can’t form cartels and do that.

  5. I’ll keep this in case I ever feel tempted to do any business with Kobo…

  6. A quick look at my Smashwords dashboard for the year reveals:

    Apple: 528
    B&N: 156
    Page Foundry: 44
    Scribd: 18
    Baker & Taylor Blio: 18
    Flipkart: 15
    Sony: 14
    Kobo: 11

    It’s not real difficult for me to figure out the value Kobo has in my life.

    • Just curious, Greg. Do you do anything to help support any of the various retailers (and if so what)–linkage to their sites and so on. I sell very well at Kobo, but I am also an associate there (as well as Amazon and B&N). I post coupons, deals and direct some traffic to almost all the retailers.

      I’m not for or against any one retailer. I support all of them that sell my books, but since I do sell so well on Kobo, I wonder if any of that is because I mention it and other retailers to my readers on a regular basis.

      • I do nothing to get those sales, all of them listed, other than do my blog. Go figure.

        • Here’s some codes you can post for your readers–these MAY work on your book. You might want to try them (just go through the check out until you get to the enter code spot and see if it does the discount).

          I post these types of coupons frequently (at least once a month to my blog.

          You can test a couple to see if they work on your book:
          halfdiscount35
          thanks8_6cl87
          Comeback1sq42

          PERKOPOLIS (40% off, MULTI-USE, possibly CA only)
          SAV50 (50% off- one time use per person)

  7. So the way Kobo hopes to compete against Amazon is “Because Nazis”?

    But if the Amazon battle extends to indie authors, authors will have less leverage.

    That’s because distribution platforms like Kobo haven’t focused on offering more leverage. Indie authors’ other retail choices besides Amazon are Apple (which requires specialty software for direct access), Barnes & Noble (which can’t figure out digital to save its life), and Kobo (which is apparently more focused on likening Amazon to the Third Reich than innovating). It’s been great to see Mark Coker continue to try to make Smashwords greater distribution alternative, and I hope to see more improvement there.

  8. He is correct in that there should be other good competitors to Amazon so that Amazon will not be emboldened to do any of the nasty things Tamblyn fantasizes they are planning…someday…real soon…maybe.

    For all of the reasons listed here and in other places, Kobo is not going to be one of them.

  9. Lots of people telling me how to run my business. I think they should focus on their own.

  10. I guess I’m at a loss about the tenor of the comments. Why the defensiveness about Amazon?

    Everything Tamblyn says should be common knowledge and accepted. Companies will act like monopolies if they can get away with it. It’s profitable, and Amazon needs profits badly. Everything about Amazon’s history points up its ruthlessness. It is foolish indeed to think that they will not turn on independent authors when they see that they can do it. Amazon is not your friend.

    Neither are the traditional publishers, of course. It’s always been an uneven battle between writers and publishers. That’s why a healthy paranoia is called for.

    And that’s why we need multiple publishers and distribution channels. It’s not so much that Amazon is particularly bad; it’s that no one corporation should dominate the publishing industry.

    • @ Bart Anderson,

      What you say about monopolies is very true. However, Amazon is not a monopoly right now, so any accusations should be defended.

      To become a monopoly in the e-book world Amazon have some tuff competition to overcome, Apple, B&N, each publisher and Kobo amongst many others.

      I would be more concerned from Kobo’s perspective. If their president is willing to concede that Amazon may one day become a monopoly and therefore wipeout Kobo, then perhaps he should step down and find someone to take over the controls and challenge Amazon in an open and competitive market

  11. Was coincidentally visiting DC’s Holocaust museum 10/18. Um, yeah, not a lot of patience here either for stuff like #27 either.

    Moving on to condescension, being egged on by a blogger I respect to join him on his pro-Amazon soapbox is a little condescending.

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