In part one of this series, we looked at the what-if snapshot of a world with only Amazon. Considering the ongoing struggles of publishers and bookstores to stay competitive within the marketplace and the simultaneous, exponential growth and dominance of Amazon, it may seem that Amazon is the Big Bad that will put everyone else out of business. It is a frightening scenario when we analyze the numbers. But, Amazon is not the Big Bad.

While many bemoan the meteoric rise of the mega-store and its “robber-baron-type market power”[1] over the publishing industry, we need to shift our focus from the one finger that points at Amazon and take a serious look at the three fingers pointing back at us.  I’m brought to mind of a scene in the classic movie It’s a Wonderful Life. In the film, the stock market has just plummeted and people are making a run on the bank. The “Big Bad” Mr. Potter, all-around villain of Bedford Falls, has guaranteed to cover the bank’s holdings, and he offers to guarantee the people who have shares in the Bailey Brothers’ Building and Loan—for a price, that is. He’ll give fifty cents on the dollar for each share.

By this point in the film, we all know Potter wants total control of the town, and with his effective take-over of the bank, all he lacks is the Building and Loan. We also know that people don’t want Potter to be in control, but when tragedy strikes, the people lose sight of the detriment to a Potter monopoly. They are so worried about their money and what losing it means for their futures, that the general attitude quickly becomes “better fifty cents on the dollar than no money at all.”

When faced with an uncertain future, this type of thinking is understandable, and I often see a similar attitude when authors and publishers talk about Amazon. Publishers say things like “We can’t fight Amazon because without Amazon, our sales would be non-existent.” I hear indie-authors say things like “I don’t care if Amazon puts publishers out of business as long as Amazon keeps letting me publish my stories.” These attitudes may be understandable, but they are dangerously short-sighted.

In It’s a Wonderful Life, good ol’ George Bailey, owner of the Building and Loan and all-around hero, implores his patrons to see the bigger picture, and it’s a good lesson for those of us in the publishing industry today.

 

Don't you see what's happening? Potter isn't selling. Potter's buying. And why? Because we're panicky and he's not. That's why. He's picking up some bargains… I beg of you not to do this thing. If Potter gets ahold of this Building and Loan, there'll never be another decent house built in this town. He's already got charge of the bank. He's got the bus line. He's got the department stores. And now he's after us. Why? Well, it's very simple. Because we're cutting in on his business, that's why. And because he wants to keep you living in his slums and paying the kind of rent he decides.—George Bailey, It’s a Wonderful Life

 

Can’t we, as publishing industry professionals, see what’s happening? We’re selling our wares for much less than fifty cents on the dollar simply because we’re afraid not to. Authors are flocking to self-publish—even if it helps to facilitate the collapse of the industry—sometimes, simply because they’ll get a few extra bucks now instead of later[2]. And instead of being pleased with a few actual, income-generating sales, authors and publishers are jumping for joy—and even jockeying for—ten thousand free downloads[3] (I’ve heard several readers say things like, “I never have to buy a book again because I have hundreds on my Kindle that I’ve downloaded free.”) So, if revenues are crashing, we have only ourselves to blame. We’ve encouraged the devaluation of our own product as we scramble and panic to find a foothold with the buying public. All the while, Amazon is the calm iceberg floating on the still water, and we’re the Titanic. (It wasn’t the iceberg that caused the ship to sink; it was lack of human foresight and action.)

If our world with only Amazon becomes a reality, we won’t have Amazon to blame. Amazon can’t dictate wholesale price-points unless publishers let it. Amazon can’t extinguish other publishers unless authors quit partnering with publishers to produce quality products and readers buy only Amazon-published books. Amazon can’t put bookstores out of business if consumers buy books directly from publishers and from shops other than Amazon.

Amazon isn’t the Big Bad. Amazon is just a company whose execs know how to strategize and capitalize on a situation. But remember: only 7% of Amazon’s revenue is from book sales. They don’t have to run scared. Even if every publisher and every indie author pulled every title from Amazon, Amazon would still be raking in billions. Yet, the Big Five and other profitable, publishers continue their love-hate relationship with Amazon, engaging in price-wars and discount negotiations to the detriment of the industry at large, rather than cutting the cord and selling their books where profits could remain competitive (perhaps at some yet-to-be-born online mega-bookshop). All the while, the iceberg calmly floats through the ocean waiting for publishers to crack their own hulls on its deceptively sharp edges that lie beneath the surface.

In 2014, the world’s 57 largest publishers pulled in more than $35 billion, combined.[4] That’s 30 billion dollars more than Amazon’s revenue from books, so while a good chunk of that publisher revenue had to have come from Amazon sales, an even better chunk must’ve come from somewhere else. Yet, Amazon seems to have ever-increasing power and influence over the future of books.

With all the money and sway behind the Microsoft/Barnes and Noble endeavor to keep Nook in the marketplace, the e-reader just can’t seem to keep a foothold. Why? Because we all cater to Amazon. The very day Barnes and Noble announced it would pull Nook from countries outside the U.S. and U.K., I read where someone said, “Thank God I went with Kindle.”

Really? That’s the reaction to hearing the competition is shrinking, to your choice being diminished? Perhaps if everyone who’d had that same thought had bought a Nook a few years ago, Nook would be thriving today and consumers worldwide would still have one more glorious choice…and Amazon would have a little less power in the marketplace.

But Amazon is not the Big Bad. If we don’t like the Amazon advantage, we should do something about it. Because if we don’t, and our world with only Amazon theory becomes reality, we won’t have anyone to blame but ourselves.

So what can we do to ensure the future of publishing? As in any industry, the companies with the deepest pockets have the most influence, but that doesn’t mean that other retailers, literary agents, authors and small publishers are helpless. We all need to do our part. The future of publishing doesn’t have to be bleak or frightening. In fact, there is hope. In the third and final installment of this series we’ll dive into ways in which we can all ensure a thriving future for the book-o-sphere—a world that includes Amazon and other retailers, publishers, indie authors and literary agents. In the meantime, I leave you with one more thought-provoking quote from It’s a Wonderful Life. . .

Now, We can get through this thing all right. We've got to stick together, though. We've got to have faith in each other.—George Bailey, It’s a Wonderful Life

 

(This series continues tomorrow with the third and final installment in which we'll look at possible solutions)

 


[1] http://www.nytimes.com/2014/10/20/opinion/paul-krugman-amazons-monopsony-is-not-ok.html?_r=1

[2] This is a generalization based on some authors’ motivations. The author of this editorial acknowledges that there are myriad reasons for authors to self-publish, and that self-publishing is not necessarily a bad thing.

[3] The author wants to make clear that as a publisher, she has offered free books and will continue to do so on occasion. This statement is to illustrate the sweeping and ballooning strategy of “free” that has come to dominate, rather than enhance, the industry in recent years.

[4] http://www.publishersweekly.com/pw/by-topic/international/international-book-news/article/67224-the-world-s-57-largest-book-publishers-2015.html

 

 

 

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