British based print on demand authors can for the moment at least, breath a collective sigh of relief, as after almost a weeks silence, Amazon have finally confirmed that they have no plans to implement their controversial print on demand policy within the UK.
Graeme Neil reports on The Bookseller, that the decision to tell publishers of such titles in the United States that their print on demand titles would have to be printed at Amazon's own facilities in order to be directly available on amazon.com has caused a storm, raising fears that Amazon are trying to squeeze competitors out of the print on demand market.
He goes on to say that "one observer said that the move could be seen as 'the thin end of the wedge'. 'Will they eventually say to HarperCollins for example 'We don't want your physical books anymore. Instead we will print them at our centres'? If you look at what they have done with e-books, they are selling them in their own format. Where do you draw the line?"
Angela Hoy, co-owner of print on demand services company BookLocker, who raised the first objections, said: "From the p.o.d. publishers we've talked to, and from our own experience at BookLocker, we could all be looking at a dire and immediate threat of revenue cuts if we refuse to sign the Amazon/BookSurge contract. 'PublishAmerica said that it had been told that if it did not comply, the "Buy" button would be removed from all of the publisher's listings. This demand would force PublishAmerica to submit 60,000 separate book files (text and cover), and redo each of them in order to conform to Amazon's complicated technical specifications."
Graeme goes on to cite the now notorious open letter from Amazon, before confirming that the company has no plans to implement this strategy in the United Kingdom. No mention however is made of his this impact print on demand books by British authors which are printed by Lightning Source in both the UK and US for these respective markets, and whether the US editions will be withdrawn from their sale. At the time of writing my own book is still live, and until I hear any differently I can assume that these titles too are safe.
In the meantime, Jerry Simmons has dedicated his entire newsletter this week to the unfolding events, which are rapidly becoming well, the biggest thing since print on demand first came to the UK.
I print his newsletter here in its entirety for the benefit of those who are not on his mailing list, and with the recommendation that you consider joining.
"Due to recent events I’ve decided to focus this entire newsletter on the Amazon situation. In my opinion, this is the first step toward the complete elimination of the books by self-published, print-on-demand, and small publishers that refuse to use Amazon’s BookSurge and largely depend on Amazon for sales. This is vertical integration at it’s worst and illustrates what big companies can do when they are allowed to strong arm the smaller ones. It’s time to take a stand, now or forget about it. Forever remain at the mercy of the big booksellers.
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IN CASE YOU HAVEN’T HEARD -
POD Publishers Told to Sell Directly Through Amazon, They Have to Use Booksurge.
Amazon has tried a number of tactics to push the print-on-demand services of their Booksurge subsidiary and now the company is using its leverage in the marketplace to drive that business. For the past month the e-tailer has been explaining their new policy to publishers who use print-on-demand: To have a direct "buy" button that lets customers purchase POD books from Amazon rather than from third-party sellers featured on the site, those books must be printed and fulfilled by Booksurge. Spokesperson Tammy Hovey tells the WSJ, "It's a strategic decision. What we're looking to do is have a print-on-demand business that better serves our customers and authors. When we work with some other publishers, it's not truly a print-on-demand business." She "declined to provide specifics," according to the Journal, but "said she doesn't consider the move an ultimatum.
"The new policy was first brought to light through a coordinated blogging effort by some of the affected POD publishers. Co-owner of POD publisher BookLocker.com Angela Hoy has the longest post on her WritersWeekly zine. She reports on a conversation with a Booksurge salesperson who "admitted that books not converted to BookSurge would have the 'buy' button turned off on Amazon.com, just as we'd heard from several other POD publishers who had similar conversations with Amazon/BookSurge representatives."There are no accounts yet of the policy being imposed on traditional publishers that also use Lightning Source or other print-on-demand vendors; by the current accounts the moved is aimed at independent publishers whose focus is POD books as well as self-publishing competitors to Booksurge such as Lulu.com. (Separately, Amazon has been working since mid-2006 to get mainstream publishers to use Booksurge for print-on-demand books sold through the e-tailer, for traditional purposes out of print books; large print; etc.--as well as to fulfill "demand spikes" when a regular title is temporarily out of stock.) Ingram and their Lightning Source operation have worked closely with Amazon in the past in a variety of ways, including packing orders with Amazon packages and labels.
MY REACTION AND QUESTIONS -
This is an outrageous strong arm tactic by the largest online bookseller in the world. There are forces at work behind the scenes that will only complicate this for anyone that doesn’t buckle under to the demands of Amazon.
Why haven’t the same demands been made of traditional publishers?
Because they all subsidize Amazon through a variety of fees and discounts, completely outside the ability of the small publishers and authors, it’s about money.
What happened to the free market concept of price, service and reliability?
Why bother when you have the muscle to force this upon your customers.
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More From Amazon on POD, and Toasters
Amazon's Patty Smith spoke to Computerworld further about their new requirement that POD-based small publishers and self-publishing companies print their titles through Booksurge if they want the books sold directly by Amazon. "When we publish a print-on-demand title in our own fulfillment center, we can then marry that on-demand book with a regular book, or a toaster, if that's what the customer ordered in the same box and ship it the same day to the customer. And that print-on-demand book that we printed is also eligible for free shipping."She reiterated that companies that don't wish to use Booksurge can still sell their POD books through Amazon's Advantage program ($29.95 per year plus 55% of the list price of the book) and other third-party marketplace seller programs.BookLocker.com Angela Hoy says she will not use Booksurge. "We would [rather] take an initial significant hit to our revenues, and we estimate that Amazon comprises about 30% of our revenues."
MORE REACTION AND A QUESTION -
First of all the excuse that marrying titles to other products is the reason behind this move is ludicrous, it’s an excuse.
If marrying products with books is the reason behind the move why not impose the same on traditional publishers who use offset printing?
Because Amazon doesn’t own an offset printing company, YET!
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Ingram on Amazon
Ingram chairman John Ingram issued a brief statement on Amazon's recent move to drive POD publishers to use Booksurge if they want their books sold directly by the e-tailer, noting "it clearly is alarming many of our publisher partners." At the same time, Ingram reports that "so far we've been unable to get a response directly from Amazon.com."He says, "We all live in a world where decisions are made about insourcing and outsourcing, and free choice is important. At Ingram Book and Lightning Source, we are going to work really hard to continue to be the compelling choice as publishers make their outsourcing decisions.... At Lightning Source, we produce a great product and thus do justice to our publishers' valuable titles. There is no question that we provide the highest print quality, the fastest turnaround speeds, and the most comprehensive portfolio of channels for a publisher's books."
FINAL REACTION AND QUESTION -
I find the lackluster response by the Chairman of one of the largest print-on-demand facilities puzzling and at the same time alarming.
Why do you find the response alarming?
I worked in New York with big publishers long enough to know that John Ingram’s reaction to Amazon’s move is entirely too nonchalant and basically it was a non-reaction. That smells of collusion to me and you can bet, Ingram isn’t budging an inch when it comes to the demands of Amazon. They need each other!
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QUESTIONS OF THE WEEK -
The following interview was conducted by Author Marketing Experts for their blog post which can be found at their web site http://www.amarketingexpert.com/ .
AME - What’s the real outcome going to be from this Amazon decision?
JDS - The publishers impacted will follow the demands of Amazon and print their books with Book Surge. The wider implication is that Amazon strengthens their position with these publishers and creates a monster with their vertical integration. This leaves each one of those publishers vulnerable to new demands by Amazon. What’s next? Higher discounts. Right now these publishers have been forced to change vendors, it might have cost them a bit more money, but remember, they market to writers not consumers. So if they are unable to place their authors’ books on Amazon, it looks bad in the eyes of their customers, the writers. These publishers don’t have the courage to say no and take a stand. And it’s not about the fact they sell a ton of books on Amazon, it’s about their customers’ view of them and their ability to market their own books.
AME - How do you predict the long-term effects of this as it relates to the small author and publisher?
JDS - The long-term effects for the author and publisher are devastating. With Amazon strengthening and securing their place in the distribution and sales channel, they can do anything they want. The next move will be to squeeze these small authors and publishers for placement fees, advertising fees, and eventually higher discounts. When you give in once, it never stops, this is the way of the publishing world and booksellers. It will get to the point where they start to lose money on each book sold. Only then will Amazon back off, but you can bet they are going to push authors and publishers to the wall and take every possible nickel out of the equation.
AME - What can an author/publisher do to “fight back?” -
JDS - Draw the line with this decision, pull their books from Amazon, create a new online market for selling their books, a central location for all self-published, print-on-demand books that has no alliance with any publisher or printer. Again, it’s not about selling books, it’s about how they are seen in the eyes of their customers, the writers. They are concerned about their own pipeline for new business drying up and that is much more important than giving in to Amazon’s demands. Each one of these publishers could switch all their allegiance to B&N.com today, but they haven’t, and the reason is that in the eyes of the writer, they feel they must be on Amazon to be successful. Short term it hurts business and they are more concerned about that than the longer term impact which is going to be a continual erosion of their profit margin.
AME - What alternatives do authors and publishers have besides selling their books on Amazon?
JDS - It’s time for the self-published, print-on-demand companies and small publishers to begin creating their own marketplace, totally and completely separate from all the online platforms that sell their books. I strongly believe that the website http://www.nothingbinding.com/ is a solution, and for full disclosure, it is a site that I founded. But here is the key, if you are not part of the traditional world of big New York publishing, from which I spent 25 years, then authors must realize it is fruitless to continue to struggle to become part of something dominated and controlled by the largest publishers in the world. Amazon is clearly inside the traditional world, and they are setting restrictions on anyone outside that wants to be part of their world. This will never end! It’s time now to create your own community and establish a voice in the marketplace. I’m confident that Nothing Binding can fill that void, becoming the community and voice for Independent publishing. The name alone signifies a non-alliance with any publisher or printer. A social networking website that allows authors free placement of their books with links to outside sources is a perfect way for authors to separate themselves from the traditional world of big publishing; in fact, it’s the only way to create a market and achieve increased sales they so desperately want and need.
AME - Do you think this was a bad decision on Amazon’s part and if so, why?
JDS - Obviously Amazon weighed the profit from the sales of all these POD books versus the additional revenue of printing AND sales. They made a calculated gamble and it appears they have been right. Now there is no stopping them on their demands. It won’t happen overnight, but they will make new rules and continue to do so until it negatively impacts their own revenue stream. Giving in is a monumental mistake for the author and publisher, if the POD companies had taken a stand against the decision and risked short-term profits, they would have been much better in the long term and more respected by their own customers in the marketplace. Why do you think Amazon did this only for the print-on-demand books and not books that are offset printed? They claim they did this so it would be easier for them to marry books with other products that customers wanted, combine the package and shipping for convenience and cost savings. What about all the other books that are offset printed? They have the same problem with marrying books and products, but they don’t own an offset printing company, yet! If I was running any company that does a substantial amount of business with Amazon and saw what they were doing with books, I’d keep a close eye on what other parts and manufacturing companies they purchase. Vertical integration in this case is good for Amazon, no, great for Amazon, but bad for the publishing business and possibly very bad for other product lines sold on Amazon.
AME - Since AuthorHouse/iUniverse and Lulu have signed the contract with Amazon, does this change the playing field for the other publishers, or is it irrelevant (and if so, why)?
JDS - With Author House and Lulu agreeing to Amazon demands, it puts pressure on the other companies to follow suit. None of these companies can risk their own business drying up and even though it’s doubtful they lose a ton of sales if they dropped from Amazon, it would be the negative perception their own possible customers would have, i.e. the writer, and of course their competition would use this as leverage in their own marketing as “being the one company still doing business with Amazon.” These writers don’t really understand the implications, yet, all they see is that their books are or are not on Amazon for sale; that’s all they care about.
In the survey of writers I completed long before NB was started, I found that virtually 98% felt they must have their books on Amazon, and clearly 70% hated the fact they had to give a 55% discount to them. When asked if Amazon went away tomorrow, how much would it impact sales, only about 15% felt they sold enough books on Amazon to make a difference. They must be there, they hate being there, yet it doesn’t really make a big difference, so what’s the point? Once Amazon raises the effective discount, or asks for ad or placement fees, and the publisher passes this along to their authors, they might wake up. But who knows, right now, all the author cares about is making sure their books are still listed and for sale on Amazon.
Fighting back should be done gradually and not a knee jerk reaction. I think if these authors and publishers set a deadline for Amazon to reverse their decision or else they would pull all books, they could get positive media attention to this, they will have capitalized on this in a way that would draw attention to them and their books, and in the long run they would be out from under the thumb of a very big online retailer. The analogy I use is that if the U.S. had been serious about alternative fuels back in 1973 during the oil embargo, we wouldn’t be in the mess we are today, 35 years later. Of course you can’t compare oil to books, but the fact remains, this cave in to Amazon is a very steep and slippery slope and it won’t take anywhere near 35 years for them to realize their mistake, maybe 35 months!
AME - If authors seek out other platforms to sell their books – how will they compete with the “comfort level” consumers feel with Amazon?
JDS - There is no way to compete with the comfort level of Amazon and that of course is a problem, but a short-term one. Solutions will create short-term discomfort, but I strongly believe people buy books on Amazon because it’s all they know. If there was a viable alternative, then I think consumers would welcome it. The responsibility is on the shoulders of the publishers to counter this strategy with cover price discounts, until the consumer starts to feel comfortable again and then you can readdress the price issue. These publishers will have to make some short-term concessions to attract their consumers, but it beats what they are going to have to endure when they cave to Amazon. There is no easy solution, there is no silver bullet that will make everything okay tomorrow, there will be some issues that have to be worked out, but if all these authors and companies would combine forces, create a new online market for themselves and their books, in 35 months they will be glad they did. Eat it in the short term for long term gain—that is the answer to the Amazon problem. Because Amazon is going to do nothing in the future to help the POD companies’ bottom lines, they are going to continue to eat away at their margins in a number of ways while at the same time squeezing them on price and discount. It’s a no win situation for the authors and publishers and it doesn’t appear that they really realize the situation they put themselves in by giving in to Amazon’s demands.
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MY PRESS RELEASE RESPONSE –
An Amazon Monopoly?
Authors shut out of Amazon; one site offers a solution
SAN DIEGO, CALIFORNIA – The little guy has lost another battle but this time, it’s the book industry that’s taken a hit. It was a shot heard round the publishing world in record time when Amazon announced that any small press or print-on-demand publisher doing business with them would need to print books through their publishing arm: BookSurge. Insisting it’s just “good business,” the terms of this deal feel more like a monopoly to those affected.
Jerry D. Simmons is a former Executive with the Time Warner Book Group who left there in 2003 to build one of the leading social networking sites for Independent authors, NothingBinding.com, says: “The long term effects for the author and publisher is devastating, with Amazon strengthening and securing their place in the distribution and sales channel, they can do anything they want. The next move will be to squeeze these small authors and publishers for additional fees and eventually higher discounts. When you give in once, it never stops.”
So what can an author or small publisher do? Penny C. Sansevieri, President and CEO of Author Marketing Experts, Inc., whose company specializes in Internet promotion says: “It’s time for authors to realize that Amazon is not the only game in town. They need to expand their online marketing to include social platforms like http://www.nothingbinding.com/. A site that can give their book exposure and then link the book to a store other than Amazon will help them fight and hopefully win this new war Amazon has decided to wage against the little guy.”
Can Amazon be stopped? “It’s doubtful,” says Simmons, “the wheels are already in motion, now the only thing the smaller publisher and Independent author can do is look for alternatives. This is a sad day for Independent publishing. Now it’s time to show Amazon they can’t win.”
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AMAZON DISCUSSION ON BLOG TALK RADIO -
You can hear my new blog talk radio show hosted by myself and Penny C. Sansevieri of Author Marketing Experts, Inc. Friday 10:00 am MST, Noon CST, and 1:00 pm EST. Simply cut and paste the link below to your web browser and tune in:
http://www.blogtalkradio.com/ThePublishingInsiders
If you would like to listen to last weeks’ show, cut and paste to your browser or click the link below:
http://www.blogtalkradio.com/ThePublishingInsiders/2008/03/28/The-Publishing-Insiders-1
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SUBSCRIBE TO MY BLOG -
Beginning yesterday April 2nd, I’ve started my blog on Nothing Binding. You can subscribe via rss feed at the site, here is the link:
http://www.nothingbinding.com/blog/jerry
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A RECOMMENDATION FROM OUR FRIENDS IN THE UK -
From Author June Austin, April 1, 2008
I would not normally do this, but some issues are just too important to ignore, and this is one of them. I and others in the publishing industry, are calling on as many people as possible to boycott amazon.com (and co.uk if they copy what .com are doing). The following article, which I posted on my blog site yesterday, explains all, and more to the point, why. THIS IS NOT A HOAX.
To read what I have to say, go to http://juneaustin.blogspot.com/
In short though, amazon.com are trying to force print on demand authors and publishers in the United States to switch printers, from market leader Lightning Source, to Amazon’s own recently acquired operation, Boksurge. They are threatening to remove any books printed by Lightning Source from their website if they do not sign agreements with Booksurge by tomorrow. This is no April Fool, but deadly serious.
Please circulate this to as many people as possible on your own mailing lists, as the more people that know about this the better. At the moment I am unsure as to how this will impact authors and publishers outside the US (Lightning Source also have a printing plant in Milton Keynes where my book is produced along with millions of others). My editor has today emailed their CEO and is awaiting a reply.
This is not a hoax, but a very real threat facing all publishers and authors who use print on demand methods, whether through self publishing or otherwise. Don't take my word for it though, but see for yourself here:
http://www.thebookseller.co.uk/news/55688-amazoncom-tightens-printing-rules.html
http://writersweekly.com/the_latest_from_angelahoycom/004597_03272008.html
In the meantime, I would urge you all NOT to order any books from Amazon at all until this is resolved satisfactorily.
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FINAL COMMENTS -
I spent 25 years in New York publishing, I’ve seen just about all there is to see. I’ve personally experienced the pressure a large bookseller can apply to a publisher for more money. The first time you give in to those demands, it’s over. These companies will continue to apply pressure in a number of ways to get what they want.
In the case of Amazon, I predict that this is just the first step. I realize that publishers have caved to the demands, but as authors you still have an opportunity to take a new direction. Create your own online marketplace for your books! This is the only chance you have to be successful via the web. A single location where you can direct traffic away from Amazon is your only hope if you ever want to maintain an online presence and have any chance of selling books in numbers that will make a difference.
Amazon was never your solution, they are part the traditional world of publishing, and will always be a part of that world. You aren’t invited and they don’t want you, they’ve made that obvious by their actions. If you don’t start a movement now, today, this weekend, away from Amazon onto another completely free and unaligned website, you are going to be stuck in the mire and deceit of someone like Amazon until the day they kick you to the curb.
Make your move to http://www.nothingbinding.com/, before it’s too late!
Jerry D. Simmons
April 3, 2008"
The boss at my own publishing company, Authors OnLine Ltd said in an email to me this morning that he is somewhat concerned at the lacklustre response to this threat that has been made by Lightning Source, and I have to say that I agree. It makes one wonder if there is more to this than meets the eye. He goes on say "I have to say I haven't got to grips with the complete story of this. The reason I say that is we don't actually deal with Amazon at all. It's Lightning Source that deal directly with them, we don't even know what Amazon have bought from us until after the event! And LS are saying in their statement (now on our front page) that "All your titles continue to be available to all of our channel partners, including Amazon.com, with immediate availability for shipment within 24 hours." Now that is a very understated response to say the least and, unless I have totally misunderstood the situation, rather odd for a company who's basic business is directly threatened.
Take the small self-publishing guys like us out of the equation for the moment and look at LS's core business. Most of it comes from making traditional publishers books into POD, their main client being Cambridge University Press. They print over a million books a year for them alone. Now are Amazon going to refuse to sell such mainstream publishers POD titles only through BookSurge. Now that would be interesting! Ok AuthorHouse and Lulu are big players but minnows compared to the amount of POD done by traditional publishers - and increasing very steeply annually."
Graeme Neil reports on The Bookseller, that the decision to tell publishers of such titles in the United States that their print on demand titles would have to be printed at Amazon's own facilities in order to be directly available on amazon.com has caused a storm, raising fears that Amazon are trying to squeeze competitors out of the print on demand market.
He goes on to say that "one observer said that the move could be seen as 'the thin end of the wedge'. 'Will they eventually say to HarperCollins for example 'We don't want your physical books anymore. Instead we will print them at our centres'? If you look at what they have done with e-books, they are selling them in their own format. Where do you draw the line?"
Angela Hoy, co-owner of print on demand services company BookLocker, who raised the first objections, said: "From the p.o.d. publishers we've talked to, and from our own experience at BookLocker, we could all be looking at a dire and immediate threat of revenue cuts if we refuse to sign the Amazon/BookSurge contract. 'PublishAmerica said that it had been told that if it did not comply, the "Buy" button would be removed from all of the publisher's listings. This demand would force PublishAmerica to submit 60,000 separate book files (text and cover), and redo each of them in order to conform to Amazon's complicated technical specifications."
Graeme goes on to cite the now notorious open letter from Amazon, before confirming that the company has no plans to implement this strategy in the United Kingdom. No mention however is made of his this impact print on demand books by British authors which are printed by Lightning Source in both the UK and US for these respective markets, and whether the US editions will be withdrawn from their sale. At the time of writing my own book is still live, and until I hear any differently I can assume that these titles too are safe.
In the meantime, Jerry Simmons has dedicated his entire newsletter this week to the unfolding events, which are rapidly becoming well, the biggest thing since print on demand first came to the UK.
I print his newsletter here in its entirety for the benefit of those who are not on his mailing list, and with the recommendation that you consider joining.
"Due to recent events I’ve decided to focus this entire newsletter on the Amazon situation. In my opinion, this is the first step toward the complete elimination of the books by self-published, print-on-demand, and small publishers that refuse to use Amazon’s BookSurge and largely depend on Amazon for sales. This is vertical integration at it’s worst and illustrates what big companies can do when they are allowed to strong arm the smaller ones. It’s time to take a stand, now or forget about it. Forever remain at the mercy of the big booksellers.
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IN CASE YOU HAVEN’T HEARD -
POD Publishers Told to Sell Directly Through Amazon, They Have to Use Booksurge.
Amazon has tried a number of tactics to push the print-on-demand services of their Booksurge subsidiary and now the company is using its leverage in the marketplace to drive that business. For the past month the e-tailer has been explaining their new policy to publishers who use print-on-demand: To have a direct "buy" button that lets customers purchase POD books from Amazon rather than from third-party sellers featured on the site, those books must be printed and fulfilled by Booksurge. Spokesperson Tammy Hovey tells the WSJ, "It's a strategic decision. What we're looking to do is have a print-on-demand business that better serves our customers and authors. When we work with some other publishers, it's not truly a print-on-demand business." She "declined to provide specifics," according to the Journal, but "said she doesn't consider the move an ultimatum.
"The new policy was first brought to light through a coordinated blogging effort by some of the affected POD publishers. Co-owner of POD publisher BookLocker.com Angela Hoy has the longest post on her WritersWeekly zine. She reports on a conversation with a Booksurge salesperson who "admitted that books not converted to BookSurge would have the 'buy' button turned off on Amazon.com, just as we'd heard from several other POD publishers who had similar conversations with Amazon/BookSurge representatives."There are no accounts yet of the policy being imposed on traditional publishers that also use Lightning Source or other print-on-demand vendors; by the current accounts the moved is aimed at independent publishers whose focus is POD books as well as self-publishing competitors to Booksurge such as Lulu.com. (Separately, Amazon has been working since mid-2006 to get mainstream publishers to use Booksurge for print-on-demand books sold through the e-tailer, for traditional purposes out of print books; large print; etc.--as well as to fulfill "demand spikes" when a regular title is temporarily out of stock.) Ingram and their Lightning Source operation have worked closely with Amazon in the past in a variety of ways, including packing orders with Amazon packages and labels.
MY REACTION AND QUESTIONS -
This is an outrageous strong arm tactic by the largest online bookseller in the world. There are forces at work behind the scenes that will only complicate this for anyone that doesn’t buckle under to the demands of Amazon.
Why haven’t the same demands been made of traditional publishers?
Because they all subsidize Amazon through a variety of fees and discounts, completely outside the ability of the small publishers and authors, it’s about money.
What happened to the free market concept of price, service and reliability?
Why bother when you have the muscle to force this upon your customers.
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More From Amazon on POD, and Toasters
Amazon's Patty Smith spoke to Computerworld further about their new requirement that POD-based small publishers and self-publishing companies print their titles through Booksurge if they want the books sold directly by Amazon. "When we publish a print-on-demand title in our own fulfillment center, we can then marry that on-demand book with a regular book, or a toaster, if that's what the customer ordered in the same box and ship it the same day to the customer. And that print-on-demand book that we printed is also eligible for free shipping."She reiterated that companies that don't wish to use Booksurge can still sell their POD books through Amazon's Advantage program ($29.95 per year plus 55% of the list price of the book) and other third-party marketplace seller programs.BookLocker.com Angela Hoy says she will not use Booksurge. "We would [rather] take an initial significant hit to our revenues, and we estimate that Amazon comprises about 30% of our revenues."
MORE REACTION AND A QUESTION -
First of all the excuse that marrying titles to other products is the reason behind this move is ludicrous, it’s an excuse.
If marrying products with books is the reason behind the move why not impose the same on traditional publishers who use offset printing?
Because Amazon doesn’t own an offset printing company, YET!
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Ingram on Amazon
Ingram chairman John Ingram issued a brief statement on Amazon's recent move to drive POD publishers to use Booksurge if they want their books sold directly by the e-tailer, noting "it clearly is alarming many of our publisher partners." At the same time, Ingram reports that "so far we've been unable to get a response directly from Amazon.com."He says, "We all live in a world where decisions are made about insourcing and outsourcing, and free choice is important. At Ingram Book and Lightning Source, we are going to work really hard to continue to be the compelling choice as publishers make their outsourcing decisions.... At Lightning Source, we produce a great product and thus do justice to our publishers' valuable titles. There is no question that we provide the highest print quality, the fastest turnaround speeds, and the most comprehensive portfolio of channels for a publisher's books."
FINAL REACTION AND QUESTION -
I find the lackluster response by the Chairman of one of the largest print-on-demand facilities puzzling and at the same time alarming.
Why do you find the response alarming?
I worked in New York with big publishers long enough to know that John Ingram’s reaction to Amazon’s move is entirely too nonchalant and basically it was a non-reaction. That smells of collusion to me and you can bet, Ingram isn’t budging an inch when it comes to the demands of Amazon. They need each other!
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QUESTIONS OF THE WEEK -
The following interview was conducted by Author Marketing Experts for their blog post which can be found at their web site http://www.amarketingexpert.com/ .
AME - What’s the real outcome going to be from this Amazon decision?
JDS - The publishers impacted will follow the demands of Amazon and print their books with Book Surge. The wider implication is that Amazon strengthens their position with these publishers and creates a monster with their vertical integration. This leaves each one of those publishers vulnerable to new demands by Amazon. What’s next? Higher discounts. Right now these publishers have been forced to change vendors, it might have cost them a bit more money, but remember, they market to writers not consumers. So if they are unable to place their authors’ books on Amazon, it looks bad in the eyes of their customers, the writers. These publishers don’t have the courage to say no and take a stand. And it’s not about the fact they sell a ton of books on Amazon, it’s about their customers’ view of them and their ability to market their own books.
AME - How do you predict the long-term effects of this as it relates to the small author and publisher?
JDS - The long-term effects for the author and publisher are devastating. With Amazon strengthening and securing their place in the distribution and sales channel, they can do anything they want. The next move will be to squeeze these small authors and publishers for placement fees, advertising fees, and eventually higher discounts. When you give in once, it never stops, this is the way of the publishing world and booksellers. It will get to the point where they start to lose money on each book sold. Only then will Amazon back off, but you can bet they are going to push authors and publishers to the wall and take every possible nickel out of the equation.
AME - What can an author/publisher do to “fight back?” -
JDS - Draw the line with this decision, pull their books from Amazon, create a new online market for selling their books, a central location for all self-published, print-on-demand books that has no alliance with any publisher or printer. Again, it’s not about selling books, it’s about how they are seen in the eyes of their customers, the writers. They are concerned about their own pipeline for new business drying up and that is much more important than giving in to Amazon’s demands. Each one of these publishers could switch all their allegiance to B&N.com today, but they haven’t, and the reason is that in the eyes of the writer, they feel they must be on Amazon to be successful. Short term it hurts business and they are more concerned about that than the longer term impact which is going to be a continual erosion of their profit margin.
AME - What alternatives do authors and publishers have besides selling their books on Amazon?
JDS - It’s time for the self-published, print-on-demand companies and small publishers to begin creating their own marketplace, totally and completely separate from all the online platforms that sell their books. I strongly believe that the website http://www.nothingbinding.com/ is a solution, and for full disclosure, it is a site that I founded. But here is the key, if you are not part of the traditional world of big New York publishing, from which I spent 25 years, then authors must realize it is fruitless to continue to struggle to become part of something dominated and controlled by the largest publishers in the world. Amazon is clearly inside the traditional world, and they are setting restrictions on anyone outside that wants to be part of their world. This will never end! It’s time now to create your own community and establish a voice in the marketplace. I’m confident that Nothing Binding can fill that void, becoming the community and voice for Independent publishing. The name alone signifies a non-alliance with any publisher or printer. A social networking website that allows authors free placement of their books with links to outside sources is a perfect way for authors to separate themselves from the traditional world of big publishing; in fact, it’s the only way to create a market and achieve increased sales they so desperately want and need.
AME - Do you think this was a bad decision on Amazon’s part and if so, why?
JDS - Obviously Amazon weighed the profit from the sales of all these POD books versus the additional revenue of printing AND sales. They made a calculated gamble and it appears they have been right. Now there is no stopping them on their demands. It won’t happen overnight, but they will make new rules and continue to do so until it negatively impacts their own revenue stream. Giving in is a monumental mistake for the author and publisher, if the POD companies had taken a stand against the decision and risked short-term profits, they would have been much better in the long term and more respected by their own customers in the marketplace. Why do you think Amazon did this only for the print-on-demand books and not books that are offset printed? They claim they did this so it would be easier for them to marry books with other products that customers wanted, combine the package and shipping for convenience and cost savings. What about all the other books that are offset printed? They have the same problem with marrying books and products, but they don’t own an offset printing company, yet! If I was running any company that does a substantial amount of business with Amazon and saw what they were doing with books, I’d keep a close eye on what other parts and manufacturing companies they purchase. Vertical integration in this case is good for Amazon, no, great for Amazon, but bad for the publishing business and possibly very bad for other product lines sold on Amazon.
AME - Since AuthorHouse/iUniverse and Lulu have signed the contract with Amazon, does this change the playing field for the other publishers, or is it irrelevant (and if so, why)?
JDS - With Author House and Lulu agreeing to Amazon demands, it puts pressure on the other companies to follow suit. None of these companies can risk their own business drying up and even though it’s doubtful they lose a ton of sales if they dropped from Amazon, it would be the negative perception their own possible customers would have, i.e. the writer, and of course their competition would use this as leverage in their own marketing as “being the one company still doing business with Amazon.” These writers don’t really understand the implications, yet, all they see is that their books are or are not on Amazon for sale; that’s all they care about.
In the survey of writers I completed long before NB was started, I found that virtually 98% felt they must have their books on Amazon, and clearly 70% hated the fact they had to give a 55% discount to them. When asked if Amazon went away tomorrow, how much would it impact sales, only about 15% felt they sold enough books on Amazon to make a difference. They must be there, they hate being there, yet it doesn’t really make a big difference, so what’s the point? Once Amazon raises the effective discount, or asks for ad or placement fees, and the publisher passes this along to their authors, they might wake up. But who knows, right now, all the author cares about is making sure their books are still listed and for sale on Amazon.
Fighting back should be done gradually and not a knee jerk reaction. I think if these authors and publishers set a deadline for Amazon to reverse their decision or else they would pull all books, they could get positive media attention to this, they will have capitalized on this in a way that would draw attention to them and their books, and in the long run they would be out from under the thumb of a very big online retailer. The analogy I use is that if the U.S. had been serious about alternative fuels back in 1973 during the oil embargo, we wouldn’t be in the mess we are today, 35 years later. Of course you can’t compare oil to books, but the fact remains, this cave in to Amazon is a very steep and slippery slope and it won’t take anywhere near 35 years for them to realize their mistake, maybe 35 months!
AME - If authors seek out other platforms to sell their books – how will they compete with the “comfort level” consumers feel with Amazon?
JDS - There is no way to compete with the comfort level of Amazon and that of course is a problem, but a short-term one. Solutions will create short-term discomfort, but I strongly believe people buy books on Amazon because it’s all they know. If there was a viable alternative, then I think consumers would welcome it. The responsibility is on the shoulders of the publishers to counter this strategy with cover price discounts, until the consumer starts to feel comfortable again and then you can readdress the price issue. These publishers will have to make some short-term concessions to attract their consumers, but it beats what they are going to have to endure when they cave to Amazon. There is no easy solution, there is no silver bullet that will make everything okay tomorrow, there will be some issues that have to be worked out, but if all these authors and companies would combine forces, create a new online market for themselves and their books, in 35 months they will be glad they did. Eat it in the short term for long term gain—that is the answer to the Amazon problem. Because Amazon is going to do nothing in the future to help the POD companies’ bottom lines, they are going to continue to eat away at their margins in a number of ways while at the same time squeezing them on price and discount. It’s a no win situation for the authors and publishers and it doesn’t appear that they really realize the situation they put themselves in by giving in to Amazon’s demands.
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MY PRESS RELEASE RESPONSE –
An Amazon Monopoly?
Authors shut out of Amazon; one site offers a solution
SAN DIEGO, CALIFORNIA – The little guy has lost another battle but this time, it’s the book industry that’s taken a hit. It was a shot heard round the publishing world in record time when Amazon announced that any small press or print-on-demand publisher doing business with them would need to print books through their publishing arm: BookSurge. Insisting it’s just “good business,” the terms of this deal feel more like a monopoly to those affected.
Jerry D. Simmons is a former Executive with the Time Warner Book Group who left there in 2003 to build one of the leading social networking sites for Independent authors, NothingBinding.com, says: “The long term effects for the author and publisher is devastating, with Amazon strengthening and securing their place in the distribution and sales channel, they can do anything they want. The next move will be to squeeze these small authors and publishers for additional fees and eventually higher discounts. When you give in once, it never stops.”
So what can an author or small publisher do? Penny C. Sansevieri, President and CEO of Author Marketing Experts, Inc., whose company specializes in Internet promotion says: “It’s time for authors to realize that Amazon is not the only game in town. They need to expand their online marketing to include social platforms like http://www.nothingbinding.com/. A site that can give their book exposure and then link the book to a store other than Amazon will help them fight and hopefully win this new war Amazon has decided to wage against the little guy.”
Can Amazon be stopped? “It’s doubtful,” says Simmons, “the wheels are already in motion, now the only thing the smaller publisher and Independent author can do is look for alternatives. This is a sad day for Independent publishing. Now it’s time to show Amazon they can’t win.”
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AMAZON DISCUSSION ON BLOG TALK RADIO -
You can hear my new blog talk radio show hosted by myself and Penny C. Sansevieri of Author Marketing Experts, Inc. Friday 10:00 am MST, Noon CST, and 1:00 pm EST. Simply cut and paste the link below to your web browser and tune in:
http://www.blogtalkradio.com/ThePublishingInsiders
If you would like to listen to last weeks’ show, cut and paste to your browser or click the link below:
http://www.blogtalkradio.com/ThePublishingInsiders/2008/03/28/The-Publishing-Insiders-1
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SUBSCRIBE TO MY BLOG -
Beginning yesterday April 2nd, I’ve started my blog on Nothing Binding. You can subscribe via rss feed at the site, here is the link:
http://www.nothingbinding.com/blog/jerry
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A RECOMMENDATION FROM OUR FRIENDS IN THE UK -
From Author June Austin, April 1, 2008
I would not normally do this, but some issues are just too important to ignore, and this is one of them. I and others in the publishing industry, are calling on as many people as possible to boycott amazon.com (and co.uk if they copy what .com are doing). The following article, which I posted on my blog site yesterday, explains all, and more to the point, why. THIS IS NOT A HOAX.
To read what I have to say, go to http://juneaustin.blogspot.com/
In short though, amazon.com are trying to force print on demand authors and publishers in the United States to switch printers, from market leader Lightning Source, to Amazon’s own recently acquired operation, Boksurge. They are threatening to remove any books printed by Lightning Source from their website if they do not sign agreements with Booksurge by tomorrow. This is no April Fool, but deadly serious.
Please circulate this to as many people as possible on your own mailing lists, as the more people that know about this the better. At the moment I am unsure as to how this will impact authors and publishers outside the US (Lightning Source also have a printing plant in Milton Keynes where my book is produced along with millions of others). My editor has today emailed their CEO and is awaiting a reply.
This is not a hoax, but a very real threat facing all publishers and authors who use print on demand methods, whether through self publishing or otherwise. Don't take my word for it though, but see for yourself here:
http://www.thebookseller.co.uk/news/55688-amazoncom-tightens-printing-rules.html
http://writersweekly.com/the_latest_from_angelahoycom/004597_03272008.html
In the meantime, I would urge you all NOT to order any books from Amazon at all until this is resolved satisfactorily.
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FINAL COMMENTS -
I spent 25 years in New York publishing, I’ve seen just about all there is to see. I’ve personally experienced the pressure a large bookseller can apply to a publisher for more money. The first time you give in to those demands, it’s over. These companies will continue to apply pressure in a number of ways to get what they want.
In the case of Amazon, I predict that this is just the first step. I realize that publishers have caved to the demands, but as authors you still have an opportunity to take a new direction. Create your own online marketplace for your books! This is the only chance you have to be successful via the web. A single location where you can direct traffic away from Amazon is your only hope if you ever want to maintain an online presence and have any chance of selling books in numbers that will make a difference.
Amazon was never your solution, they are part the traditional world of publishing, and will always be a part of that world. You aren’t invited and they don’t want you, they’ve made that obvious by their actions. If you don’t start a movement now, today, this weekend, away from Amazon onto another completely free and unaligned website, you are going to be stuck in the mire and deceit of someone like Amazon until the day they kick you to the curb.
Make your move to http://www.nothingbinding.com/, before it’s too late!
Jerry D. Simmons
April 3, 2008"
The boss at my own publishing company, Authors OnLine Ltd said in an email to me this morning that he is somewhat concerned at the lacklustre response to this threat that has been made by Lightning Source, and I have to say that I agree. It makes one wonder if there is more to this than meets the eye. He goes on say "I have to say I haven't got to grips with the complete story of this. The reason I say that is we don't actually deal with Amazon at all. It's Lightning Source that deal directly with them, we don't even know what Amazon have bought from us until after the event! And LS are saying in their statement (now on our front page) that "All your titles continue to be available to all of our channel partners, including Amazon.com, with immediate availability for shipment within 24 hours." Now that is a very understated response to say the least and, unless I have totally misunderstood the situation, rather odd for a company who's basic business is directly threatened.
Take the small self-publishing guys like us out of the equation for the moment and look at LS's core business. Most of it comes from making traditional publishers books into POD, their main client being Cambridge University Press. They print over a million books a year for them alone. Now are Amazon going to refuse to sell such mainstream publishers POD titles only through BookSurge. Now that would be interesting! Ok AuthorHouse and Lulu are big players but minnows compared to the amount of POD done by traditional publishers - and increasing very steeply annually."
