A storm in a tea cup

Following some comments posted on here by one Aaron Shepard a week or so ago, regarding Amazon.co.uk and their plans to implement their own POD service, some interesting things have happened.

Aaron posted on here to say that both Bertrams and Gardners had stopped stocking Lightning Source titles, and that they were only available through what he referred to as 'back order'. This he said, had allowed Amazon.co.uk along with their other sites outside the US, to start listing LSI titles as 'out of stock' or to stop taking orders for them at all.

I was puzzled by these comments, since neither Bertrams or Gardners routinely stock any POD titles, no matter who they are printed by (my own book, which is stocked by Gardners, is very much the exception). Most POD books are available via special order only, which is what Aaron refers to as 'back order'. What this means is that rather than Gardners etc keeping the books in stock, they are printed to order as and when needed. This is the norm for most POD titles, and the reason why they are not normally returnable, hence the fact that the majority of retailers do not keep in stock.

Having said this, no retailer in their right mind would refuse to obtain a book that a customer had specifically requested, for to do so would be commercial suicide. If the customer requests this book, and pays for it upfront, which they would be expected to do so, then the sale is guaranteed, so what has the retailer got to lose? It is money for old rope.

It is true that Amazon.co.uk was showing such titles as out of stock, but when you looked at the details for these books, Amazon also said that they would let customers know when the books were available (expected within 6 to 9 days) and not take their money until then. There is nothing sinister in this at all, so I don't understand what Aaron was so upset about.

I emailed Richard to see what he knew and received the following reply:

"It would appear that Amazon managed to inadvertently route all Lighting Source books to the US printing works thus putting every POD book in Britain 'Temporarily Out of Stock' - and Gardners have not changed their policy, procedure or systems - if you start looking on Amazon now, you will see that they are all beginning to come back to normal. So a bit of a speculative storm in a tea cup - my info is from the President of Lightning Source who is a long standing business friend of mine, so I usually eventually get to the bottom of things."

He is as usual right. The majority of books are now showing as available within 24 hours - so back to business as usual.

I noticed that Paul has also posted some comments on The Bookseller stating that he spoke to I Damien Peachey from the Amazon press office. Damian assured him that although Amazon would prefer to print in house via Booksurge, publishers not signing up will be able to carry on exactly as they have been, with no problems at all. Titles will be available exactly the same as they always have.

I spoke to Paul in person the other night, and he relayed this tale in somewhat more detail. He also stated that he had spoken to the Business Development Manager of a large print on demand company based in both the UK and US, and he has received a letter from Amazon, confirming that printing with Booksurge is not compulsory, and things will continue as normal for all who do not sign up. So now we have it, in black and white, no one is forcing anyone to change printers.

All is well then that ends well. As Richard said all along, it is all a storm in a tea cup.

Amazon UK launches POD service

Around the end of March this year, stories began to circulate around the Internet that Amazon.com were contacting US based print on demand publishers by telephone and telling them that from now on, if they wished their books to be listed directly (i.e have buy now buttons) on Amazon.com, then they would have be printed by Booksurge, Amazon's own printer. This understandably caused a flurry of protests, for various reasons, which I blogged extensively about at the time, and which I will talk more about later on. It culminated in Angela Hoy, proprietor of Booklocker.com together with her husband Richard, filing an anti-trust suit against Amazon, which is due in court at any time.

Everyone in the UK breathed a sigh of relief when Amazon confirmed that we were safe - for the moment, but sadly it seems that this moment has passed, for earlier this week The Bookseller ran an article written by Graeme Neill entitled Amazon UK launches POD service.

The article states that Amazon has launched a print on demand programme in the UK, which means that they can rapidly print and ship individual books following a customer order. The service will allow them to bring previously unavailable titles, such as out of print books or foreign language editions, into print in the UK. Publishers who have joined the programme are listed as Faber, John Wiley and Sons, HarperCollins UK, Cambridge University Press and Allen and Unwin Australia. Amazon state that they will be able to print books in both colour and black and white, and that the books will be 'virtually' indistinguishable from traditionally printed (lithographic) titles.

The article goes on to state that for a limited time, Amazon.co.uk will be offering free set up for publishers with POD ready print on demand files. The service will it seems be offered from Amazon's fulfilment centre in Milton Keynes, the exact same town where POD printer Lightning Source are also based.

The more I read this article the more confused I got, as what the article describes is the exact service that Amazon already have through their partnership, if that is the right word to use, with Lightning Source. The similarities are so similar, that I began to wonder if they had come to an agreement with Lightning Source to print books with their name on in their own fulfilment centre - especially since Cambridge University Press are so I am told, Lightning Source' biggest customer by far.

Somewhat suspiciously, Christopher North, Vice President of media at Amazon.co.uk says that "Amazon will be consulting with its US POD company Booksurge for their 'expertise and experience'". He went on to say that Amazon.co.uk would not require publishers to use its POD service exclusively, adding that "We are offering titles that are being produced by other print on demand providers".

The funny thing is that they said the exact same thing in the States, but this turned out to mean that publishers who refused to print with Booksurge would have to join the inappropriately named Amazon Advantage programme instead, which requires publishers to give Amazon 55 percent off the list price (the same terms that wholesalers demand, when they are not a wholesaler), and pay Amazon $29.95 a year, plus all shipping costs to send the books to Amazon. These terms are even worse than the Booksurge contract, and that is saying something.

If this is what Amazon are proposing to bring into the UK then we should all be concerned, as it will cause ripples that will impact across the book industry for years to come.

This will be a lesson for all of us in unity consciousness - what publishers, large and small will need to do is band together and pool their resources, standing up and saying NO, we will not allow you to do this.

Although I reacted with fury to begin with, now that I have had a chance to think, the threat is a bit overplayed. The laws are different in this country, and the Monoplies and Mergers Commission would never let them get away with this. The court case in America with BookLocker is yet to be decided also, and to push ahead with this prior to the verdict would be stupid in the extreme. The fact is that no one, not even Amazon can force anyone to do anything that they don't want to - people like to think otherwise as thay way they can kid themselves that they don't have a choice, and then don't have to take responsibility.

Amazon do not buy books published by the smaller companies and the self publishing outfits direct from them, but through wholesalers. I know this for a fact, as I been told it many times by many different people. It makes sense for them to obtain my book in this way, since it is stocked by Gardners, who give them a far better deal (and higher discount) than Richard would. All books that have both an ISBN and distribution through either Bertrams or Gardners, the UK's two largest wholesalers (all major POD companies have accounts with both) are automatically fed to Amazon's site by the ISBN agency, and there is nothing that Amazon can do to prevent this. It is how the system works. They can in theory remove any book that they like from their site (and I am sure that they would find a way - they did with Hachette Livre) if they really wanted to, but this would entail an awful lot of work, too much even for the mighty Amazon. I mean think about it for a moment, would they really go to the time and trouble of wading through all those books from all those publishers and removing them from their site - of course not, and more to the point, would they really alienate themselves from companies that provide their most lucrative source of income - no - they know which side their bread is buttered.

I don't think we have reason to panic then quite yet.

Fingers and toes crossed

I have just spoken to Paul, the amateur publicist for works on behalf of Richard's authors, and boy do I wish I had gone to that Winchester Book Festival. It seems that there were representatives there from Amazon, Booksurge and Authorhouse and Paul ruffled the feathers of all three - which is probably not difficult to do! When Amazon admitted that they are planning to implement their controversial Booksurge policy in the UK, Paul's words were "over my dead body", or words to that effect and promised them one hell of a fight (he has a lot of contacts in the media that he would not hesitate to use). He compared the quality of Booksurge books to one of his own, printed by Lightning Source and was able to prove that the LS, which is five years old and has been handled by well over 100 different people, is far better quality, since unlike the Booksurge one, the pages are all intact and not coming away from the spine.

As for Authorhouse, well my opinion of them is well known. It seems that Authors OnLine have a growing reputation within the POD world for turning out good quality books, which is making them a wee bit jealous. Authors OnLine as a company are really going places, with their X-Books website, and many other innovative ideas that are helping to raise their profile. They have had several major successes this year, including I am proud to say, my own work.

Paul's new book has just been published and is making inroads in Waterstones stores. He has 4 book signings already lined up, and is trying to work out a deal with Waterstones to get the book into more of their stores. Peter North, the new independent author advisor at Waterstones Head Office, has looked at Richard's site, and from what Paul says, he is very impressed with the range and quality of titles. He tells me that they are looking at stocking (this will be core stock, buying direct from Richard) several of Richard's titles, including my own, which is of course already stocked and selling well in almost 90 of their stores.

I always knew that it was only a matter of time before this book began to get noticed, and it seems that it may finally be about to happen. Fingers, toes and everything else then crossed to see what transpires.

The rise in print on demand

I have become aware this morning of two articles extolling the virtues of print on demand, in two of the UK's most influential publications, The Economist and the Sunday Telegraph. Both make interesting reading, and are worth detailing here.

The first article in The Economist, is entitled Hard Pressed. The author, whose name is not mentioned, states that he has spent 35 years working in the publishing industry listening to the moans and groans of printing presses at work. Most commercial presses he says, these days use offset printing, but that is rapidly changing to digital (for this read print on demand). As distribution costs have sky rocketed, publishers have set up satellite printing plants to deal with regional markets (this is actually how Booksurge who are at the centre of the Amazon debate began). The economics of offset printing do not lend themselves well to short print runs. This is where print on demand comes in.

These machines, despite their advantages do not come cheap, with the author quoting a figure of around $750,000 for one 60 foot machine. Despite the initial cost, they have several advantages. Firstly, they do not have to print thousands of copies of the same image; the
impression made on successive sheets of paper can be entirely different. This allows publishers to tailor output for different markets - say for example Sydney, London or New York.

Second, unlike the wet inks used by traditional presses, the toners in digital printers are not absorbed into the paper, but form a layer on the surface instead. The images remain crisp and clear around the edges. It also means that they can be used to print on a variety of different mediums - such as packaging, fabrics and metal foils.

The disadvantage is that the cost per page remains the same no matter how pages are printed - against offset printing, where the more you print, the cheaper it becomes.

It has also led to the rise in print on demand publishing, where authors can choose to print their own books, bypassing the traditional agent, publisher route. This is no longer confined to the self publisher, as publishers both large and small also embrace this technology.

The advantages are obvious - you no longer have to guess how many copies to print, but can have them printed 'on demand' as and when the orders come in. It saves time and money, in terms of warehousing, shipping and returns, offsetting the initial higher print costs. At a time when everyone is trying to save trees, then this has to be a good thing.

Xerox, who are according to the article, the leader in digital colour printing, have upped the ante with their new generation of high-end presses, the iGen4. This xerographic leviathan can handle runs of up to 7 million colour pages a month. Their nearest competitor, the Indigo 7000 colour press from Hewlett Packard can handle just 4 million pages a month.

While you cannot tell the difference with books, such machines the article states, do not come close to matching the performance of traditional printing for newspapers and magazines.

The Economist prints about 1.65 million copies a week, with around 122 pages per issue, using eight printing plants around the world. On average, each of these plants handle 100 million pages a month - within a few hours of each other every Thursday, so that as many copies as possible can be delivered to news stands and newsagents first thing Friday morning. The best of today's digital printers would need a fourteen-fold increase in speed in order to match this.

What they lack in speed, the new generation of digital printers more than makes up for in quality. But this too could change, as waiting in the wings are some nifty ideas for applying ink-jet know-how to commercial printing.

Earlier this week, Xerox unveiled plans for a new gel-ink technology, with the consistency of toothpaste. When jetted from the print heads, this turns rock hard when exposed to a pulse of ultra-violet light. Because they are not water or alcohol-based like conventional ink-jet materials, they do not bleed into the paper and will cling to almost any surface, just like the digital inks.

This clever technology pioneered by Xerox's research centre in Canada could provide digital printing with its biggest chance yet to crack open the $400 billion offset market and break into the newspaper and magazine market. Watch this space.

The second article, on the Sunday Telegraph website says how 'new' print on demand technology is revolutionising the publishing industry, since it means that for the first time, publishers can bring back into circulation those classic out of print books that have a relatively small audience.

A new imprint, Faber Finds is soon to be launched with this aim in mind. There have been various impediments along the way, not least of all the industry's somewhat hostile attitude towards POD. It seems that even in these so-called enlightened times, agents and publishers are fearful of what this revolution will mean, and the very real threat that this presents to the industry, as if writers can publish their own works at such low cost, why would these agents and editors be needed at all? The article does not of course state this, and there will be always be a place for such people, but the fear is still there, and needs to be addressed.

Authors though were also concerned, especially given what happened with Simon and Schuster last year, where the company attempted to lock in authors whose books were available via POD, by stating that they were contracted to S&S for as long as the book remained in print, even though they may do nothing at all to promote it, and the author could earn more money from publishing themselves via a POD provider like Authors OnLine Ltd.

To overcome these issues, Faber and Faber put the authors at the very heart of this experiment, by approaching them and actually asking them to select titles for the new imprint. Initial talks were with P D James and John Lanchester, both of whom grasped the potential with great enthusiasm. This was mirrored by the many other writers who were approached, many of whom have written pieces for the new imprint's website and are championing books and writers that they cherish, but which are no longer conventionally (for this read via book shops for large discount via conventional offset printing) available.

Faber realised that authors are also readers, and that, according to Chief Executive Stephen Page, was the final piece of the jigsaw. Faber Finds will have a thriving online community who will be able to suggest books for the list as they buy them, review books and discuss their passions and interests with other visitors to the site.

In this way the technology of online life has been married to printing technology, creating an opportunity (perhaps) that has never existed before. This will bring together many excellent books, as well as writers, readers and the wider literary community to coax life back into some of the more fragile books in our culture.

The books will be available via all the usual channels, from either book stores or online.

This does sound, I must admit, like a imprint which will be very much going places, and will add a lot to the literary world, where publisher, author and reader work together to create a unique community designed to preserve and enhance our literary masterpieces. Whether it is truly unique is as always, open to debate.

Booklocker files class action lawsuit against Amazon.com

As I mentioned last night, Booklocker.com, the print on demand company that started the whole Amazon thing off by bringing it to the awareness of others within the industry, has filed a class A suit against Amazon. The following article is re-printed with permission and in its entirety from the Booklocker website.

"BookLocker.com has filed a class action lawsuit against Amazon.com in response to Amazon’s recent attempts to force all publishers using Print on Demand (POD) technology to pay Amazon to print their books. You can read the complaint here.

Amazon began their clandestine effort earlier this year by phone (nobody there seemed to want to put anything in writing), approaching POD publishers, and telling them they must pay Amazon to print their books or their active “buy” buttons would be turned off at the Amazon.com website. What this means is Amazon customers won’t be able to purchase those books directly from Amazon.com (and would not qualify for free shipping), but only through third-party resellers on the site.

Under the Amazon/BookSurge contract, Amazon:

* Controls the printing price of the POD books - The prices can change at anytime, at Amazon’s discretion, with 30 days notice.

* Controls the retail price of the POD books across the board - Publishers would not be able to sell their books for a lower price through “any other channel” (including other bookstores), and would not even be able to sell their books for less to their own customers under any circumstances.

* Controls the wholesale price of the POD books - Amazon’s new contract demands a 48%-52% discount (different contracts have been sent to different publishers). Many small, independent publishers can’t afford to offer this discount to bookstores and would be forced to raise their book prices, which will ultimately hurt book buyers.

* Controls the digital setup and scanning fees for each POD title - After the initial dump of current books, publishers would be charged approximately $50 per title (again, different publishers are receiving different contracts) in setup fees and/or varying scanning fees payable to Amazon/BookSurge. These fees can change at anytime, at Amazon’s discretion, with 30 days notice.

* Controls the formatting specifications - Many publishers can’t absorb the massive number of man-hours required to reformat every single book interior and cover file in their inventory to match Amazon’s specifications.

* Controls the quality of the books - Refer to THIS ARTICLE for details and links. It’s no secret that BookSurge has a poor reputation for quality, including complaints about pages falling out of books, upside-down pages, and more. If a publisher pays Amazon to print their books, their reputation could suffer due to any possible BookSurge quality problems with that publisher’s books.

* Attempts to control the public’s knowledge of who has signed the Amazon/BookSurge contract, along with the details of that contract, through a confidentiality clause, so that publishers signing it may feel they can’t talk about it at all.

* And, Amazon controls the golden nugget - that coveted “buy” button that book buyers want (so their order can qualify for free shipping).

In a public statement, Amazon offered only one alternative to publishers, which is their “Advantage Program.” However, they did not divulge in the public statement that the terms of the Advantage Program are even worse than their printing contract. The Advantage Program requires POD publishers to give Amazon 55% of the list price, pay them $29.95/year, and pay the shipping costs for books going to Amazon.

STRONG DISSENT FROM INDUSTRY REPRESENTATIVESThe Author’s Guild, the American Society of Journalists and Authors (ASJA), The Small Publishers Association of North America (SPAN), YouWriteOn.com (the U.K.’s leading writer’s website) and the National Writer’s Union have all issued strong statements denouncing Amazon’s attempted power grab of the industry.

OUR STORY After hearing rumors of Amazon’s alleged activities, we spoke to an Amazon/Booksurge representative by phone on March 26th. You can read what transpired that day HERE.

After reviewing all the materials presented to us, and after talking on- and off-the-record with publishers, authors and industry representatives at all levels of this controversy, it is our opinion that Amazon may be positioning itself to directly print and control every book it sells. By forcing publishers to sign their extraordinarily oppressive contract, Amazon gains the power to charge publishers whatever printing and distribution costs it desires, as well as controlling the retail, discount and wholesale prices of the books it prints, and, through this contract, automatically positions itself to control the market.

We cannot say for certain if what Amazon is doing is legal or not at this point; that is for the Federal courts to decide. However, in our opinion, the seemingly covert manner in which Amazon has conducted itself in this matter seems to make their actions highly suspicious.

WHAT’S NEXT? Amazon has already taken control of publishers’ ebook sales on the Amazon.com website by requiring ebooks to be available for their ebook reader, the Kindle. Now, Amazon is attempting to take control of the printing of all POD books. We wonder if traditionally published books are next. Some are speculating that Amazon won’t stop until they are being paid to print every book they sell.

ADDITIONAL INFORMATION You can read more information about this situation HERE, including a time-line of the events that have transpired. You can comment on this situation HERE.

ARE YOU AFFECTED? According to Amazon’s public statement, ALL POD books will be affected. If you are a POD publisher (this includes self-published authors who publish their own POD books through a printer), or a traditional publisher using POD technology for some or all your books, and would like more information, please contact:
Angela Hoy, PublisherBookLocker.comangela@booklocker.com"

Most of what Angela says is unfortunately from what I can tell, is pretty much true, apart from the obvious anomaly, that Amazon cannot remove books from their site without a lot of hard work on their side ! Titles are fed to their site via a direct feed from the ISBN agency, and the only way to remove a book and its buy button from the site, is to completely withdraw it from the distribution network, or for someone at Amazon to go through and systemically remove all POD books from their site - I cannot see this happening.

There is also one more exception. It does NOT affect all print on demand books - just those whose publisher originates in the United States. For the moment at least, overseas authors (that is to say, authors whose publisher is not based within the United States) are safe - one more good reason to keep the business in our country, and support the British book industry !

Attorney General issues statement about Amazon/Booksurge

The following is a copy of an email sent to Richard and Angela Hoy and posted on their website earlier today:

Dear Richard and Angela

The Washington Attorney General's Antitrust Division has received several inquiries and concerns regarding the new "print on demand" or "POD" policy recently implemented by Amazon.com. Individuals who have contacted our office claim that Amazon is engaging in "monopolistic practices." I wanted to take this opportunity to update you and your readers of our office's work regarding this issue.

As with all complaints regarding a business, we have advised Amazon.com of these concerns and have asked the company to respond to us. In the meantime, the Antitrust Division is conducting an initial review of the marketplace and will respond more fully once that review is complete.

In order for the Attorney General's Office or another enforcement agency to take action on an antitrust law violation, a court must be convinced that a company has attempted to monopolize a relevant market or is attempting to exclude others from a market it has already monopolized. The relevant market is judged not only in terms of what products are in question, but the geographic service area in which competitors compete.

If it is determined that the markets involved are national in scope, it may be more appropriate to refer this matter to one of the federal antitrust agencies for review.

Additional Resources: * Consumer tips can help enforcement agencies identify unethical and suspicious corporate behavior when it occurs. Individuals who have unique information about the market that they would like to share are invited to complete a complaint form and submit it to the Antitrust Division. The complaint form can be found online at http://www.atg.wa.gov/antitrust.aspx.

You may wish to direct your readers to our website at http://www.atg.wa.gov/amazonpod.aspx where this information is currently posted.

Kindest regards
Kristin Alexander
Seattle Media Relations Manager
Washington State Attorney General's Office

YouWriteOn urges authors to boycott Amazon

Regular readers of this blog will know that when the whole Amazon thing kicked off, just over a week ago, one of the first things I did was email everyone on my mailing list, and also post on here, encouraging everyone to boycott Amazon and not have any further dealings with them until further notice.

I am pleased to see that I am no longer alone in this endeavour, as the managers of YouWriteOn.com, a website funded by the Arts Council and aimed at budding writers, who review others work in exchanging for having their own reviewed, for a chance of getting a critique by industry experts, including leading UK publishers, have now added their weight to the anti Amazon campaign.

A report written by Graeme Neill in today's edition of The Bookseller online reads as follows:

"YouWriteOn.com, the Arts Council initiative for new writers, has called for a boycott of Amazon after the retailer's move to push publishers into using its own print on demand service.
Last week Amazon caused anger among small and independent publishers in the US when it told them that all p.o.d. titles would have to be printed at Amazon's fulfilment centres by its POD service BookSurge. It sparked fears that Amazon was trying to squeeze competitors out of the POD market.

There are no current plans to introduce BookSurge into the UK. However, YouWriteOn.com has invited all POD authors to list books on its site with a free link to any bookseller apart from Amazon. It called this "effectively...a proactive boycott of Amazon".

"It seems that Amazon are effectively attempting to monopolise the POD industry, and monopolies are never to the benefit of individuals. This will inevitably lead to less choice, less opportunities, and less royalties for POD writers," said Edward Smith, manager of YouWriteOn.Com. "It is also a red flag to the publishing industry in terms of how Amazon may use their influence on books from mainstream commercial publishing houses in the future."

The trouble is that having gone to their site, I cannot for the life of me see exactly how POD authors are supposed to do what Edward proposes. All I have received so far is an invite to review a book. Perhaps I am meant to do this first and then I can upload my book to their site. The report in The Bookseller should really make this clear, and much as I admire their philosophy and what they are trying to do, this does smack in its own way of their own attempt to not just help POD authors, but also to increase their membership. This may of course be my well developed inner cynic talking here.

I know that this is becoming big news when I see that this is the third report on the Amazon debate to appear on The Bookseller online today. Graeme Neill also reports regarding the Authors Guild statement that I mentioned on Friday, where they surmise that Amazon are attempting to control much of what the Guild refer to as the 'long tail' of publishing. The Guild, echoing the views of so many others state that in their view "once Amazon owns the supply chain, it has effective control of much of the 'long tail' of publishing - the enormous number of titles that sell in low volumes but which, in aggregate, make a lot of money for the aggregator."

This is what we in the UK would call back list titles, those books that sell in relatively slow but steady numbers, as indeed mine does.

It is uneconomic for book stores to stock many of these titles, since they cannot get sufficient discount, and the books are also non returnable. Once Amazon has control of the supply chain for these books, via Booksurge, they will be able to dictate any terms that they want, having both authors and publishers over a proverbial barrel, or so they think.

Owning the supply chain would allow them to easily increase profit margins on these books by insisting on higher discounts and upping the prices for printing. Most publishers, the Guild state, would be able to do little but grumble and comply. If Amazon really think this, then they have an awful lot still to learn and are in for one hell of a shock.

The Guild go on to state that "We suspect this maneuver by Amazon is far more about profit margin than it is about customer service or fossil fuels. The potential big losers (other than Ingram) if Amazon does impose greater discounts on the industry, are authors - since many are paid for on-demand sales based on the publisher's gross revenues - and publishers."

The third story to appear today is regarding Amazon's attempt to control pricing as reported a few days ago in Publishing News. I am totally incredulous to see two messages of support that actually agree with this policy, by Julian Rivers and someone purporting to be a tree (if I was a dog I would cock my leg against them and see what they think of that!)

This person states that in their opinion "publishers should stick to publishing and if this action stops publishers stupidly trying to undercut retailers to make a quick few quid, then that's good news for them all from the mighty Amazon to the humble indie. Publishers should support and work with retailers, not cut corners and cut them out." What a shame this does not appear to work the other way.

Julian in the meantime states "Amazon are just like any other trader who realises that their supplier is their competitor as well . They are completely correct in assuming that the new RRP is the price that the publisher is seeking to sell the book to the public at. How else could they judge it? I personally think that all the big players should follow suit, and the small ones too for that matter. The publishers need to respect their trade customers large and small, and thank goodness that Amazon are now strong enough to take the publishers on. All the retail trade needs to follow their lead." He does not get it though - it is the retailers that cause the problem, not the publishers. Publishers would never offer to sell books at high discount unless the chains did not do this themselves. What we need is for all of them to get round the table and discuss this in a sensible and rational manner, realising that when it comes down to it, both want the same thing - to make money by selling books. There is nothing wrong with this, but not at any price, for one has to work with the competition and not against it. Competition is healthy, for it keeps us on our toes.

As I say, let's not forget that without the authors who write books there would be no Amazon, and no book industry full stop.

Amazon hits the non publishing press

There is not much to report re Amazon, as one would expect at the weekend, except for an interesting discussion on my favourite writers forum, My Writers Circle, which has dragged me back into this in some ways. It is difficult not to get too involved in this, and start getting angry all over again, but I can't help but feel that Amazon have made a big mistake that will come back to haunt them in the night.

Marion Webb de Sisto feels the same way, as she sent me an email today with a link to The Times website which she entitled Karma for Amazon. Marion, like me, is a spiritual writer, so she knows about these things. The article, which is written by reporter Dalya Alberge, the Arts correspondent is entitled Amazon furious after publishers undercut its book prices online. Personally I say tough titties - they publish these books and bore the financial risk, so they are damned well entitled to charge any price that they like. If Amazon don't like it then tough !

Dalya reports as follows:

"An online price war for books has broken out, pitching Amazon against some of Britain’s biggest publishers.

Amazon is angry that Penguin, Bloomsbury and others are discounting titles on their websites, encouraging customers to buy direct instead of using the online retailer.

Penguin’s online store has reduced a boxed set of 20 Penguin Epics from £100 to £55. Amazon sells the collection at £98.64. Bloomsbury offers a 25 per cent discount on all its books, with free postage and packing on British deliveries over £20.

There are fears that Amazon may retaliate by regarding a publisher’s online price as the recommended retail price and applying its trading terms to that. If a publisher discounts a £20 book to £15 online and Amazon has a contract for a 50 per cent discount on the full price, Amazon would pay the company £7.50 instead of £10. Publishers say that this would be unfair and could ultimately drive up prices.

Amazon also faces increased competition from high-street booksellers, including Waterstones and Borders, who are stepping up their online activities. Such is the power of Amazon that several publishers did not feel able to talk on the record yesterday. One senior executive said: “It’s very serious. I can’t believe they’d be allowed to get away with it under competition law. Forcing people to increase prices seems to me entirely wrong.”

Others accused Amazon of having become particularly aggressive lately. One source claimed that the online seller recently removed the “buy buttons” from a book on its website to prevent users from being able to purchase it. “They then went to the publisher and said, ‘Give us an extra 2 or 3 per cent or we won’t put the buy buttons back’,” the source said.

An Amazon spokesman said: “It is speculation. We never talk about discussions with suppliers.” He declined to comment further.

Discounters have brought huge price advantages to book buyers, but the discount businesses do not have to bear the risks associated with investing in new authors or new titles by established authors. Until the Net Book Agreement was scrapped in 1995, it offered some protection to publishers, by ensuring that retailers sold books at the recommended price.

Roger Tagholm, of the trade paper Publishing News, believes that Amazon sees publishers as manufacturers, who should not be setting prices.

But Simon Juden, chief executive of the Publishers Association, which represents up to 140 publishers, felt that Amazon was on shaky legal ground. He said: “Terms of trade will have been set up upfront, when contracts were signed. Neither side can unilaterally change those. In my view, Amazon would be in breach of contract if they tried to do this.”

Ursula Mackenzie, chief executive officer and publisher of Little, Brown and chair of the Trade Publishers Council, said: “Our discount to Amazon is based on a notional RRP (recommended retail price), an agreed formula that we work to. For them to suddenly decide they will take a different view of what that RRP was means that the price on the publisher’s website effectively becomes the RRP. They can’t do that unilaterally. What is going to exercise people is that we can all see the growth of Amazon, which is startling and rapid, so they will increasingly have considerable power and there is no real competition to them. That’s the concern.”

There are fears that the latest development could affect authors and independent booksellers. Mark Le Fanu, of the Society of Authors, said: “Discounts demanded by the big retailers have been rising relentlessly, squeezing authors’ royalties. We hope that publishers will resist any pressure to increase discounts still further.”

One publisher was found to be broadly supportive of Amazon, although he also preferred to speak off the record. “I can’t see that it’s a major problem. Amazon sell their books at all sorts of discounts. That’s the nature of the market. They’re free to sell them at whatever price they like.”

I still find it very interesting how this is forcing the commercial presses into the equation, so that they have to look at how their own arguably equally aggressive slant on pricing and discounting comes back to haunt them. They may not be directly involved in setting such policy, and to some extent the abolition of the net book price agreement has rendered them powerless, but they have been complicit in allowing discounts to become greater each year by stealth, and many of them as well remain hostile towards self published books issued via print on demand, while at the same using the technology for their own ends. This is a double standard. Understand that this is more of an observation than a criticism, as like I said yesterday, I have to try and remain detached from this situation and not get too emotionally involved.

Nadine Laman from My Writers Circle sent me an interesting link to the Finance pages on AOL, which keeps track of Amazon's share price. Nothing much seems to be happening at the moment, but there is also a link on that page to some comments written by former hedge fund manager, television presenter and and self publisher Timothy Sykes. Timothy says that Amazon have proved through their actions that they care little for those who helped make their billions, which let's face facts- are the readers, writers and publishers.

The article states:

"Amazon bullying raises monopoly and business concerns

In the last few days, book selling giant Amazon.com Inc (NASDAQ: AMZN) has made a few more enemies in the publishing world by forcing the little-known group of print-on-demand (POD) publishers to either submit to using its POD subsidiary, Booksurge, or risk being prohibited from selling on its industry-leading website. No matter the cost and complications of breaking off relationships with other vendors, re-formatting books and a host of other problems, Amazon laid down the law, saying convert - and do it quickly - or face the consequences.

What's more disconcerting is that an official press release was made public only after smaller publishers like Angela Hoy of Booklocker.com started writing publicly about blackmail-type phone calls from Booksurge representatives. Fearful of losing their businesses literally overnight, many POD publishers such as iUniverse and Lulu have capitulated while strong willed publisher PublishAmerica refused to give in - and was quickly made an example of when Amazon disabled the buy buttons on their book titles!

As an author selling my own critically-acclaimed POD book An American Hedge Fund on Amazon, outrage has compelled me to write about how unethical and more importantly, monopolistic this all is.

In a short-term business sense, Amazon is right to use its massive size to gain market share for Booksurge and squeeze out the smaller players, but the problem is this goes against what made it great - offering the lowest prices and widest selection, basically like an online Wal-Mart Stores Inc (NYSE: WMT). To authors and publishers, Booksurge is known for its poor product quality and high cost structure, supremely inferior on both fronts to rival Lightning Source (LS) -- trust me, I did the research and that's why I chose LS - the POD subsidiary of Ingram Industries, the leading book wholesaler and the company on which Amazon has clearly declared war.

So, by making Booksurge the only POD option, relegating quality-loving publishers and authors to much smaller websites of Borders Group (NYSE: BGP) and Barnes & Noble Inc (NYSE: BKS), Amazon proves it no longer cares about its customers getting the widest selection at the cheapest prices - oh yes, even publishers that give into Amazon's demands will be forced to raise their prices - it cares more about its own profits.

Until this latest development, I believed Amazon was the future of book selling. It was making money, as were the publishers and customers who received the cost/quality benefits, but when a company happily alienates its suppliers whose hardships will inevitably be felt by the company's customers, I cry foul. Authors, readers, consumers and businesspeople unite! Sign THIS petition and let Amazon know what it is doing is wrong. That it is only a retail giant because we, the consumers, say so. We, not it, have the power here. While POD publishing is just a tiny niche, it's a slippery slope; if you let Amazon get away with this, it might be your business and industry it comes after next."

Amen to that.

Amazon tightens its grip - now dictating to publishers re their own prices !

Chris Work, who posted some comments on one of my earlier posts on this blog, I see from The Bookseller website, has added a form to his blog to contact the Washington State attorney with regard to the Amazon affair. This can be found here. All you have to do is simply copy the text and send it to the email address that Chris provides with any message of your own. I urge everyone involved in this affair to send this form post haste, as like Chris says on his blog, "Amazon isn't going to pay much attention to you or me... but they will listen to anti-trust lawyers of the state of Washington". I don't see that they will have an awful lot of choice in the matter, but then again, I don't know how US law operates, and anything is possible.

The Bookseller it seems though is not the only British heavyweight publishing website to be covering this story, as according to the latest edition of Publishing News, the headlines of which were waiting for me in my inbox when I got home from work today:

"AMAZON HAS THREATENED publishers who sell direct at discount on their own websites with punitive action. PN understands that it has said that if the publisher continues, Amazon will take the selling price as the RRP and apply its terms of trading to that price. In other words, if Amazon receives a 50% discount from Penguin, for example, but Penguin is selling a £20 book for £15 on its website, Amazon will only give Penguin £7.50, rather than £10. One publisher told PN: “This has been around for a while. There have been discussions going on since Frankfurt. Essentially, they're not happy when the manufacturer, as they call us, sets the price of a book. The threat is that they will apply the agreed terms of trading to our web price. But they are on very shaky legal ground. After all, they've been invoiced at an RRP less their discount, so if they refused to pay that amount, they would be in breach of contract.”

Another publisher was more forthright. “Nobody can tell somebody else what price to sell a book at. Publishers will resist this. We're talking about very few titles and we are very confident of our position.”

Although the number of titles being sold direct by publishers is very few, some observers believe Amazon sees it as the thin end of the wedge and wants to fire a warning shot. The move is being driven by Amazon's UK Head of Books, Christopher North, and comes as a blog storm has erupted over Amazon.com's announcement concerning its print-on-demand operation BookSurge. Independent publishers are angered by the US company's decision to economically favour those companies that switch their printing to BookSurge. The row forced Amazon to release an open letter clarifying its position. Amazon.com will sell titles from other POD providers it said, but the publishers would have to join Amazon's Advantage Program, which has a fee. Amazon UK said that are no plans to introduce the service here, but one publisher is taking legal advice. “They're abusing their monopoly position. Once they've got you, they'll start increasing the terms.”

In the background to the moves may be Amazon's realisation that it has effectively dominated online bookselling for some years. Its figures with publishers grow faster than any other retailer (hence publishers' reluctance to anger it), but with other players establishing their online operations - Waterstones.com and, shortly, Borders as well as increasing noise from Play.com and publishers' own sites - it realises that this might very soon change.

This is indeed the thin end of a very long wedge, and I think Clive Keeble is right when he said a few days ago that "Amazon are a dangerous predator that needs to be stopped".

I have a reading booked with my good friend Diana Summer tomorrow, my first for over a year, to discuss various issues regarding work and the book, and I plan to include this as one of the questions. I have my own theories, some of which I have mentioned in previous posts, but it will be interesting indeed to get spirit's take on this.

Angela Hoy says on her latest post, that she suspects the reason that Authorhouse, I-Universe and Lulu caved in was because there is a clause in their contracts (in Authorhouse and I-Universe's case anyway) that says that authors must pay $75 for inclusion on Amazon.com. They have therefore painted themselves into a corner with their own greed, since by failing to sign the Booksurge contract they would have left themselves wide open to being sued by disgruntled authors for breach of contract. I will have to check the Authorhouse UK website, but I believe I am right in saying that they also make a similar charge. Having had dealings with this company when I was looking for a suitable POD provider back in early 2006, I have to say that this would not surprise me, as they seem to charge for pretty much anything they can get away with, and more's the pity, they do ...

Angela goes on to say that "Lulu has third party service providers (that pay Lulu commissions) that offer Amazon listing enhancement services for a fee to Lulu authors. One Lulu author surmised on their forum, "Lulu will just have to supply Amazon with books..." So, perhaps they found themselves in the same bind as AuthorHouse.

The deadline given to some publishers was rumoured to be April 1st and AuthorHouse/ I-Universe and Lulu both announced agreements with Amazon on March 31st - the day before. This leads both Angela and myself to believe that Amazon may have had them both by the probverbial short and curlies. This is what you get though when you charge authors for something that happens automatically without you actually having to do a thing. Make no bones about it, if my publlsher leaves Lightning Source to do all the fulfilment direct with Amazon, then it is exactly the same with all these others too. They are then sitting pretty taking the authors hard earned cash for doing to put it politely, bugger all. I hear the sound of one thousand unseen chickens clucking as they come home to roost ...

Angela also confirms that there is as yet no word from Xlibris, as does my friend UK based author Marion Webb de Sisto, who because she is married to an American and has her largest market there, chose to publish with Xlibris.

I could write much more on this debate if I chose to, but I do have the questions to write for tomorrow, and it has been a long day, and so I am now going to sign off before I email Angela with the links posted on here tonight and hit the snooze button !

UK authors safe from amazon's threat - for the moment ...

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."

A statement from Ingrams and Lightning Source

The Amazon debate shows no signs of diminishing yet, with further links to various articles and discussions being added to Angela Hoy's website on an ongoing basis.

Amazon made their by now, infamous statement yesterday, but I see from Mick Rooney's blog, that Ingrams (who of course own Lightning Source) have also added one of their own, which Mick summarised as follows:

John Ingram said, while “the questions that are being raised about Amazon.com and its Booksurge division don't directly relate to Ingram - either Lightning Source Inc. or Ingram Book Group - it clearly is alarming many of our publisher partners.” John Ingram goes on to say, “publishers are telling us they feel Amazon.com’s actions are not appropriate.”Amazon have yet to directly respond to Ingram, and it remains to be seen if they will. John Ingram continued, “We all live in a world where decisions are made about in sourcing 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. Our breadth of distribution channels including the online retailers remains the same, and Ingram still provides one day turnaround in the fulfillment of orders for books including print on demand titles.”

John is of course absolutely correct, Lightning Source do offer a far superior service in every way possible. How can they not do when they are part of the US's largest wholesaler Ingrams, through which virtually every US book store obtains their stock. Booksurge realistically cannot compete with that on any level.

Mick it seems though has one hell of a sense of humour, since after I added comments to his blog yesterday expressing my opinion re the Amazon statement he replied as follows:

"Yes, June, the Amazon 'Interested parties' statement released on Monday is very much a sales pitch aimed at their customers. What it fails to mention is that for quite some time Lightning Source Inc have been 'drop-shipping' the POD books ordered on Amazon. So when customers get those nice cardboard cartoned books, with the Amazon logo emblazoned on it, delivered directly to their doorstep - it has all all been done by LSI. I think the worst thing about Amazon's move is the 'sop' the say about how POD publishers can send 5 copies of each book to them to house for their inventory! Lets see LSI deal with 4400 POD accounts approximately, hmmm, let's say at the most reserved estimate per publisher 50 titles and times 5 copies, hmmm, I get a holding inventory of 1.1 million books. I think every POD should take them up on their offer. That 'ill teach 'em."

It certainly would, and the idea of this happening I must admit did put a smile on my face. I somehow don't think their system would be able to cope ...

Mick though is absolutely right, that Lightning Source have indeed been sending goods directly to the customers homes for some time, as they do for all manner of other companies that they have accounts with. It is common knowledge that they have the facilities to do this - even printing a compliment slip in the account holders name (for arguments sake Amazon) so that it looks like the goods have come direct from them, when in reality they have come direct from the printer.

There is an interesting link on Angela Hoy's website where some comments have been made by one Glenn Fleishman, a former Amazon employee, which are very illuminating to say the least. Glenn, who claims to have worked for Amazon for around six months, states that in his opinion "this whole POD scheme stinks to me of MBA-ism. Because we can do something, we will try it, and we are the big player, so we get to make the rules. We’ll see how this plays out. I suspect it’s going to result in a top-down management decision from higher in the Amazon food chain, some apologies, and some more black eyes for the firm." Let's hope he is right.

In the meantime, on that same website, a lady named Julie, who claims to have worked for Amazon in one of their US distribution centres last Christmas, and for all we know may still work there, has confirmed in her own words that "there are two or three main ones (distribution centres) that have everything including the POD equipment. All the rest are “forward deployment” centers which just have the most popular items in stock just outside major cities. In other words, Angela Hoy was right yesterday when she said that Amazon, contrary to their grand claims of saving the environment and improving customer service, do not print books at all of their centres.

None of this is really the issue, it is about them trying to monopolise the market and limit the options available to both authors and publishers wishing to sell their books direct on Amazon.com.

Lightning Source, alongside Ingrams have also made a statement of their own, which can be read as follows:

April 1, 2008

Dear Customer

Lightning Source has been following the recent press coverage and discussions about Amazon.com and BookSurge. We are aware of the concern this is causing the publishing community. The issue centers around Amazon.com tying the availability of your books and terms of sale at Amazon.com to the production of books at the Amazon.com subsidiary BookSurge, specifically requiring you to use BookSurge in order to sell on Amazon.

Like you, we are very concerned about any conduct that would serve to limit a publisher’s choice in supply chain partners and to negatively impact the cost of your products to consumers. We believe that choice and selection of best of class services are critical to the long term success of publishers and a vibrant book market.

Lightning Source continues to provide the highest quality digital on demand print and distribution services for every one of our customers. All your titles continue to be available to all of our channel partners, including Amazon.com, with immediate availability for shipment within 24 hours.

We are committed to providing you with the best of class quality product and fastest distribution service in the market, and will continually work to develop new channels and new offerings.
Lightning Source will continue to monitor this situation and let you know when we have more information. Please feel free to call your Lightning Source point of contact, if you have any additional questions.

J. Kirby
BestPresident & CEO, Lightning Source Inc.

Can't really argue with that and personally I say to him, best of British luck!