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Industry Insight

Amazon's Print On-Demand Unit Moving to Monopolize Market?

In a move that rocked the POD publishing industry this week,

By Jmhershey
Published: March 28, 2008

In a move that rocked the POD publishing industry this week, Amazon apparently is insisting that POD publishers that want to have their books sold directly on the Amazon website will have to use Amazon’s own on-demand printing facilities (BookSurge) or else have the “buy” buttons for their publications removed from the site. Amazon claims that it is attempting to have a true POD business that improves its service to customers and authors, but a number of voices have been raised in opposition, most crying foul, some “monopoly,” and still others speculating about the repercussions of Amazon’s salvo on traditional publishers and struggling authors. Today’s Washington Post story contains links to other reports in the Wall Street Journal, WritersWeekly and other outlets. Worth reading are the many angry comments submitted in sympathetic response to the WritersWeekly piece. We haven’t heard the last of this, I’ll wager.

 

Discussion

By Patrick Henry on Mar 28, 2008

Amazon's decision ought to provoke a reaction as vigorous as the one that greeted Adobe when it embedded the “Send to FedEx Kinko’s” button in Adobe Reader and Adobe Acrobat. Adobe found out the hard way that exclusionary behavior loses friends and alienates people. Is Amazon capable of being taught—and learning—the same lesson?

 

By Author on Mar 30, 2008

A good case can be made that what Amazon is attempting to do violates anti-trust laws. Waiting for federal anti-trust action would take many years--years to get the Justice Department to act, years of trials, years of fussing over what the court decision means. Notice how long it took to deal with Microsoft's tactics, despite the fact that the corporations they were bullying were large and powerful. None of us can afford that long a wait. Action at the state level, however, could move much faster, particularly if it involves off-the-record contact and a somber warning from those who can make trouble for Amazon. Amazon is headquartered in Seattle about a ten minute drive from the office of the Antitrust division of the Washington state attorney general, also in Seattle. Here's the contact information: Office of the Attorney General Antitrust Division 800 Fifth Avenue, Suite 2000 Seattle, WA 98104-3188 http://www.atg.wa.gov/Antitrust/default.aspx Telephone: 206-587-5510 Fax: 206-464-6338 Note the remark on that web page that "The Antitrust Division only processes complaints that involve either Washington State residents or businesses located in Washington State." Amazon is in Washington state, so it matters not where you are. You might also want to raise the issue with your state attorney general's antitrust office, asking them to get in touch with their colleagues in Seattle. If you're a publisher, encourage your authors to write. If you're an author, encourage other writers to contact them.

 

By Thomas D. Greer on Mar 31, 2008

My first reaction was "Boycott Amazon!". However, doesn't Amazon have the right to sell what they want to sell? I think we'd all agree, "of course". So, if they want to decide to sell only POD books they produce, don't they have that right? We may think it's a stupid decision (which I do, just so we're clear), but I think it's far-fetched to call it illegal. I do see parallels between this and Adobe's Fedex-Kinkos debacle. That too, was short-sighted, but not illegal. I believe social pressure and publicity, which worked to wake-up Adobe, might also wake-up Amazon. What rankles, I think, is that Amazon has always appeared to be a producer-agnostic distributor. Now that they've crossed the line and became a content manufacturer, leaving others out in the cold, where does that leave the other producers? They have to find another distribution channel. If Amazon so controls the market that they are the only distribution channel for POD publications, then we can cry "monopoly". Are we really to that point?

 

By Victor Curran on Mar 31, 2008

There's a strange deja vu in Amazon.com's announcement that they won't sell print-on-demand titles unless they are printed at BookSurge. Book publishers got out of the printing business decades ago, because book publishing is a seasonal business. Publishers couldn't afford to tie up their capital in factories that for half the year were idle (or contracted out to do competitors' work).
So why is Amazon muscling its way into the printing business? Amazon's value proposition isn't the merchandise. They sell convenience, the ease of shopping for books, music, movies, cameras, and golf clubs all in one place, and getting them delivered to your door quickly. They're successful because they put their resources into the buyer experience. They let other people invest in factories, warehouses, and inventory.
Amazon might have saved itself a lot of trouble by reading Charlie Rheault's history of the Riverside Press (you can even buy it on Amazon). The Riverside Press was a printing plant operated by Houghton Mifflin until the 1970s, and their story illustrates that assets aren't worth keeping if you have to bully your customers and business partners into paying for them.

 

By Heidi Tolliver-Nigro on Mar 31, 2008

<> I would argue that, while in most cases that's true, when a company becomes so monolithic that it changes the dynamics of the marketplace so that companies and entire business models essentially become dependent upon it and consumers essentially have few (or no) other choices, the equation changes, too. So Microsoft becomes a better example. Amazon has become so monolithic that, in order to survive, entire self- and subsidy publishing industries have had to become almost entirely dependent upon it. Thus, Amazon has power over individual companies and even entire marketplaces that other companies don't. If Amazon succeeds in its effort to require all of its books to be published through BookSurge, it will completely change the subsidy and self-publishing landscape, not because of market forces but at the whim of a single company. These Amazon-pressured-to-become-Amazon-centric industries, essentially, will have no other options. As a niche Christian publisher in my "other" life (Strong Tower Publishing), I know all too well the increasingly narrow options for marketing books because of the pressure exerted by Amazon. From when I started in 2000 to today, the retail options have dwindled to frighteningly low levels. I have watched editing, design, and publishing models be conformed by the opportunity and monolithic nature of Amazon, and by changing the equation in such a drastic fashion, this decision would have ripple effects that greater than might first be obvious on the outside. Without Amazon being able to market through Amazon, POD publishers have little value. So one by one, those businesses disappear. So do the editing, design, and other services that were supported by them. Amazon says that authors and publishers can use its Marketplace to sell books, thus not impacting POD publishers as greatly, but that's not, in fact, true. The Marketplace option has much higher costs than the other model, and many POD publishers that can make money selling through Amazon's regular channel will not be able to make money through Marketplace. It's not a matter of book price. It's a matter of hidden costs, such as packaging, shipping, and transportation. I called Lighting Source (through whom I print all of my company's books) this morning to ask about the issue and was told flatly "not to worry about it," that LSI customers would be getting a letter on the issue shortly. Apparently, there is a clash of lawyers going on even as we speak. And, as someone who has been offered great opportunity but also been forced into dependence upon Amazon, I wait for the results with bated breath. Heidi Tolliver-Nigro

 

By Aaron Shepard on Mar 31, 2008

You might be interested in the post on this issue on my Publishing Blog, "Amazon Declares War on Lightning Source." http://www.aaronshep.com/publishing/blog.html Aaron Shepard Author, Aiming at Amazon Webmaster, Sales Rank Express

 

By jeff lazerus on Apr 03, 2008

And Lightning Source has a near monopoly on the print side. I would love the opportunity to crack that market, but small publishers seem to use LSI almost exclusively. Good for them. Bad for me, as a smaller upstart. Maybe I can get a job at Amazon. This is not the same as the whole "Adobe Reader/Kinko's button" debacle. That was a complete slap in the face to the thousands of small printers who rely on consumer business to feed their kids. Hugely stupid. It's also not as important an issue as "do not mail" legislation. In this case, it's surprising that Amazon hasn't done this sooner, actually. Also, if you are a writer for one of the most highly regarded print information sites on the web, this post seems quite biased since you have some sort of self-interest. There are other distribution channels. If Amazon wants to try printing, great. Maybe you should complain to HP instead, for selling to competitors. Maybe I will complain to HP myself.

 

By Adam Dewitz on Apr 03, 2008

Jeff: I wouldn't categorize Lightning Source as having a monopoly on the production of books for Amazon.com. Lightning Source made a substantial investment in developing a complete system to serve a niche market. They developed a lot technology themselves: MIS, supply chain management, production automaton, even a custom RIP for their print engines. It took them almost 10 years to see a return on their investment. Until Amazon.com made their decree you had the "opportunity to crack that market" if you were willing to make the investment.

 

By Mike on Apr 03, 2008

Jeff - Stop asking for a handout and make a process that can get Amazon a book in the supply chain in 20 hours. I am sure there are some solutions that could be customized a bit to fit this process. Or print 5 books and send them to Amazon, when one gets ordered ship them another to have on hand. The fact of the matter is that Amazon wants to fulfill POD in a timely manner. Anyone will have a hard time getting that book into Amazon's supply chain in the time they need. Your comment and the Adobe Reader/Kinko's button points out how this industry lacks innovation. You could have made that button and distributed it yourself, in fact http://printceoblog.com/2007/07/adobe-fedex-deal-good-for-industry#comment-1630" rel="nofollow">you still can! Jeff, your lack of creativity is a slap in the face to the printing industry in general and to people who innovate.

 

By drjoewebb on Apr 03, 2008

This is the risk of competition. This is not an "Adobe situation" like we had last year. I'm sure many small publishers were selling on their own and through other websites. This is all the more reason for even self-publishers to work with ondemand printers who will market aggressively, and also for self-publishers to remember that they need to promote their work as well. They should still sell through Amazon. Amazon is a retailer, and they can do this, as annoying as it may be.

 

By Mary on Apr 13, 2008

Did you know that if you agree to work with Booksurge through Amazon, you will not be able to offer better discounts to other parties through your own website or other outlet? Amazon not only wants to control the POD market, they want to price-fix as well. They are seeking to tell publishers and independents how they can sell and at what price. It's a "do it our way or no way." I'm sorry, but that's totalitarianism. Not free trade, capitalism. If they are allowed to do this, then they will soon do the same to small non-POD publishers, then go after the big boys. It all seems pretty innocuous on the surface, but I'm sure most dictators seemed decent at first, too. If writers and publishers don't stand up to Amazon now, we deserve what we get. I, for one, am launching a letter campaign and encouraging everyone I know to leave Amazon in the dust.

 

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