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“We’re in Amazon’s sights and they’re going to kill us.”

January 22, 2012

According to one unidentified industry insider, Amazon may be drawing down on the Big Six.

Standard disclaimer: The opinions in this article are mine and are not necessarily those of the Florida Writers Association, its leadership, or its members.

According to, that’s the last line in a long e-mail from a publishing insider (full text here). The insider is convinced that Amazon is trying to spend the New York publishing industry out of existence, using an approach similar to the one the US used to exploit the USSR’s internal weaknesses in the 80s. Spend an enormous amount of money and make your competition bet it all to keep up.

Publishers can’t afford a $1 million royalty. Amazon can. Publishers can’t afford to take a big loss on books. Amazon can. Publishers don’t have something else to fall back on to pay the bills. Amazon does.

One could argue, as Sarah Lacy, the author at pandodaily does, that publishers are lazy, going with the sure thing, that they lack innovation. And while that might be true, if Amazon’s approach is to spend the Big Six out of existence, that could be considered a predatory business practice. And if it happens that way, the publishers, be they lazy, scared, or just stuck in an old business model that doesn’t work, will petition the Justice Department to bring an anti-trust lawsuit on their behalf.

Either way, a model in which Amazon is the path to publication isn’t healthy. Anti-trust laws exist for a reason and predatory business practices are one of them.

In its defense, Amazon is doing things traditional publishers aren’t doing. There’s a reason Seth Godin, JA Konrath, and others are going to Amazon. They’re getting more money, but that’s not the entire picture. A document was recently leaked from Hachette indicating why publishers are relevant.

Among the points, one directly challenged by the insider in the nando article, is that Hachette finds new, unique voices. It acts as a venture capitalist for writers, pledging advances to fund the writing process. They sell and distribute books and help authors build a brand and protect their intellectual property.

Konrath responded that publishers should stop saying they’re relevant (when you have to tell people–even internal people–that you’re relevant, that’s not a good sign). He says they should actually be relevant. While Konrath’s first point deals with paying authors, the rest do not. They deal with time to market, marketing, and fighting piracy. Konrath says publishers should stop because the pirates will always win (everywhere but Pittsburgh).

In other words, it wasn’t just the royalties that lured Konrath to Amazon. It was the overall business model.

This fight has many rounds left, but the pando article certainly caused a number of waves. The tea leaves seem to say that publishers must become more nimble to survive. But where there’s turmoil, there’s always opportunity. And that is good for authors or would-be authors.

One Comment
  1. January 23, 2012 6:54 pm

    There’s always one at the bleeding edge of something that is frowned upon until the product or methodology becomes accepted.

    I have grown to appreciate some of Amazon’s offerings although I admit as a self-published author it becomes difficult to distinguish quality books from the unedited garden variety offering. Whatever the case, Amazon is bridging the gap with grander resources where the traditional print world does not care to.

    For all the rabble that Amazon accepts, the reader is not stupid and authors with good content are able to shine through in a shorter period of time.

    These days in the larger brick and mortar bookstores, it’s still all about the imprint. I’m curious to see how Amazon will bridge that gap.

    Great post.

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