Amazon is taking on book publishers

By January 23, 2012 2 Comments

Last May I wrote that  I’m a big fan of Amazon as a business. Since then my admiration has increased – Bezos and his team continue to pick bold strategies and execute them well. The success of the Kindle Fire is grabbing all the headlines but the company is also quietly turning the book publishing industry on its head.

As you may have heard Amazon is now publishing authors directly, in competition with publishers. Just like publishers they offer advances and marketing and distribution services. Seth Godin is one of their authors. And their position vis a vis traditional publishers is strong (from Techcrunch):

Amazon’s publishing arm is surprisingly strong. They have a number of benefits including inexpensive print-on-demand as well as a massive Kindle install base. What do traditional publishers have? Well, Amazon.

There are even allegations that Amazon is consciously trying to force publishers out of business by offering leading authors above market advances that mean Amazon will make a loss on their book. Sarah Lacy explores this point in detail here.

It seems to me that ebooks and the web are changing the rules for publishing in ways that render a lot of the traditional publishing activity obsolete. Authors are able to market direct to their customers using social media and now that we can read authors blogs, book reviews and even download one or two chapters for free the ability the role of gatekeeper is less important. To adapt and survive in this new environment traditional publishers will need to shrink their businesses. In common with many other industries transitioning to digital they are finding that terribly difficult. Step in Amazon.

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