Apr 052008
 

I wrote earlier about Amazon attempting to force print-on-demand publishers like iUniverse and Lulu and other small-press publishers to use BookSurge to print all books sold through Amazon. Essentially, the retailer is also the printer and wants deep discounts from publishers for the privilege of printing through them. The discounts will lead to lower royalties for authors. In other words, authors will be hit the hardest by Amazon’s latest move, authors who already struggle to make every sale and an income from their books. Since I first wrote on this breaking story, there have been further developments, which you can read about on WritersWeekly website. There is some confusion as to which POD and small-press publishers have acquiesced to Amazon’s demands; it doesn’t help that Author Solutions — the parent company of iUniverse — issued an incomprehensible (to me!) statement. WritersWeekly is keeping everyone up to date about breaking developments, a welcome service as many of us are not being kept up to date by our own publishers.

The American Society of Journalists and Authors (ASJA), a respected organization that advocates on behalf of authors and journalists in the United States, issued a press release yesterday. Their stand against this move by Amazon could not be clearer. The Authors Guild, the society representing published book authors, wrote to their members denouncing Amazon’s move and has made that e-mail message public. I’ve reproduced them both here in full. They bring up different points as to why this is a really bad idea on Amazon’s part.

ASJA Press Release

CONTACT:
Russell Wild, ASJA president, 610-530-0078
Salley Shannon, ASJA vice president, 301-740-2819

April 4, 2008

Big, rich Amazon now gouging independent publishers — and writers, most of all

The American Society of Journalists and Authors, the nation’s trade association for freelance nonfiction writers, is disgusted with Amazon’s announced move requiring that all print-on-demand (POD) books sold on Amazon’s site be printed by their own print-on-demand house, BookSurge.

As of April 1, Amazon is requiring small publishers to sign a contract agreeing to such demands.

At first, Amazon representatives denied they were threatening small booksellers with having the “buy it” buttons for their books turned off if they didn’t sign on the dotted line. Later this week, Amazon admitted the move, as reported in Writer’s Weekly and The Wall Street Journal. The contract being offered to print-on-demand publishers, which ASJA officers have seen, also includes a confidentiality clause forbidding disclosure of not just specific contract terms, as is typical, but any discussion at all. Thus, small publishers who have signed the contract may not say so, much less reveal the pressure they were under.

In addition, Amazon is punishing publishers who sell their books at a discount from cover price directly on their publisher’s websites. It is taking that discounted price as the book’s “cover price” and then applying their own discounts accordingly.

“We applauded when Jeff Bezos and Amazon gave small publishers and even writers who self-published a way to get their books before the public,” observed ASJA President Russell Wild. “With these grabby, strong-arm tactics, Amazon negates all that — and the years of goodwill it has built up with writers, who ultimately will bear the brunt of any price increases in the printing of independently published books.”

ASJA joins PMA, the independent book publishers association, which also has spoken out against Amazon’s move to forcibly get business for its own BookSurge subsidiary. The writer’s group also will urge the Washington state attorney general’s office to investigate whether Amazon’s move constitutes restraint of trade or otherwise violates anti-trust laws.

Authors Guild Message to Members

Amazon Tightens Grip on Long Tail
Text of April 4, 2008 e-mail to members:

Last week Amazon announced that it would be requiring that all books that it sells that are produced through on-demand means be printed by BookSurge, their in-house on-demand printer/publisher. Amazon pitched this as a customer service matter, a means for more speedily delivering print-on-demand books and allowing for the bundling of shipments with other items purchased at the same time from Amazon. It also put a bit of environmental spin on the move, claiming less transportation fuel is used (this is unlikely, but that’s another story) when all items are shipped directly from Amazon.

We, and many others, think something else is afoot. Ingram Industries’ Lightning Source is currently the dominant printer for on-demand titles, and appears to be quite efficient at its task. They ship on-demand titles shortly after they are ordered through Amazon directly to the customer. It’s a nice business for Ingram, since they get a percentage of the sales and a printing fee for every on-demand book they ship. Amazon would be foolish not to covet that business.

What’s the rub? 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. Since Amazon has a firm grip on the retailing of these books (it’s uneconomic for physical book stores to stock many of these titles), owning the supply chain would allow it to easily increase its profit margins on these books: it need only insist on buying at a deeper discount — or it can choose to charge more for its printing of the books — to increase its profits. Most publishers could do little but grumble and comply.

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.

We’re reviewing the antitrust and other legal implications of Amazon’s bold move. If you have any information on this matter that you think could be helpful to us, please call us at (212) 563-5904 and ask for the legal services department, or send an e-mail to [Subject=RE: Request for Information: Amazon Moves to Seize the Long Tail ]legalservices@authorsguild.org.

Feel free to post or forward this message in its entirety.

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Copyright 2008, The Authors Guild. The Authors Guild is the nation’s largest society of published book authors.

The Authors Guild is the nation’s largest and oldest society of published authors and the leading writers’ advocate for fair compensation, effective copyright protection, and free expression.

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  • Author

    Someone with Microsoft Press told me that when Microsoft created it, the executives were told in no uncertain terms that Microsoft had no interest in running a vanity press, that they had two years to show a profit or go out of business.

    Amazon bought BookSurge in 2005, just over two years ago. The ensuring time has done nothing to fix problems that make going with Lightning Source rather than BookSurge one of the easiest decisions any publisher can make.

    It’s easy to expect that Amazon execs may have given BookSurge a similar ultimatum and, with the warning about to come due, BookSurge demanded one more opportunity, the ability to threaten POD publishers with removal from Amazon sales. Amazon execs might not have thought through the implications of what they were doing.

    If so, then hanging tough for a little bit longer, stalling off or even refusing to talk with BookSurge’s sales staff when they call, may pay dividends in the long run. BookSurge might just go away and Amazon might learn to leave the printing and publishing to others.

  • Author

    Someone with Microsoft Press told me that when Microsoft created it, the executives were told in no uncertain terms that Microsoft had no interest in running a vanity press, that they had two years to show a profit or go out of business.

    Amazon bought BookSurge in 2005, just over two years ago. The ensuring time has done nothing to fix problems that make going with Lightning Source rather than BookSurge one of the easiest decisions any publisher can make.

    It’s easy to expect that Amazon execs may have given BookSurge a similar ultimatum and, with the warning about to come due, BookSurge demanded one more opportunity, the ability to threaten POD publishers with removal from Amazon sales. Amazon execs might not have thought through the implications of what they were doing.

    If so, then hanging tough for a little bit longer, stalling off or even refusing to talk with BookSurge’s sales staff when they call, may pay dividends in the long run. BookSurge might just go away and Amazon might learn to leave the printing and publishing to others.

  • Shireen

    That sounds logical to me. Hopefully BookSurge will go away, but I suspect not just passive, but active resistance may be what will get Amazon to change its mind.

    iUniverse has just confirmed in an e-mail to me that they are using Lightning Source and will continue to do so when printing my books.

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