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The Future of Competition in Publishing: Be Very Afraid

Adventures in Self-Publishing

Lord Stanhope's Printing PressIf you were to count up all of the earnest articles, blog entries, and even Colbert Report routines that have been dedicated to the Amazon vs. Hatchette dispute, well, you wouldn't have an accurate number, because more would have been written while you were counting. Curiously enough, almost 100% of them  miss the point of greatest concern to authors. The real issue isn't whether the on-line retailer or the publishers win the current battle, but whether there will be any real competition in the marketplace in the future regardless of who wins. Right now, it's very hard for me to see how there can be.  Here's why.

Authors today have only one real and one theoretical way to get their books in front of  potential buyers. The real one (because it's available to anyone) is to self-publish, and the theoretical  one (because first-time authors have at best a one in a thousand shot at success) is to somehow secure a contract with a traditional publisher of any size.

Despite those odds, the existence of traditional publishers still matters, however. That's because no matter how inept and unable to adapt they may have shown themselves to be in the face of Amazon, they still act as a brake on how much Amazon can cut prices. True, Amazon has been willing in the past to sell books below cost, but Wall Street has been losing patience with such practices, and the retailer has been under increasing pressure to start showing profits. You don't have to go too far out on a limb to conclude that this is why Amazon is putting the screws to Hatchette right now, or that it plans to do the same with each of the other publishers as its contract comes up for renewal.

That brings us back to the contract negotiation, and what the likely consequences of the outcome, one way or the other, is likely to be.

If Hatchette and the other big publishers are successful in holding off Amazon, then it's pretty safe to assume that not much will change with the way they do business. But if Amazon wins, the traditional publishers will be under severe financial pressure. Given the fact that they have steadfastly refused to innovate or change thus far, it seems more likely to assume that they will react by dramatically cutting overhead than by exercising creativity.

And they're certainly not going to react by raising royalties for authors, so the already increasing movement of published authors to self-publishing can only accelerate.

If cost-cutting fails to maintain the profit margins of the publishers, one would expect that the conglomerates that own them will either sell them, or, if they aren't happy with the price they can get, spin them off as independent public companies, distributing the stock to their current shareholders as a dividend. This isn't speculative; it's how corporations work. Just last month Time-Warner announced that this is what it would do with its magazine business. Next year, Time, Inc., the former crown jewel of the conglomerate, will become an independent public company instead of a drag on Time-Warner's earnings. A list of sales of insufficiently profitable subsidiaries and divisions would run into the tens of thousands.

Should authors care which outcome occurs? The answer depends on whether you're looking at the near or the long term.

The short term answer looks like this: if the publishers win, then Amazon will have an incentive to continue to innovate, making it easier and more profitable for authors to sell directly to Amazon. This will maintain incentives for more published authors to move to self-publishing.

On the other hand, if Amazon wins, publishers will be under further price pressure, and will presumably provide fewer, and not more, services to authors. As more and more authors shift to Amazon, and as more and more publishers go out of business or downsize or become even more selective in who they take on, Amazon's control of the terms under which authors are paid will dramatically increase.

So in the short term, the answer is yes - it matters.  But how about in the long term?

That, I submit, is a different story. The reason is that no matter who wins, the degree of competition in the marketplace is going to continue to decrease. The only question is how quickly the traditional publishers continue to lose authors, because it appears increasingly true that they simply aren't offering a superior alternative to self-publishing. Either way, whether it takes two years or five, it seems certain that Amazon will end up with monopoly power, if only because the traditional publishers seem to be so incapable of taking any action to prevent it.

Once Amazon owns, say, 75% of book sales - or only eBook sales - or even just eBook fiction sales (if indeed it does not have this last percentage already) -  it will have exactly zero incentive to maintain royalties at a higher level than traditional publishers, or to offer any new services.

And why should they, if they will receive the same amount of revenue either way? Every dollar spent on behalf of, or paid to, an author decreases Amazon's own profits. Always remember that first and foremost, Amazon's business model, like Wal-Mart's, is based on providing the lowest price possible to the customer.  If you'd like to see what happens to product innovation when a company successfully acquires a monopoly, you might want to give a read to this: Why Johnny Can't Format (a book).

So where does that leave authors?

In trouble, and if you want to see what trouble looks like, take a look at the music industry, where indie musicians make pennies when their songs are played tens of thousands of times on the streaming services that are now dramatically cutting into download sales as well as CD sales.

What authors really need is more competition in the marketplace, and it's difficult to see where that will come from if Amazon ultimately succeeds in gaining effective control of  prices.

So the moral of the story is this: it doesn't matter whether Hatchette is "good" and Amazon is "bad" or the other way around. And looking into the future, it doesn't matter whether Amazon has been "good" to authors in the past. What matters is to be clear-eyed in understanding what the future holds.

Amazon is a business, and it will act in exactly the same way that every other public company always has, and always will. If it can gain a monopoly through legal means, it will. And when it has succeeded in grasping that rarest of holy grails, it will take advantage of its monopoly power in every legal means available to it. That most assuredly will include lowering author royalties to the lowest price it can while maintaining the flow of new content.

Given the fact that authors always have, and doubtless always will, continue to write no matter how unlikely the prospect of financial success, you can decide how low those royalties will go. If you want my opinion, it will be lower than traditional publishers are paying now.

Can you come with a reason why I'm likely to be wrong? If so, I'd love to hear it.


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For those that are interested, there's a very spirited debate about this blog entry going on over at my writer's blog, Tales of Adversego, where I also posted this entry.  You can check it out here:  http://bit.ly/1pT08Bd

 

  -  Andy

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The Future of Competition in Publishing: Be Very Afraid
Authored by: SamanthaE on Tuesday, September 29 2015 @ 09:42 AM CDT

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The Future of Competition in Publishing: Be Very Afraid
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Authored by: anda on Wednesday, October 07 2015 @ 10:09 AM CDT

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This guide Anda Sumatra to visit Medan, North Sumatra region and vacation in the tourist place of interest. Anda Sumatra this region became world famous for many things. There are many interesting objects that are worth visiting here. There Anda Sumatra cool plateau, waterfalls, historic sites, unique museums, religious buildings are often the object Anda Sumatra photography and other objects that you must visit while on vacation in North Sumatra.

Anda Sumatra capital of North Sumatra province is Medan. Medan is the largest metropolitan city Anda Sumatra outside of Java and is the third largest city in Indonesia after Jakarta and Surabaya. Anda Sumatra Medan into the gate region of western Indonesia. In the city of Medan can be found several large buildings and magnificent Anda Sumatra which will keep the legacy of history and noble religious values. The attractiveness of the city of Medan Anda Sumatra make this city as one of the most popular tourist spots across the country.

 

Anda Sumatra Medan is one of the largest cities in Sumatra, even in Indonesia. Medan is the capital of the province of North Sumatra. Anda Sumatra cities including major cities in Indonesia which is inhabited by various ethnic groups. As a major city, Medan Anda Sumatra has many interesting tourist places. One of the tourist spots in the field are very popular even abroad Anda Sumatra namely Lake Toba. Anda Sumatra infrastructure development is very influential in stretching in the field of tourism. Natural attractions is the mainstay Anda Sumatra tour packages offered in Medan. Anda Sumatra .

Thank You.

 

The Future of Competition in Publishing: Be Very Afraid
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The Future of Competition in Publishing: Be Very Afraid
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The Future of Competition in Publishing: Be Very Afraid
Authored by: warda jamila on Saturday, January 23 2016 @ 06:14 AM CST
The Future of Competition in Publishing: Be Very Afraid
Authored by: warda jamila on Saturday, January 23 2016 @ 06:36 AM CST
The Future of Competition in Publishing: Be Very Afraid
Authored by: indahdewi on Sunday, January 31 2016 @ 07:01 AM CST

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The Future of Competition in Publishing: Be Very Afraid
Authored by: cimacity on Thursday, February 25 2016 @ 07:50 AM CST
The Future of Competition in Publishing: Be Very Afraid
Authored by: jakibadr on Wednesday, March 09 2016 @ 03:37 PM CST

 إذا أردت عيش سعيد في منزل هادئ مفعم بالحيوية فاحرص على بقاءه نظيفا،لأن النظافة أساس سعادة الإنسان،فنظافة منزلك تعكس شخصيتك،لذالك فأنت بحاجة إلى شركة قمة الخليج،فهي شركة تضع بين يديك كل ما ستحتاجه للحصول على بيت نظيف و فاخر ،و من بين هذه الخدمات التي تقدمها لعملائها هي • خدمة النظافة العامة شركة قمة الخليج تضع بين أيديكم خدمة النظافة العامة التي تشمل شركة تنظيف منازل بمكة المنشات و الفلل الفاخرة وكذلك الشركات و الفنادق وتقوم شركة تنظيف مفروشات بمكة كذلك تنظيف المسابح والواجهات الزجاجية والسيراميك،و كل الأمور المتعلقة بالتنظيف،كما أن شركة تنظيف كنب بمكة تعتمد في تقديم خدمة النظافة العامة أسس منتظمة فى شركة تنظيف موكيت بمكة و ذالك باستخدام مواد ٱمنة عليها ترخيص من وزارة الصحة و هذا لهدف وحيد تقديم الجودة و بامتياز لأن النظافة شيء هم في حياتنا اليومية، فقمة الخليج شركة تضمن لك عزيزي العميل فضاء نقي لأسرتك ولذلك لكى نسهل لك فنحن لنا فروع فى جميع انحاء المملكة شركة تنظيف سجاد بمكة • خدمة إنشاء العوازل: نظرا لارتفاع درجات الحرارة بالمملكة ستزيد من ضرورة عزل الأسطح من للحفاظ على درجة منازلكم و تفادي تسرب أشعة الشمس، تضع بين أيديكم خدمة إنشاء العوازل التي تعتمد على مواد ذات جودة عالية للإتمام خدمة إنشاء العوازل على أكمل وجه، فشركة هي الوحيدة المتخصصة في هذا المجال بأعلى المستويات،لأن لها عمال كفئ و مدربون لتنفيذ خدمة إنشاء العوازل بكل معايير الجودة ونقوم بالعديد من خدمات العزل مثل شركة جلي بلاط بمكة

The Future of Competition in Publishing: Be Very Afraid
Authored by: seofighter on Friday, May 13 2016 @ 09:40 PM CDT
The Future of Competition in Publishing: Be Very Afraid
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The Future of Competition in Publishing: Be Very Afraid
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The Future of Competition in Publishing: Be Very Afraid
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The Future of Competition in Publishing: Be Very Afraid
Authored by: manunited on Sunday, June 26 2016 @ 08:16 PM CDT

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