Wednesday, June 6, 2012

Amazon.com Buys Avalon Books! Now What?

So, Amazon.com has purchased Avalon Books. This is going to make things interesting.
For the better part of a year, the rumor mills were cranking out the line that Amazon was looking to get into publishing for itself and just dispense with dealing with major publishers altogether. Now it has finally happened.
I will say the book publishing companies have done a much better job at dealing with ebooks than the music publishing companies did with digital music. Which is to say, they made the same mistakes that the music industry did, just not as badly. The music industry erred so badly, that they pretty much left themselves wide open for an upstart to sweep in and take it away from them. That upstart was Apple with the iTunes Music Store. Apple is now arguably, the largest music distributor on the planet.
My suggestion to company executives, next time you hear about a new technology popping up that might affect your business? You’d damn well better park your “I know better than you” attitude at the door of your office and go and talk to your newest and youngest employees. Instead of viewing these new technologies as threats to your distribution channel, try looking at them in the light of how to leverage them to your advantage.
The music industry didn’t.
Steve Jobs did.
Enough said.
Ebooks have actually been around for a lot longer than people think. For almost three decades now. The reason they never caught on until a few years ago was that there were no viable ebook readers on the market. It could also be mentioned that there were a limited number of titles available. Everyone knew that ebooks would eventually catch on, it was simply no one had come up with a good, affordable, ebook reading system to support that.
This was when the publishing industry made their biggest mistake. They took the attitude that ebooks would never really catch on. That ebooks were merely a sideshow that would come and go. In fact, I know people in the book selling industry that still stubbornly cling to this notion! Even though sales on ebooks have already outstripped sales of printed paper books.
So, the publishers basically sloughed off ebooks and Amazon.com stepped up to take them.
Amazon.com took their cue from Apple’s iPod. Build the device to support the concept of ebooks and start pushing it. And in very short order, Amazon.com did for ebooks what Apple had done for MP3s: created a device that worked and worked well at presenting ebooks for reading.
It didn’t take long for the publishing industry to realize that they had shot themselves in the foot, much in the way the music publishing industry had shot itself in the head concerning digital music. They had created a monster by handing the ebook market to Amazon.com.
Amazon.com first became the largest distributor of books in the world. Then Amazon.com took over the ebook market. They already had the infrastructure needed for distribution, it was just a matter of loading the ebook files onto a disk where people could download them after paying. They became such a heavyweight in the book distribution market, that they began to dictate terms to the publishers, much in the way Walmart dictates terms to their suppliers. “Play by our rules now, or we’ll cut you off.”
And that’s what Amazon.com did: they cut off Macmillan when they balked at Amazon.com’s demands. The boycott didn’t last long, but it sent a shockwave through the industry! Amazon.com didn’t just prove they were willing to play hardball, they put nails in the bat, too.
Buy purchasing the publishing company, Avalon Books, Amazon.com has sent a chilling message to the publishing industry: We don’t need you anymore!
Amazon.com had done one thing by simplifying the process by which an independent author could publish himself via converting it to an ebook. Now, they’ve stepped up to the next level by bringing in the ability to actually nurture new talent by becoming a publisher themselves.
Amazon.com has upped the ante. The key question is how are they going to attract new talent to their publishing arm? Is this going to bring about new competition into a stagnant industry? If it does, this could result in a writer’s spring where better terms are offered to authors to try and lure them in. Or, as the field of publishers narrows, will Amazon.com turn on the authors and say, “Now that we are the only game in town, we are going to dictate new terms to you for royalties…”
Again, this is one of these situations where only time will tell what is going to happen next. Many pundits have been saying that the publishing industry has been terrified that Amazon.com would get directly into the publishing business, rather than just being a distributor. Well, now that it has happened, we’ll see the result.