Publishing Wars

Thanks Amazon

am  04.12.2012 in Hamburg in der Zentralbibliothek. Foto: Axel Heimken/dpa
Amazon is not the enemy. Source DPA.
  • Why it matters

    Why it matters

    Amazon’s radical business model and investment in digital publishing have revolutionized the way books are sold. They have also made it the dominant force in publishing, leading to criticism.

  • Facts

    Facts

    • Amazon has 237 million active users worldwide.
    • Amazon controls about 65 percent of U.S. e-book and printed book sales.
    • It generates about $5.25 billion in revenues from book sales.
  • Audio

    Audio

  • Pdf

Amazon is an easy target.

Criticism of the online retailer — often well deserved — grew increasingly loud at the Frankfurt Book Fair. The list is long: Amazon is brutish in its dealings with publishers, it treats its workers badly, it has dubious tax and data ethics, and it’s a would-be monopolist in an axis of evil that includes other Internet giants such as Facebook and Google.

The wholesale condemnation of Amazon is considered good form in many circles, even when some of those same complainants sneak off to their cubbyholes and send in an order. But the total damnation of the company is not fair.

For example, when it was announced that Kruso, a novel by the late, great German author Lutz Seiler, had won the German Book Prize, many booklovers immediately downloaded the book onto their electronic reading devices. The publishing industry has Amazon to thank for creating this revenue stream, which benefits both publishers and authors. Bold investments by Amazon have assured that book-selling survives into the digital age.

The producers of e-book readers and the operators of other e-book shops are profiting from the groundwork laid by the U.S. giant.

Now the producers of e-book readers and the operators of other e-book shops are profiting from the groundwork laid by the U.S. giant. The success of the German firm Tolino demonstrates that there is room in the e-book universe for a well-conceived straggler.

Amazon functioned as the catalyst for an industry that stood by helplessly when confronted by the digital challenge. Publishers themselves should have been the ones to promptly embrace the digitalization of content by creating a shared e-book reader with open standards where books from major publishers could be bought. If introduced promptly, it would have shaped the market. But instead, little action was taken.

Similar mistakes were made in the music industry. Corporations couldn’t agree on a single strategy for digitalization, so music files were initially mostly copied and exchanged without the industry receiving a penny. The fact that many people started paying for digital music was due largely to Apple and its iTunes store.

In the digital age, no hegemony rules forever.

Apple was criticized — as Amazon is now — for its closed system and quasi-monopoly. But in the digital age, no hegemony rules forever. As if to underline this point, Thom Yorke, the leader of the band Radiohead, has just very successfully released his latest album on Bittorrent, a file-sharing website.

The dispute between Amazon and the publishers also deserves to be seen from a different perspective. The higher margins on e-books — prices are relatively high compared to printed books — have been made possible by Amazon and its costly development of infrastructure. The company now wants a bigger slice of that extra pie.

Amazon has built an entire system available through Kindle, its e-book reader, and for authors who rely on self-publishing. This is all part of the gauntlet thrown down to traditional publishers, who still place great value in editorial offices, marketing and other expensive operations.

Those who are quick and creative and offer added value will survive in the digital world.

Jeff Bezos, founder and chief executive officer of Amazon, worked hard to achieve a position of strength by investing heavily, keeping prices low and offering first-rate customer service. This allows Amazon to demand financial concessions from publishers, with the threat of delayed shipping, no preordering facility and calling for author boycotts hanging over them if they resist.

Of course, Amazon is also partially responsible for its bad image. The company aroused anger by misusing its virtual monopoly — extortion-like methods don’t play well with customers. And the consequences of new business models such as flat rates for books and increased self-publishing without using traditional publishers must be monitored.

So far, there is no clear indication that the cultural word is being made poorer through these new developments, but vigilance is required.

Fighting Amazon is no help either. Those who are quick and creative and offer added value will survive in the digital world. That’s why large bookstore chains are having problems, while lovingly curated neighborhood bookshops are thriving.

No matter who wins, there is good news for publishers: People will continue to read no matter what the format.

 

The author is Handelsblatt’s bureau chief in Munich. To contact the author: Hoepner@handelsblatt.com

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