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Further Thoughts on Amazon/BookSurge

I keep turning the Amazon/BookSurge story over in my mind, and decided today that it was worth a deep look at the stakeholders, and their stakes:

Print-on-Demand (POD) publishers: These include self-published authors as well as publishers with tens of thousands of titles. The POD model is cost-effective for many types of publishing. POD publishers choose their printers based on cost, quality of the product they turn out, and other differentiating terms.

Amazon: Not only do they sell books, but through their POD service BookSurge, they print them. They have just mandated to POD publishers that they will only sell POD titles printed by BookSurge. If POD publishers want to sell non-BookSurge books, they need to pre-print copies and send them to Amazon’s warehouse. This takes the “OD” out of POD, and defeats the business model entirely.

What Amazon has done, essentially, is force the POD publishers to choose between BookSurge, its proprietary service with a proprietary format, and Lightning Source/Lulu/etc. Amazon says that it hasn’t actually forced a choice — that publishers are free to use whatever service they like and then pre-print five copies to be stored in Amazon’s warehouses. For a small publisher, that’s pretty demanding, and the fact is, most POD publishers use on-demand technology because it’s cheaper. By pre-printing titles for sale, small publishers get into the same business that mainstream publishers do — the business of pulping and remaindering books that don’t sell.

Ingram: Not only do they distribute books, but their POD service Lightning Source prints them. Lightning Source is the largest POD service in the country. They also ship titles for Amazon that aren’t carried by other sources. Ingram on Monday said that none of this actually had any impact on Lightning Source, but that’s not the case. Amazon has said they will not send true POD orders to Lightning Source. The only way they will sell Lightning Source titles is if they already have those books in the warehouse.

Barnes & Noble: Like Amazon, of course, they sell books. They also have a very close relationship with Ingram. They will not sell any books printed by BookSurge. It may be that Ingram doesn’t do anything directly to Amazon in retaliation for this loss of business, but they might suddenly get even closer to Barnes & Noble than they already are — maybe team for an exclusive digital initiative.

Baker & Taylor: Like Ingram, they distribute books. They are the preferred vendor for Amazon, though Amazon will go to Ingram if B&T doesn’t carry the book in question. One issue is, will the non-BookSurge books reside in B&T warehouses? Could B&T find itself carrying Lightning Source books because Amazon will only deal with those as they deal with books from non-POD publishers?

Borders: In trouble. Relaunching a website, purportedly on May 3. This is where Borders could get smart and play Switzerland. They could serve as a POD portal, selling all POD titles regardless of affiliation. But at this point it’s asking a lot for Borders to keep its head above water, much less strategize at this long-tail level. So unless they’ve suddenly acquired some major talent in several divisions of their Web site, that’s rather a long shot.

The Customer: He just wants a book — his mom’s book, a how-to book, a book on an obscure topic. He wants a book that may only be available on-demand. How does he know where to find it? Why must he go to Amazon, and then B&N, to see if he can get it? Amazon’s not going to sell Lightning Source titles; B&N’s not going to sell BookSurge titles. But the customer doesn’t know or care who the printer is. He just wants to be able to find and buy the book.

That all said … it’s worth looking at both Lightning Source and BookSurge with a microscope.

Ingram has done some interesting things with regard to book distribution in the last few years. First, they created Ingram Digital Group (IDG), which is charged with exploring content delivery initiatives to both retail outlets and libraries. Second, they acquired VitalSource, an ebook platform heavily in use by college textbook publishers. Third, they acquired Coutts, whose MyiLibrary product is also an ebook platform for the academic and institutional market.

So Ingram has these delivery systems for large amounts of content, ready to package as white-label platforms with subscriptions included. With the digital files that Lightning Source uses, Ingram could conceivably distribute the current POD offerings as ebooks as well, distributed across its Coutts or VitalSource platforms.

Meanwhile, Amazon is scanning books for its “Look Inside” program. Obviously, it has a platform capable of delivering ebooks — it does so daily. If Amazon insists that its POD publishers stick with BookSurge, and treats other POD vendors as traditional book publishers, then it could conceivably build a feeder system like IDG has with Lightning Source: from BookSurge into the “Look Inside” platform and into ebooks.

And if Ingram’s longtime alliance with B&N (10 years ago, B&N attempted to buy Ingram) is threatening Amazon — if the mere potential of IDG allying with B&N.com to distribute Lightning Source/VitalSource/MyiLibrary content as ebooks is at all threatening to Amazon — then surely Amazon’s sudden focus on BookSurge is a natural one.

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  • http://www.philiphowe.com Phil Howe

    I realize that article is a year old but I found it to be very informative and so I thought I would update the info and try to reach Amazon directly and see what is happening now, July 09+
    After 12 calls to foreign customer service reps who didn’t know anything about Amazon’s policies, and 2 hours on the phone, I finally reached a US agent who said he will send me the info and hopefully it will be something I will pass on. I am sure other authors have similar questions.
    Basically- it comes down to: if you use BookSurge (Now Amazon owned) do they block other POD published works and make it hard to get into the stores- but Amazon has, I believe around a 60%+ total market share of all books sold.
    Or- do you use Lightning Source, (or another POD publisher) who works with Ingram for distribution and is more likely to get into the stores, but will no longer be sold thru Amazon’s site.
    I expect it is a juggling act for both, but if I find out I will try to post it here and elsewhere. Most of the other info is so outdated or sour on Amazon and BookSurge that it would not be a fair comparison.
    It would be nice to hear from authors who have used either publisher/printer.
    By the way, the best number to reach Amazon is
    800 201 7575. I tried about 10 others and I did get to make jokes with 6 people in India, 1 from Malaysia, one kid from Costa Rica, and a nice woman from Canada, all completely ignorant of how to answer my questions. Oh well.
    Phil

  • Joe

    the article is misleading because Ingram OWNS Lightning Source, Inc, and Lightning source has been ripping off want-a-be authors by adding continuous fake miscellaneous cost, and if author fails to pay those fraudulent charges, they simply deducting it from author’s compensation and if author wants answers, they immediately cancel contract. The POD business is America’s dirtiest best kept secret, and obviously, they continue to promote lies such as in the above article…probably written by one of their own.According to INGRAM’S LIGHTNING SOURCE, they sell over one million POD per year…and a few hundred dollars fraudulent intake from each author or pod publisher, it adds up to a hefty sum in their pockets.