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Publishers Beware: Amazon has you in their sights

While I was wrong the other day about Google’s AppEngine being a lock-in play (see the comments on that post), I don’t think I’m wrong that Amazon has serious plans for vertical integration of the publishing industry. Having got retailers on the ropes, they now are aiming at publishers. From a Publisher’s Weekly article entitled As Amazon soars, bookstores creep:

With Amazon’s growing power in book sales, it’s understandable that publishers may be a bit anxious on learning that in Amazon’s 10-k filing with the Securities and Exchange Commission, the company lists among its many competitors not just bookstores but also publishers.

Amazon has seemingly embarked on a number of strategies to lock-in both consumers and publishers.

It is a free-market economy, and competition is the name of the game. But as Amazon’s market power increases, it needs to be mindful of whether its moves, even those that may be good for the company in the short term, are ultimately destructive of the ecosystem on which they depend. I believe that they are heading in that direction, and if they succeed with some of their initiatives, they will wake up one day to discover that they’ve sown the seeds of their own destruction, just as Microsoft did in the 1990s.

At O’Reilly, we have a motto: “Create more value than you capture.” It’s a wise motto for companies far bigger than we are to adopt. If you do that, you ensure a healthy ecosystem. If you capture more value than you create, watch out, because stagnation is on the way.

Amazon has, so far, created huge value for the publishing ecosystem. Now, as they become more powerful, they need to be especially watchful that they don’t irreparably damage an industry on which they too depend.

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  • http://infinitesecond.blogspot.com Benjamin Black

    Couldn’t agree more, Tim. The solution to running out of blue ocean is not to turn it red, it’s to make more blue ocean.

  • Scott Barstow

    Shouldn’t we be heralding the downfall of the monolithic publishing houses just as we are in music, et al?

    It seems to me the future of publishing is more with Lulu and others than with companies like Amazon anyway…

    Buying John Grisham’s next book right from his website, having it printed and shipped to me from Lulu is what I look forward to.

  • bowerbird

    scott said:
    > Shouldn’t we be heralding the downfall
    > of the monolithic publishing houses
    > just as we are in music, et al?

    you betcha.

    and instead of having lulu ship you that book,
    you’ll just pick it up at your local kinko’s…

    print-on-demand where the customer actually is.

    it’s a lot cheaper to ship bits than books.

    -bowerbird

  • bowerbird

    i forgot that i have invented an acronym for it,
    so i might as well put it out there for the world.

    patpod = print at the point of demand

    and it’s really stupid to do it any other way…
    (for instance, sometimes a book is printed pod,
    then shipped to amazon, and then shipped to you.
    why pay for shipping two times, instead of zero?)

    -bowerbird

  • Brrandon Nordin

    Bowerbird et al.

    There’s a big difference between publishing and printing/selling though bookstore etc. Someone still helps commission, select, edit, market etc. And while blogging, Print on demand etc all expand outlets for self-publishing, there’s still something to be said for professionaly mediated works and a defined reward structure for authors as well as others in the value chain.

    Actually publishing is one of the least monolithic industries out there: just go to the Franfurt Book Fair or ABA – around the few (and fewer) large multinationals, are hundreds of small presses – no-one has a monopoly on good ideas. Ditto a bookstore – few outlets carry a wider range of SKUs.

    Its the classic long tail business – and while Amazon could decide to lock up a Stephen King or Obama for an exclusive…they would never publish the next “camel” book…but as Tim points out, they could destroy both the distribution and creation system that allows 100o0′s of special interest non bestselers find an audience each year.

    And P.S: printing a 500 page book at kinkos cost a ton more than buying it from B&N, consumes twice as much paper, and is a disposable object.

  • Rob F

    Regarding the 10-K filing:

    It’s possible that Amazon is seeking to expand the definition of its market as broadly as possible, in order to deflect claims of its competitive power. A broadly-defined market would result in a lower measure of market concentration, at least in terms of the Herfindal-Hirschman Index (HHI).

    I don’t necessarily believe this argument, but I did want to put it out there for debate.

    (I’m not a lawyer or financial analyst; I’m just recalling what I was taught as an economics undergrad).

  • http://garymlewis.typepad.com/educational_imaginations Gary Lewis

    “Create more value than you capture.” I like it. But for any given situation, what does it mean? Is it just a gut feeling or do you have a way to operationalize it? Just curious.

  • http://radar.oreilly.com/nikolaj Nikolaj Nyholm

    tim,

    have you considered that amazon may be listing the publishers as competitors because they (the publishers) will start selling directly? ;-)

    /n

  • http://publishingmojo.blogspot.com/ Victor Curran

    There’s a strange deja vu in Amazon.com’s announcement that they won’t sell print-on-demand titles unless they are printed at BookSurge. This type of vertical integration was common for book publishers a century ago, but they got out of the printing business because they couldn’t afford to tie up their capital in factories.
    So why is Amazon muscling its way into the printing business? Amazon’s value proposition is the buyer experience, the convenience of shopping for books, music, movies, cameras, and golf clubs all in one place, and getting them delivered to your door quickly. They’re successful because they let other people invest in factories, warehouses, and inventory. Why acquire assets if you have to bully your customers and business partners into paying for them?

  • http://www.kenarnoldbooks.com Ken Arnold

    As a startup that’s using the Amazon/Booksurge chain to get up and running with a list quickly, I find Amazon’s strategy a boon to small publishers like me. I can manage the business without maintaining high inventories and invest my money in publicity and book development. I don’t know what Amazon’s long-term strategic goals might be, but it does seem to me that POD as a means of production solves a lot of publishing problems (not all, of course), particularly in the management of inventory and returns. The exclusion of books produced in this way, even when they are not subsidized or self-published, by review media and some stores is probably preventing more small publishers from using these efficient systems. That needs to change.

  • http://www.mayareynoldswriter.blogspot.com Maya Reynolds

    Tim: I agree. The key is that vertical integration issue.

    Amazon now owns all the pieces of the publishing chain on the way to the consumer (the print-on-demand press, the wholesale outlet and the retail outlet). What I find alarming is their willingness to coerce their partners in one part of the chain (the small presses who use their retail services) to increase market share (and revenue) in another part of the chain (their POD operation BookSurge).

    Washington State has agreed to look at the restraint of trade issue. I’m hoping the Department of Justice agrees to do so as well.

    Thanks for this post.

    Sincerely,

    Maya

  • dsanger

    Tim;
    I agree, but the current trend of unchecked capitalism means big corps. will seek to dominate any market they enter and destroy ALL competition. Witness the same forces at work in the US government’s determination to dominate and weaponize space. We just don’t care about cooperation, community, and coexistence anymore. Dominate and Destroy are how we operate in the 21st century–God help us.

  • http://www.koona.com Tomas Sancio

    Hi Tim,

    Amazon is already acting like a publisher with its Kindle. All you need to do is submit your text in HTML format and voilá, it’s available for the Kindle, bypassing everybody.

    But IMHO what publishers provide to the end user (i.e. the reader) is a great big seal of quality. If I see a computer book with a detailed animal drawing on the cover, I’ll assume that it’s at least a capable way to learn a given technology. If not, I have to head for the web to find reviews and if the technical book is new, these reviews will be hard to find. Hence, in the near future, at least the publishers like O’Reilly and friends of Ed with their peer-review added value have little risk in Amazon eating their lunch.

    But Amazon Shorts is a different story (not sure if the pun was intended). All a writer has to do is to create his/her story, have it copy-edited by a friend and post it to Amazon.com for others to enjoy. With a little more effort, this could translate to longer works such as novels. Amazon is already encouraging their customers to review the “Amazon Breakthrough Novel” which is a dress-rehearsal for the type of peer-review that a novelist would need. The people at Penguin should be scratching their heads figuring out what are they doing there, besides adding the cute little logo to the cover.

    In a nutshell, as you mention, the more value you add, the less you should fear Amazon. Just don’t rest on your laurels.

    Cheers.

  • Pietro

    Tim, I agree with the the reader who stated that any company in capitalism in the long run will seek to own and dominate its market. I worked many years at MS and know that for fact. I also agree that in the very act of their greediness, they plant the seeds of their own demise. I have long thought that MS’s OS/App mix architecture is the culprit of their current problems. If Amazon persists in their greedy behaviors, they will be prone to fall in the same trap — and so will Google and others — I liked your ides of putting more value out than what you collect.

  • http://tim.oreilly.com Tim O'Reilly

    Scott and Bowerbird,

    I don’t think that you are thinking “ecosystem.” First off, as Brandon said, publishing is far from monolithic — rather, it’s retailing that’s monolithic, with now only three buyers (Amazon, Barnes & Noble and Borders) dictating which books will be made available in volume.

    Publishing has always had low barriers to entry. My first two books were published in editions of 100 copies each, and the manufacturing price per copy was about 10% of what I’d pay to publish those same books on Lulu today. And without knowing anything about publishing or book retailing, I was sucked into the ecosystem. O’Reilly books were discovered first by independent retailers, most of them now out of business. Borders discovered us when the buyer saw someone buying a whole set of our X books in Softpro, and said, “who are these guys?” B&N quickly followed Borders. (Amazon didn’t exist yet.)

    We were soon able to invest in expanding our publishing operation, rather than just doing it opportunistically, because advance orders from bookstores would pay the printing bills. Larger print runs drove down costs, making it even more cost-effective to produce books.

    We could never have invested the huge sums that we did to bring some key books to market (sendmail comes to mind, which took six years and six authors before we got it right) without the support of the retail ecosystem. That’s almost all gone.

    And if it continues, I predict fewer good books, not more. People producing books via Lulu don’t have a reasonable expectation of significant sales. I know Lulu doesn’t like to think of it this way, but it’s today’s equivalent of what we used to call a “Vanity press,” not a replacement for traditional publishing. People are able to publish books for themselves and their friends. And the fact that occasionally a book reaches a slightly broader market is an accident. Bob Young told me that the average number of copies sold of a Lulu book is under 2.

    Let me give you an example of how today’s much more consolidated marketplace makes it harder to place publishing bets. Borders and B&N have largely thrown in the towel on many high end books, saying “Amazon’s going to get that business anyway.” So they’ve shrunk their computer book sections, and are taking zero copies of important books, even from important publishers like us. We recently told them of our plans for a Hadoop book for instance, and both B&N and Borders said they won’t carry it. That leaves us with Amazon. Amazon will pre-order only a couple of hundred copies.

    I’ve had to fight with my publishing team to get this book approved, since they’re worried that they won’t make back the investment it will take to bring it to market. It’s a lot easier to be sure of making money on a book like Mac OS X: The Missing Manual, to which the chains will commit an advance order of thousands of copies. Now that’s also good publishing, but you can see how the opportunities are shrinking.

    Meanwhile, Amazon is increasingly throwing their weight around. Conversations with the buyers start to sound like this: “Are you really telling me that our books won’t show up in searches unless we agree to contribute to your new merchandising program?”

    I don’t doubt that in the long run, there will be new long-tail economic models that support investment in specialized forms of content that don’t have the volume to be supported by advertising, but we’re heading for a really tricky period where the old models will be dead before the new ones have arrived.

    Meanwhile, Amazon itself depends heavily on the old model. If we were to decide to pass on a hadoop book because it’s no longer economic to publish, however important, everyone loses. Developers lose, we the publisher lose, and Amazon ultimately loses, as they have less to sell.

    In this case, we’re pushing forward, but I can’t tell you how many books that you might have found useful never got published, because the economics have changed so much in the past half dozen years.

    This is why I urge Amazon to be thoughtful in preserving the publishing ecosystem, not just treating it as a resource to be exploited for their benefit, coal to be strip-mined, forests to be cut down. It will take a long time for the second growth forest to produce trees to match those that they might destroy by being too aggressive in their competition with publishers.

  • http://www.mayareynoldswriter.blogspot.com Maya Reynolds

    Tim: {applauding}

    A former VP at the Time Warner Book Group, Jerry Simmons, was asked the question: “How do you predict the long-term effects of this as it relates to the small author and publisher?”

    His answer: “The long-term effects for the author and publisher are devastating. With Amazon strengthening and securing their place in the distribution and sales channel, they can do anything they want. The next move will be to squeeze these small authors and publishers for placement fees, advertising fees, and eventually higher discounts. When you give in once, it never stops, this is the way of the publishing world and booksellers. It will get to the point where they start to lose money on each book sold. Only then will Amazon back off, but you can bet they are going to push authors and publishers to the wall and take every possible nickel out of the equation.”

    This is important stuff.

  • AJR

    Teaching courses (in Canada) with your books as the text has frequently been frustrating when the current version goes out of stock, and the new one hasn’t made it here yet.

    I’ve long wanted to be able to go to a vending machine, (perhaps in a conventional bookstore), slide in a credit card, and in 10 minutes or so, walk away with a freshly-downloaded copy of the most current version of the Camel Book, (or whichever of your excellent volumes I need at time). Pricing that reflected the current USD/CDN exchange rate would be nice, too.

    The technology appears to exist for this; the question is, do the economics permit it yet? Filling semi-trailers from offset presses probably is still the best way of printing Dickens, Grisham or Shakespeare, but for smallish quantities of frequently updated texts, there has to be an alternative.

  • http://electricspec.com Betsy Dornbusch

    “Buying John Grisham’s next book right from his website, having it printed and shipped to me from Lulu is what I look forward to.”

    This is exactly the problem (not to pick on you personally, but to illustrate a point). You could have named one of ten thousand authors that wrote books last year, and yet you pulled John Grisham’s name out the hat. Why? Because he’s one of a handful of writers who get publicity dollars from his publisher, which is directly related to how many copies major buyers (ie: Amazon) will purchase. The other thousands of authors this year? Never heard of ‘em. The biggies won’t buy someone without a proven sales record. So, without some power resting in the hands of independent booksellers and smaller publishers, the quality and quantity of our market shrinks (conceivabley down to nothing when the Kings, Rowlings, and Grisham’s of the world kick it).

    And if we go the way of POD as the norm–especially if John figuratively kills his editorial and marketing team at his publisher–I predict you’ll eventually pay a premium for his book. Downloading it to your own machine will become the more economical option. Except the anectdotal evidence I’ve seen leads me to believe that people want a traditional, edited book in their hand.

    Hmm. Current trends seem to leave us with lower quality books at a premium price, fighting against a hundred other more economical entertainment options.

    This pattern doesn’t bode well for the publishing industry.

  • observer

    Oreilly said:

    “even those that may be good for the company in the short term, are ultimately destructive of the ecosystem on which they depend.”

    Well, this doesn’t describe the entire mindset of corporate America and Wall Street? Come one. Destroying the ecosystem you depend on is the raison d’etre of corporations and the sociopathic personalities that claw their way to the top of those organizations. This is American, right?

    The fully-expanded version of destroying that ecosystem looks like:

    “Destroying the ecosystem that you inherited and upon which civilization depends but which you can dissolve and turn into cash which cash you then spend on coke n’ whores for the rest of your days, living your life in a blur of private jets, islands and 5-star restaurants while those who come after you live in some sort of eco-hell which you left behind”.

    It’s important to describe things as they really are. I mean, the first step towards solving the problem is articulating its full reality, right?

  • http://tim.oreilly.com Tim O'Reilly

    observer –

    Yes, with Wall Street in particular, we’re living through an era of excess and its consequences. But to characterize that as the norm for all business is to go too far. More than that, it seems to me that there are many companies that have prospered for a very long time by paying attention to their market, using “ecosystem thinking,” and building for the long term.

    Every system has its light and dark side, its strengths and its weaknesses.

    What’s more, we have a lot of history that shows that industries can reform, and take a longer view, especially with some amount of appropriate government regulation or prodding. Global warming (and the paradoxically related problem of peak oil) is of course one of the big test cases coming up.

  • http://www.warrenadler.com Warren Adler

    For the past eight years, I have been blindly optimistic about the future of e-books. I have made countless speeches, attended numerous meetings flacking the concept as the wave of the future. Mostly, what I encountered was skepticism, sometimes disbelief, and at times downright hostility. Indeed, the prevailing opinion was that the e-book would never be a credible challenge to the paper book industry. My optimism is, at long last, on the verge of vindication.

    While I’m not ready to say a final bye bye to the modern paper book in all its guises, I am going to enjoy watching the publishing fallout from the early failure to recognize the e-book surge and observe the wrenching displacement about to be caused in the industry by a horse and buggy mentality that will be both costly and emotionally and financially draining.

  • http://tim.oreilly.com Tim O'Reilly

    Warren –

    I’m surprised at your experience, which is the opposite of mine. I’ve seen a blind optimism about ebooks on the part of publishers, with a lot of hopeful investment, without deep thought about what will make an online book *different.*

    At O’Reilly, we placed a bet that one thing that would make an online book different would be that it wouldn’t be a standalone artifact. That’s why we launched Safari as a library of books that people could get access to. That bet has paid off with revenues in excess of the entire industry-reported revenue for standalone ebooks.

    The ebook will be very different from the paper book, which is why the new flowering of, say, cell-phone novels, is unexpected to publishers. Pioneers have thought about how to ADAPT the book here to the episodic nature of cell phone reading, rather than just popping the latest bestseller out as an ebook.

    I do think that new devices like the Kindle hold great promise, but that promise is partly because of features that go beyond the standalone book, such as the always-on EVDO access.

    Meanwhile, that promise is, I think, going to be less than would have been possible because of Amazon’s power-grab. They learned the lesson of Apple’s proprietary music format on the iPod, how it led to lock-in and greater profits, but they missed the fact that it was the ability of users to populate their iPods from CDs ripped from mp3s that created the fertile ground for the iPod.

    This is another example of the “ecosystem” thinking that I was referring to in this post. Amazon needs to think about the ebook ecosystem, rather than trying to create a Kindle monoculture, which is what they appear to be doing now. They should be encouraging every type of ebook content as supported on the Kindle, instead of trying to lock publishers and readers into a proprietary format.

  • Michael R. Bernstein

    Tim, you said: “Bob Young told me that the average number of copies sold of a Lulu book is under 2.”

    That number seems very low, of course, but what are we comparing it to? Do you have a figure for the average number of copies sold of ‘traditional’ books for the industry as a whole? How about excluding vanity publishers?

    There may also be some survivor bias in the figure. Don’t some successful Lulu books subsequently get ‘traditional’ deals, which removes them from Lulu?

  • http://tim.oreilly.com Tim O'Reilly

    Figures vary for different publishing segments, but typical print runs are in the thousands or tens of thousands.

    I remember from the old SFWA bulletin that the average print run of a paperbound science fiction book used to be around 50,000, with expected returns of 40-50%.

    I remember hearing years ago that an average poetry book would sell only a few hundred copies, but the economics of offset printing generally mean a print run of a few thousand at least.

    At O’Reilly, we generally print between 3000 and 10,000 copies of a new book. After 10,000, your price breaks don’t get so much better, and your inventory risk goes up.

    Mass market paperbacks of course are much cheaper and done in higher volume.

  • bowerbird

    tim said:
    > I don’t think that you are thinking “ecosystem.”

    tim, you can be assured i am thinking of exactly that…
    but it’s true that my ecosystem isn’t the same as yours.

    > First off, as Brandon said, publishing is far from monolithic

    i agree. but it’ll be decentralized even more in the future,
    down to the level of the individual customer doing patpod.

    > rather, it’s retailing that’s monolithic, with now only
    > three buyers (Amazon, Barnes & Noble and Borders)
    > dictating which books will be made available in volume.

    “in volume” is the key phrase. niche publishing is the future.
    i agree there’s a problem with the system as it currently exists,
    and i dearly hope that problem is fatal.

    > Publishing has always had low barriers to entry.
    > My first two books were published in editions of
    > 100 copies each, and the manufacturing price
    > per copy was about 10% of what I’d pay to
    > publish those same books on Lulu today.

    ok. (wondering where this is going…)

    > And without knowing anything about publishing
    > or book retailing, I was sucked into the ecosystem.

    future authors who know nothing about publishing
    (or book retailing) will be sucked into my ecosystem.
    there’s nothing like a no-cost “risk” to spur an effort.

    > O’Reilly books were discovered first by independent
    > retailers, most of them now out of business.

    see? your ecosystem is already shriveling up…

    > Borders discovered us when the buyer saw someone

    you got discovered by one of the hit-makers,
    so you became a hit. congratulations for you.

    nirvana was signed by subpop — the equivalent,
    in some sense, of your “independent retailers” –
    and then was signed to a major label.

    but that ecosystem is shriveling up as well…

    > We were soon able to invest in expanding…
    > …
    > making it even more cost-effective to produce books.
    > We could never have invested the huge sums…
    > …
    > That’s almost all gone.

    i would say it _is_ “all gone”. there will still be
    small publishers, but the ones who can succeed
    (right off the bat) will _not_ sign up with majors
    because they will have found the way to succeed
    _without_ those majors. and honestly, who needs
    a “partner” who eats 90% of the profit while adding
    very little to the bottom-line? that’s a no-brainer.

    that’s the way it is when there is a _revolution_.
    you want _evolution_, so you can still be a player.
    that’s not the way it’s gonna happen.

    > And if it continues, I predict fewer good books,
    > not more. People producing books via Lulu don’t
    > have a reasonable expectation of significant sales.

    they don’t _need_ to have that expectation to proceed,
    which is the thing that makes this ecosystem different.

    and despite the lack of expectation of “significant sales”,
    many of ‘em will attain sales that are “significant enough”
    that they _continue_, and that _persistence_ is what will
    bring them to the next level, where they can reasonably
    expect to attain significant sales, and where they succeed.

    > I know Lulu doesn’t like to think of it this way, but it’s
    > today’s equivalent of what we used to call a “Vanity press,”

    oh geez, you’re desperate to stoop to a comment that low…

    > not a replacement for traditional publishing.

    you’re absolutely right, tim. it’s _not_ a replacement.

    good thing, since the world doesn’t _need_ a “replacement”
    for traditional publishing. it needs something brand new…

    > People are able to publish books for themselves
    > and their friends. And the fact that occasionally
    > a book reaches a slightly broader market is an accident.

    and those “accidents” will become ever-increasingly common.

    especially once we put into place _collaborative_filtering_
    which enables people to pull needles out of the haystack…

    > Bob Young told me that the average number of copies
    > sold of a Lulu book is under 2.

    which shows how non-traditional this brand-new system is.

    i bet you thought he was conceding some tragic weakness.
    wrong. he was sending out a feeler to see if you “get it”…

    (or maybe he was trying to throw you off the scent, i don’t
    know how sneaky the guy is, so let’s go with “a feeler”, ok?)

    > Let me give you an example of how today’s
    > much more consolidated marketplace
    > makes it harder to place publishing bets.

    tim, you keep arguing the wrong points.

    the issue is not whether it is “hard to place publishing bets”.
    the issue is that it’s no longer necessary to _place_ such a bet.

    which means that an author doesn’t need to have a publisher
    to “cover his bet”. which means authors don’t need publishers.

    and when authors don’t need publishers, who gives a darn
    if the “ecosystem” that supports those publishers shrivels up?

    > Borders and B&N have largely thrown in the towel on
    > many high end books, saying “Amazon’s going to get
    > that business anyway.” So they’ve shrunk their
    > computer book sections, and are taking zero copies of
    > important books, even from important publishers like us.

    well, gee, tim, that’s a problem for _you_,
    and other “important publishers” like you.

    but i’d say it presents a _big_opportunity_
    for the small and unimportant authors who
    could compete against you. a real big one…

    > We recently told them of our plans for a Hadoop book
    > for instance, and both B&N and Borders said
    > they won’t carry it. That leaves us with Amazon.
    > Amazon will pre-order only a couple of hundred copies.

    gee, tim, that’s awful. i’m sorry.

    good thing your customers will still be able to
    buy it from amazon. look on the bright side…

    > I’ve had to fight with my publishing team
    > to get this book approved, since they’re worried that they
    > won’t make back the investment it will take to bring it to market.

    ok, but _that_ sounds like a personal squabble
    between you and your “publishing team”, maybe
    concerning the direction your company takes…

    > It’s a lot easier to be sure of making money
    > on a book like Mac OS X: The Missing Manual,
    > to which the chains will commit an advance order
    > of thousands of copies. Now that’s also good publishing,
    > but you can see how the opportunities are shrinking.

    good thing apple leaves your company such a nice pile of money.

    > Meanwhile, Amazon is increasingly throwing their weight around.

    that’s what 800-pound gorillas do, tim.

    > Conversations with the buyers start to sound like this:
    > “Are you really telling me that our books won’t show up in searches
    > unless we agree to contribute to your new merchandising program?”

    one corporate hand washes the other corporate hand.
    i thought all big publishers already understood that…

    > I don’t doubt that in the long run, there will be new
    > long-tail economic models that support investment in
    > specialized forms of content that don’t have the volume
    > to be supported by advertising

    ok, well good, i’m glad to see the visionary hasn’t gone blind.

    > but we’re heading for a really tricky period where
    > the old models will be dead before the new ones have arrived.

    and civilization will no doubt stumble. let’s hope she doesn’t fall.

    or, to put it another way, get over yourself.

    > Meanwhile, Amazon itself depends heavily on the old model.
    > If we were to decide to pass on a hadoop book because
    > it’s no longer economic to publish

    excuse me.

    you mean, “it’s no longer economic _for_o’reilly_ to publish,” not?

    which opens the door nice-and-wide for some hadoop author…

    > Meanwhile, Amazon itself depends heavily on the old model.
    > If we were to decide to pass on a hadoop book because
    > it’s no longer economic to publish, however important,
    > everyone loses. Developers lose, we the publisher lose,
    > and Amazon ultimately loses, as they have less to sell.

    if the book is _that_ important to publish, then _someone_
    – i’m guessing it’ll be that author — will make it available,
    and they will make money from it, and that success will spur
    similar efforts, from that author and from other authors, and
    a _new_ ecosystem will spring out of all those little successes.

    and when something comes along that challenges _them_,
    when they are too big for their britches, they will bitch too,
    and write blog posts about how to protect their ecosystem.

    > In this case, we’re pushing forward, but I can’t tell you
    > how many books that you might have found useful
    > never got published, because the economics have
    > changed so much in the past half dozen years.

    well then we’re even, because i can’t tell you
    how many books that i might have found useful
    were never published by the current ecosystem,
    because they didn’t have the mass appeal needed.

    so i’m overjoyed at the thought of a new ecosystem
    that will allow those niche-interest books to emerge.
    because, frankly, the mass-appeal stuff is _pablum_.

    > This is why I urge Amazon to be thoughtful in
    > preserving the publishing ecosystem, not just
    > treating it as a resource to be exploited for their benefit,
    > coal to be strip-mined, forests to be cut down.
    > It will take a long time for the second growth forest to
    > produce trees to match those that they might destroy
    > by being too aggressive in their competition with publishers.

    environmentalism can always be exploited for a good metaphor.

    -bowerbird

  • http://tim.oreilly.com Tim O'Reilly

    Sorry bowerbird, but we’re just going to have to agree to differ.

    I’m a big believer in user-generated content, but I’m also a believer that investment is required for many valuable projects, and that bottom-up isn’t the only answer.

    Not only that, evidence shows us again and again that small is replaced by large, that when the revolution is over, the pattern repeats.

    You seem to completely miss my main points:

    - traditional print publishing had VERY low barriers to entry. Having been there, I can tell you that it is easier and cheaper to publish successful print books than to create successful web properties. The new marketplace that’s evolving actually has higher barriers to entry, with the prospect of domination by a single large player who will extract maximum revenue for itself, not for the ecosystem as a whole. And you think that’s better????

    - re Lulu, I’m just pointing out that it’s *different.* It doesn’t fill anything like the same niche as traditional publishing. (Web sites are a much closer analogy to traditional publishing … and you’ll note that the most successful web sites have turned into companies, not the work of individuals (even though they start there.)

    etc.

    Not worth arguing.

  • bowerbird

    tim said:
    > I’m a big believer in user-generated content, but
    > I’m also a believer that investment is required
    > for many valuable projects, and that
    > bottom-up isn’t the only answer.

    we don’t disagree on any of that.

    when investment is required for valuable projects,
    it will be located. so top-down is the answer there.

    > Not only that, evidence shows us again and again
    > that small is replaced by large, that
    > when the revolution is over, the pattern repeats.

    it’s usually with a different version of “small”, however.

    > You seem to completely miss my main points:
    > – traditional print publishing had VERY low barriers to entry.

    and the new type of print publishing has even lower barriers.

    which is a good thing.

    > The new marketplace that’s evolving actually
    > has higher barriers to entry, with the prospect of
    > domination by a single large player who will
    > extract maximum revenue for itself, not for the
    > ecosystem as a whole. And you think that’s better????

    amazon will have no effect on authors who sell directly to
    customers who found the books via collaborative filtering,
    where the books are printed in an hour at the corner shop.

    zero.

    yes, your ecosystem of middlemen is “endangered” by
    the one middlemen who cuts out all of the other ones.

    but my ecosystem cuts amazon out of the loop as well…

    > re Lulu, I’m just pointing out that it’s *different.* It doesn’t
    > fill anything like the same niche as traditional publishing.

    we don’t disagree on that either. lulu doesn’t fill the same niche
    as traditional publishing. not now. not yet. and maybe not ever.
    because transportation of the physical product is still required…

    but p.a.t.p.o.d. — print-at-the-point-of-demand — can
    certainly fill the same niche as traditional publishing _plus_
    bring about a whole new arena of _tiny_ niches in addition…

    this will bring about a flowering of possibilities for authors…

    > (Web sites are a much closer analogy to traditional publishing …
    > and you’ll note that the most successful web sites have turned into
    > companies, not the work of individuals (even though they start there.)

    i’m talking about books.

    -bowerbird

  • bowerbird

    now, _this_ blog entry is worth reading!
    > http://indiekindle.blogspot.com/2008/03/feedback-is-filter-who-will-distinguish.html

    brilliant observation, elegant language…
    best thing i’ve read this year…

    -bowerbird

  • http://www.investorsrolodex.org Investor

    Will be intrsting to see if any monopoly laws seem to come from this.

  • http://PublishingTrenches.wordpress.com Walt Shiel

    Michael R. Bernstein said: “Do you have a figure for the average number of copies sold of ‘traditional’ books for the industry as a whole? How about excluding vanity publishers?

    “There may also be some survivor bias in the figure. Don’t some successful Lulu books subsequently get ‘traditional’ deals, which removes them from Lulu?”

    Statistics can be slippery to gather, at least reliable stats, in this business, but I have combined data from R. R. Bowker (publisher of Books-in-Print and the keeper of ISBNs in the US) and Publisher’s Weekly (the main industry professional journal). Here’s what the numbers say.

    Something over 200,000 new titles were published last year, with:

    * 93% selling less than 1,000 copies
    * Overall average sales of about 500 copies
    * 7% of books account for 87% of sales

    In past years, it was possible to get some basic stats from the various subsidy publishers (iUniverse, Xlibris, PublishAmerica, et al — and, yes, including Lulu), but they have stopped publishing useful sales data. For good reasons, too. It would discourage their would-be clients.

    However, the generally accepted average sales through those outfits is certainly less than 100 copies per title, possibly as low as 65 copies.

    Are there success stories? Of course, but they are the exceptions that prove the rule…and serve to distort the average sales numbers (upward). And those very, very few successful authors would no doubt have been far more successful using a true self-publishing model.

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