Here are a few stories from the publishing space that caught my eye this week.
IPG stands up to Amazon
The Big Six aren’t the only ones concerned about Amazon’s growing hold on the publishing industry. This week, the Independent Publishers Group (IPG), the second largest independent book distributor for small, indie, and mid-size press titles, started pushing back. On Tuesday, IPG president Mark Suchomel sent a note to the company’s distribution clients announcing that Amazon failed to renew IPG’s agreement to sell Kindle titles of its books. As Suchomel explained in the memo (which can be found in full at PaidContent):
“As of today, the Amazon.com website no longer offers for sale any electronic titles from any of IPG’s client publishers … As has been publicly reported, Amazon.com is putting pressure on publishers and distributors to change their terms for electronic and print books to be more favorable toward Amazon. Our electronic book agreement recently came up for renewal, and Amazon took the opportunity to propose new terms for electronic and print purchases that would have substantially changed your revenue from the sale of both. It’s obvious that publishers can’t continue to agree to terms that increasingly reduce already narrow margins. I have spoken directly with many of our clients and every one of them agrees that we need to hold firm with the terms we now offer.”
Melville House reported Wednesday that Amazon pulled the “Buy” buttons for all IPG Kindle titles — 4,443 according to the New York Times, as the post noted — “because IPG could not accept Amazon’s new demands.” The Melville post has a nice roundup of the story coverage and noted one of the larger underlying issues:
“These are the kinds of companies that don’t have the resources to absorb something like this so easily. They will be more damaged, more deeply endangered, than a Big Sixer could have imagined. There’s every likelihood that some of those little publishers sell most of their books on Amazon. This could put them out of business.”
This could put them out of business, or force the small publishers to work directly with Amazon. The Melville post also suggests the situation may be an instance of Amazon sending a message to the Big Six and that things may be coming to a head: “There is in any event no question that this is a critical moment between the big houses and the monopolistic retailer.”
The battle to democratize the ereader continues
On the heels of an increase in sales, Barnes & Noble turned up the heat in the ereader battle, launching an 8GB Nook tablet for $199 and lowering the price of the Nook Color to $169. In a press release, William Lynch, chief executive officer of B&N, stated, “In the third quarter, our traffic and sales in stores were the highest we’ve seen in five years.” According to the release:
“The consolidated NOOK business across all of the company’s segments, including sales of digital content, device hardware and related accessories, increased 38% during the third quarter to $542 million, on a comparable sales basis. NOOK unit sales, including NOOK Simple Touch™, NOOK Color™ and the new NOOK Tablet, increased 64% during the third quarter as compared to the same period last year. Digital content sales increased 85% on a comparable basis.”
B&N includes apps, newsstand and book sales in its digital content category. Reuters reported that “the Nook business is expected to generate $1.5 billion in the fiscal year ending in April.”
The Nook line acquired a new sales outlet this week as well, as Office Depot announced Thursday that it would sell the devices, joining the likes of Target, Walmart and Staples.
Brick & mortar has come full-cycle: We’re back to the indies
Novelist Ann Patchett appeared on “The Colbert Report” this week. She was introduced by Colbert as “an author who is working to save independent bookstores,” at which point Colbert quipped, “Independent bookstores! I should buy one of those on Amazon.” The five-and-a-half-minute segment was funny, of course, but Patchett recently opened Parnassus Books, a brick-and-mortar bookstore in her hometown of Nashville, and had a few interesting comments as to why she did this and why she thinks brick-and-mortar has a future:
“We had two huge bookstores [in Nashville], both over 30,000 square feet, one an independent, one a Borders — they both closed. Suddenly, I’m living in a town with no bookstore … both of those stores were profitable every month they were open; they closed at corporate levels, so they had larger issues … We’ve had the cycle: Little bookstore does well; it gets bigger. Crushed by the superstore — Barnes & Noble, Borders chains. They were then crushed by Amazon, and now we’ve cycled all the way back. Suddenly, people are saying, ‘I want to have a place to take my kids for story hour on Saturday; I want to have a place to go to a book club or see an author read’.”
Colbert also addressed the issues of discovery and of opting to shop at a bookstore versus the convenience of buying on the Internet.
You can view the entire segment in the following video.