
Amazon Signs Up Authors, Writing Publishers Out of Deal - GavinB
http://www.nytimes.com/2011/10/17/technology/amazon-rewrites-the-rules-of-book-publishing.html
======
muhfuhkuh
I've read various things from writers about Amazon's publishing deals. They
have AmazonEncore, which republishes and promotes emerging authors and mid-
listers with self-published novels, giving them an extremely generous
(compared to the Big NY Five) cut of the proceeds for every book sold on
Kindle.

Of course, for indie publishers in general, if you sell your ebook for over
US$2.99 in the Kindle bookstore, you keep 70%. Same with Nook Bookstore. Seth
Godin self-publishes by this method. Stephen King publishes short stories and
novelas through Kindle Singles, a more curated kindle publishing vehicle that
publishes short essays, longer journalistic pieces, and short fiction that
gives authors a 70% cut regardless of the author's set price.

Being the #1 bookseller and ereader manufacturer is faring very well for
Amazon.

~~~
jseliger
It's not bad for a lot writers, either, so far, at least compared to
traditional publishing. I wrote a longish post on the subject:
[http://jseliger.com/2011/10/17/on-amazon-signs-up-authors-
wr...](http://jseliger.com/2011/10/17/on-amazon-signs-up-authors-writing-
publishers-out-of-deal/) which explains why I might end up as one of those
self-published writers: it's not just the economics of publishing right now,
but the difficulty of even getting published at all if you're a classic
outsider. The desperate will use whatever cheap and quick methods they can to
get their work out there. Yeah, 99% of that work will be lousy, but the
unrecognized good stuff will be there too.

------
timjahn
More and more, the middlemen in every industry are starting to realize just
how irrelevant they are.

~~~
mtraven
Amazon's not a middleman?

Of course they are, they just happen to be the biggest one, capable of eating
all the others.

~~~
bennesvig
There have always been two levels of middle men in the book business. The
publishers and the sellers. This eliminates one big middle man.

~~~
Samuel_Michon
By calling them middlemen, you're implying that publishers add no value to the
end product. That's a misconception: an author writes a manuscript, a
publisher makes it into a book. Often, it takes as much time and effort to
turn a manuscript into a book as it took the author to write the manuscript.

As more writers choose to self publish ebooks, it's becoming quite clear how
crucial the role of a publisher is. Most of those self produced 'books' are
completely unreadable.

Charlie Stross explained it well: [http://www.antipope.org/charlie/blog-
static/2010/02/cmap-2-h...](http://www.antipope.org/charlie/blog-
static/2010/02/cmap-2-how-books-are-made.html)

Also, Amazon isn't taking publishers out of the equation. It's becoming one.

~~~
dlss
The publisher is a very odd beast -- the services you are citing as their
primary benefit are the kind you would expect an author with money to simply
pay for themselves.

Or to put it another way, publishers are a combination of:

1\. Angel investors / Talent scouts (insert moneyball reference here)

2\. Labor pool for book completion (cover design, editing, etc)

3\. Marketing assistance

4\. Physical printing

5\. B2B marketing to get printed books on bookshelves.

Five distinct businesses. Why are they commonly grouped? My guess is a
combination of most authors not being very business oriented / not wanting to
not think about these sorts of things (30%), and most authors not having the
money to hire their own #2 (the other 70% of the story).

Amazon already has a product for #5 on its own, and a separate product
providing #4 and #5 together. This story is about them adding on the #1-#2-#3
punch that is currently the exclusive domain of publishers.

Stross is a technical and successful guy -- he should probably just hire his
own #2 and #3, and then use amazon's #4 and #5 service. He probably won't, out
of loyalty to the angel investor that pulled him out of obscurity (or the
contract his angel made him sign...), but hopefully future Strossi will!

~~~
veyron
You have to think about it from the author's perspective. Many authors are not
interested in the minutiae of the process, and the publisher serves as a
single point for the author. There's no need to deal with a separate person
for market and a separate person for physical distribution. There is a value
(albeit small for some people) to bringing the disparate pieces together into
a single package, freeing the author from the need to handle these pieces.

FWIW: I wish the people performing this service in the financial industry
weren't gouging customers ...

------
ghurlman
Barnes & Noble's has a publishing house of their own for a while; I'm
surprised it's taken Amazon this long.

~~~
shadowsun7
Amazon has been launching imprints for the last year or so, including romance
imprint Montlake Romance, thriller imprint Thomas & Mercer, and most recently
sci-fi imprint 47North. Nothing new here, this article has been a long time
coming.

------
padobson
Books are great - and certainly more cost effective for someone like Amazon to
go straight to the content creators.

I would like to see them do the same with music and video, but that costs a
bit more to produce. There are a number of middlemen out there that need
stronger competition from alternate sales channels. Big NY publishers are just
a subset of incumbents holding on to a dying business model that need a good
shot of disruption.

~~~
jwallaceparker
They've started Amazon Studios which is already heading down the road of
competing with other Hollywood production companies.

~~~
michaelfeathers
At what point does this end up touching anti-trust?

------
richardw
I've always been amazed that all the publishers never got together and said
"let's build our own web store". I understand that it's not simple, but the
alternative is to have Amazon disintermediate you at some point.

~~~
eftpotrm
Why did the record labels not put together a RIAA-controlled iTunes well
before Apple did? Or the movie studios an MPAA download store before Netflix?

One, they've got a lot invested in the current model, which is primarily
priced around selling medium rather than content -
<http://www.paulgraham.com/publishing.html>. Two, they've spent years learning
to compete and regard their biggest threats as each other. They're not
culturally equipped to work together to combat a transformational challenge.

~~~
richardw
RIAA didn't want music delivered electronically, and iTunes got them over that
hump. They could not have thought of that themselves. However, an online book
store selling the same products you have for a hundred years is a much easier
sell. You aren't harming your existing business, you're extending it from
publishing to distribution and sales. That's just vertical integration - quite
well-understood as a business technique.

The tricky part is the touchy-feely web aspect (since that they understand
publishing and are very close to distribution already). So given the amount of
money they stand to lose, I have no doubt they could have made it work.
Undercut the prices everyone else has to charge and you create a serious
incentive for people to try you out, forgive your mistakes and give you 5
years to slowly figure out how to perfect the model.

------
wicknicks
This had to happen sooner or later. I can't help but feel sad at how some
content owners have been sticking to old school technology for decades without
trying out new opportunities.

Publishers will soon be replaced with such 'distributors' soon. Today its
books, tomorrow someone will come along and do this to the music industry.

------
acabal
I've been reading about the imminent death of publishers for a while now, but
I don't think they're ever going to disappear completely. And I run a site for
writers that processes hundreds of manuscripts daily.

People like to make the comparison of the inevitable democratization of books
to how the internet changed the music industry, but that's just not an apt
comparison.

Books cannot be consumed in the same way as music. Pop songs are usually 2-3
minutes long, and an entire album clocks in at half an hour to an hour.
Generally you can listen to a few songs from a band and make a decision as to
whether you like their style and want to buy the album on the spot. Books
aren't like that. A reader must often invest a significant amount of time--
days--before it becomes clear that a book is or isn't good. Publishers provide
the extremely valuable service of _validation_. If you get your book published
up by Random House, then the reader at the store can say, if absolutely
nothing else, that a group of well-read professionals thought your book was
good enough to warrant stamping with their brand and spending money polishing
and marketing. You just can't say that about 99% of self-published material,
and when it can take days for a reader to determine quality, that distinction
becomes important.

And, despite what many would lead you to believe, publishers provide a
valuable service besides validation. They take a raw manuscript and polish it
up to professional standards. The manuscript is only part of the finished
product that we call a book. You also need cover art, which is your book's
first impression and incredibly important--not something you want to leave to
your 18-year-old nephew with a cracked copy of Photoshop. You need
typesetting, which is still important in the digital world: how many middle-
aged writers know--or want to learn--HTML/CSS? You need editing. Having run a
site for writers I can guarantee you that an author's perfect final manuscript
is still filled with typos, mistakes, and ripe for polishing from a trained
professional. You need marketing: the best book in the world won't get read if
nobody knows it exists. The truth is that writers are good at writing, but
often not that good at all of the other aspects of publishing a book. A big
publisher takes that off their hands and handles it in a professional way.

I suspect that the people who say publishers are dead have themselves never
picked up a random indie author's book from Amazon. If they had, they'd
realize that not every author is Amanda Hocking or Scott Sigler. In fact
they'd probably realize that what they just read was filled with typos, had
shitty cover art, maybe had greater structural problems like weak
characterization, and likely was priced just about right at 99 cents.

If anything, the death of publishers could be very dangerous, because when
young new readers start getting burned by crappy self-published books, they'll
get turned off to reading and we'll have lost yet another generation to TV and
fast media.

~~~
saljam
Or, this could lead to the birth of a decentralised web-of-trust review and
recommendation system. Imagine if something like this works: When a person
reads a book, he rates it according to his taste. He would also rate how much
he "trusts" the opinion of any of his peers. Then, for any book, he could ask
the question "How good do my peers think this book is?" or "How good does the
faculty of University of Manchester School of Computer Science collectively
think this book is?" This then propagates the ratings of this group, and the
ratings of the people they "trust", to come up with an answer. The amount of
trust can act as some sort of a coefficient at each step.

Now, instead of saying "a group of well-read professionals, picked and chosen
by Random House, thought this books was good enough," you can say "a group of
people, whom I trust to be well-read professionals, or to have good taste, or
to be accurate, or to be knowledgeable in their field, thought this books was
good."

The technology is there, and frankly I won't be surprised if someone already
wrote something like this.

BTW, this isn't limited to books. You can substitute "book" with academic
paper (and you get peer review!), films, music, or pretty much anything
provided by a social-web recommendation service,

~~~
cstross
_Or, this could lead to the birth of a decentralised web-of-trust review and
recommendation system. Imagine if something like this works: When a person
reads a book, he rates it according to his taste. He would also rate how much
he "trusts" the opinion of any of his peers._

Unfortunately what you get with this system ends up looking like Amazon's
reader reviews, because most readers are neither perceptive nor trained in
analytical reading.

Viz: [http://www.antipope.org/charlie/blog-static/2011/01/faint-
pr...](http://www.antipope.org/charlie/blog-static/2011/01/faint-praise.html)

~~~
saljam
That's not what I was proposing. The whole point is that you select who you
trust and how much you trust them for any given subject. A random reviewer
like the one on Amazon wouldn't have much influence on my rating unless I
"trust" them personally, or some one I highly trust in turn highly trusts
them.

I'm saying trust too much now.

------
g2link
This may be the final death knell for the publishing industry but it also
indirectly provides a clear description of how Internet empowered businesses
can be fatally disruptive. The quote that has to be burning holes in the
stomachs of publishing pros everywhere comes from Amazon executive Russell
Grandinetti: “The only really necessary people in the publishing process now
are the writer and reader,” he said. “Everyone who stands between those two
has both risk and opportunity.”

<http://g2li.me/ppkHhM>

------
FD3SA
Why do I suddenly get the sense that no amount of stimulus funding is going to
solve the structural unemployment issue in the USA? We appear to have crossed
the technology Rubicon, whereupon the ratio of jobs created to jobs destroyed
by technology becomes less than unity. The Luddite fallacy only holds true as
long as the ratio is above or at unity.

Interesting times.

~~~
morrow
[http://www.ted.com/talks/clay_shirky_on_institutions_versus_...](http://www.ted.com/talks/clay_shirky_on_institutions_versus_collaboration.html)

I agree that it won't be fixed by stimulus - but it's because I believe that
the current system is undergoing a form of violent restructuring, where
current institutions and platforms are fighting for their survival against a
tidal shift that's moving from a society dominated by centralized, few,
powerful institutions, to decentralized, numerous, systems and platforms of
democratic organization.

I think what makes technology an always doubted, yet positive, force is that
the rate of change and the instability it causes makes short term guesses
easier to make successfully than longer term ones. For example, at the birth
of the cell-phone, it's easier to predict that this new tech will kill off the
pay-phone industry than it is to predict the future coming of the iPhone, or
app stores, or the market 3d cell-phone cameras. It's easier to look at the
current landscape, and predict how this new tech will damage it, than it is to
look at a blank slate, and predict what of an infinite number of possibilities
will actually work in the newly created space.

~~~
DanielBMarkham
It's also easy to step back until something good comes of it, focus on just
the good, and ignore the bad.

Take your cell phone example. Cell phones are allowing the government to track
the location of all it's citizens. Without a warrant in some cases. If
somebody would have predicted that back when cellphones were introduced,
people would have laughed them out of town. It was a ludicrous and paranoid
idea. Yet here we are. We sit around watching videos, liking Facebook
comments, and checking in at various events, all while a critical part of our
anonymity has been destroyed.

I'm not saying it's all bad. I'm saying there is a mix. If you ask me, I'd
rather not have cell phones and have a more private life. No amount of slick
packaging and voice control interfaces is going to make up for what I've lost.
But we don't have to choose, of course. We can have our cake and eat it too.

What's happened is that technology is staying leaps and bounds ahead of
politics. It's like we're having to re-engineer the social contract every
couple of decades or so. And the yahoos we have in power around the world are
much more interested in their petty political games than this seismic shift
that's occurring under them (which, in all honesty, they probably don't
understand and probably couldn't deal with anyway). So the system gets more
and more out of whack.

Just wanted to balance what you were saying. This isn't a story of technology
always making things better even though we sometimes doubt. It's a story of
technology making things more _complicated_ and making the individual more
powerful in some ways and that having effects that we poorly understand.

~~~
morrow
I completely agree with you, it's definitely easy to filter the evidence in
favor of or against new technology to make a point, or to satisfy a worldview.
I also agree that every new technological advancement offers the possibility
to use it for both good and bad purposes.

I think what I was trying to say to the original commenter was what you've
offered me, which is a balance to the argument that new technology will have
an inherently good or bad effect on the world.

I probably mis-represented my opinion by overstating the positive effects of
tech - I think my real point was that most kinds of change begin with
negatives - and that the reason people continually doubt technology or seem to
overplay the negatives is due to it's ever-changing nature. Not that it will
inevitably lead to something good and the bad part is just a hiccup - it's
just easier to predict the short-term bad than it is to predict the long term
good.

------
kanenathan213
Finally. Now somebody just needs to do this for academic papers that taxpayers
pay for and leech publishers profit from.

~~~
william42
<http://www.plos.org/>

------
brady747
My father (about 5+ years ago when itunes was picking up steam) thought Apple
would sign Madonna and several other big artists and start producing music
themselves. I guess he was just off by brand name and a good number of years
ahead of the curve with the idea, but its exciting to see this change
happening.

------
sathishmanohar
Next in the list is Music Labels. Go Digital Companies.

------
roqetman
I wonder if there could be a model where an author releases a "beta" version
of their book at a cheaper price and then "fixes" suggested by readers are
then released for free to those who bought the original. A kind of group
editing. A later version 1 could be released at a higher price for those who
don't want to deal with errors.

~~~
tokenadult
_I wonder if there could be a model where an author releases a "beta" version
of their book at a cheaper price and then "fixes" suggested by readers are
then released for free to those who bought the original. A kind of group
editing._

These days, a lot of writers write alpha versions as blog posts. Commenters
and other bloggers provide suggestions of fixes.

------
ilamont
I think publishers will still have a lot of strength in niche
areas/specialization, areas in which Amazon can't effectively scale. That is,
unless it starts recruiting editorial staff or begins partnering with smaller
publishers in those areas.

------
epo
Amazon is an old-fashioned monopolist. When dealing with these beasts they are
your friend until it is more profitable for them not to be.

JK Rowling does not require Amazon but Amazon will never produce another JK
Rowling because they will not do the marketing and groundwork necessary.

Authors are investing in their future when choosing commercial partners. By
partnering with Amazon they could be putting all their eggs in one basket,
this is not necessarily a bad thing to do but it does require that you watch
that basket very carefully.

~~~
rmc
_Amazon will never produce another JK Rowling_

Yes they can. They don't need a widely popular children book about magic and
wizards that gets lots of children excited. All they need are loads of books
to sell that people want to buy.

Will Amazon shut down their eBook business if JK Rowling doesn't sign up? No.
That should tell you how much Amazon need JK Rowling.

~~~
nobody314159
It's EASIER for Amazon produce a JK Rowling.

You sign up 10-100-1000 childrens writers, it costs you almost nothing. Then
if one of them starts to get any traction through reviews, blogs, slashdotting
etc you can very quickly and easily promote the hell out of them by simply
putting them on the front page of Amazon.com or pushing suggested books at
your customers.

Compare that to traditional publisher - it has to pick one author and spend a
lot of time and money sending them on signing tours, book shop promotions,
getting reviews in the NYT. So they have to spend 90% of it's money on the
existing big names to be sure of a return.

------
Hitchhiker
Marc's on the game

[http://online.wsj.com/article/SB1000142405311190348090457651...](http://online.wsj.com/article/SB10001424053111903480904576512250915629460.html)

------
alanh
Hello, obvious future!

------
bluedanieru
They're using their platform to get into publishing, not making the industry
obsolete as the title (and the article) imply.

~~~
mynameishere
Traditional publishing is the scurviest thing you'll ever meet in a lifetime.
Basically, in traditional publishing you do:

The writing. The editing. The marketing.

...and they pick up 98 percent of the profits, if any. With self-publishing
(not just amazon) typically over 50 percent off the bottom goes to the author.
This is an absolute necessary change to the industry. It will result in 2 or 3
fewer JK Rowlings, but 100s of thousands fewer outrages.

~~~
gruen
It's not exactly 98% of the profits; but, it still seems egregious.

From what I've noticed, royalties are generally about 10% of gross against
advances (if any), or $1 on a $10 soft-cover. The publisher spends money on
the acquisition, editing, printing, and distribution; in brick-and-morter
land, this isn't cheap. Remember that the store needs to make a couple of
bucks, too.

Additionally, major retailers include a buyback clause—if the book doesn't
sell, the retailer can sell up to something like 15% of the initial purchase
order back to the publisher. The publisher often forwards your share of that
burden into your royalty payment schedule.

Though, ultimately, while authors might get screwed financially in a lot of
ways, publishing does, as a consumer, keep a lot of crap out of your
purchasing decisions. Publishers (on the whole) do provide a lot of value to
you: are you going to buy _Gruen's AWESOME guide to Ruby_ or _The Ruby
Programming Language_ from O'Reilly Publishing with its venerable woodcut
cover treatment?

If you're trying to get your work out there (which is why people write in the
first place) you're probably willing to take the traditional publishing deal.

~~~
jeremymcanally
The annoying thing about being charged for returns is that you have no control
over how many are ordered. When my book Ruby in Practice went to stores, I
felt like there were FAR too many copies going out. Lo and behold, tons of
them came back and now I'm eternally on the hook for the cost of those even
though I had zero input into how many were actually produced and distributed.

Publishers are helpful, but the game is inextricably rigged in their favor,
which sucks.

~~~
gruen
Author contracts are the worst. Agents can help, but unless you're at scale,
their cost/benefit is a wash.

We should compare notes.

------
ck2
Who is the --AA of the publishing industry, obviously they have far few legal
protections for their schemes.

