Tuesday, April 17, 2012

Amazon.com v Traditional Publishers



This NYT article is very odd. I cannot quite figure out what the outrage is, and why it is a bad thing for Amazon to exist. So, guess I'd better try to freeze dry the darn thing and get to cypherin'.

 1. Authors attempt to sell books to publishers.
 2. Publishers act as gatekeepers, pick books to publish, cover their own costs of production, give a little    something-something to the lucky authors.
 3. Brick and mortar bookstores, which come in two varieties, (Consult movie "You've Got Mail") also buy books from publishers.
 4. As do door-to-door or networking booksellers.
 5. Amazon buys books from publishers. It, (as well as others) offer e-reader versions of books as well.
 6. All these folks sell said books to consumers.
 7. Amazon's marketing strategy is to offer lower prices than any other source of books. They are well situated to do so, due to the nature of their order processing and distribution methods (relies on the world-wide-inter-tubes).
 8. Consumers like low prices, convenience, or, if they live a good distance from brick and mortar outlets, rely on cheap, speedy and reliable Amazon.
 9. Publishing houses don't like that Amazon is setting up an expectation of economical pricing.
 10. They are concerned for the brick and mortar and network/door-to-door direct sellers.
 11. Perhaps this concern stems from their belief that the demise of these more traditional book sellers will have an overall negative effect on their own businesses.
 12. Some publishers have pulled out of agreements with Amazon, and will no longer sell through them.

 This is nothing new. It is a market playing out technological innovation that is, in effect, cutting out middle-men; not unlike the market forces that are causing trouble for print news media. To complain about it is as futile as complaining about gravity. Other than throwing your sabots into the works, what do you expect to do, or have done about it? Government intervention? Lawfare?  Who the heck knows? The article doesn't go into solutions. In the long run, I suspect the old-line publishers will have to adapt, or perish.

 At least some, if not most, rational consumers will opt NOT to buy a wood pulp version of their favorite newspaper IF electronic and free versions are available. Similarly, rational actors who are avid readers will order books on-line IF they are available, and especially if they are substantially cheaper. For, this also obviates the need to travel to the brick and mortar equivalent. Less time, less gasoline. And, as is often the case if your tastes do not lean to the best-seller, one runs no risk of failing in the hunt (and having wasted time and money in the process).

 Also, as any smart shopper will do, IF they have the capability to comparison shop on items, book-buyers will do so. Penny pinching is to be expected from every consumer. Only the well to do can afford the luxury of paying prices higher than the lowest available.

 The comments on the article are as interesting as the article itself. Some decry the development, lamenting the waning of the two varieties of brick and mortar booksellers, and the loss of the experience of making treks to these stores. Admittedly, it is a nice atmospheric to walk into the locally owned bookstore and browse, even the large chain stores offer character, what with their nose-ringed baristas and knowledgeable staff.

Be that as it may, online retailers make it possible, not only to find better pricing, but variety and rare books, even if in reprint, and do so in much less time than such expeditions used to take. What is more, I actually prefer the atmosphere in used book sellers, a niche market I think is in no danger from the advent of the inter-tubes. They tend to be owned and run by knowledgeable folks, and occasionally have the coffee sans nose-rings.

In fact, several such stores I frequent USE the inter-tubes to market their books, more widely now than was possible before the advent of Amazon, E-Bay and the internet. That's a good thing for these true mom & pop establishments.

The publishers and some commenters worry that the gate-keeper function is being bypassed by on-line publishing, and self-publishing. We've heard similar worries for more than a decade now from the journalistic establishment, what with the rise of the blogs, news aggregation and what-not. So, is QC really down the crapper? Effective crowd sourced fact checking and global competition, decentralized though it is, serves the function, and people do it for free while in their basements and wearing their jammies,  or so J.S. Mill tells me.

 Others, (academic authors in particular) are having a draught from the Schadenfreude Brauhaus as they watch the publishers of their tomes, no longer able to charge the hefty price-tag with relative impunity, while giving the authors themselves only around 10% of the take. They sip on their sudsy brews as they watch the old publishing establishment sweat academics exploring other avenues for publication, in hopes of taking more of the...take. Can you blame them? The imprimatur and prestige of a publishing house is nice to have, and lends gravitas, but it doesn't pay the bills does it?

So put those sabots and Birkenstocks back on your feet, and embrace the future!