Monday, September 26, 2011

What the Amazon Tablet Means for Bookselling

Philip White

Yep, I’m well aware that this is not a technology blog. But for the next few paragraphs, please indulge me by reading how a forthcoming, yet-to-be-confirmed gadget (and, while we’re on the subject, the Borders meltdown) will impact the bookselling business.

So here’s the rub. In November, Amazon will almost certainly introduce its own tablet. Now, on the surface, this may provoke a yawn and something like, "Really, another iPad clone?" And you would be justified for such a response--numerous non-Apple manufacturers have tried to emulate the success of the iPad. Most (even my own beloved HTC Flyer, which, unlike the rest, allows you to write on the screen, synch the notes to Evernote and perform a full-text search to find them--a true digital notepad) have sold a moderate number of units, but nothing to trouble the Cupertino-based behemoth. Others, like the ill-fated Motorola Xoom and, even worse, the discontinued HP Touchpad have tanked.

But here is where Amazon is different. Unlike its afore-mentioned peers, the company isn’t trying to create an all things to all people device, and doesn’t have some kind of inferiority complex about the iPad that leads to throwaway features such as a rear-facing camera--which will own the Worst Tablet Thingy Nobody Uses title until tablet makers get the hint and stop including it.

By contrast, Amazon CEO Jeff Bezos and his crew know their customers--not least because they have millions of data points from all the transactions--and realize what they want. With the Kindle, this was the largest selection of ebooks, long battery life, no screen glare, and the convenient, portable size of a paperback book. With the forthcoming Amazon Kindle Tablet or whatever they call it, the first three of these will hold true. The fourth is trickier because it will be a glossy touchscreen instead of an e-ink display. However, from my own tablet experience, if you set the background color to sepia and reduce the contrast to minimum, the eye strain issue typical of reading on a shiny screen goes away.

Amazon also knows that its customers want music and movies on the go, and don’t want to worry about storing them on a tiny device. So what has it done in advance? Boosted the selection of its instant video streaming service, and launched its own cloud-based music offering. Amazon’s MP3 store is a winner--consistently offering albums cheaper than iTunes with an equal selection. There are rumors that those who buy the Kindle Tablet will get the video subscription fee waved for a year. Double win. And it’s not a coincidence that on the "Shop All Departments" menu on the Amazon homepage, its video, MP3 and e-book "departments" are #s1, 2 and 3 on the list. The next reason for buying the Kindle Tablet will be the price: the estimated $250 cost is half that of the cheapest iPad. Due to its convenient form factor, focus on e-books, movies and music (instead of apps, a market that Apple dominates) and brand loyalty, I predict that the device will own the #2 spot in the tablet sales charts.

Anyway, I digress--back to books. The ability to reach tens of millions of customers via one device (Kindle) put Amazon in a strong position in its continuing pricing negotiations with publishers. With two such devices (not counting the Kindle DX flop here), this will be solidified. Amazon is also riding the wave of the Borders implosion. As publishers will no longer to fight over table space at the big B--though Barnes & Noble is still a factor--they will focus their attention on getting books onto Amazon’s "best of" lists, on offering early discounts for forthcoming bestsellers, and to finally getting e-book pricing right. Now, the debate over what an ebook is worth will continue, because Amazon knows its users are ticked off when ebook prices go over 10 bucks (some Kindle user groups even flag such books to dissuade others from buying), and the publishers need to maintain the perceived value of books and boost per-copy margins. But with the power of its ever-wider reach, Amazon will be, for better or worse, in a stronger position to tip that argument towards its side of the see-saw. It will also be fascinating to see how the success of the Kindle Tablet and decline of Borders affects hardback and softback prices on If only we’d see the start of e-book and hardback bundles.

Another factor that bolsters Amazon’s position as the primary bookseller is its publishing arm. Initially focusing on obscure books and relatively unknown authors, this is now pinching big-name writers such as Timothy Ferriss, author of The Four-Hour Work Week. And the interesting thing? Instead of being wooed, Ferriss and his fellow defectors come to Amazon! As the company expands its roster and its catalog, it is developing a seamless, end-to-end model--signing talent, publishing their books, and selling these titles through its own distribution point. This is a powerful new variation of Amazon’s self-publishing empire, which already has an almost unassailable position in that ever-growing niche.

How traditional publishers will compete with these factors remains to be seen. From a writer’s perspective, the benefits of going with a publisher instead of Amazon’s publishing arm are undeniable--skilled editors with years of experience, publicity managers with large contact books, and relationships with newspapers, magazines, radio stations and bloggers. Same goes for the "why to sell rights to a publisher instead of self-publishing" list, to which you can also add guaranteed money up front. Also, it’s unclear (to this writer, at least) whether Amazon will publish physical copies or just ebooks. If it’s just the latter, are they missing out on potential revenue, or merely reading the tea leaves and seeing ever-increasing ebook sales, diminishing hard copy revenue and more bookstores closing? Regardless, Amazon is the dominant force in bookselling, and with its latest gadget soon to be unveiled and its publishing wing taking off, that won’t be changing any time soon.


Dan Allosso said...

Amazon owns Createspace, which is the best self-publishing platform out there. It's light-years ahead of iUniverse. Uses their own print on demand resources, as well as Ingram's Lightningsource. It really rocks. And I think it changes the economics of self-publishing, which has gone from vanity press to real alternative to vanishing mainstream publishing in the last five years.

PW said...

Thanks for your comment, Dan. Createspace certainly seems to be the best platform. Self-publishing is certainly easier and potentially economically worthwhile, yet traditional publishers still offer significant value - a guaranteed advance, PR connections, and editorial expertise that can hone a writer's vision, to name just three.

Dan Allosso said...

The big change, in addition to POD technology, is that you can buy those services a la carte at Createspace, but you retain control of your project -- and there's no longer an up-front fee. And of course, the royalty is so much higher it probably shouldn't be called a royalty. You get whatever the book sells for, less production and distribution costs, which seem fairly reasonable.

I'm looking at this from the outside, of course (as usual). If I had a good agent or was able to get the attention of an editor, maybe I'd feel differently. They'd still have to convince me, I think, that by giving it to them I'd reach a whole lot more people.

One thing that DOES interest me a lot about this new model, is how much it resembles the process that a lot of the people I've been studying went through, getting their books out in the nineteenth century.

PW said...

I'm interested to learn more about your 19th century publishing discoveries, Dan. Maybe that's a future HS post?

I recently talked with a friend who's a politician in the UK. He told me that, in his experience, it's easier than ever before to publish a book, but harder to make money from writing books alone than it was 10 years ago because of a crowded marketplace and diminishing sales.

I really like ready The Shatzkin Files blog to find out more from a longtime industry insider:

Dan Allosso said...

I think it may be, Philip. Just today I was looking at Samuel P. Putnam's _Four Hundred Years of Freethought_. At the end of it, after the index, is a ten-page long list of subscribers. This is going to be really valuable to me, tracking down freethinkers in the Gilded Age, but think of it: subscribers!

PW said...

Now I REALLY want to read a post from you on Gilded Age publishing. I am, frankly, completely ignorant on such matters.

I'll get HCR and RS on this bandwagon, too!