Still Conflicted about Amazon

Rachelle Gardner — Wed, 20 Nov 2013 05:18:02 +0000

I’ve just finished reading Brad Stone’s The Everything Store: Jeff Bezos and the Age of Amazon. I’m still processing what I learned, and checking other sources for differing perspectives, but my initial reaction is that this is an eye-opening, clarifying, sobering yet illuminating resource for anyone interested in publishing or business in general.

I approached this book the same way I’ve always approached Amazon: (1) as an Amazon customer, and (2) as a person employed by traditional publishing. The two perspectives leave me feeling a little whiplashed at times, since they induce two opposing views of Amazon.

As a customer, I’ve always been extremely happy. I’m a Kindle reader, a Prime member, and I use Amazon almost every day.

As a publishing professional, it hasn’t been quite so easy. In the beginning Amazon was a terrific customer for publishers and authors. Over the years the company has evolved into a ruthless competitor—while still being our primary customer.

Along with everyone else, I watched the evolution of Amazon. But until I read The Everything Store, I didn’t have a full understanding of exactly how it all went down. And I didn’t understand Bezos’ approach to his business, which often amounts to a scorched-earth policy.

The “customer” side of me loves being wooed and treated well. The “publishing” side of me has to deal with the fact that our biggest customer is also our fiercest rival. This rival has unparalleled leverage over other businesses including publishers, and is not shy about using it to compel cooperation.

I’ve loved Amazon over the years. I admire the company for so many reasons. I’m blown away by their innovation and the way they constantly re-evaluate their business and come up with new and better ways to serve their customers.

But I don’t like how their domination can come at such a high price. In a couple of notable instances when Amazon wanted to purchase other companies (Zappos.com and Diapers.com), Amazon used its power to launch price wars rather than stay at the negotiating table, bullying the companies into selling at the price Amazon wanted.

When it comes to publishers, Amazon has used the formidable power of its technology to remove all of a certain publishers’ books from Kindle sales; and at another time, to remove publishers’ books from their powerful book-recommendation engine, causing those publishers’ sales to drop significantly. Amazon is willing to use hardball tactics rather than negotiation when it suits their purpose.

Everyone knows the publishing business is struggling. But it’s not just because of technology and the changing environment. There was a tipping point that changed everything for publishers: the $9.99 e-book introduced by Amazon.

While publishers had been in talks with Amazon for months, providing Amazon with files and metadata to start translating books into Kindle e-books, Amazon never spoke a word about a plan to sell the e-books for such a low cost. It was sprung on publishers at a moment when it was far too late to back away. As one publishing executive put it, “It was one more nail in the coffin that no one realized was being closed over us, even while we were engaged every single day in a conversation about it.”

At $9.99 for an e-book, publishers could no longer make their margins. All of the economics of publishing began to change. Readers became accustomed to e-books at low prices (which, of course, has been greatly intensified by the massive influx of self-published books at rock-bottom prices). Lawsuits were filed, the “agency model” was born, and Amazon has continued to use their leverage to convince publishers to toe the line.

Publishers remain dependent on Amazon, which remains simultaneously their biggest customer and fiercest competitor. It is a precarious place for publishers to be.

I’m not advocating a return to the old days. When cars were invented, there was no going back to the horse-and-buggy no matter how badly it hurt the business of the blacksmith and the saddle-maker. We’re in a new world—a better world—and there’s no going back.

But there are downsides to a single company having so much power. I think it comes down to this: We know Amazon can negotiate, and behave fairly. But we cannot trust them to do so. When it serves their purpose, they’ll play hardball to get what they want.

So here we sit—loyal Amazon customers. Admiring Amazon as a hugely successful company. Working with Amazon to do everything possible to help our books sell. And wondering when the next nail in the coffin will come, and what it will look like.

Still, as quickly as we’ve seen the rise of Amazon (and Google, and Facebook, and Apple, and…) we will keep seeing things continue to change. The story isn’t over. Monopolies don’t last forever. If you don’t believe me… can I sell you a Blackberry?

The Everything Store is a fascinating and informative story, but definitely not the final chapter in how books are published, sold, and read. I’m excited to see the story continue. And I’m still conflicted about Amazon.

What about you?
Are you conflicted in your views of Amazon?
What do you think is coming next in this brave new world of publishing?

Comment below, or if you’re reading this via email, comment by clicking: HERE.

→Click over to the Books & Such blog, where today I’m highlighting nine interesting takeaways from The Everything Store.

TWEETABLES

“I love Amazon…but I don’t like how their domination comes at such a high price.”  Click to Tweet.

“Wondering when the next nail in the coffin will come, and what it will look like.”  Click to Tweet.

“The story isn’t over. Monopolies don’t last forever.” @RachelleGardner on Amazon.  Click to Tweet.

“The Everything Store” is eye-opening, clarifying, sobering yet illuminating. Click to Tweet.

The post Still Conflicted about Amazon appeared first on Rachelle Gardner.

Books - Rachelle Gardner

Still Conflicted about Amazon

Comment below, or if you’re reading this via email, comment by clicking: HERE.