Macmillan vs Amazon

[Berkut]

Also, Amazon has the books, has the reviews, has the customer feedback, has the methodology for collecting money, has high consumer satisfaction and confidence, and has the relationships with all of the publishers.  I really don't see any strength anyone could have in distributing e-publishing that Amazon lacks.

I'm imagining a model where if you want to buy an e-book, you go directly to the publishers portal.  Because it's online, it's not like it's particularly strenuous to get there compared to having to go to a different store.  Perhaps I'm underestimating the strength of online-customer loyalty, but I don't think it's an impossible challenge to overcome.

I mean, if there's a book you're interested in it's not like you won't purchase it just because it's not on Amazon, is it?  Assuming you're made aware of it's existence.

But it doesn't look like anyone's doing what I'm imagining, so there may be some real obstacles in the way.  Perhaps designing and operating an e-book sale site is prohibitively expensive for even big publishers?  Or perhaps there's some sort of legislation that forbids it?  Or maybe Amazon really drives sales enough that it would be a big risk to forego those sales as you try to redirect e-book customers to the publisher's site?  I don't know.

But I don't think you are giving enough credit to what Amazon has created with their customer experience.

Sure, if you know exactly what you want, maybe you go to the publisher...but who in the hell knows who publishes what book? I certainly don't. I suppose I could go to Amazon to find out though....and then I might as well just buy it there.

Plus, maybe I won't like the book. Maybe I want to see some reviews first. Could the publisher host reviews? Of course! But will I trust them? After all, tehya re the publisher - they might censor bad reviews. But I know Amazons reviews are credible, so I am going to go check theirs out first....hmmm, might as well buy it from them since I am there already.

Of course, most of the time I don't really know what book I want to buy. I want something, maybe I have several options I want to choose between. Where could I go to see what I might like? Where can I go to see what other people who like the kinds of books I like like? Oh look! Amazon.com!

I can go on of course - Amazon is successful because they have created a customer experience, not because they have some books that you can buy for some small discount.

Hell, the other day I was browsing the New Releases at the local library, saw a book I thought might be interesting, went to the library public PC, looked it up on Amazon to see some reviews, and then decided I would actually check it out from the library and read it. (Stephen Kings new book about the town that gets stuck under a dome, forget what it was called since my wife ended up reading it first, then it had to be returned before i got a chance to actually read it).

[grumbler]

Interesting.  If I was a publisher, I'd still be gunning for them; especially as competing hardware platforms come up.

But publishers are vulnerable to getting underbid, themselves.  Amazon already offers a 70% royalty on net to authors that give them "print-ready" ebooks for the Kindle.  No publisher can pay that kind of royalty under the current business model - right now they pay about 10% (sometimes less).

[Jacob]

Interesting.  If I was a publisher, I'd still be gunning for them; especially as competing hardware platforms come up.

But publishers are vulnerable to getting underbid, themselves.  Amazon already offers a 70% royalty on net to authors that give them "print-ready" ebooks for the Kindle.  No publisher can pay that kind of royalty under the current business model - right now they pay about 10% (sometimes less).

Yeah, that's an interesting point.

I guess however it shakes out, there's the potential for convergence between publishing and e-sales.

[Jacob]

But I don't think you are giving enough credit to what Amazon has created with their customer experience.

Sure, if you know exactly what you want, maybe you go to the publisher...but who in the hell knows who publishes what book? I certainly don't. I suppose I could go to Amazon to find out though....and then I might as well just buy it there.

Plus, maybe I won't like the book. Maybe I want to see some reviews first. Could the publisher host reviews? Of course! But will I trust them? After all, tehya re the publisher - they might censor bad reviews. But I know Amazons reviews are credible, so I am going to go check theirs out first....hmmm, might as well buy it from them since I am there already.

Of course, most of the time I don't really know what book I want to buy. I want something, maybe I have several options I want to choose between. Where could I go to see what I might like? Where can I go to see what other people who like the kinds of books I like like? Oh look! Amazon.com!

I can go on of course - Amazon is successful because they have created a customer experience, not because they have some books that you can buy for some small discount.

Hell, the other day I was browsing the New Releases at the local library, saw a book I thought might be interesting, went to the library public PC, looked it up on Amazon to see some reviews, and then decided I would actually check it out from the library and read it. (Stephen Kings new book about the town that gets stuck under a dome, forget what it was called since my wife ended up reading it first, then it had to be returned before i got a chance to actually read it).

Those are all really good points Berkut, that I likely missed because I'm not an Amazon customer and I don't use their reviews.  But obviously they do a good job of what they do, and have their strengths.

Certainly, for the a publisher portal to work they'd have to market it a certain amount.  Perhaps rather than do it on a publisher level, do it on an imprint - you know, market Tor as the leading purveyor of science fiction.  They'd have to strengthen their brands, but that's a marketing challenge that I think could be overcome.

As for the reviews, that's a really good point.  That's a bit harder, because of the trust deficit with a publisher supported review site, and it's perhaps unlikely that a pure-user-reviews site could survive independently without the revenue that comes from sales.

But yeah, I probably underestimated Amazon's strengths.  I still think there's potential there, for cutting out one middleman in the chain, but perhaps it's better realized by Amazon buying (or becoming) a publisher.

But if I were a publisher I'd definitely look at ways to expand my scope beyond managing writers, printing physical books and selling IP to third parties.  Amazon is the market leader in their niche, but I'd still be eyeing them.

[grumbler]

But if I were a publisher I'd definitely look at ways to expand my scope beyond managing writers, printing physical books and selling IP to third parties.  Amazon is the market leader in their niche, but I'd still be eyeing them.

As a publisher, I can say that this is definitely true.  The Amazon model isn't perfect for publishers, that is for sure (my company tried a title through Amazon, and got pretty much crushed by the overall costs to us, plus the remainder policy).  Right now we focus on direct sales to people we know want our kinds of books (only about 20% of our sales go through book stores, and all of them are stores whose owners we know).

e-publishing is definitely something we are eying, but format wars are still an issue.

[Jacob]

As a publisher, I can say that this is definitely true.  The Amazon model isn't perfect for publishers, that is for sure (my company tried a title through Amazon, and got pretty much crushed by the overall costs to us, plus the remainder policy).  Right now we focus on direct sales to people we know want our kinds of books (only about 20% of our sales go through book stores, and all of them are stores whose owners we know).

e-publishing is definitely something we are eying, but format wars are still an issue.

Interesting.  When I was speculating about taking on Amazon, I was thinking more from the perspective of a big publisher like MacMillan.  Challenging Amazon would require some serious cash, I imagine.

If I was a niche publisher, I'd probably look at what you're doing and maybe seeing if I could band together with other publishers in the same field for a genre or niche site (wargames and military history, if I recall correctly).  If you had a number of reputable niche publishers in the same genre, the reviews would probably start accumulating and be more credible and if you hook up your direct and e-sales there that could give you a bigger cut of the profits?  I mean, I don't know what the cost would be (or the energy required), but on the face of it it doesn't seem ludicrous.

[grumbler]

If I was a niche publisher, I'd probably look at what you're doing and maybe seeing if I could band together with other publishers in the same field for a genre or niche site (wargames and military history, if I recall correctly).  If you had a number of reputable niche publishers in the same genre, the reviews would probably start accumulating and be more credible and if you hook up your direct and e-sales there that could give you a bigger cut of the profits?  I mean, I don't know what the cost would be (or the energy required), but on the face of it it doesn't seem ludicrous.

That is the direction we are going.  We have already taken on board one "e-publishing" (rally meaning flash printing and e-publishing, because people tend to like to have those paper copies) guy and as of this spring will be taking on another.  Most of the history publishing industry around our size, though, doesn't think the new trends will effect them at all.