It’s one of those glorious moments when someone gets their just desserts: Cassie Edwards has been dumped by her publisher. They’re citing “editorial differences” that cannot be reconciled.
Plagiarism is serious business with serious consequences. It’s about time publishers started doing the right thing instead of covering up for these authors.
The Huffington Post posted this article about the Amazon/BookSurge POD kerfuffle. It’s a good description of the issue from the point of view of a small publisher and/or self-publisher.
Also,it would seem that the actions taken by The Authors Guild and others concerned with the legal aspects of Amazon’s new policy are having an effect.
The Washington State Office of the Attorney General has issued a statement that says, in part:
April 8, 2008
The Washington Attorney General’s Antitrust Division has received several inquiries and concerns regarding the new “print on demand” or “POD” policy recently implemented by Amazon.com. Individuals who have contacted our office claim that Amazon is engaging in “monopolistic practices.”
As with all complaints regarding a business, we have advised Amazon.com of these concerns and have asked the company to respond to us. In the meantime, the Antitrust Division is conducting an initial review of the marketplace and will respond more fully once that review is complete.
In order for the Attorney General’s Office or another enforcement agency to take action on an antitrust law violation, a court must be convinced that a company has attempted to monopolize a relevant market or is attempting to exclude others from a market it has already monopolized. The relevant market is judged not only in terms of what products are in question, but the geographic service area in which competitors compete.
If it is determined that the markets involved are national in scope, it may be more appropriate to refer this matter to one of the federal antitrust agencies for review.
I know next to nothing about antitrust law so I won’t even speculate as to the outcome.
It’s been a couple of days, and although it seems like the furor has died down a bit, a lot has been going on behind the scenes. I’ve got links to several press releases below, and there’s an announcement from Amazon UK that’s got some people upset.
But first, an update on the Amazon/BookSurge story.
The Authors Guild sent this e-mail to its members today. It says, in part,
Ingram Industries’ Lightning Source is currently the dominant printer for on-demand titles, and appears to be quite efficient at its task. They ship on-demand titles shortly after they are ordered through Amazon directly to the customer. It’s a nice business for Ingram, since they get a percentage of the sales and a printing fee for every on-demand book they ship. Amazon would be foolish not to covet that business.
What’s the rub? Once Amazon owns the supply chain, it has effective control of much of the “long tail” of publishing — the enormous number of titles that sell in low volumes but which, in aggregate, make a lot of money for the aggregator. Since Amazon has a firm grip on the retailing of these books (it’s uneconomic for physical book stores to stock many of these titles), owning the supply chain would allow it to easily increase its profit margins on these books: it need only insist on buying at a deeper discount — or it can choose to charge more for its printing of the books — to increase its profits. Most publishers could do little but grumble and comply.
We suspect this maneuver by Amazon is far more about profit margin than it is about customer service or fossil fuels. The potential big losers (other than Ingram) if Amazon does impose greater discounts on the industry, are authors — since many are paid for on-demand sales based on the publisher’s gross revenues — and publishers.
Also, the Independent Book Publishers Association has spoken out on the issue. Shelf Awareness says:
PMA, The Independent Book Publishers Association, which represents more than 4,000 independent publishers, has joined the protest against Amazon’s new policy that POD titles must be printed by Amazon’s BookSurge subsidiary to be sold without extra charges on the online retailer.
In a statement, executive director Terry Nathan said: “This policy imposes a significant financial burden on tens of thousands of small and independent publishers who can least afford it. Without the opportunity to benefit from competitive pricing, small publishers risk at best an expensive and needless overhaul of their manufacturing process, and at worst, the loss of their livelihood.
“On behalf of all the small and independent publishers whose businesses are in jeopardy, we urge Amazon to reconsider its position. Over the years, Jeff Bezos and his company have given small and independent publishers a level playing field to compete with the largest of companies. Suddenly, this magnificent playing field has been converted into a ‘members only’ club, to the detriment of those very publishers who have contributed to Amazon’s success. We will continue to monitor developments in the weeks ahead.”
And in other news, Amazon UK has raised a lot of hackles. According to this article, Amazon UK has threatened that for publishers who sell their books directly to consumers at a discounted rate, Amazon UK will pay those publishers based on the that discounted price rather than the cover price OR the listed Amazon price.
In other words, if Amazon receives a 50% discount from Penguin, for example, but Penguin is selling a £20 book for £15 on its website, Amazon will only give Penguin £7.50, rather than £10.
One publisher told PN: “Essentially, they’re not happy when the manufacturer, as they call us, sets the price of a book. The threat is that they will apply the agreed terms of trading to our web price. But they are on very shaky legal ground. After all, they’ve been invoiced at an RRP less their discount, so if they refused to pay that amount, they would be in breach of contract.”
Another publisher was more forthright. “Nobody can tell somebody else what price to sell a book at. Publishers will resist this.”
Lightning Source International has released a statement on the Amazon / Booksurge announcement.
The statement says, in part:
We are aware of the concern this is causing the publishing community. The issue centers around Amazon.com tying the availability of your books and terms of sale at Amazon.com to the production of books at the Amazon.com subsidiary BookSurge, specifically requiring you to use BookSurge in order to sell on Amazon.
Like you, we are very concerned about any conduct that would serve to limit a publisher’s choice in supply chain partners and to negatively impact the cost of your products to consumers. We believe that choice and selection of best of class services are critical to the long term success of publishers and a vibrant book market.
Lightning Source continues to provide the highest quality digital on demand print and distribution services for every one of our customers. All your titles continue to be available to all of our channel partners, including Amazon.com, with immediate availability for shipment within 24 hours.
In this article, Publisher’s Weekly discusses the Amazon statement issued yesterday and Ingram’s response to the issue.
I still take issue with Amazon saying
“It isn’t logical or efficient to print a POD book in a third place, and then physically ship the book to our fulfillment centers. It makes more sense to produce the books on site, saving transportation costs and transportation fuel, and significantly speeding the shipment to our customers
For some orders, that might be true. Might. But Lightning Source does not physically ship the book to Amazon’s fulfillment services. They ship the book directly to the buyer, in Amazon packaging! Amazon is deliberately misleading people with this statement, and I hope more people call them on it.
Furthermore, I have yet to see any indication that BookSurge can print these books at the fulfillment centers. How is it logical or efficient for BookSurge to “print a POD book in a third place” (namely, the BookSurge printing facility), “and then physically ship the book to our fulfillment centers”?
In terms of saving transportation costs and transportation fuel, A=B. Both BookSurge and Lightning Source would be shipping directly from their printing facilities, in separate packaging from items shipped from Amazon’s fulfillment services. And shame on Amazon for trying to imply that this strategy is somehow environmentally inspired.
A statement from Ingram, owner of Lightning Source and a major wholesaler, says “publishers are telling us they feel Amazon.com’s actions are not appropriate” and that attempts to get Amazon to clarify their POD policy have not received a response.
Apparently Lulu.com, AuthorHouse, and iUniverse have signed some sort of agreement with Amazon, although that’s all secondhand info and unverified.
BookSurge was acquired by Amazon in April of 2005 (I thought it was 2006; sorry about that).
At BookExpo America last May, BookSurge announced agreements with Oxford University Press, Cambridge University Press, Princeton University Press, Lexis Nexis, HarperCollins, John Wiley & Sons, McGraw-Hill, Pearson, Springer, Gale, and Kensington, among others, to ” use BookSurge’s Print on Demand service to make their current, backlist, out-of-print and large print books available to millions of customers on Amazon.com and through other distribution channels.”
Then in June, BookSurge and Kirtas, a company that digitizes print works, “announced a collaboration with universities and public libraries to preserve thousands of rare and inaccessible books from their collections and distribute them via BookSurge’s Print-on-Demand service. This collaboration, which will greatly enhance the selection of rare and historic books for sale on Amazon.com and other retail channels, represents a breakthrough approach to digitization and preservation that will ensure the public will have access to these works indefinitely via Print on Demand.”
I think the current tactics by Amazon are an attempt to expand these collaborations, not to punish small publishers. It’s entirely possible that whoever made the decisions and directed their implementation simply didn’t understand that online POD presses are the ones who would be the most affected, and that they’d have no problem complaining about it. Loudly.
Obviously I could be completely, utterly wrong about this. But as I said, it doesn’t make sense to me that Amazon would deliberately alienate small publishers; it seems far more likely to me that they were giving bigger publishers an ultimatum and instituted a one-size-fits all policy. We’ll see; I suspect there will be more announcements on Monday.
I just wanted to clarify that I believe the small presses and POD publishers are getting caught in the crossfire as Amazon tries to position itself in the lucrative POD market following its acquisition of BookSurge about a year ago.
I don’t for a minute think Amazon’s intention was to alienate small/independent/electronic/other publishers who use POD technology to create printed, bound books (although they’ve certainly succeeded in doing so). I just don’t think they’re that…unsavvy? Is that the word I’m looking for?
I think Amazon is going for the much larger, lucrative backlist market.
The major traditional publishing houses and academic presses have embraced POD as a means of keeping their backlist titles available. Instead of having to fund an offset print run of titles they likely cannot sell and will have to warehouse, these publishers can now make available thousands of titles that can be ordered, printed, and shipped one at a time. This is a potentially huge market, it’s a growing market, and at the moment LSI (at least, this is my understanding) dominates it.
I believe this is the market Amazon is trying to gain a larger share of. I’m pretty sure Oxford already uses BookSurge, and I’ve heard McGraw-Hill and HarperCollins do as well. I think Amazon instituted this policy to try to get other large academic and mainstream publishing houses to shift from LSI and other POD printers to BookSurge.
I could be wrong, but this is the only explanation that makes any sense to me.
As a result of Amazon’s new POD policy, another publisher’s books are no longer available directly through Amazon. Instead of having the gold “add to cart” button and qualifying for free shipping, their books now are only available through the Amazon marketplace through third-party sellers. I’ve not heard an official statement from Whiskey Creek Press on this. I suspect other e-publishers who use POD for sales of print editions will run into this issue at some point.
I have heard, and I don’t have verification on this, that one way publishers can avoid using BookSurge instead of their current printer is to become an Amazon Advantage member. However, at least a couple of publishers have told me that although the signup fee is only $29.95, the “standard 55% commission” on sales makes this an unworkable option for them.
(ETA: More on the affiliate program is located in the comments. Thanks for the info!
About a year ago, Amazon acquired BookSurge. BookSurge offers self-publishing and POD services (the self-publishing extras, such as editing and cover design, are not cheap, either).
Now the word comes from various sources that Amazon has decided to cut into the huge POD market share held by Lightning Source (LSI).
Basically, what’s going on is this: POD publishers who use LSI as their primary printer are being told they need to switch to BookSurge if they want to be listed and sold directly through Amazon (i.e., have the gold “Add to Shopping Cart” button and qualify for free shipping, etc.). Those who choose not to go this route will still be available through Amazon through the Amazon marketplace and third-party vendors.
This is a big deal for several reasons. First, like it or not, Amazon has a huge market share when it comes to book sales. Books that are self-published or published by small POD presses are already fighting an uphill battle, and if they’re not available directly through Amazon, that’s likely going to have an effect on sales.
Second, LSI is a subsidiary of Ingram. Ingram Book Group is a major wholesaler, and most self-publishers, POD publishers, and small presses rely on these wholesalers because they are unable to afford the services of a dedicated distributor. By listing their books in the Ingram database, these publishers make their books available to a wide audience.
BookSurge does not list its titles with Ingram. It does list them with Baker & Taylor. What this means for the independent and/or POD publishers is that if they want to maintain their ability to sell books directly through Amazon, they would have to print their books through both LSI (for books sold through Ingram as a wholesaler, say at Barnes and Noble) and BookSurge (for books sold through Baker & Taylor or Amazon).
This means two sets of formatting specifications, two setup fees, two vendors, etc., etc., not to mention two different pricing structures. This could have a major impact on smaller presses, who might have neither the time nor the resources to set this up for current and future titles, let alone backlist titles.
The folks at Lulu are aware of the situation but have yet to make an official comment. Current discussion on their forums is focusing on whether Lulu would have to create a whole new set of templates to meet BookSurge specs, which apparently are more restrictive than current Lulu specs (meaning BookSurge might not even have the capability to print all Lulu titles).
PublishAmerica, which in my opinion is worse than typing out a manuscript by hand and photocopying it in your school basement, has this to say about the situation. PublishAmerica’s books are no longer available directly through Amazon (and by extension the online stores for Borders and Waldenbooks, which use the Amazon listings) although they are still available through Barnes & Noble.
Now, as it happens, Barnes & Noble is a partner of, and possible part owner of, iUniverse, so who knows what their next move will be or if they will refuse to sell books printed by BookSurge.
Right now there’s a lot of speculation and not a lot of concrete information. But I think it’s yet another factor to keep in mind for those who are considering the POD and/or self-publishing route.
After reading yet another online discussion of self-publishing and publishing through small independent presses, I started thinking, and I wondered, how do people buy books? Where do most sales happen?
Turns out that a few months ago, Publishers Weekly summarized the results of a survey about U.S. books sales. I was a little bit surprised by the results, and once again reminded of the importance of bookstores.
In a nutshell, the survey found the following breakdown:
Direct sales (book fairs, conferences, etc.) = 3% of total sales
Book clubs = 12%
This surprised me, as I didn’t think that book clubs were still so big. But then I thought about Harlequin and all of their imprints that members receive on a monthly basis, and thought, that makes sense that genre book clubs might be doing well if readers regularly buy the new releases and like the convenience of home delivery.
Internet sales = 20%
This number also surprised me: only two of ten books purchased in the U.S. are purchased online. I would have expected this to be higher.
Total of direct sales, book clubs, and Internet sales = 35% of total sales
That’s pretty impressive. But if you think about it, that means bookstores account for 65% of total sales.
Sixty-five percent. That’s a huge chunk of total book sales.
This is extremely important because so many small presses rely on wholesalers and online book retailers for their total book sales, yet online sales account for only two of every ten books sold. Presence in brick-and-mortal bookstores is still critical for book sales.
So authors: when you’re choosing a publisher, make sure you can find their books in stores, on the shelves. This means the publisher has a distributor who is actively working to make your books available to consumers where most book sales are made.
ETA: As mentioned above, this survey represents the U.S. only. My understanding is that online sales make up a much larger proportion of total sales in the UK; I have no idea about other locations.