Nascent

Amazon: A New Kind of Publisher

While most of the attention and ire of the publishing industry seems to be trained on Google these days, the most clueful colleagues I speak with appear unanimous in the view that the biggest threat to their livelihoods is actually Amazon. I think they’re right, as this recent announcement shows. It may just prove to be the publishing news of the decade.

To see why, consider first that the publishing industry — from agents and publishers to wholesalers and retailers — essentially exists to connect people who have interesting content to those who are willing to pay for it. In general the system works reasonably well, but in the age of the web all those layers look mighty inefficient and ripe for disintermediation. Furthermore, as Clay Shirky and Chris Anderson have pointed out, infinite online shelf space and smart computer algorithms are turning traditional publishing approaches on their heads: “filter then publish” has become “publish then filter”.

This new “post-filter” paradigm (as Chris puts it) is potentially a much more efficient and effective way of carrying out the matchmaking role currently fulfilled by the publishing industry (among others). The snag is that to make it work you need a large set of data about individual and collective tastes (so that, based on analysis of collective behaviour, you can accurately predict which individuals will be interested in a particular item). Google achieved this in search by studying the link patterns of the web; Apple achieved it in music by getting everyone to load their CDs into iTunes, and buy new tracks from the iTunes Store.

For books, of course, Amazon is the owner of that precious data set. They know more than any other organisation about my reading habits — heck, they probably know more than I do about my reading habits. In contrast, Waterstones knows nothing at all about my preferences even though I must have bought at least as many books there over the years as I have at Amazon. The other players in the current publishing chain know even less.

Which puts them all in a frighteningly fragile position. So far Amazon have employed their user data mainly in improving search results and delivering personalized recommendations, all with a view simply to selling more stuff delivered through traditional channels. But in principle there’s no reason why they shouldn’t take a leaf out of Lulu’s book by accepting content direct from authors, promoting it direct to users who are likely to have an interest, fulfilling any orders using print-on-demand, and sending a cut of the revenue back to the original authors. Fast, efficient — and not a traditional intermediary in sight.

Which brings us back to that announcement:

CreateSpace, part of the Amazon.com, Inc. group of companies (NASDAQ: AMZN), today announced the launch of a new online Books on Demand service. Also announced today, the company is no longer charging setup fees for books, audio CDs and DVDs. Authors, filmmakers and musicians can now offer their works to millions of customers on Amazon.com, CreateSpace.com and via their own free customizable eStore without any inventory, setup fees or minimum orders.

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CreateSpace books sold on Amazon.com are printed on demand, display “in stock” availability on Amazon.com and can be shipped within 24 hours from when they are ordered. The books are automatically eligible for Search Inside!™, Amazon Prime™, Super Saver Shipping™ and other Amazon.com programs as well.

So there you have it: Amazon becomes the ultimate clearing house for books of all kinds (and much else besides), with none of the traditional middlemen getting a look in. Genius. If you’re an agent, publisher, wholesaler or retailer of books and you haven’t just soiled your undies then you don’t understand what’s going on.

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