Juergen Boos, Director of the Frankfurt Book Fair, took the opportunity in his opening address for this year’s edition of the book trade’s biggest jamboree to warn against the dangers of oligopolies in publishing, and of technical standards becoming means towards market domination. In a series of more or less coded or directly explicit warnings about the market influence of Amazon, he stated that: “Technical standards – from payment systems to search algorithms – influence the way in which we read, and the things we know. In a very general way, they control our access to intellectual goods.”

And lest anyone be left in any doubt about exactly who and what he meant by this, Boos added: “Apple, Amazon and suchlike … are machines for customer retention which are in control, not only of the e-commerce, but also of the end devices. As such, they have the customers in their power.”

However, Boos pointed to innovation within the publishing industry as the answer to this oligopolistic behavior, ticking off a series of startups and initiatives, as well as self-publishing successes, to show the entrepreneurial spirit abroad: “The USA and the UK already proclaimed 2012 to be the ‘Year of the Start-up’ – Now that spirit has also taken hold in the rest of Europe, including the German-speaking countries.”

As a thesis, it’s not bad, especially not when Boos proclaims that: “Technical standards are tools. They must be designed to serve people and their needs, not the other way around.” But it’s worth remembering that what he largely means, and specifically references in the opening press release, is that the traditional publishing industry should get involved in setting those standards, rather than leaving them to the likes of Amazon. Alas, it was the reluctance of old-line publishers to engage in doing just that, or with the potential of digital publishing at all, that handed over so much of the value chain to the ebook distributors. (In other words, it’s a little late in the day for the corrupt old jades to get religion, but that often happens when they feel the cold breath of mortality.)

I agree that the whole debate about Amazon creating an oligopoly is one hugely worth having. Kindle is one of the best examples going of customer lock-in and consumer data mining. It’s just that you know that Boos is engaged in special pleading on behalf of his old book trade constituency when he makes these points. And the big numbers being talked about at Frankfurt suggest that his constituents are managing to navigate an oligopolistic world just fine.

4 COMMENTS

  1. The big publishers have been an oligopoly themselves for years with their control of authors. Right now, they are making their greatest profits from their Draconian rights demands and poorer profit sharing with authors as well as the cheaper production costs of ebooks.

    And, they have always been controlled by the distributors because they are so frinking stupid. Before the Internet changed everything, the distributors and the bookstores controlled their access to buyers, and what did they do?

    They gave better wholesale prices to the big box stores and wiped out a huge number of small bookstores. They also helped destroy a majority of the smaller book distributors so that Ingrams and a few others became so dominant.

    Anyone who trusts Amazon to treat them fairly or care about the publishing business is a naive fool who hasn’t paid attention to what Amazon has been doing, but Amazon and its competitors are business as usual for the publishing industry.

  2. I see little reason to worry about what the big publishers are doing in the ebook market. The only advantages they have over smaller publishers are larger advertising budgets and media contacts. Apart from that, ebook distribution is perhaps the most wide open free market in human history.

    Most of the time, big tends to beat little for three reasons: 1. Barriers to entry. 2. Cost of distribution. 3. Scaling costs.

    1. Barriers to entry. What does it cost to get into ebook publishing other than the time required to write book itself? An old computer with Word is all you need to make Smashwords happy and have that ebook available from almost everyone but Amazon. Send that same Word file to Amazon, and you’re available there. Cost: free to about $500.

    2. Cost of distribution. This is what it costs to get your ebook in the hands of customers. With traditional books that includes printing costs, warehouse costs and shipping, plus whatever it takes to get that book on shelves. With all but Amazon, that cost is nothing for digital. With Amazon it’s a download charge (boo, hiss) that gets tacked on to each sale.

    3. Scaling costs. To sell a million copies of a print book, you have to be very big. To sell a million copies of a digital book, size doesn’t matter. Those huge server farms that Amazon and Apple are running take care of the production for you at no extra charge. Miss Nobody can release a novel at the start of a month and just by word of mouth be selling thousands of copies a day by the end of that month. She need do nothing to meet that added demand. With print, her small publisher would be hopelessly overwhelmed.

    The larger publishers aren’t really in an adapt or die situation. They’re no fools. They’ll see the game has changed and change. Pricing will have to come down to match those of small publishers and independent authors. Royalties will go up. Marketing of printed books will stress more ‘buy this book for a gift’ and less ‘buy it for yourself.’

    The real problem that all publishers, large or small, face in a market dominated by Amazon is finding ways to establish direct contact with potential buyers. Amazon knows what sort of book millions of people like, but few publishers do. When they release a new ebook, they’re dependent on Amazon hyping it and taking the lion’s share of the resulting sales. With contact information, publishers could contact potential customers directly and sell directly or though a retailer they prefer over Amazon.

    One addition comment. Large publishers who want fight oligarchic lock-in need to put their money where they mouth is. Establish one price for books in an industry standard format (ePub) and another that’s more for propriety formats such as Amazon’s.

    Publishers can even take the moral high ground, insisting that the lower prices are to encourage people to buy ebooks that they can read on any device, while the higher price is to punish companies that lock in customers.

  3. [quote]One addition comment. Large publishers who want fight oligarchic lock-in need to put their money where they mouth is. Establish one price for books in an industry standard format (ePub) and another that’s more for propriety formats such as Amazon’s.

    Publishers can even take the moral high ground, insisting that the lower prices are to encourage people to buy ebooks that they can read on any device, while the higher price is to punish companies that lock in customers.[/quote]

    Apple has as big a lock in as Amazon does, and I don’t think they would put up with being charged a higher price than, say, Kobo.

  4. Contractually, a publisher can’t sell a book for less than what Amazon, etc., can.

    And anyone who puts a self-published book up on any site without spending money on a professional edit and a pro book cover, as well as shabby formatting deserves the derision and lack of sales that will befall them.

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