Here’s another article from an exec of a Direct-to-Consumer (D2C) publisher about “disintermediating Amazon,” this one on Publishers Weekly. John Oakes of OR Books puts Amazon’s success in an interesting perspective when he points out that, when you get right down to it, the main advantage Amazon really has is “a comfortingly familiar Web site” that didn’t even exist at all just a few years ago.
What is it selling? Its ability to sell. What if publishers were to sell e-books and print books direct, straight to consumers—and consumers were to get used to the idea of buying direct? Suddenly one can imagine Amazon becoming an anachronism, joining the lengthy list of publishing’s dying or extinct species.
He also points out that D2C isn’t the only advantage OR has: the company is convincing bookstores to buy its books on a flat 50% discount, non-returnable basis. Because the stores can’t return copies that don’t sell, they order smaller amounts—then they order more when those sell out. And he also sees Espresso as another potential way to improve distribution.
I find it interesting that there’s suddenly so much talk about publishers starting to sell directly to consumers. Until the Department of Justice thing broke, it didn’t even seem to be on the radar of most people in the publishing industry, save for the occasional exception like Nic Boshart or Brett Sandusky. The publishers like O’Reilly and Baen who’d been doing it for years kept chugging right along, and none of the big publishers seemed to put forward much effort to try to match them.
With publishers having to find another way to keep Amazon from eating their lunch if agency pricing falls through (for the time being), who knows? Maybe we could see something come of it this time.
Publishers such as Baen have been doing this for years. There’s really not much to it, from a technical perspective. I ran an experiment a while back to see just what would be involved:
Regarding dis-intermediation, why stop at the publisher level? Neither retailers nor publishers have as strong a claim to essentialness as they once had. Digital technologies have made direct author-to-reader transactions entirely feasible.
Oakes mixes the usual dose of hysterical fantasy about Amazon with a germ of a new idea … a willingness, at long last, of actually competing with Amazon ! Unfortunately he overstates his business model and gets completely carried away with his new thinking.
Also long as publishers still persist in trying to sell people the nonsense of Amazon as a nasty predatory monster, they will continue to fail fail fail. And Oakes shows all the signs of continuing that tradition.
Where Oakes shows some germ of promise is in waking up, if only in a small way, to the truth that Amazon is not doing anything super naturally special. They just sell products online through a very well designed web site and they ensure that the consumer drives everything they do. It’s not rocket science, and the market is open to anyone else to do the same.
Unfortunately Oakes then gets lost, in my view. His OR model (paper based) is indeed selling D2C but not in a really comparable or replicable way. OR are changing the financial model and the returns model, but with only two titles a month it is hardly scalable as he describes it and not something to get really excited about. The implications of scaling that to 5,000 paper titles asks serious questions about risk management by stories who must chose what titles they can actually sell and the sizeable risk of being left holding dead stock.
What needs to be encouraged through, is a new willingness to actually COMPETE in some way with Amazon and not, as the rest of the legacy publishers are doing, to simply lie back and cry about being thrashed within an inch of their life without doing a thing to complete.
What Amazon is selling is its ability to function like a bookstore. A place where customers can browse and buy without having to run around town to publishers’ little boutiques. How many publishers have the specialized draw of O’Reilly or Baen? It’s already been established that most readers couldn’t care less who the publisher of the average book might be, so why would they bother to seek out those publishers in order to buy?
Catana – I agree. It is self evident imho.
One solution is for Publishers to develop a joint venture platform to market and sell their titles. It makes complete sense to me and I cannot figure out why this hasn’t been done.
A platform that offers a range of publishers titles, as long as they cover a significant and worthwhile chunk of the titles readers want to read, will offer the reader a real alternative to Amazon.
A platform that offers a range of publishers titles within a Genre can also create some traction imho.
D2C will stand little chance against the ease of a megastore (for customers) until contract clauses that ban authors/publishers from selling their ebooks for less anywhere else get eliminated. Getting rid of that clause is the one and only good aspect I see in the DOJ’s otherwise absurd lawsuit against Apple. If the typical book buyer knows he can usually get a better price direct from a publisher than from Amazon or Apple, he will go there. That’s let Little Book Press stand a chance of competing with giants.
Since Apple takes 30% off the retail price and Amazon does the same (in a certain price range), it would make sense for authors/publishers who can host and distribute their ebooks for less than that, to sell their books themselves for less than the Apple/Amazon price. It also gives them contact information about their customers, something that can prove useful in the future. That’s why D2C makes sense.
That said, I doubt most authors and small publishers want to deal with all the hassles of maintaining a website and handling financial transactions. What might work better would be a third-party provided website. Entered one way, it’d look to customers like they were going direct to a publisher. Entered another way, it’d look like an online bookstore handling many publishers, a sort of co-op for publishers.
The advantage of that third-party website is that authors/publishers would be their customers. Apple and Amazon can treat authors and publishers badly because we’re not their real customers. We need them more than they need us. This third-party would need our business or we’d go to competitors. That’d make it more responsive to our needs.
Perhaps even more important, these third-party providers could also offer substantial benefits to book buyers, since they aren’t caught up in buyer lock-in like Amazon and Apple. For an illustration of that check out O/Reilly, a tech book company that sells its ebooks directly to the public. Once you buy an ebook from it, you can get copies from it in other formats. Buy a book from Amazon, and you only ‘own’ the book in a Kindle format. Buy an O’Reilly ebook, and, if you shift from reading on a Kindle to reading on an iPad, you can download that same ebook in your new format for free. As an author, I like that. I don’t want my readers to be trapped in buyer lock-in.
Michael – I don’t see the logic in your assertion. Publishers or writers can sell their titles for exactly the price they set for their Amazon titles. Why can that not succeed ?
Amazon has weaknesses. One of them is the pure extraordinary size. Smaller retailers such as collectives or joint ventures can use that weakness.
I don’t buy agency ebooks, so my purchases have always been subject to discounting by Amazon. The rare time I purchase directly from an indie publisher is when they put their books on significant sale. I am not at Amazon for their cozy website or their great customer service (although both are nice) – I am there for low prices and and so far most D2C publishers aren’t competitive in that area on a regular basis.
I started using Amazon when I couldn’t find the book I wanted in the local bookstore (I’m not a best seller reader). D2C is fine for hard copy books and I will often use them for those books but D2Ccan be difficult for ebooks.
Amazon has the advantage BECAUSE they are a large bookstore and carry many publishers ebooks. It gives me one location to purchase from, will “store” my archive collection for me, does not require a computer to download a book in my archive, works (and syncs) on a wide range of devices, and will tell me if I already own a copy.
I would highly recommend that D2C publishers find a way to allow users to store their ebooks to a common repository so one does not have to go to multiple sites to retrieve different books.