The same week Amazon censored that book review, it was buying up other e-book delivery channels. Despite having introduced its own, similar product just weeks earlier, Amazon bought out the other major product Americans use to read e-books — the Stanza iPhone software from Lexcycle.
Did Amazon buy Lexcycle to assist in its marketing, or to shut it down? Well, consider what happened the last time Amazon bought a leading e-book technology provider, Mobipocket. Overnight, Amazon eliminated all competing e-book vendors and formats from its Web site. Yet, incredibly, Amazon never rolled out Mobipocket books. Instead, Amazon introduced an even more closed, proprietary system — Kindle.
How likely is it that Amazon will allow Smashwords, Feedbooks, and other emerging content providers to provide free and low-cost content through Stanza and iPhone? Don’t bet on it. Meanwhile, Amazon has made it nearly impossible for publishers to provide their content on Kindle without Digital Rights Management encoding, preventing readers from sharing or reselling content they’ve bought. Even as it slashes its warehousing, inventory and shipping costs thanks to e-books, Amazon is squeezing publishers, grabbing an even bigger portion of the selling price of digital books compared to paper.
Amazon is also meddling with the emerging digital-printing industry, known as print on demand (POD). Thousands of small publishers like me, who are too small to attract national distributors or wholesalers, survive from our Amazon sales. But recently Amazon has been trying to strong-arm us into its BookSurge self-publishing subsidiary.
But instead of attracting entrepreneurs to BookSurge by offering us good deals, Amazon is threatening to break our kneecaps — by removing the “buy” button for our books on Amazon.com. Take it or leave it — no discount to buyers, no distribution outside Amazon, less money for me and other publishers, and higher prices for consumers.
In essence, Amazon is telling publishers, “Pay us to print your books — or else.” When Amazon announced this POD policy last year, the reaction from publishers (never folks to agree on much) was unanimous: stunned incredulity.
Perhaps mindful of the fact that this behavior might be considered anticompetitive in some quarters, Amazon has been careful not to put any of these “offers” into writing, but discussing it only via telephone. And that is why I have been careful not to answer my telephone when Amazon’s BookSurge representative has repeatedly phoned me.
What does it say about the competitive landscape of book retailing when a “salesman” from the world’s largest retailer feels entitled to call an independent publisher, demanding to become your sole manufacturer, distributor and seller? The deal would cut my income by more than 50 percent. Sorry, but I would rather go out of business than knuckle under to that.
If Amazon wants to enter more segments of the publishing business, it should earn new clients by offering attractive terms, winning business on the merits. Amazon shouldn’t be allowed to get even bigger by threatening to put the little guys out of business.
Amazon’s anticompetitive steps in e-books and POD will put many thousands of smaller publishers and booksellers like me out of the business instantly. But these policies threaten the entire publishing industry. E-books are one of the few bright spots for big, traditional publishers who employ hundreds of thousands of professionals. And a growing number of big and mid-sized publishers are using POD to keep backlist titles in print.
Amazon’s recent moves run counter to what made the company great, the spirit of open competition that makes our society the most informed and vibrant in the world. Unfortunately, as it has become more profitable, Amazon is throwing its weight around in publishing, just as Microsoft did in the mid-1990s when it grasped for a stranglehold on desktop computing.
Now, however, the stakes are even bigger. This isn’t just about software or PCs, but the freedom of information and the viability of a free press in our nation. Amazon has achieved profitability partly by clobbering local Mom & Pop brick-and-mortar bookstores. Its campaign to grow still larger by putting scores of new publishers out of business isn’t only wrong, but amazingly shortsighted.