Sunday, April 6: The A.D.D. Detective
AMAZON MUSCLE
by Leigh Lundin
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| Susan Slater |
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Author Susan Slater has written a raft of books, including at least two mystery series I’m aware of, the Ben Pecos and the Dan Mahoney mysteries. Her web site is well worth viewing for another reason, because it is one of the rare good uses of Shockwave Flash on a web site.
When Susan’s books go out of print and demand drops from several thousand to a few hundred or dozen, she calls upon an industry technology called PoD, ‘print on demand’. Print-on-demand whips out a paperbook book about the same way your computer prints a cover letter, one copy or a thousand.
PoD powerhouse Lightning Source (LSI) is perhaps the biggest, but there’s many smaller companies and even schools led by Indiana University that offer PoD services, providers that include Cambridge, Cornell, Harvard, Penn State, Princeton, Rutgers, and Texas A&M.
It’s important to note that PoD is not the same thing as publish on demand, sometimes called vanity presses that specialize in bringing to fruition self-published books. Publish-on-demand and print-on-demand are often confused, because self-publishers often revert to PoD because of the smaller numbers of copies involved.
In 2005, Amazon acquired a PoD called Booksurge. According to reports, its quality was spotty, so in 2006, Amazon pumped resources into Booksurge with new equipment and technology. Still, it seems, the upgrade didn’t attract customers. Jeff Bezos had plans for Booksurge, something called vertical integration– cutting out the middle man.
Amazon has been a well-run company and its CEO, Jeff Bezos, is considered an enlightened executive and entrepreneur. Bezos made Amazon into the little bookstore who could, defying experts who questioned if anyone would buy books on-line. We like Amazon and we invariably link the books we talk about to Amazon. But…
The POD People
I receive mailings from a Yahoo group called Publishing and Promoting. Sometimes the content is less than scintillating when an author waxes enthusiastically about baking cookies in the shape of her characters for her book signing. All right, maybe not that extreme, but it can be dry stuff. However, this week heated up about a topic that may change the way authors and ultimately readers do business.
If you’ve been on Amazon.com recently, you may notice some of the BUY buttons are missing. There’s a reason for it. In a P&P memo, Janet Elaine Smith quoted Publishers Weekly which quoted a Wall Street Journal article about Amazon.
"Amazon has notified publishers who print books on demand that they will have to use Amazon’s POD facilities if they want to sell their books directly on Amazon.com, the Wall Street Journal reported.
"’The move signals that Amazon is intent on using its position as the premier online bookseller to strengthen its presence in other phases of bookselling and manufacturing," the Journal continued. Amazon "has evolved into a fully vertical book publishing and retail operation. Most recently, Amazon acquired audiobook seller Audible Inc. Amazon also sells its own ebook reader called the Kindle.’
"’Publishers will have to use Amazon’s BookSurge POD subsidiary. Among competitors are Ingram’s Lightning Source and lulu.com."
Publishing & Promoting is a small, informal group, but PMA, The Independent Book Publishers Association, is not and neither is Publishers Weekly or Writers Weekly. So far, every industry article and news source I’ve read has either questioned the policy or condemned it.
Alison Rose Levy in Arianna’s Huffington Post mentions Booksurge’s reputation for higher cost and lower quality. She says, "Anyone who dreams to one day write their own book would be impacted by this change."
The Phone Call
Diane Newton passed along a note by Bill Altimari, in which he says he received an eMail for him to call Amazon’s Booksurge rep, and, in what he characterized as a "slap in the face", was told that to continue business as usual, he was to commence printing with Booksurge. Furthermore, he says, Booksurge/Amazon intends to charge for the printing of the book and take 48% of the net (although some have been told 48% of the retail).
At this point, I’d say I was cautiously concerned; however, some people are panicking. Amazon is getting astonishing push-back, but I think it’s too early to assume that Amazon has slipped into eBay’s "We’re too big to care" mold. However, we don’t know exactly what’s going on because, to quote Writers Weekly, "the confidentiality clause in that contract is the tightest I’ve ever seen. Don’t expect anybody at those firms to ever talk about what they had to give Amazon to keep their BUY buttons turned on.."
Below, I’ve included a reference of several links, including the announcements in Publisher’s Weekly, The Wall Street Journal, and The Washington Post. The Writers Weekly Clearinghouse page has a most comprehensive list of links.
Many of the questions raised in blogs and letters to editors relate to restraint of trade and antitrust concerns. If the situation grows more serious, most commentators don’t see much help coming from the present Justice Department. Under this administration, virtually all Sherman antitrust investigations were halted. In 2000, the Justice Department won a major anti-trust suit against Microsoft and were considering potential perjury charges against Microsoft’s new CEO, Steve Balmer. However, within days of assuming office in 2001, John Ashcroft ‘forgave’ Microsoft (a huge campaign contributor), flushing away all that work and tax money (and the victory). That was seen as a business signal that pretty much anything goes.
Today, you can witness the result even as Microsoft strong-arms Yahoo in an attempt to take over that company. Indeed, ComputerWorld relates Amazon’s move to a Microsoft situation.
Opinions
Hill Kemp of Guardian Angel Publishing spoke with an attorney who commented:
"I definitely think Amazon’s actions sound like antitrust violations. My question would be why is the justice department not on this already? Justice is so political these days, it’s hard to know what they would really go after at this point. Many states have similar antitrust provisions in their business regulations, and maybe you could find an AG’s office at the state level who would be willing to listen to a complaint of this nature.
"Seems to me that the folks with the ox to be gored here would be the other POD companies. They should be banging on doors at their local state house, if not financing a civil suit of their own."
Deborah Sell suggested, "Rather than limiting any responses to the Justice Department, why not include the Federal Trade Commission as well?"
Karen Syed of Echelon Press has staunchly risen to Amazon’s defense: "Amazon has been great to us and I understand their logic, to some degree, for this. It is about business. They are probably sitting on a HUGE number of titles that may or may not be moving and that costs them money. … Truth is, this is a good business move for Amazon, and I would say the best way to get around it is to get an Advantage account and sell more books."
Karen touches upon another point in that some authors and small houses have expressed fear about going up against Amazon (not that I’ve sensed the least whiff of intimidation). I’ve never known writers to be particularly reticent, but the argument is that publishing is a relatively small world, and that reputations on both sides could be damaged, particularly those calling for boycott.
Canadian writer Mark O’Meara has a different fear, that the new cross-border shipping restrictions could put him out of business.
Amazon PoD Links
- Announcement
- http://www.publishersweekly.com/article/CA6545772.html?nid=2286&source=title&rid=632422858
- http://online.wsj.com/article/SB120667525724970997.html
- http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9073198
- http://www.washingtonpost.com/wp-dyn/content/article/2008/03/28/AR2008032800327.html
- Writers Weekly Warehouse
- http://www.writersweekly.com/amazon.php
- Playing Monopoly
- http://www.huffingtonpost.com/alison-rose-levy/writers-and-publishers-fi_b_94825.html
- PW on Booksurge plans
- http://www.publishersweekly.com/article/CA6545772.html?q=Amazon+POD
- Amazon explains
- http://www.publishersweekly.com/article/CA6546490.html
- Our Friend, Bill Crider
- http://billcrider.blogspot.com/2008/03/hmmmmm.html
- Murder by 4
- http://murderby4.blogspot.com/2008/03/amazon-to-force-pod-publishers-to-use.html
- PMA
- http://www.publishersweekly.com/article/ca6547782.html
- Fear
- http://www.writersweekly.com/the_latest_from_angelahoycom/004597_03272008.html
- http://www.writersweekly.com/the_latest_from_angelahoycom/004610_04022008.html
- Comments
- http://www.pma-online.org/articles/shownews.aspx?id=2090
- American Society of Journalists and Authors
- http://www.asja.org/media/nr080404a.php
- Amazon UK
- http://www.thebookseller.com/news/56032-no-plans-for-amazon-uk-pod.html
POD is only a useful option for authors who have already established a reputation. Booksellers shy away from POD because the books thus produced have a higher unit cost, are made available at low to nonexistent discounts, and are not returnable to the publisher for credit.
In short, I do not recommend POD as an option for anyone but the author who wants to make reprints of his work available, or to those who desire a relatively low-cost vanity press for a subscription audience.
The above comment about the usefulnness of POD is absolutely NOT TRUE! The value and potential profit is dependent entirely upon how the author/publisher does business and the choices they make. As a publisher, I have used POD technology for nearly 8 years with LSI and I could not be happier. I do the formatting so I know it is quality, LSI and any other POD printer works with what thier client submits.
As for pricing, the client also determines the price of the book. If an author/publisher wants to make money they have to be prepared to set their price a little higher and market a little harder. The POD printer does not set the price.
Same with the discount and returnability of the items. The client sets the level of discount and decides the terms for returns.
I will admit that in the beginning we set our prices so low to stay competative that a couple of our titles, Echelon makes 11 cents profit on, but that was our mistakes.
Echelon titles have bee full returnable since day one and that has allowed us to be accepted into a variety of distribution programs, including Ingram, Borders Group, Follett Library Services, and Partners Book Dist., to name a few. Using POD technology for some of our titles has done nothing to hamper our distribution or sales, in fact I am seeing higher profits on some of our POD titles than on our offset printed titles that we are currently warehousing.
Generalizations are what confuse and damage the industry and to make blanket statements is unfair to authors who may want to use this print technology. They absolutely can be successful with it if they make educated and solid business decisions.
Karen Syed
http://www.echelonpress.com
As a longtime former bookseller familiar with the POD marketing model and its retail restrictions, I stand by my comments. Echelon may allow returns, but this is not typical of POD houses. Your comment that if a POD author wants to make money, he should be prepared to price his book higher than the market standard supports my point.
I do not recommend POD to novice authors for other reasons as well, not least of which is that POD houses are unfortunately notorious for poor editorial standards, if they have any at all.
Yes, success is possible. I do know of a few authors who have opted for POD and have achieved some measure of success, notably Sue Ann Jaffarian and Doug Lyle — but both of them jumped to “traditional” publishers as soon as they could. So there’s proof that success is possible — but it is even less likely via POD than with an agent and an established press.
As far as generalizing is concerned, my advice was intended for writers, not publishers. If I didn’t consider it useful and accurate, I wouldn’t have provided it.
It appears we are talking about two different things. You seem to be talking about subisdy/vanity presses which is comepletely different than what I am talking about, which is PRINT on DEMAND which is a specific technology for printing. POD houses, as you call them are vanity presses and I also don’t recommend them, but an author can definitely be successful using PRINT on demand technology and operating on their own behalf as a business.
And for clarification, Echelon is NOT a POD house, we are a traditional indepedent publishing house that chooses to utilize PRINT on demand technology to produce some of our titles.
Amazon Open Letter to interested parties:
We wanted to make sure those who are interested have an opportunity to understand what we’re changing with print on demand and why we’re doing so.
One question that we’ve seen is a simple one. Is Amazon requiring that print-on-demand books be printed inside Amazon’s own fulfillment centers, and if so why?
Yes. Modern POD printing machines can print and bind a book in less than two hours. If the POD printing machines reside inside our own fulfillment centers, we can more quickly ship the POD book to customers — including in those cases where the POD book needs to be married together with another item. If a customer orders a POD item together with an item that we’re holding in inventory — a common case — we can quickly print and bind the POD item, pick the inventoried item, and ship the two together in one box, and we can do so quickly. If the POD item were to be printed at a third party, we’d have to wait for it to be transhipped to our fulfillment center before it could be married together with the inventoried item.
Speed of shipping is a key customer experience focus for us and it has been for many years. Amazon Prime is an example of a successful and growing program that is driving up our speed of shipment with customers. POD items printed inside our own fulfillment centers can make our Amazon Prime cutoff times. POD items printed outside cannot.
Simply put, we can provide a better, more timely customer experience if the POD titles are printed inside our own fulfillment centers. In addition, printing these titles in our own fulfillment centers saves transportation costs and transportation fuel.
Another question we’ve seen: Do I need to switch completely to having my POD titles printed at Amazon?
No, there is no request for exclusivity. Any publisher can use Amazon’s POD service just for those units that ship from Amazon and continue to use a different POD service provider for distribution through other channels.
Alternatively, you can use a different POD service provider for all your units. In that case, we ask that you pre-produce a small number of copies of each title (typically five copies), and send those to us in advance (Amazon Advantage Program-successfully used by thousands of big and small publishers). We will inventory those copies. That small cache of inventory allows us to provide the same rapid fulfillment capability to our customers that we would have if we were printing the titles ourselves on POD printing machines located inside our fulfillment centers. Unlike POD, this alternative is not completely “inventoryless.” However, as a practical matter, five copies is a small enough quantity that it is economically close to an inventoryless model.
Might Amazon reconsider this new policy?
Only if we can find an even better way to serve our customers faster. Over the years we’ve made many improvements to our service level for consumers. Some of these changes have caused consternation at times, but we have always stuck with the change when we believe it’s good for customers. An early example: many years ago we started offering customer reviews on our website. This was a pioneering thing to do at the time. The fact that we allowed *negative* customer reviews confounded many publishers — some were downright angry. One publisher wrote to us asking if we understood our business: “You make money when you sell things! Take down these negative reviews!” Our point of view was that our job was to help customers make purchase decisions. It made sense to us to stick with the customer-centric position of embracing customer reviews, even negative ones.
Another example: a few years ago, we made the decision to offer used books, and to make those used copies available directly alongside the new editions. This caused significant consternation, but we stood by the decision because we were convinced it was right for customers. Sometimes a used book will do and it can sometimes be had at a significant cost savings relative to a new book. We stuck with the customer-friendly decision.
Our decision with POD is the same. Once a book is in digital format, it can be quickly printed on modern POD printing equipment. 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 and Amazon Prime members.
We hope this helps those who are interested understand what we’re working to do and why. We believe our customer-focused approach helps the entire industry in the long term by selling more books.
Sincerely,
The Amazon.com Books Team