Amazon Publishing: The Road to Conquest & How Bezos Razed New York
Amazon Publishing might be the new normal of the 21st century book business. Whether this is a good thing or a bad thing remains to be seen.
I’ve always wanted NY Publishing to survive and thrive. Sure, I had nostalgic reasons. NY was (is) a cultural institution, with pedigree and history.
Amazon didn’t seem to possess the love for the written word. They sold camping equipment, soldering irons, plastic dog poo and massage chairs. How could they care about books? About literature?
Simply calling themselves Amazon Publishing did little to sway my opinion.
Change is Scary
I’ve been blogging on these business changes since 2005 (my first blogs were on one of the very first what-we-would-recognize-as-a-social-media-site, Gather).
I wrote post after post until I started feeling like that crazy guy downtown. You know the one I’m talking about? Guy wearing an ad board with THE END IS NEAR spelled out in duct tape or glitter.
Alas, the digital revolution has taught a lot of painful lessons. One of the hardest? We’re either architects or artifacts. True for publishers as well as authors.
If we hope to thrive in the next evolution of change, it’s critical to understand the larger picture. Without context, there’s no way to be strategic.
The 411 on Amazon Publishing
For the past twelve years or so, Amazon Publishing has been playing to win, as opposed to NY, who was playing to ‘not lose.’
Huge difference.
Instead of being on the offense, sticking and moving and learning how to play the new game or even invent their OWN newer game (and make Amazon hustle for a change)…the powerhouse publishers ran down to Blockbuster and rented You’ve Got Mail for the six-hundredth time.
Change at the Speed of Wi-Fi
By all indications, NY Publishing didn’t grasp that they only had a very small window to act if they wanted to survive (forget thrive).
Instead of redoing their business plan, they wasted precious time trying to rekindle ‘The Good Old Days’ and protect their besties Borders and Barnes & Noble…at all costs.
The Big Six (namely the multi-national media conglomerates in charge) couldn’t fathom a world where they weren’t the ballers. Anyone who claimed differently was deemed a lunatic, a hack, a poseur, delusional, etc.
Fast-forward to today (no VCR required because only my mother still uses one).
Borders is a ghost, and Barnes & Noble is now at the mercy of Elliot Management—the hedge fund that purchased them this past June.
Elliot Management, should they stick to their playbook, will shut down most of the large stores and part them out into smaller stores more reminiscent of the mom-and-pops Barnes & Noble pulverized on their way to power.
#Irony #Comeuppance
Good news is B&N shouldn’t go away completely. Bad news is those massive multi-million-dollar orders and preorders that financed the large NY houses just went bye bye.
So how did we all get here in such a short time? To answer this question, I’m going to cite the original personal coach/self-help guru…Sun Tzu.
Amazon Publishing & The Art of War
Jeff Bezos dreamed Amazon would one day replace The Big Six publishers and that he could completely reinvent the book business. He wanted the system to be more egalitarian.
Bezos believed consumers needed more say in what books they liked instead of relying on gatekeepers, AP reviewers, and (pre-negotiated) book displays to tell them what they should like.
Bezos had a plan to take out traditional publishing, and this plan is one I’ve done a fair job of predicting.
***gets cramp patting self on back***
I’d like to claim it’s because I’m super smart, but I had help. Anyone who’s read Sun Tzu’s The Art of War—and paid even MILD attention—could see the proverbial ‘writing on the wall.’
Every move Amazon has made over the past two decades or so might have appeared random, but to the trained eye? There has been NOTHING random about Amazon’s strategy.
But, Amazon couldn’t have secured the Iron Throne book market domination if traditional publishing had taken them seriously from the get-go and believed Amazon to be an actual threat.
Had the multi-national media conglomerates been paying attention, this might have ended very differently. Alas…
Pretend to be weak, that he (your enemy) may grow arrogant.
~Sun Tzu
Or, if you’re Amazon taking on publishing: Pretend to be a nut who believes that everyone will one day shop on the Internet…so that your competition will remain arrogant.
While NY argued over their favorite stock paper and mocked Facebook as a ‘passing fad,’ Amazon prepared for conquest.
They first dedicated massive resources to salvage the remains of Web 1.0 after the dot.com debacle. In 2002, Amazon launched AWS (Amazon Web Services), one of the first cloud-based systems able to track web site popularity and patterns and aggregate this information for marketers and developers.
In simple terms—who clicked what site when and why and how many times? Kind of an awesome thing to know if you want to sell stuff.
Then, in 2006, Amazon expanded AWS. My POV? Bezos (among other visionaries) wanted to ensure the infant Web 2.0 would have all it needed to grow into the leviathan it is now.
AWS added EC2 (Elastic Compute Cloud) and S3 (Simple Storage Surface) in order to expand their cloud storage and virtual computer capacities exponentially. Several years later (in 2012), Amazon purchased Kiva Systems (now Amazon Robotics) to streamline order fulfillment.
***More proof Amazon IS actually SkyNet. Alas, at least I know when the machines come for me, I get free shipping…because (DUH) I have Prime.
Anyway, improved search capabilities and data aggregation (better algorithms to predict and guide purchase habits), stronger safeguards against fraud, and increasingly faster shipping (using ROBOTS) all formed the foundation for Amazon’s future conquest.
On-line shopping had work efficiently and seamlessly or nothing else mattered.
The easier, safer, and more convenient Bezos could make it to buy from Amazon, the more the everyday consumer would trust them with their business. Bezos understood knowledge was power…literally. Whoever held the purchasing data from the web, held the keys to the kingdom (publishing kingdom included).
What I find uniquely interesting is this. Bezos built the early Amazon infrastructure offering products that weren’t culturally sentimental.
Consumers didn’t have the same emotional attachment when it came to electronics and sports equipment. Bezos appreciated that books would hit us in the feels.
Going there too soon would’ve been bad strategy. He waited to hit fast and hard.
Speed is the essence of war. Take advantage of the enemy’s unpreparedness; travel by unexpected routes and strike him where he has taken no precautions. ~Sun Tzu
Trust me, NO ONE in traditional publishing anticipated the Internet sucker punch. Traditional publishing didn’t even believe on-line shopping or ebooks would ever be viable, let alone a threat. They made no plans, took no real precautions.
Instead, they held onto their mantras:
Readers will always want paper.
Only techies and early adopters want audio and digital books. These formats will always be a fringe market and not worth the effort.
Readers don’t want to order on-line. They want a BROWSING experience with a latte.
Amazon Publishing might as well have been a campfire ghost story or urban legend in 2006. But, when Amazon released (unleashed) the Kindle?
$#!t got real.
If he is taking his ease, give him no rest. ~Sun Tzu
Amazon launched the Kindle and, with that, offered deep discounts on digital books (all books, actually). When some of the NY houses refused to lower prices on digital titles, the ‘BUY’ buttons on all their titles mysteriously disappeared.
It was a glitch.
Suuuure.
Glitch or not, it doesn’t take a business expert to realize that losing even a DAY of on-line sales probably hurt…a LOT.
Since NY had only recently started learning how to use email, one can imagine that algorithms, cloud computing and analytics weren’t exactly part of their wheelhouse.
Treat your men as you would your own beloved sons. And they will follow you into the deepest valley. ~Sun Tzu
Before Amazon launched the Kindle, though, they made sure to capitalize on a massive tectonic shift that had already split the book world years earlier.
Amazon Publishing understood the deal NY had made with the devils (Borders & Barnes & Noble). The big-box giants promised unprecedented wealth and success…which they delivered.
All NY had to do was to sacrifice their mid-list authors.
There was no ‘room’ for these authors. The big-box bookstore model relied on the selling power of household names (literary blue bloods).
With limited shelf-space, the plan worked better to shelve mostly author royalty, then pepper in new authors to give the appearance the big chains actually cared about the written word.
Ah, but a lot of authors had made The Big Six into the giant it had become (not just the blue bloods).
The author middle class had dedicated years, even decades to their ‘masters.’ Yet, NY unceremoniously cut them loose without so much as a ‘thank you for your service.’
…and Amazon was more than eager to publish these authors’ vast (and vetted) backlists and offer absurdly generous royalty rates. Not only that, but these authors could publish as many books as they pleased. Heck, they could write in any genre they wanted.
Be free!
What the big-box model tossed into the dirt, Amazon picked up, polished and sharpened to a razor edge.
If his forces are united, separate them. ~Sun Tzu
First, Amazon cleaved the body of authors into passionately divided camps—pro-indie versus diehard traditional. But then, Amazon Publishing also took advantage of the rivalry between Borders and Barnes & Noble.
These two big-box chains, in an act of unrepentant greed, had almost single-handedly destroyed the indie and mom-and-pop bookstore model. Once those ‘competitors’ fell away, they set their sights on each other.
#Brilliant
They built more and more giant stores, sometimes even across the STREET from each other. The more they built and battled, the more expensive it became to maintain an edge.
Soon, it devolved into a race to the bottom of who could give away the most stuff/books the cheapest. Which one could add in cards, records, movies, toys, and mani-pedis to gain an advantage.
This plan doesn’t work well with that kind of massive overhead.
Meanwhile, Amazon kept pounding on both of them and Borders fell first, namely because they mistakenly believed they could go it alone in cyberspace.
Back in 2001, Borders Group made a deal with Amazon and agreed that Amazon would co-manage Borders.com. Then, in 2007, Borders thought they’d go it alone with their own online bookstore and yeah…
It didn’t work out.
Attack him where he is unprepared, appear where you are not expected. ~Sun Tzu
Amazon has spent the past seven or so years testing different models in cyberspace: Amazon Worlds, Amazon Scout, Kindle Unlimited, and Kindle Direct Publishing to name a few.
With the massive influx of indie and self-published authors, Amazon has been using writers and our books to improve ways to connect readers with books THEY love.
Amazon Publishing learned how to better detect and destroy anyone gaming algorithms. They’ve been willing to take risks to see what worked, what failed, and what could be salvaged and reinvented.
But, what Amazon REALLY was doing was perfecting its algorithms so they could take out the critical piece to dropping NY to its knees—Barnes & Noble.
Checkmate
Amazon Publishing has always been the ‘other woman in the red dress,’ but (as I claimed in a 2012 blog) this ‘other woman’ wanted a ring and to be considered legit.
Seven years ago, I posited that Amazon Publishing would soon open brick-and-mortar stores…and got flamed in my post’s comments. Everyone at the time believed Amazon to be perfectly content to remain in cyberspace.
I didn’t agree.
Bezos had ALWAYS wanted to take down publishing. He would not be content to remain an on-line book retailer. He’d want a place to showcase Amazon Kindles, and it could hardly be called a victory if he launched brick-and-mortar Amazon bookstores only to display mostly NY titles.
No, that wouldn’t do. Amazon stores would show off AMAZON authors.
When it came to Amazon Publishing, Bezos wouldn’t settle for anything less than total conquest.
How did I ‘know’ Amazon would open brick-and-mortar stores? Because NO ONE believed/expected they ever would.
Yet, it made sense. Amazon Publishing would have browsing space they could smart-stock using the data collected via their algorithms. They’d have enough information to know what books sold well and where.
This would drastically increase sales while simultaneously reducing waste.
***Remember, Amazon started out dominating the business of gathering and sorting information.
I suspected Amazon Publishing was waiting for Barnes & Noble to close a certain percentage of stores before they pounced.
According to Forbes, between 2008 and 2017, Barnes & Noble was closing an average of 21 stores a year to remain afloat.
Amazon opened its first physical store in 2015.
Dismissed as coincidence…
When Barnes & Noble fell? Checkmate.
Feign disorder, and crush him. ~Sun Tzu
This is where I don my large hoop earrings, polish my crystal ball and speak in a bad gypsy accent.
It was obvious to me (and anyone who could do math) that once Barnes & Noble fell, whatever remained of NY publishing would be in serious danger.
Without those massive preorders to fill shelf-space in oversized stores, NY publishing would be in a real financial pickle.
Recently, I blogged about the chaos in the publishing world. Currently, there are a million plus books self-published every year, and this number is climbing. On top of that? NY hasn’t had a breakout novel in SEVEN years.
To add insult to injury, that last breakout novel was 50 Shades of Grey.
To put it bluntly? Readers are fed up being used as unpaid gatekeepers.
When we buy a novel, our goal is to be entertained, NOT to determine if the writer could pass English 101.
***When reading a novel feels more like grading 8th grade papers? We’ll just watch Netflix, thanks.
There is a part of me, however, that believes Amazon has allowed this chaos to flourish for the simple reason that it serves their original goal—REPLACE NY Publishing.
Deviating a bit from Sun Tzu, the current mayhem in the book world is a scene straight out of Plato’s The Republic.
The Downside of Book Democracy
Democracy is a byproduct created when those disenfranchised in an oligarchy (writers overlooked, snubbed or rejected by NY) finally revolt (go indie or self-publish).
Freedom for the sake of freedom becomes the imperative. Every participant is permitted to live and act as he/she pleases (write whatever they want, even if it makes no sense and readers don’t want it)…because, FREEDOM.
These and other kindred characteristics are proper to democracy, which is a charming form of government, full of variety and disorder, and dispensing a sort of equality to equals and unequals alike.
Plato’s ‘The Republic’
According to Plato, though initially a pure democracy might seem appealing, the state comes to be ruled by people who are unfit to rule.
In reference to publishing, the market comes to be dominated by those unfit to be published.
Pure democracy—which, letting anyone with a keyboard and internet access to be an ‘author’ surely is a pure democracy if I’ve ever seen one—ultimately devolves into bedlam.
Once this happens, Plato asserts that the population (market) will become SO vexed, they will welcome anyone who promises they can establish some form of order.
The New Era of Amazon Publishing
A few years ago, I speculated Amazon was waiting for the publishing industry to almost completely devolve. Only at that point would Amazon Publishing strike the coups de grace.
Amazon Publishing has already lured in the disgruntled/betrayed mid-list authors. They’ve also attracted most of the bright-eyed newbies who’d never even consider publishing with NY (some can even write).
Ah, but Amazon Publishing’s final move? Seduce the author blue bloods to the winning team.
Check
July 22, 2019 Publisher’s Weekly announced that mega-author Dean Koontz signed a five-book deal with Amazon Publishing’s Thomas & Mercer imprint.
It was one thing when Amazon seduced the mid-list New York Times and USA Today best-selling authors. Dean Koontz is a whole other creature.
According to the article Koontz Inks Multibook Deal with Amazon Publishing:
The deal follows a string of agreements Amazon Publishing has struck with bestselling authors recently; in 2018 alone, Thomas & Mercer inked multi-book, seven-figure deals with Barry Eisler, T.R. Ragan and Robert Dugoni. Other top authors to come on board include Sylvia Day and Patricia Cornwell…
…Koontz said that Amazon ‘presented a marketing and publicity plan smarter and more ambitious than anything I’d ever seen before.’ He added: ‘The times are changing, and it’s invigorating to be where change is understood and embraced.‘
~Rachel Deahl
Just…ouch.
Dean Koontz has worked with Brilliance Audio (a division of Amazon) as well as Amazon Original Stories for the past few years. Yet, this new deal is certainly a landmark event.
According to Fortune, Koontz is the biggest author to sign with Amazon to date.
Since the late 1990s, Dean Koontz has predominantly published via Penguin Random House’s Bantam (more than 45 releases).
Dean Koontz’s jump to Amazon is a hard, if not mortal, blow to one of the remaining large publishing houses. Not only that, but this changing in alliances can’t help but be a harbinger of things to come.
How long until other mega-authors follow? My guess?
Not long.
Brave New Amazon Publishing
It’s been a long road through dangerous and uncharted digital territory. I know I’ve posted plenty of frightening articles/predictions.
Hey, change is scary. We can’t plan for what we don’t understand.
Yet, I’ve insisted all along to remain calm and just keep writing, learning and improving. Focus on the quality of the PRODUCT. The pendulum always swings back the other way.
Whenever there is innovation, a wild and massive market shift, pandemonium invariably erupts. This happened with the introduction of the Gutenberg Press, the railroad, the automobile, airplanes, radio, television, 24-hour news, cable TV, personal computers, video stores, affordable Spanx…and on and on.
The old goes through denial, digs in and finally whatever industry it happens to be can no longer sustain their outdated ways and they die off. The new emerges until IT becomes the old and the cycle repeats.
Humans LOVE stories. It’s why we—authors—are pretty much always ‘safe’ so long as we focus on being the best at what we do. Sure, we go through changes, too. Lean times, terror, change…and then a new normal arises from the ashes.
Ultimately, I was confident new gatekeeping would emerge.
It HAD to.
There is simply no way to sift through a million-plus books per year for the gems.
Now that Amazon has a system for smart-stocking, has now begun building brick-and mortar stores, and has managed to recruit the ‘one ace in the hole’ NY had left (their household name authors)?
Game Over
I don’t believe what remains of New York publishing will go away for good (at least not soon). Amazon won’t wipe them out completely if, for no other reason than to avoid being called out as a monopoly.
It seems obvious that Amazon Publishing will implement a similar but VASLTY updated publishing model that will (ideally) have the capacity to get good books into the hands of readers.
How this will look, exactly? I don’t know.
Audible followed a suggestion I made in a 2012 blog (whether they got it from me or not, I don’t know but will totally claim credit 
