Then, Amazon came along and turned everything upside down. Including typewriters!
In my previous post, How Amazon Destroyed Barnes & Noble, I explained how Amazon (alone) could not be held responsible for the bookstore’s troubles.
This post addresses another common complaint, that Amazon has destroyed publishing.
Again, things are not as black and white as that. Yes, Amazon is a shark. But it was the publishing industry which made blunder after blunder, allowing Amazon to take advantage of their mistakes.
Let’s take things from the start.
A Brief History of 20th Century Publishing
As Kristen Lamb points out in her must-read post, Goliath has Fallen & What This Means for Writers, publishing worked in a pretty standard way for over a century. Writers would take their books to publishers. If their pitch was successful, the publishers would then sign them on, publish the books, and distribute them to smaller chains and independent bookstores around the country.
The leaders in charge of the publishing business knew they had three jobs:
- Protect the writers, producers of the product publishers sold.
- Protect the bookstores, distributors of books.
- Protect the readers, consumers of books.
These are listed in order of importance. If there are no writers, then there is no content: no stories, no books, no movie rights, nothing. With no distribution network, even the most avid book readers will have no way of getting their hands on books. And with no readers, there’s no way to sustain your business.
The Barnes & Noble Effect
Then, around 2006, the book business started fracturing. Barnes & Noble introduced the big-box model, followed by outsiders like Walmart. Under the new paradigm, selection and variety ruled. This meant a fight for the best shelf space. But with shelf space precious and finite, these mega-stores soon dropped extensive backlists.
Problem was, those backlists had once been the bread-and-butter for the working author. Under the new big-box model, the stores would now only stock the backlists of the top-earning authors, as those were guaranteed to sell.
Strike One
In the first of four crucial blunders, the publishing business used this business reality to justify mothballing the backlists of virtually all authors who weren’t household names. This meant instead of an author earning royalties off, say, fifteen books, they could only earn royalties off their most recent title.
Many authors witnessed decades of work vanish along with the small bookstores that supported them.
Midlisters were hit particularly hard. Not only did this change mean a drastic pay cut, but it also meant these authors had no viable backlist to cultivate existing fans into future fans. There was no longer a way to truly earn their way into household name status. If fans wanted an author’s earlier books, they had to go find them in secondary markets: used bookstores, garage sales and any other place where the author wasn’t paid.
Strike Two
When Amazon launched the Kindle, early adopting readers found themselves in a conundrum. They had a new gizmo where they could read all the books they wanted… but there weren’t all that many books.
This didn’t have to be so. E-books offered publishers had a second chance. An opportunity to do right by their authors. Yes, they couldn’t do anything to protect them from Barnes & Noble and the rest, but they could have resurrected those titles at least in e-book form.
Publishers possessed a ready arsenal of thousands of mothballed titles; novels which had already been thoroughly edited and market tested. Many of these books had earned the coveted titles of USA Today and/or NY Times Best -Selling Book. A deal with Amazon would have meant good books for their customers to load on their new Kindle device, fresh money from non-earning titles, and income for struggling authors. Also, it would have let the Big Six gather critical data to guide future business decisions. Were e-books just a fad, as they’ve been trying to convince themselves ever since? Or were they here to stay?
A win-win-win-win situation if there ever was one.
So, what did the Big Six do? They decided that didn’t want to discount their new titles on Amazon. And, without a single shred of evidence, dismissed this e-book thing as really just a fad.
That E-Book Fad
So, instead of creating a Big Six controlled e-book division staffed with eager college grads to format books and flood Amazon with gatekeeper-approved books, the Big Six decided that e-books were evil. Readers would always want paper and a browsing experience in an oversized store with ridiculous overhead.
Authors weren’t convinced. So, they asked for the rights to their backlists. Since publishers felt these were worthless, they were happy to oblige and initially handed backlists back to the authors. They truly believed e-books were a fool’s pipe dream and a fad (though did nothing to test this opinion).
But then the inconceivable happened. Those spurned authors started converting their cast-off backlists into e-books and making tons of money. With readers desperate for good e-books, these authors started making far more income than they ever had through traditional publishing.
This e-book gold rush ignited a mass exodus of multi-published and mid-list authors… right into Amazon’s welcoming arms.
The Big Six had failed spectacularly in protecting their most valuable asset: their writers.
Strike Three
Belatedly, the publishing world woke up to the danger. The next generation of household names had historically been cultivated, groomed, and promoted from the ranks of the mid-list.
But the mid-list authors, after years of loyalty, got fed up with being treated so poorly and were leaving in droves.
So, what did the publishers do? Did they see the error of their ways and make an e-book division strictly for backlists? Negotiate with Amazon? Maybe even broker a deal that if enough e-book copies sold, a book/series could garner a fresh print run?
Nope.
Publishers changed all the contracts to make it where authors no longer had rights to their backlist. Ever. Those backlists would remain the property of the publisher indefinitely to do with what they wished. Including nothing.
A once-devoted author pool suddenly turned bitter, and for very good reasons. Not content to starve, a large portion of the traditional talent went rogue. Or, rather, hybrid. They cut their losses and began self-publishing. More than a few created indie houses of their own that were more efficient and geared toward the digital marketplace.
The authors who’d once made money for publishers suddenly became additional competition, with Amazon’s blessing, of course.
What’s insane is that, as Kristen repeatedly explains, most of the traditional authors had zero desire to leave. They’d been publishing traditionally for years, even decades. Going it alone meant a lot more work and a steep and highly technical learning curve, from a group that feared e-mail!
Most of these authors simply wanted to just write the books like they always had. But when faced with starvation? You serve the master who feeds you.
In an ironic twist of fate, the Big Six helped self-publishing transition from “shunned last-ditch of the hack wanna-be writer” into a viable and respectable publishing alternative.
Strike Four (Yes, I know you’re already out by now but the match goes on)
Having done such a poor job at protecting their authors, how were the Big Six doing with their second job, protecting bookstores?
Sadly enough, they didn’t treat the smaller chains/indie bookstores any better. It didn’t matter that small chains, Indies, and countless mom-and-pop bookstores had been the beating heart of publishing since its inception. These stores promoted authors, held events and book signings. They pushed literacy, actively sold books and made The Big Six what it was.
However, when Barnes and Noble and Walmart started sending the Big Six bucketloads of orders, they also demanded deep discounts. Which they got because, economics: the larger the order, the deeper the discount.
Caught between Amazon and the bix-box discounts, the smaller chains and mom-and-pop indies couldn’t compete. They steadily died off until only a tenacious few remained.
While this happened, the Big Six blithely continued to support the big-box stores at the expense of authors (talent) and smaller bookstores (their former allies).
Amazon rubbed its hands with glee. The Big Six had already sent Amazon their best authors. They were now destroying Amazon’s competition to boot. Unsurprisingly, Amazon continued to build its e-book empire and squeeze everyone smaller into oblivion. It even picked an ugly fight with Hachette in a clear sign of its intentions, as I warned as early as 2014.
There were so many crucial moments like this:
- As early as January 2010, Amazon removed the BUY buttons from all Macmillan titles.
- A ‘mysterious’ glitch temporarily removed the BUY buttons off ALL the Big Six titles—Penguin, Simon & Schuster, Macmillan, HarperCollins, and Hachette.
- Amazon (allegedly) removed virtually all the discounts on Hachette titles, according to a 2014 article in Forbes.
Faced with all these red flags, publishing leadership should have thrown everything they had into innovating and making darn sure no one ever had the power to grab them by the tender bits. They should have gone back to their primary goals:
- Protect the authors
- Protect the bookstores
- Protect the readers
Instead, they alienated the authors, sending them in droves to Amazon. They destroyed the bookstores by offering deep discounts to big-box stores. They ignored the needs of their readers by refusing to sell them the e-books they craved. And to top it all off, they claimed that e-books are (repeat after me) just a fad and nothing needs to change.
It’s almost like the Big Six were trying to ensure Amazon’s rise as a publishing powerhouse.
Now, while the Big Six were busy burying their heads in the sand, Barnes and Noble collapsed.
What About Us?
While it remains to be seen whether this will be a wakeup call for an industry that’s deep in denial, what does that all mean for us writers?
For one thing, we have to hope and pray that Elliott Advisors C.E.O. James Daunt can deliver, or we might all be spelling Amazon, M-O-N-O-P-O-L-Y.
This matters. A lot. Amazon (or anyone) having total control should be scary for all authors. But, it is a particularly frightening scenario for Indies, as we lack the resources and legal know-how to fight a large machine.
Unfortunately, if Barnes & Noble doesn’t salvage something out of this mess, it could spell the end of legacy publishing.
So, will the Big Six finally wake up and realize that authors are their most valuable resources?
Will they learn from their past mistakes and remember that, besides those bulk orders which stock the Barnes and Noble, they also need orders from those mom-and-pop stores they once ‘didn’t need’ and—with help from their besties Borders and Barnes &Noble—damn near killed off?
And have they realized that, if the Elliot Advisors hadn’t ridden to the rescue, the entire U.S. legacy book industry could have collapsed? Most other investors or corporate raiders would have bought Barnes & Noble and promptly held a yard sale.
Personally, I’m not holding my breath.
Next Steps
Which is why, for us writers, the best advice is:
- To know the business of our business, regardless of the path we choose.
- We also have to write excellent books. The more books we write and the better they are, the more negotiating power we’ll have.
- And, finally, an author brand and platform is not an option, it is a lifeline. The only way to Amazon-proof and future-proof ourselves is to create a passionate and vested following who will buy our books no matter where we list them.
As Kristen stresses, yes, it’s a tumultuous time in publishing, but while industries change, humans never do. Humans will always want stories and information. So long as there are humans, there will be educators, inspirers, and storytellers.
Our industry might be a mess, but our jobs are secure.
For more excellent insights into the publishing world, visit Kristen Lamb’s blog, where much of the material for this post came from!
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Great summary, Nick – thanks for drawing my attention to it. Sounds like a broken business model to me – and like all great broken business models, it’s always someone else’s fault…
Things are in constant flux, so who knows what the future’s gonna bring?
Well, it’s a pity, Nicholas. From 2007 to mid-2016 indie authors enjoyed best times (thx to Amazon).
In fact, indie authors did so fabulous, that the money maker/middle men people decided to see if they could squeeze out a share too. Suddenly, everybody, including authors who had been let go by their traditional publishers were “experts in the field.”
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Here is a list of features Amazon gave indie authors – FOR FREE – SO THEY COULD PROMOTE THEIR BOOKS:
• publish books more or less for free (vs. what vanity publishers did)
• the author “like” button (done away in 2014)
• the automatic tweet button (done away in 2015)
• the automatic FB button (done away in 2014)
• the 50-review-boost feature (done away in 2015)
• the connect Kindle to review platform feature (moved from Amazon to Goodreads in 2016)
• the email addresses of Amazon’s 10,000 top reviewers, of whom until 2016 about 5,000 were standing by to review indie author books
• free book promo options (since 2018: paid options on Goodreads)
I kept track of this info for my books. None of these features came back and that’s why today, promoting a self-published book is more expensive than it was in 1998 when I listed my first book with Amazon.
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Every single one of these features was removed after “book marketers” invited their followers to cheat (“here is a trick how you can used this…”).
Indie authors who published their first book in 2017 or later don’t even know what used to be “out there” (provided by Amazon who had a real interest in pushing the indie author market whereas they show no interest in accommodating the cheaters)
In short, the only people/organizations that didn’t lose anything in the last three years were the ones who never offered “anything tangible” in the first place:
• no research
• no reviews (giving authors the names of other people who may or may not review doesn’t count)
• no surveys
• no review platform
• no up-keeping of a sales/review platform
• no nothing
And why did these “book marketers” succeed? Because they offered everything – for free. Too many indie authors fell for it.
Re last line: And why did these “book marketers” succeed? Because they offered everything – for free. Too many indie authors fell for it.
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I meant to say, these “book marketers” offered “their advice” for free so indie authors thought they received free help and purchased promos from the “book marketers.”
Maybe I should explain a bit how Amazon’s FREE PROMO features worked (b/c Amazon was not the big bad wolf in all of this)
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THE “AUTHOR LIKE” BUTTON (created for free by Amazon)
Amazon gave readers the opportunity to “like” authors. Once authors accumulated a certain number of likes their books were shown (for free) to browsing customers.
E.g. A customer looked at cooking books (Italian cuisine) but didn’t buy any of the books they looked at. Amazon kept showing them more and more books about Italian cooking, Italian food, fiction books playing out in Italy, etc… the concept was that the customer might have heard about the author/the book/be impressed with the number of reviews… etc.
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And, you can guess what happened: Some book marketers came up with the idea to set up “street teams” who “liked” the author pages of all other authors who were on the same team.
• Lots of people who did not even use editors tried to promote their books this way.
• Amazon “discontinued” the service and the good authors who never tried to cheat got hurt, too.
• The same goes for every item on above mentioned list.
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I’ll leave it to everybody to figure out who is to blame for the difficulties the self-publishing industry experiences now – and the rising costs.
Gisela Hausmann mention in her comment a few Amazon offers. Is this one still available? “• the email addresses of Amazon’s 10,000 top reviewers, of whom until 2016 about 5,000 were standing by to review indie author books
Dear Nicholas,
Neither the Big-5 nor Amazon destroyed self-publishing – it was the word “FREE” that did it.
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It kind of reminds of a movie scene from the 50’s, in which the little boy says to the bigger boy, “If you give me your candy bar I’ll tell you which one of the HS girls kisses every boy.” And, then eats the candy bar while the big boy gets slapped by the girl and eventually reprimanded by his father, the HS principal, and the local priest.
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Internet marketers (I purposely don’t call them book marketers because these marketers will sell every type of product the same way: “Here! We give you something for free so you see that we are your friend. And, now that we have established trust we’ll take your money. We’ll also invent ‘new services’ and new products’ every month so we can keep charging you.”):
(1) encouraged everybody under the sun and moon to publish a book, including people who can’t write an interesting FB posting.
(2) gave the advice to flood top reviewers’ Inboxes with emails tailored from crappy templates. I surveyed the Hall-of-Fame reviewers for my book “Naked Truths About Getting Book Reviews.” Already in 2016 the Hall-of-Famers deleted 97% of request emails because they could see at one glance “what kind” of email these were (https://www.huffpost.com/entry/the-five-most-common-mistakes-when-seeking-book-reviews_b_57a106e1e4b00e7e26a06a1d)
(3) In mentioned book I gave detailed instructions how to contact top reviewer the right way. Said book was also the first nonfiction book that wasn’t a biography to win finalist at the coveted Kindle Book Review Awards (category nonfiction overall). But, neither this nor the fact that Bloomberg interviewed me about getting reviews from Amazon top reviewers made authors understand that I told the truth about this topic; because they followed FREE ADVICE, never mind that it was given by people may have selfpublished their first book in 2012 and by the end of 2014 started calling themselves a book marketing expert.
(4)Not surprisingly, more and more top reviewers whose Inboxes got flooded with about 200 emails per week (x 52) = 10,400 emails per year (all tailored from one of four silly templates) had enough and made their profiles “invisible.”
!!! Because it’s an insult to treat people, who do work for which Kirkus charges $425 – for free – the way top reviewers got treated. Let’s not forget that the top reviewers are the very people whose reviews are appreciated the most by Amazon’s PAYING customers (even more so than Kirkus reviews).
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(VERBATIM quote of an email I received, “Hey, you seem to know what you are doing, can I send you my book?” Side note: I made my own profile invisible in mid-Nov. 2017.)
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(5) To bypass that the top reviewers made themselves unavailable, Internet marketers set up “reviewer groups.”
Of course, authors have always cheated on Amazon but the Internet book marketers took things to a new level. A group with only 100 authors can produce up to 10,000 reviews if every author reviews only books from this circle. (How does Amazon know who is in the groups? I described the process (w/illustrations) in my book “Naked Good Reads.” )
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Of course, it shouldn’t have been a surprise that Amazon did not stand by idly but tightened every algorithm they could tighten. Again and again, they found themselves “in the news” with Forbes, Inc. Magazine, and the New York Times et al writing about review cheaters on Amazon.
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Summing it up:
The cheater activities killed Amazon’s GOOSE THAT LAID THE GOLDEN EGGS!
Now, the top reviewers are in hiding, Amazon’s algorithm kicked out thousands of reviewers who’ll never be able to review again, and authors have to pay for the same things they could have had for free!
The Internet marketers have moved on too. Now, many of them advise on how to buy ads (on Amazon, Bookbub, and Facebook). Because that’s all that’s left.
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For the record: This book marketing expert selfpublished books already in 1988, 1993, and 1998, long before the Kindle and PoD were invented and she can prove it.
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If indie authors want to reclaim self-publishing they have to get “the middlemen” out of the industry, the people who do nothing but offer or even sell advice “what OTHERS will do.” (Like the little boy with the candy bar.)
Because quite often “the other party” won’t do everything the middlemen suggested they’ll do.
Thank you for the detailed response, Gisella!
It is such a total mess, Nicholas. But unfortunatley, I don’t think this all depended on publishers’s blindness.
I work in an independent bookshop in Italy, which is also a publishing house. Around 10 years ago, when e-books started to gain interest here in Italy (they have never been particularly popular here, and they still aren’t) ‘my’ publisher looked into it, all thrilled for this new development, convinced this was going to be the future of publishing. But only after a couple of years and a few attempts at the e-book marketing, my publisher abandoned the idea completely. The sad truth is that e-books makes it harder to cover the costs. A pulisher still has the same flat costs for an e-book (by these I mean editing, design, proffofreading, and all the in-house cousts) than he has on a paper book, but since nobody is going to buy an e-book for the same price as a paper book, covering the costs of a brand new e-book will require roughly 10 times as long as covering the costs of the same book in paper format. As the economic crises stroke, this became incresingly unsustainable.
On the other hand, Amazon has make it harder for publisher as well. We are specialised in university books, and many of our authors are the lecturers of the university here in Verona. Our bookshop is situated right in front of the university, you just have to cross the street. But customers have been charmed by Amazon’s mantra that you can have everything in no time and lecturers often guide their students to the Amazon page of their books on their very mobile phones, right in the classroom.
This resulted in our books being bought massively on Amazon even if the same book may be bought from us simply by crossing the road.
This is not a mere matter of attitude. Amazon requires a huge percentage on sells (higher than any bookshops has ever asked for), which means that we earn a lot less on book sold on Amazon than we do on any other selling. But because the customers are so unreasonably Amazon-focused, my publisher decided to keep selling though Amazon nonetheless. This year it resulted on one of our ‘bestselling books’ to be sold massively on Amazon, and being the price of the book just 6,50 euro, we are barely able to cover the cost of the book when it sells of Amazon. Which means that Amazon is the only one who gains any money from those sells.
You see that there is a problme with Amazon brain-washing (and I don’t have any problem calling it so): customers don’t see any other way to get the books, even when that alternative way is right in front of their noses, and publishers can’t refuse to sell on Amazon because in these hard times that might be the only way to sell anything.
But of course this leaves publishers with such slim earnings that the smaller ones might not get enough to survive.
We sometimes talk about it in the publishing house I work in. My publisher told me that he can see that things are changing fast, but for a company that has worked in a certain way for many years (this publishing house in some 25 years old) changing everything is not easy, especially now when investing money is hard and sometimes impossible. Add to this that leaving the old way (lean as it may be) for an unknown one is never easy, and becomes really scary when you barely have enough to keep floating.
I do fear Amazon monopoly. I think to some extent it already exists in the minds of readers and in many self-publishing authors’, which scares me even more.
Amazon can afford to take on any risks, not only because of its size, but also because it doesn’t rest all its earnings on publishing books alone. If something goes wrong in the publishing section, Amazon can cover the cost with its earning on grocery goods. No publisher can do that.
So yes, I think a part of the problem was that publishers might have undervalued the danger. But on the other hand I also think that publsihers had very little possibility to change in an effective way as fast as times did.
But in spite of this I’m still hopeful. Amazon doesn’t have any respect for books or authors. It is not a publisher, creative rights are barely protected when uploading a book on Amazon. This is not the most effective way to go about publishing books and I do think that things will get back to more sensible ways in the future. It might be a very far away future, though.
Thank you for the great comment! I’m not sure I don’t understand all of it, though. You say that readers buy your book on Amazon instead of your bookstore. This is, presumably, a book which you publish, right? And a book that lecturers recommend. So, why don’t you sell it for more on Amazon and tell the lecturers that students can buy it at a discount (the original price, really), from your bookstore? That way, even if they buy it on Amazon, you still make a decent profit. Or am I missing something?
It’s a book the publisher where I work publishes and it was written by a lecture of the university, then adopted by a few other lecturers.
Students can already buy it on a discount in our bookshop (we apply discounts on all of our own publications). They just don’t bother. The lecturers don’t bother to suggest students to cross the road and go buy the book from us (because students should buy the book where they want), and the students don’t bother to even look around wherther the book is available on their same road (because hey, everybody knows Amazon is handy).
See, I don’t think it has anything to do with the price (we are talking after all of a book which full price is € 6,50). I think it’s a way of thinking. People just look on Amazon by defoult.
This is hardly healthy for anyone, if you ask me. Well, anyone but Amazon of course.
Thanks for the clarification! Interesting…
Excellent share Nicholas. We are at the Zon’s mercy that’s for sure!
Worrying…
Shared! Great post – and true
Nick, I am already on your mailing list and got this post in my box 😉
Thank you so much, Luna! Both for the comment and for subscribing 🙂