How Amazon has disrupted the book industry

Book store shelf. amazon book industry

Bookstore shelf

Just over ten years ago, in November 2007, Amazon unleashed the Kindle. It has disrupted the book industry––publishers, authors, and readers––more than anything since the paperback.

On Amazon’s own site, anyway, sales of ebooks surpassed print books in April 2011, less than four years after the Kindle’s debut.

Five years ago, some people were wondering if printed books could survive the onslaught of ebooks. Since then, demand for printed books has been rising. Ebooks won’t go away, but neither will print.

The Kindle Store now has close to 6 million ebook titles and accounts for more than 80% of all ebooks sold in the US. And Amazon has had more impact on the book business than just the Kindle.

Some keys to the Kindle’s success

iPad as ebook reader. amazon book business

iPad as ebook reader

The press release that announced the first Kindle promised customers could connect the device to their home computers and sync it. It would be comparable to loading music on an iPod.

But as the team developed it, they wanted something faster and not tied to a computer. Some customers might think of a book they wanted while waiting at the airport. Could they download content from there quickly?

Cell service could deliver it fast enough, but the team didn’t want the Kindle tied to a phone contract, either. Working with Qualcomm, Amazon developed Whispernet. Every Kindle owner would have a free 3G connection they could use to download books, no matter where they were.

No one can do anything with a Kindle but read. It will not interrupt readers with notifications of new emails or social media posts. Kindle owners appreciate the peace and quiet.

But Amazon chose not to make its customers buy a Kindle device. Instead, it developed an app for reading on computers, tablets, and phones. More people use each of these three platforms than use a dedicated e-reader.

Amazon and traditional book publishers

man surrounded by books. amazon book publishersTraditionally, book publishers set the list price for books. They sell them to bookstores at a discount, and the stores used to sell them at the list price. Crown Books successfully challenged the publishers’ right to dictate the price but didn’t disrupt the basic book industry model.

When a book publisher decides what to publish, it anticipates which books will sell many copies very quickly and which will not sell as fast. This estimate determines the size of the print run.

A small number of authors dominate the best-seller lists. Other authors, including many who win prestigious awards, sell much less well. They take warehouse space longer. Often, books by these authors appear as trade paperbacks, which make less money than hardcover best-sellers.

Copies of books that have not sold a year after publication are known as the backlist.

Same-day delivery, print on demand

Some in the book industry claim that Amazon’s sales practices can squeeze out the backlist, which accounts for a big chunk of their profits.

Take Amazon’s same day delivery as a recent example. Whatever titles anyone wants to read in print, they will want them immediately. Customers won’t know or care about book industry terms like front list, mid list, or back list.

The trend in book publishing lately has been for smaller runs and faster turnaround time. Fewer unsold books cuts down on the backlist. The smallest possible print run is a single copy. Print-on-demand (POD) could solve the problem of keeping older books available. Amazon, at least in part through CreateSpace, dominates that technology as it does the rest of the book business.

Some book industry observers worry a POD model could disrupt the traditional supply chain. It could also put Amazon in control of book printing of anything but new blockbusters.

Other printing companies will need innovative technology to produce smaller quantities of a title and maintain the quality of printing the public expects. They are working on advances not only of inkjet printing and digital imaging, but also digital binding. They are not conceding their market to Amazon.

Third-party booksellers on Amazon

Amazon has recently begun to allow third-party vendors to sell new books. That way, if Amazon doesn’t have a copy of a title in its own warehouses, customers could buy it anyway with the one-click system.

Some book publishers object that these re-sellers haven’t necessarily bought books from publishers. They may be selling remainders, books returned by bookstores because they didn’t sell there. Or books with minor damage that stores wouldn’t accept. Some book business observers worry that neither publishers nor authors would receive any money from third-party sales.

Amazon and authors

Kindle at the beach. Amazon and book industry

Kindle at the beach

The introduction of the Kindle changed the relationship between authors and book publishers. No longer did a publisher’s acquisitions department decide whether a book would be published. No longer did authors have to query publisher after publisher trying to get their book into print.

Amazon’s self-publishing platform, Kindle Direct Publishing (KDP) allowed independent authors to self-publish ebooks. Smashwords and other competitors soon followed. The reading public quickly adopted the idea of reading from screens. With a little push from competitors, Amazon allowed authors to set the price for their ebooks.

Independent authors started to lose some of that new-won independence at the end of 2011. Amazon introduced KDP Select. It offers authors a 70% royalty on the list price, with some conditions attached. First, the price must be no less than $2.99 and no more than $9.99. Second, and more important, authors must agree not to sell their books digitally through any other channel. They can sell print copies any way they like, but they may not even offer their books through their own website.

Amazon has grown so large that authors have few other viable choices besides KDP. Remember, all other ebook distribution networks combined handle only 20% of sales volume.

What’s more, Amazon introduced Kindle Unlimited (KU) in 2014. KU customers can read any KDP Select book without buying it. It’s like a lending library. Authors receive some money, but only about half a cent per page read.

Amazon and the book

Kindle reader. Amazon, book industry

First generation Kindle Paperwhite WiFi

From the start, the Kindle has attempted to preserve the look and feel of a paper book. Consumers may welcome innovation, but they will not accept anything too strange or new.

For example, when libraries started to introduce computerized catalogs, patrons revolted until libraries could duplicate the look and feel of a card catalog with a computer.

Now, card catalogs have virtually disappeared. Computerized catalogs have gone online. Patrons can use them without visiting the library. By this time, labeled displays have replaced the card format. Library catalogs no longer resemble card catalogs at all.

So far, most of the technological developments of the Kindle have produced an improved emulation of the printed page. There’s even talk of an electronic paper that consumers can detach, fold, or even crumple.

But Amazon has developed audio books for the Kindle and its apps. With traditional audiobooks a human, professional vocal artist reads the text. Amazon uses Alexa to read them. It’s working on improving Alexa’s voice to give a better long-form listening experience.

Alexa speaking the text of audiobooks is only Amazon’s first step away from emulating print. I’ll leave it to others closer to the book industry to speculate about what books will be like if Amazon ever decides to emphasize the difference between ebooks and print. But I will hazard a prediction that printed books will never go the way of the card catalog.

Sources:
2018 book manufacturing outlook includes ranking of top 5 book printers based on latest PI 400 list / Julie Greenbaum, Book Business. December 14, 2017
2018 book publishing predictions – are indie authors losing their independence? / Mark Coker, Huffington Post. January 5, 2018
Amazon steps up its battle with the book industry / Alex Shephard, New Republic. May 10, 2017
The Kindle changed the book business. Can it change books? / David Pierce, Wired. December 20, 2017

Photo credits:
Bookstore shelf.
Some rights reserved by ZeroOne
iPad as book reader.
Some rights reserved by Michael Coghlan
Man surrounded by books. Source unknown
Kindle at the beach. Source unknown
First generation Kindle.
Public domain from Wikimedia Commons


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