This has been a thing in self-publishing for, like, a decade, but it’s always worth re-mentioning that there’s always more money in telling other people how to (allegedly) make money than there is in, yanno. Actually making money…
I generally don’t use Amazon.com, originally out of a single-person boycott and more lately because as soon as they opened a regional operation they because useless, but every now and again I do end up there, and am endlessly reminded just how much their website…. sucks.
Today in irony, Amazon registers a patent to prevent comparison shopping, a.k.a. showrooming, in physical stores.
Given that Amazon is probably the biggest beneficiary of showrooming, it seems they maybe just jumped on this to prevent someone else from doing so. Also, I’ve no idea how this could be a “patent” given the technology is basically just “block competitor URLs on the in-store wifi’s web proxy” but… whatever. You do you, dinosaurs in the patent office.
Tl;dr, you shouldn’t be using free in-store wifi anyway so… yanno. There’s that.
File under “what do you mean people still use the postal service?”
One of the things I like about Australia Post, is that they’ve well and truly embraced their role as Official Distributor of Internet Goods, for which see services like ShopMate (a fake US address you can use for places that don’t ship internationally) and Parcel Lockers (24/7 parcel pickup).
[Amazon] started as a “book retailer” and nothing else. They leaned on Ingram’s Oregon warehouse to enable their business model, which was to take an order for a book and accept payment, then procure the book from Ingram and send it to the customer, and then a little later pay Ingram’s bill. This positive cash-flow model was so brilliant that Ingram could have readily enabled lots of copycats, and they formed a division called Ingram Internet Support Services to do just that. So Amazon killed that idea by cutting their prices to no-margin levels and discouraged anybody else from getting into the game. That was in the late 1990s.
They could do that because the financial community had already accepted Amazon’s strategy of using books to build a customer base and to measure future business prospects by LCV — the “lifetime customer value” of the people they did business with. And it became clear pretty rapidly that they could sell book readers other things so no- or low-margin sales were simply customer acquisition tactics. This was a game Barnes & Noble and Borders couldn’t play.
Now book and ebook sales are almost certainly no more than a single-digit percentage of Amazon’s total revenue. Kindle Unlimited, like their publishing enterprises and self-publishing offerings, are small parts of a powerful organization that has many ways to win with every customer they recruit.
Mike Shatzkin on no-margin, no-profit.
It’s not in retail, it’s in cloud.
I used to do AWS integration at my old job, mostly by stealth; our developers liked AWS, so they’d use our self-service form to provision themselves EC2 instances. By the time anyone else in the infrastructure and operations teams noticed what we were doing, we were already running 10% of our organisation’s entire server fleet in AWS, with 15% month-on-month growth, essentially supported by one single guy. We bought a DirectConnect link to our local AWS datacenter, and extended our internal domains to include AWS resources. Essentially, we treated AWS as a third datacenter (we already ran two ourselves). The only differences customers ever noticed between their EC2 instances and on-prem virtuals was that the EC2 stuff was deployed faster and never had any outages.1
We had a lot of on-prem outages. A lot. Networking shit, mostly, followed by endless bullshit hardware problems.
I worked a tech job but it wasn’t in a tech business, and the reality when you’re running tech for a non-tech company is that the business justifications for on-prem is thin at best. Really, the only reasons people have historically done it is that it’s been hard to get flexible datacenter-as-a-service offerings that scale to levels appropriate for enterprise. The word “historically” is in there for a reason; the cloud has caught up, and now large organisations (always slow to change) are following. AWS is really the only game in town, with Microsoft Azure playing catch-up. Everyone else is an also-ran.
- I should point out that this is pretty impressive, given cloud-native paradigms about infrastructure objects as disposable. Tl;dr, but if your physical server breaks, you’re supposed to fix it. If your cloud server breaks, you delete it and redeploy. Our organisation still operated very much in the former model, and even though AWS operated largely in the latter, their infrastructure was still more stable–and permanent–than ours was. Go figure. ↩
From a while back, the Authors Guild on reforming publishing contracts.
This is worth reading if you’ve any interest in publishing whatsoever, because it gives some ideas about the things you’ll find in boilerplate contracts that fall into the “standard but bullshit” bucket. A lot of these are gimmies agents (and their lawyers) will negotiate out, particularly the stuff around reversion, which is why you need an agent. But even agents can’t work magic, especially if you’re debut or in the midlist, and some clauses are bullshit across the board.
The bottom line here is that, in an ideal world (ideal for authors, that is), all rights in publishing contracts should be based on sales and usage. Publishers should not be allowed to hoard unexploited rights like giant steel-and-glass dragons sitting atop a pile of redlined manuscripts and crumpled dreams. In this brave new world of ebooks and POD, sales figures are the new out of print, and and active marketing–where the term “active” means “investment of money”–is the new exercise.
The flip side to this, of course, is a reduction in backlists owned by publishers.
Publishers, in other words, can’t be Amazon. Amazon is the dragon here; it works by hoarding vast quantities of goods, making fractions of a cent off each. It is both the “laziest”1 and most profitable model, but also the one that represents the least lock-in for content creators. The thing about being a the biggest dragon in the room, however, is that you’re a useful source of warmth for all the other big dragons, whether these are publishing houses or individual authors who own their own large backlists. In the case of publishing houses, it’s the existence of Amazon–particularly ebooks on Amazon–that’s turned their own rights hoards into piles of pennies.
And, as anyone who’s ever counted a mass of change will know, even pennies add up eventually.
Which is all a very convoluted metaphor to say that, for publishers to work the way the Authors Guild is advocating here, they’d need to shift from being Amazons to being Apples. That is, move from the “everything store” model and into the high-prestige, high-investment, high-return tastemakers.
That means no backlist, no midlist, and no (unknown) debuts. Just bestsellers, all day every day. No need to nurture talent when rights to proven works can be bought from smaller presses and self-publishes, in the way tech companies buy startups.2 Then it’s all reward and no risk, just the way shareholders like it.
None of this is a revolutionary or a secret, incidentally. The fact that the Big Five haven’t already gone down this road shows just how sentimental the industry is about its role as a custodian of culture, as opposed to profits. But there are some pretty serious signs that sentimentality is dying.
The next decade will be Interesting Times indeed, in other words. And maybe groups like the Authors Guild had better be careful what it wishes for, in this world where everything has a price…
- Quotes, because I have my content-creator hat on today, not my technologist hat. We can get into the effort behind Amazon’s infrastructure and tech investments at a later date. ↩
- What? You think Microsoft and Google and Apple and Amazon and Facebook do their own R&D? Hah! Not really. They buy it. Or, rather, they buy the first 90% and do that last 10% in-house. This is so prevalent that it’s even the business model for the vast majority of tech startups. No-one actually wants to be profitable with their company; they want to burn enough VC that their company gets enough notice to be bought out. ↩
In my day job, I do a lot of work with Amazon’s cloud infrastructure arm, a.k.a. Amazon Web Services. These are the guys who sell the servers, the storage, the platforms, and the automation that powers pretty much every Silicon Valley startup you’ve ever heard of.
People buy AWS because it’s brutally efficient, particularly at scale. If you’ve ever had to manage a physical data centre–and, more importantly, provisioning in a physical data centre–being able to log into a webpage, click a button, and spin up $100,000 worth of servers in ten minutes is literally mind-blowing.
It’s even more mind-blowing to realise that if, for example, you turn all those servers off when you’re not using them–say on weekends and at night–then your costs drop to $40,000. Oh, and if you open another webpage, you get a reporting graph that tells you exactly that. In real time.
This is Amazon’s business model, and this is what is actually meant when people talk about “cloud computing”; it’s a cost and consumption model, not just a buzzword for virtualisation. Amazon, more so than any other player, made this industry. It commoditised IT infrastructure, made it one-click and on-demand. Every other player in the market is still scrambling to catch up.
The reason I’m mentioning this, is because the fact that this is my day job means reading articles about services like Kindle Unlimited can be… interesting. Interesting because it’s pretty obvious, for anyone who comes from IT cloud land, what Amazon’s new pay-per-page model is.
It’s cloud computing paradigms brought to bear against the publishing industry. It’s fiction-as-a-service, pay-as-you-go commoditised consumption in the same way EC2 is to a blade server or S3 is to a SAN. Whether it’s “good” or not is a moot point; it is, in the same way cloud computing now is.
Amazon made the game. Now it’s up to the rest of us to figure out the rules.
Mark Lawrence looks at where the money goes in ebook pricing. Hint: it’s mostly not to the original author. Actually, by these figures, most of it’s going neck-and-neck to Amazon and the publisher. Whichever one of those two entities “deserves” their cut probably depends on which side of the selfpub/tradpub debates you come down on…
This is a pretty fascinating press release to me. It’s supposedly the twenty most “well-read” cities in the U.S., a.k.a. the cities that buy the most books. Except take a look at the top three for a second. What do you see?
Here’s a story, and it’s about city #3 on Amazon’s list.
My husband and I were in Vegas in January this year. It was our first time in the city–my first time in the U.S., in fact–and it was awesome and we loved it. We weren’t there very long, four days or so, and in that time we mostly stuck to the Strip. Hell, we mostly stuck to the end of the Strip with our hotel on it, because, a) food, b) booze, and c) shows.
Anyway. After our four days, we were going to have a brief day in L.A., then it was on to Japan. At some point we got the idea that getting a Japanese phrasebook would be an awesome thing to do, and so we decided to go look for a bookstore.
Some of you, I’m sure, are already going, “… uh-oh.”
See, here’s the thing. It’s not like bookstores are universal in Australia, either. A few years back, my husband spent a while doing fly-in-fly-out work in the Queensland port town of Gladstone, and while he was there the town’s last bookstore closed its doors. Wollongong, where we both went to university, has a similar problem at one stage. But both of those are small-ish, industrial towns. The idea that we wouldn’t be able to find a bookstore in a shopping mecca like Vegas never entered our head. So we cracked open Yelp, typed in “bookstore”, and hopped in a cab.
The closest bookstore was allegedly a Barnes & Noble near the university, which isn’t too far from the Strip. We escaped the cab and started to wander around, only to realise the store was either long closed or had never been. We tried the university co-op, but it really only sold textbooks.1 So we sat in the student union for half an hour, scouring the internet, trying to find a goddamn shop that would sell us a goddamn tourist book.
No dice.2 The “nearest” options were over an hour’s drive away, and I don’t know if you’ve been to Vegas, but getting taxis off the Strip is near impossible. We’d be able to get out, but getting back? Maybe not so much.
In the end, we opened up Amazon.com, and got our phrasebook same-day delivered to the friends we were staying with in L.A.
This is the story I was reminded of when I read Amazon’s “well-read” press release. It’s not the cities on the list do or don’t buy more books than other cities in the U.S.; there’s not enough information to judge that either way. It’s that these cities buy the most books from Amazon, and at least some of them do it because there’s no other freakin’ option.
And I really struggle to think of that as a good thing.