Tuesday, February 28, 2012

How Amazon Will Tell You What You Can and Can't Read, by Restricting Sales on the Kindle.

You may have noticed that I do not like to make this blog a place for advocacy. My focus is on, as the blog notes, Boswell and Books, not Boswell and the book industry. If I expand outwards at all, I like to look at community, both the book community (the bookstores, publishers) and the Milwaukee-area community (other great indie stores, area organizations). I think there are better sources for book news, such as Shelf Awareness, Publishers Weekly, The Amercian Booksellers Association newsletter, The New York Times, The Wall Street Journal, and so forth.

We all know that much (but not all, despite the stump speeches of some pundits) of the book business is moving digital, and that has created a quandary for both retailers and readers alike, being that information that was free flowing is now tied to an electric device. You already know that we are part of the Google ebooks program (they are cutting back on partners, but our trade association's e-commerce program is not affected) , and many of you have tried buying ebooks on your iPad, Droid tablet or phone, Nook, or Sony reading device. But folks with Kindles (except for the tablet, I'm told) are locked into buying books only from Amazon.

I have compared this in the past to the Sony Betamax, only in this case, it's not like the Amazon products are far superior to others. If you like e ink, the Nook is quite comparable, and if you want other functionality, few are going to rate the Kindle superior to the iPad. But it is still the case that the Kindle has a very high market share. Not every community has a bookstore (like McLean and Eakin of Petoskey, Michigan, for example), who has taken on as its mission the education of their community as to what concentration of business will do to the book business as a whole. And I want to say that there is a market out there for an open concept device that uses e ink.

You can read between the lines of Amazon reports (like many analysts do) that their game plan for many years has been to undercut their competitors (both other bookstores and publishers) and knock them out of their competitive position. Here's Sarah Lucy in Pando Daily ruminating on the problem. And the lack of a brick-and-mortar infrastructure is affecting all kinds of retailers But competitor's negative reactions to showrooming for Amazon is possibly forcing their hand to open their own stores. Sure, one store is just a nice vanity gesture, but won't a chain of them undercut their competitive advantage? Now I'm as confused as you are.

This is straight from a generally positive report in The New York Times: "For Amazon, long-term growth confers two major benefits: the kind of economies of scale enjoyed by Wal-Mart and eliminating or weakening competitors. The book retailer Borders has been forced out of business and a rival, Barnes & Noble, is struggling. Best Buy, the electronics retailer, reported this week that earnings plunged 29 percent, despite higher revenue and a surge of Black Friday sales, because the chain had to cut prices and offer free shipping to compete with Amazon."

Here's what I do know. Amazon turned off the "buy" button on Macmillan titles in response to their decision to move ebooks to an agency plan that leveled the playing field. And now they've taken the ebooks of the distributor/publisher Independent Publishers Group off the Kindle platform, based on not being able to force the terms they want for the product.

This is pure speculation, but one can only guess that other small publishers, when pressured, have already folded to these new terms. But IPG is a publisher that goes their own way. They've made some decisions that have gone contrary to other publishers, like charging freight when other distribution groups absorb it. At Schwartz, I even had them on our vendor of record program, buying their books through a wholesaler. But at Boswell, we looked at the low freight costs and decided it was more important for us to have a direct relationship. We love their model, their portal to hundreds of small publishers, and I have to say, the folks that work there are some of my favorite people in the industry.

Rescuing Regina, The Katyn Order, The President is a Sick Man, and The Tortoise and the Hare, all highlighted at Boswell and Books, are all IPG titles. We have a great event coming up with Jeffrey Gusfield, who has authored Deadly Valentines: The Story of Capone's Henchman "Machine Gun" Jack McGurn and Louise Rolfe, His Blonde Alibi, a history of the aftermath of the St. Valentine's Day Massacre. Gusfield appears on Tuesday, April 10, 7 pm, at Boswell. More on that later.

You may know that there are groups that are suing to end the agency plans, saying that the pricing model is monopolistic, but if this is the case, this model is pretty widespread in other industries, and it's hard to believe that the government would say that this was collusive. On the other hand, Amazon seems to be flexing their hand in a way that recalls Ma Bell and Standard Oil.

I'm not sure anymore that Amazon wants indie bookstores out of business. Who, after all, will showroom books for their electronic readers? You know what I'm talking about--it's when someone hangs out at a bookstore, scanning (or in the old days, writing down) the books they want, only to buy them elsewhere. Amazon even developed a mooching app, to make it easier for these people.

But it doesn't have to be that way. You factor other things into your purchase equations, don't you? Didn't more than one of you say to me that you made the choice not to shop at a certain big box store? And maybe it's time to acknowledge that Amazon is not an online bookstore, it's a general merchandise store that sells books.

And here's the best news for folks who already bought books on their Kindle. You can get rid of your Kindle for another device and still read the books you've already bought, because Amazon has a reading app, just like Google Books. The difference? You'll also be able to read books you bought elsewhere.

Here's Stacie's recommendation:
"When mentioning e ink devices, there's an option for consumers who want
the Kindle's experience but buy indie: the iRiver Story HD. Its price
point is just under $100, it has the best e ink display on the market
and syncs with Google e books."

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