Seemingly everyone in the book “blogosphere” has something to say about Amazon Signs Up Authors, Writing Publishers Out of Deal, which points to Amazon’s growing presence not just in book retailing but in book publishing (“Amazon will publish 122 books this fall in an array of genres, in both physical and e-book form. [. . .] It has set up a flagship line run by a publishing veteran, Laurence Kirshbaum, to bring out brand-name fiction and nonfiction”). And that’s just its big-name efforts: it now offers a platform for any moron, including this one, to upload and publish eBooks.

Naturally, as someone mulling over options, I’ve been thinking about this stuff:

1) There are a couple of problems publishers have. One big problem is simple: they offer lousy standard royalties on eBooks. Publishers apparently offer a measly 17.5%, before the agent cut. Amazon, Barnes & Noble, Apple, and so forth will offer 70% (if the author is using an agent, presumably the agent gets a cut). Big-name authors can presumably get better deals, but probably not 70% deals. So an author can sell many, many fewer eBooks and still make more money.

2) Smart authors are probably thinking about whether publishers are going to be in business at all in anything like their current form five years from now. This means authors, especially younger ones, might not want to lock in their eBooks at a 17.5% royalty rate for the rest of their lives only to discover that, five or ten years from now, virtually no one is reading paper books and virtually no one is using conventional publishers in conventional ways. If you’re a writer and you have a longer-than-the-next-quarter outlook, this makes a lot of sense.

3) On a subject closer to home, publishers and agents probably have too many false negatives—that is, people who they should offer representation to but don’t. For a long time, those people simply had no real recourse: they went away or kept trying through the rejections. Lots of now-famous writers went through dozens or hundreds of rejections. If I one day become a now-famous writer, I’ll have the same rejection story. But we don’t know about the could-have-been-famous writers who had to give up for various reasons. Today, if writers are sufficiently determined, they can start selling on their own (I may fall into this category shortly) and see what happens. Chances are good that “nothing” happens, but chances are good that “nothing” happens in traditional publishing land too. But if something happens, it would be hard to imagine that writers used to taking home 70% will happily roll over and let publishers give them 17.5%.

4) Publishers more generally are facing a classic Innovator’s Dilemma-style problem: what happens when the old model is fading but the new one is less profitable in the short to medium term? You run the risk of startups and new-model companies overtaking your business, leaving you in the position of Kodak, old-school IBM, Polaroid, everyone who ever competed with Microsoft prior to about 2004, and innumerable other companies who’ve been killed by shifting markets.

5) Since the massive bloodletting at publishing companies in the 2008 – 2009 neighborhood, it seems to have gotten even harder to get the attention of publishers, which exacerbates numbers 3 and 4, and probably drives more people toward self-publishing, thus accelerating the overall dynamic.

The major publishers aren’t daft and know all this. But they are constrained and can’t do much about it. They can’t distinguish between standard slush and what I’d like to think is my own worthwhile stuff, because if they could, they wouldn’t say no to duds and pass on hits. So this may simply be the sort of thing everyone can see coming and no one can do anything about.

EDIT: This, from Jamie Byng, is worth remembering too: “Publishing is also about finding new talent, rigorous editing, championing the books you believe in, and all that doesn’t just disappear with digital books.” The essential challenge of writing remains even if the distribution changes.

EDIT 2: Literary agent Jane Dystel:

Last week while I was following up on a proposal I had out on submission to publishers, I heard back from a senior editor at one of the top six publishing houses. This person is someone who I consider to be very smart and who has great taste. I had sent him a proposal which he acknowledged was very well done and which covered a subject he was interested in. In turning it down, he sounded discouraged and demoralized as he said that the higher ups in his company were no longer allowing him to buy mid-list titles that in the past he had been able to turn into bestsellers. Rather, he said, they were only allowing him to buy “sure things,” which I took to mean books that can’t fail.

If this story is actually indicative of a general trend in publishing, the number of false negatives should be going up and, concomitantly, the number of writers willing to try new things should too.