The latest raft of articles about Amazon and its power over the publishing industry appeared in the last couple of days (“Amazon, Destroyer of Worlds,” “What Amazon’s ebook strategy means,” “Booksellers Resisting Amazon’s Disruption”), and the first two note what is the most significant thing about Amazon, at least to my mind: how much better an experience Amazon is than the things it replaces (or complements, depending on your perspective).
Like any incumbents, publishers, as far as I can tell, want the status quo, but readers (and consumers of electronic gear) are happy to get something for less than they would’ve otherwise. Stross gets this—”Bookselling in 1994 was a notoriously backward-looking, inefficient, and old-fashioned area of the retail sector. There are structural reasons for this” and so does Yglesias—”But for consumers, it’s great. An Amazon Prime membership is the most outrageously good deal in commerce today. But competitors should be afraid.” Stross is suspicious of Amazon, and so is the New York Times writer. Their suspicions are worth holding, but the basic issue remains: Amazon is successful because it’s good.
Their books are cheap and arrive fast. Their used section is really great, for both buying and selling. Prior to Amazon and its smaller analogues, used bookstores simply wouldn’t buy books with writing in them. Amazon used buyers, however, don’t care, as long as the book is described honestly. I’m getting ready to move, which means that I’m selling or giving away somewhere between a couple hundred and a thousand books. I sold about 15 through Amazon, resulting in about $100 that I wouldn’t have otherwise. That efficiency is great, but it’s great in a way that publishers don’t like, because publishers would rather have everyone buying new books.
Amazon looks particularly good to me because I’ve spent a lot of time trying to wrangle a literary agent and failing. Five or six years ago, that meant my work would’ve spent its life on my hard drive, and that’s about it. But now that I’m done with comprehensive exams, I have time to hire an editor and a book designer and see what happens through self-publishing. The likely answer is “nothing,” but the probability of nothing happening is 1.0 if I leave the novels and other work on my hard drive forever.
Most of this was predictable: in 1997, Philip Greenspun wrote “The book behind the book behind the book…“, in which he observed: “Looking at the way my book was marketed made me realize that amazon.com is going to rule the world.” I’m sure others predicted the same thing. The publishing industry’s collective response was to shrug. I guess no one read The Innovator’s Dilemma. If publishers once were innovators, they’re not anymore.
Stross is averse to profit to the point that I think he’s signaling mood / group affiliation to some extent, but his basic economic analysis is good. Stuff like this: “piracy is a much less immediate threat than a gigantic multinational [. . .] that has expressed its intention to “disrupt” them, and whose chief executive said recently “even well-meaning gatekeepers slow innovation” (where ‘innovation’ is code-speak for ‘opportunities for me to turn a profit’)” could be rephrased; Amazon selling for less means more consumer surplus, and it appears that Amazon’s whole modus operandi is to very low, if any, profit margins; if it had margins as high or higher than what publishers and retailers shoot for, it wouldn’t be such a threat.
Anyhow, I too don’t want an Amazon monopoly or monopsony, but I don’t see a good alternative to Amazon. Barnes and Noble is, at best, second-best; their online prices finally became competitive with Amazon’s a year or two ago, but they still they’re chasing the leader instead of striving to be the leader.
If DRM on ebooks actually dies—as Stross thinks it will—that will make Barnes and Noble and other players more viable, in the same way that killing DRM on music made Amazon a viable purveyor of music (although a lot of people still use the iTunes Music Store).