Amazon: The Big, Bad Wolf

We all know the story of the big bad wolf, whether from Little Red Riding Hood, or The Three Little Pigs. It is a trope in morality tales going back farther than all of our lifetimes. The big, bad wolf is a deceitful, predatory, sneaky, and viciously intelligent creature that eats grandma and blows the house down. In recent years, the big bad wolf for the publishing industry is Amazon.

Amazon, the reason bookstores are closing, the reason publishers go broke. Capitalism in the form of a big, bad wolf, slowly destroying publishers big and small (huffing and puffing) and putting bookstores everywhere out of business (eating Red Riding Hood’s grandma for breakfast). It is an apt metaphor, and I would argue that publishers, or perhaps better to say the publishing industry, are those three little pigs, still living in straw houses, who need to find some bricks and build houses that that big, bad wolf cannot huff, and puff and blow down.

While most publishers do not have the capital to build out the kind of infrastructure in the way of Amazon, there are methods to building stronger houses that can be borrowed from the way that Amazon does its business.

Amazon may indeed be the big bad wolf it is purported to be, but maybe, just maybe, the publishing industry is like Red Riding Hood’s grandma. Maybe, just maybe the publishing industry invited the wolf in.

James Bridle writes that, “…it’s the job of publishers to enable the reading experience,”  and that companies like Amazon with its Kindle are doing this to a degree that publishers are not. 1  He writes that “what they are showing their customers—who should be publishers’ customers, but barely are—is that what they are selling you is an experience. That beautiful, wonderful, extraordinary time that you spend with a book….the reading experience is really what publishing is all about.” 2 And whether big and bad and wolfy or not, Amazon has developed a platform, customer service-based and in their Kindle, that is all about selling the reader an experience. 3 Further Bridle writes,

Publishers are concerned—desperately concerned—about the loss of perceived value in what they do. Well, the value of books lies in the time we spend with them, and the time spent creating them. Publishing needs to recognise [sic] this, and share our passion for it with readers, not least because we are readers too. 4

Here, Bridle is drawing attention to a very real problem in the industry, the problem of value. If the shift in the marketplace can tell us anything, perhaps it is that the valuation of the experience of reading is changing, and that as publishers we MUST keep pace and value it to the same degree that our readers do. Further, the industry may need to re-evaluate its own system of values and begin privileging different ways of thinking and different hierarchies. In this current landscape, the experience is valued at a higher level than the object. Publishers need to begin thinking along those same lines.

Brian O’Leary, writing three years after Bridle has similar concerns. In discussing the future of the book in a digital reality, he quotes author Hugh Howey who claimed that publishers are busy, “’Describing yesterdays as if they were tomorrows’” and O’Leary agrees stating that “There’s more than a grain of truth in his assessment.” 5

In looking at the different predictions of that future he brings forward an argument that is very hard to resist. He claims that in the current landscape, “…our response should not become a lament for the role of editors, publishers, booksellers and other supply-chain partners. Instead, let’s ask an open-ended question: ‘How can we take advantage of these trends to better serve readers?’ That’s how our industry can once again grow”, and that,

The current supply chain was designed to make transactions between a known set of players – publishers, wholesalers and booksellers – as efficient as possible. It was not designed to provide publishers with an understanding of how, where, when and why consumers access and consume content. 6

Here he is describing a solution that involves many of the things that Amazon is already doing. While I am not sure that becoming enmeshed in a system where consumption dictates a publishing mandate or model, it is clear that struggling forward within the traditional framework is like rebuilding that house of straw over and again every time it gets huffed and puffed down around the ears.

O’Leary states that,

Treating the internet as an extension of the old order is a mistake. New technologies don’t just lower transaction costs; they provide new capabilities while eliminating some transactions entirely. Ultimately, eliminating transactions means eliminating one or more parts of the prevailing order….Now, we’re seeing the potential of a platform that includes everything – writers and content alike – and excludes nothing, offering access to markets around the world. In return, publishers can try different content forms, serve global communities and use the social web to discern and meet explicit and latent. 7

Again, this is where Amazon excels, and publishers lag behind. In treating the internet as a tool for marketing, as an extension of a broken model, publishers are inviting a visit from the wolf that is Amazon. Of course, it is not an easy move to break the model that is familiar,  that has worked for decades if not centuries, but the problem is, it does not work anymore. I do not subscribe to the “publishing is dying” ideology, but if the past decade of the industry is anything to go by, publishing, as it has existed, is a broken system.

Glenn Nano and Rich Adin offer concrete examples of methods for publishers to move into a future of publishing in a landscape dominated by Amazon, ways to build new houses, one brick at a time. Nano takes the approach that the first step for publishers (he focuses on the big five) is selling books (e- or otherwise) directly to the customer. He recommends following in the footsteps of Amazon and other start-ups. He writes that,

It’s implicit that since Amazon withholds nearly all customer, sales and engagement data from publishers, these data must be highly valuable. What’s explicit is: the more you know about your customer, the better you can serve her or him. Subsequently, the better you serve your customer, the more likely she or he will return. Building sustainable business means acquiring, growing and maintaining customers, not simply unit sales. 8

And further that, “There are a lot of important lessons publishers can learn from startups, like their digital-native methods of understanding and optimizing the customer lifecycle…. The direct exchange of value with customers and potential customers is the cornerstone of building a brand that consumers recognize and remember.” 9 For Nano, what Amazon does, and what publishers need to do, is own their data, sell direct and find a way to create that brand in a reader’s mind that Amazon has already, because the customers,

…know to go to Amazon to locate books online. For publishers to sell directly and make a significant impact – in order to create and sustain the cycle of knowing your audience, serving them better through that knowledge, and developing brand memory and a consistent set of quality expectations – they must also contemplate building user experiences…that are the initial destinations unto themselves. They must create digital journeys – entranceways and exits – that make their pathways both clear and memorable to consumers. 10

Nano is offering a solution here that is not to be dismissed. Embracing a digital nativity that is not, as O’Leary requires, treating the internet as a mere extension of publishing business as usual.

Adin takes this even further. For him it is not simply a matter of developing direct-sales systems, but an all-out, anti-Amazon revolution. Adin claims that publishers have the power to prevent the Amazon monopoly on ebooks but “lack the willpower to do more than just whine.”11 and that,

This problem with Amazon was brought about originally by publishers who didn’t look beyond their noses when giving Amazon significant product discounts in the early years. The problem is being compounded by the same publishers’ inaction and by authors scrambling to join the Amazon exclusivity club. If publishers and authors do not take steps to halt the rise of Amazon, there soon will be no outlet but Amazon for national exposure. 12

He claims that the solution is to only produce ePub formatted books with an Adobe DRM, thus opening the market out of Amazon’s “closed eco system”. 13

Maybe Amazon is the devil at the door, the big, bad wolf huffing and puffing down the door, having Grandma as a late-afternoon snack, but clinging to a traditional model, ignoring or disregarding the current landscape is not the answer. That way lies tumbled-down houses and well-digested Grandmothers. Instead, publishers could take leafs out of the Amazon book and build new models. A path that might be taken is one that highlights a reading experience, and that works more directly with its markets, both readers and authors. Selling direct, exclusively producing ePub, developing a model that borrows the aspects of the value system that makes Amazon successful. One of the wonders of an open and abundant market is the lowered barriers (financial and otherwise) to developing new models for publishing, models that can take the best parts of Amazon and work them into a brick house that will,  if not defeat, at least keep that big, bad wolf at bay.

References

Bridle, James. “Publishing Experiences”. booktwo.org. February 17, 2011. http://booktwo.org/notebook/publishing-experiences/

O’Leary, Brian. “Publishing has entered a new and different era”. FUTUREBOOK, A Digital Blog from the Bookseller. February 20, 2014. http://www.futurebook.net/content/publishing-has-entered-new-and-different-era#sthash.R9x3PkcU.dpuf

Nano, Glenn. “Why Publishers Must Sell Direct” Code Meet Print. November 29, 2013. http://codemeetprint.com/2013/11/why-publishers-must-sell-direct/

Adin, Rich. “The Amazon Conundrum: Competition in eBooks”. The Digital Reader. April 11, 2012. http://www.the-digital-reader.com/2012/04/11/the-amazon-conundrum-competition-in-ebooks/