Friday, July 23, 2010

Wylie's E-Book Gambit Changes the Digital Landscape

This week the industry was shaken by Andrew Wylie's announcement that he was entering into an exclusive  relationship with Amazon to sell Kindle versions of  his author's bestselling p-books.  Wylie's move is troubling.  What's troubling is that Amazon becomes the exclusive e-purveyor of  bestselling backlist titles -- and a direct competitor of RH and other print publishers who obtained "book form" rights under legacy agreements.   From the Big-6 publishers' perspective, this disrespects both the letter of their publishing contracts (all of which contain non-competition clauses), and the spirit of them.  It's Rosettta Books all over again, but different, since the digital landscape has changed since the late 90s.  Today, for example, e-books are displacing mass market sales.   
On the one hand, you can't fault Wylie for seeking out new digital revenue streams for his authors (and their heirs).  However, Amazon is no longer just a bridge between publishers and readers.   It is a competitor.  You can't play both sides of the net without being called out for it.  

What to Do?

Traditionally, bookselling was separated from publishing, with booksellers (including Amazon) realizing the benefit of combining the wares of many publishers. Now that Amazon has the ability to perform all of the activities that take place between delivery of an edited manuscript and delivery of finished books to readers, the publishing industry needs to take a long hard look at its business relationships -- and business model.  The Wylie-Amazon alliance is a slippery slope that can easily decrease the diversity of books in the marketplace, as well as access to them.  Like Amazon's BookSurge gambit of two years ago, Amazon is seeking to steer consumers to books that they either produce and/or control.  
Two years ago, Amazon stated that they were not seeking exclusivity to indie published books (i.e., requiring POD titles be printed exclusively through Amazon's BookSurge POD service).   Industry pundits claimed that was exactly what they were trying to do.   Apparently, the pundits were correct.  Today, public disavowels are impossible.   How Amazon will deflect the wrath of the industry remains to be seen.   

In Joseph Esposito's excellent article entitled the "Platform Wars" [IBPA Newsletter], he wrote, "Book publishers have lost control over their own industry, and not because consumers have won.  They haven't -- they will be no better off with defacto platform dominance than anyone else except the company that controls the platform." 

Platforms like Amazon and Google have morphed into celestial publishers.  Amazon did this by design.  Google stumbled into the publishing business by scanning books without permission.  For their punishment they received exclusive control over "Orphan Works" (i.e., in-copyright, but out-of-print books, whose authors have gone missing).  
And so it goes.  Amazon is like the abusive partner one tolerates for the benefit of the kids.  However, the industry is loosing its patience.  While I have a beef with John Sargent (we don't see eye to eye on the GBS), I applaud his muscular response, and RH's, to Wylie's exclusive arrangement with Amazon. 

The digital meteor has hit.  It will be followed by the copyright termination time bomb.  To survive both, publishers need to present content in a variety of digital formats and rethink certain ways of doing business -- and who they wish to partner with.   Large publisher dominance is being eroded.  Change is inevitable. It cannot be stopped nor should it be.  However, it would reduce my paranoia if Amazon, Apple and (especially) Google, were prevented from playing digital favoritism.  Amazon is no longer just a retailer, and Google has never been a public utility.  They are publicly traded companies, prone to favor their own intellectual property over the property of others.     

Mr. Esposito's advice is right on  the money.  "[T]he best strategy is to be present on all the competing platforms, while exercising judgment as to timing and pricing."   Essential parts of that strategy include, making Amazon (and Wylie) stand in the corner and apologize; taking a blue pencil to the Orphan Works provision of the GBS; and, as Joe suggests, exercising good publishing judgment as to timing and pricing.   And, the industry just might want to put the Justice Department's number on speed dial.  If you sleep with a mildly abusive partner, you may wake up someday and find yourself needing an order of protection.   

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