Apple Isn’t The Only Disruptor: How Amazon Is Killing Publishers

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The Shareholder Pitchforks Are Out For Netflix

While we’re on the subject of publishing, Sarah Lacy found a great monologue on the current state of publishing and how, in short, Amazon is tearing old publishing houses a new one.

Publishers, like music producers, don’t make money piddling around with 50 mid-list books. They make money buying (for millions) and selling (a few) books by human black holes like Snooki and the Kardashians. They make money selling Stephen King novels and Newt Gingrich screeds. They make money, to mix industries, by betting on big budget dramas and reality TV. Sometimes a gem sneaks through, but it’s rare.

Amazon is trying to change that. First, the money shot from Lacy’s source:

But Amazon isn’t stupid. They’re overpaying intentionally to keep advances high (and high advances will bankrupt publishers). And they’re also taking away all the authors who actually move units. They gave Seth Godin really favorable terms on a deal. Only a matter of time before they snag a James Patterson or some other big genre fiction name.

We can’t pay $1 million for books anymore. Amazon could probably afford to lose $20 million/year in their publishing arm just to put the other publishers out of business. I think that’s what they’re trying to do–throw money around in an industry that doesn’t have any, until Amazon becomes not only the only place where you buy books, but the only place that publishes books, too.

Amazon’s publishing arm is surprisingly strong. They have a number of benefits including inexpensive print-on-demand as well as a massive Kindle install base. What do traditional publishers have? Well, Amazon. You don’t have to be Ahab to see that little houses will be sunk by the Amazon juggernaut and larger houses are reeling on deck if not taking on water. Publishers snicker that Amazon is a vanity house but, to be honest, isn’t everything a vanity house?

Look: editors do less and less and authors are expected to build platforms, market, and sell their own wares. If that’s not a vanity press, I don’t know what is. The expectation is that the package lands at the printer and goes out. The trucks roll, the author hams it up with Jon Stewart (or gets no publicity at all) and then the book drops onto the remainder table. Rinse. Repeat.

News, music, and video have been disrupted by smaller companies with less cash on hand. Do publishers even think they have a chance against Bezos?