This is how you beat Amazon
There’s a simple way to break Amazon’s growing monopoly of the book trade.
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There has been hue and cry in the last fornight about authors linking to their books on Amazon. Bookseller Kevin Smith seemed to think it was a betrayl of independent bookshops. I’m more tempted to believe that when the chips are down, independent booksellers aren’t actually as interested in defending authors as in exploiting them. Authors consistently face the most difficult financial pressures of any player in the publishing industry. Booksellers should be thinking about how they can help authors not attacking them for taking commercial options when they are presented.
Authors - and also a growing army of book bloggers - link to Amazon because they offer an affiliate scheme when pays a percentage of any resulting book sale to them. It’s only 2-3% in most cases, but Amazon’s ebook marketplace is by far the biggest, and more significantly, Amazon is the only book retailer to offer an effective affiliate scheme of any kind. Consequentially, almost everyone links to Amazon.
Instead of attacking authors and bloggers and denying the current commercial reality of the book trade, why don’t retailers and publishers do something to change it? And in the process, take arguably the most important step in breaking Amazon’s monopoly of ebooks.
Publishers and retailers should work together to establish an ebook marketplace, with an affiliate scheme that offers up to 50% to authors, book bloggers, or anyone else driving traffic, customers and sales.
Whether bookshops change to survive or simply go out of business, it’s clear now that online “word-of-mouth” is the real driver of book sales. Amazon is currently monopolising that word of mouth with a miniscule affiliate scheme. If publishers and retailers take what might be the last oppurtunity to challenge that monopoly and establish a much better rewarded scheme, they can scoop online word-of-mouth out from under Amazon and reclaim a big chunk of the ebook market.
Why won’t they do this? I think there is a psychological barrier. Publishers and retailers were their own monopoly until very recently, so coming to terms with the fact that they are now only parts of a bigger and much more diverse network is hard. And of course, this means being brave enough to hand over a massive cut of the money spent on books to people who weren’t previously part of the picture. Hard for any business, essential for publishers if they are to have any chance of survival.
Will it be a conjunction of the Big 5 publishers and a retailer like Waterstones who do this? Maybe a rival to Amazon like Apple iBooks or Google Play will swoop in and do it? Or maybe Amazon will simply hike its affiliate rates to see off any competition as soon as it emerges? However it happens, I predict there will soon be an affiliate book sales scheme offering anywhere up to 50%, and it will change book selling forever.
UPDATE 1: Competition law might stop publishers working together to do this, but that doesn’t a smaller grouping or another player won’t make it happen.