Amazon’s Iron Grip on the Book Industry

In July 1995, a year after being founded as Cadabara, Amazon.com–an online bookseller–went public on the world wide web. The launch of Amazon.com marked a huge turning point in bookselling. Today, Amazon is no longer just a bookseller, but a creator of eBook tablets, phones and most recently a hands-free speaker named, Echo. It is also the world’s largest Internet-based retailer, selling everything from Shoes to Dog Food. Despite the revival of Print sales and Independent bookshops increasingly becoming a choice for purchase for readers alike, Amazon still has an Iron Grip on the Book Industry. No matter how hard the Book Industry tries to remove themselves from the Iron Grip that Amazon has on their industry, they can’t, simply because they can’t afford to do so.

Amazon’s Market Share

In 2014, Amazon’s market share for eBooks stood at 67%, with just 33% market share coming from other eBook sellers. Their market share for all books sales–online and physical stores, print and digital–is only 41% in comparison to all other booksellers who have 59% market share. However, in just Online Sales of all books (print and digital), Amazon has a 65% market share and other online booksellers only have 35%. Although their market share doesn’t dominate all book sales, these figures aren’t positive. Amazon has no such competition online or in eBook sales. Something that isn’t positive when shopping online is a quick and easy way to buy a book with little effort involved.

Amazon vs. Hachette

In 2014, Hachette–one of the Big Five publishers­–contract with Amazon expired. Amazon wanted to extend the contract, but with new conditions. The main condition being that Hachette lower most of their eBooks to prices $9.99. Hachette did not respond, clearly unhappy with this term. 3 months after Amazon contacted Hachette about extending their contract–still without a reply–Amazon extended their contract anyway with the old terms. Except there was a catch. Amazon ceased all preorders on Hachette books, one title effected was Robert Galbraith’s (AKA J. Rowling), The Silkworm. Books that usually were delivered within a week or less, took 2 to 5 weeks to be dispatched and some Hachette titles weren’t surfacing when searched for. As a consequence of this, Hachette and their authors had fewer sales on their books. Associated Press reported that Hachette said that 5,000 titles were affected as a result of Amazon withdrawing preorders and listings of Hachette’s books. Amazon fought very dirty, ‘“First, Hachette was willing to break the law to get higher e-book prices, and now they’re determined to keep their own authors in the line of fire in order to achieve that same end. Amazon has made three separate proposals to take authors out of the middle, all of which Hachette has quickly dismissed.”’ The dispute between these companies came 2 years after the Department of Justice filed an antitrust lawsuit against Apple and Big Publishers (Hachette included), for illegally colluding to get Apple to raise eBook prices, in hope of forcing Amazon to do the same. Apple and all Publishing Houses involved lost the case.

John Green, best known for his bestselling Young Adult novel, The Fault in Our Stars, criticised Amazon in book dispute in an Associated Press’s, The Big Story article saying, ‘What’s ultimately at stake is whether Amazon is going to be able to freely and permanently bully publishers into eventual nonexistence.’ Amazon came under fire for the way it tried to negotiate with Hachette. Before the long-running battle began between the $10billion dollar Publisher and the $122billion dollar retailer, Amazon was famous for being in the media very little. This battle threw them into the limelight and they didn’t particularly come out well because of it. They also didn’t win their fight, with Amazon caving in and allowing Hachette to have more responsibility over their eBook prices.

The Aftermath:

Books Bite Back

6 years ago, when the evolution of technology was growing at a rapid speed, it was predicted by some that physical books were going to die out in the next five years. They were wrong. In the past year–5 years after that prediction­–print book sales made a 2% increase. Print books are still going strong. Nielsen commented that one of the titles to thank for the increase in printed book sales was the late Harper Lee’s, long-anticipated, To Kill a Mockingbird squeal, Go Set a Watchman. Adult Colouring Books and Celebrity book releases also played a substantial part in the sale figures of printed books rising.

In the same year, Waterstones stopped selling Kindles and eBooks outside the UK, which added shelf space for more books and as a result saw a 5% rise in sales.

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©Ariel Zambelich/WIRED

EBooks took a hit

Whilst printed books made an increase in sales, eBooks did not. EBooks sales from the ‘Big Five Publishers’ declined by 2.4%. This decrease came after just over a year since the Amazon vs. Hachette dispute was settled. In which Hachette wore Amazon down, and got it wanted: the freedom to have control over some eBook prices. This new-found power the Publisher gained has meant an increase in the pricing of their eBooks, in a move they called, ‘critical to its survival’. This step is said to be a contributing factor for the decline in eBook sales.

Amazon won’t go down without a fight

Amazon is determined to hold on to books forever. Book sales only account for 7% of what Amazon sell as a whole. Amazon sells an incredible amount books, yet this figure seems rather insignificant. Is it insignificant when you consider the sheer size of Amazon and the fact that it sells almost everything?

As well-known and previously mentioned, Amazon started out as a bookseller. Is this why Amazon are so determined to grip on to the Book Industry? No matter the cost it has on their reputation? Books overall make up just $5.25billion out of Amazon’s $75billion annual revenue (7%). Amazon’s determination to continue having a share in the book market has now resulted in them branching out into Brick and Mortar bookshops. A move Amazon have made to become a leader in increasing print sales. The first store opened in Seattle in 2015, with three more having opened since then. Rumours are now floating around suggesting that Amazon is planning to open a considerable amount more, three to four hundred as reported.

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©University Village

Amazon and Indie Author’s

Amazon has a finger in every pie; in book-selling, book-buying, and due to their Kindle Direct Publishing program, in book-publishing as well. ‘Self-publishing has its success stories, but has also caused concern among many in the industry. The fear is that Amazon could end up doing to independent authors the same thing it has done to publishers — make them reliant on a system and then use its leverage to negotiate relentlessly.’ Self-published writers, more commonly known as Indie Authors, release books that don’t have
Bowker-issued International Standard Book Numbers (ISBNs) attached them. As a result of this, according to the website AuthorEarnings.com, when sale figures are monitored, and market share percentages are released by Nielsen and Bowker, they fail to include the portion of Indie Author’s books that make up the sales in the eBook market. Furthermore, as discussed in Author Earnings, October 2015 report, when non-ISBN sales are included in eBook market statistics, the US eBook market is 50% larger than statics that only include the Bowker-issued ISBN sales. Despite not being included in conventional eBook sales statistics, Indie Authors clearly sell a lot of books, and if they are publishing or selling them through Amazon then they are making Amazon an incredible amount of money as well. 44% of all Kindle eBooks being purchased on Amazon in January 2016 were released by Indie authors.

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© AuthorEarnings.com

Can anyone break Amazon’s Iron Grip?

Amazon has played a big part in bookselling for 20 years and they are worth billions and billions of dollars, so the likelihood of anyone being able to break Amazon’s Iron Grip on the Book Industry may seem unlikely.

However, there are some factors that can have an impact Amazon and their Iron Grip: eBook prices are too expensive for what they are. I personally switch between a Kindle and Printed books. If I see a book as a Kindle edition and it costs over £4 I won’t buy it. It isn’t a physical copy so therefore paying for something that will get pushed back on my Kindle as I buy more books and then become potentially forgotten isn’t something that appeals to me. However, I would pay that and more if it were a physical book. Kindle versions of George Orwell’s 1984 and Animal Farm were pulled unexpectedly in 2009 because of a copyright issue. All of those who owned those books lost their notes and highlights, and never got them back. Proving that the value of eBooks just doesn’t match up to the value of printed books. Independent books stores are becoming increasingly popular because they provide an experience that you can’t get online. Thirdly, can e-readers progress any further? New versions of Kindle’s don’t progress very much from older versions. Products that can’t keep up with technological advances die out eventually, BlackBerry for example who have now stopped designing phones because they couldn’t keep up. And lastly, Amazon suffered a setback in their public image because of the way they handled their very public battle with Hachette.

In hindsight, Amazon will probably have an Iron Grip on the Publishing industry for a long time, but there are some things that Amazon simply can’t recreate when it comes to buying and reading books. And as print makes a “comeback”, perhaps people will stop reading their e-reader, go into a bookstore and relive the excitement and experience that comes with trawling through a beautiful bookstore and finding that perfect read.

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Featured Image: © theindustrylondon.com
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