In a recent blog post at The Future of Publishing, Thad McIlroy asserts that Amazon poses a danger to the industry — not because of the Internet giant’s recent expansion into the publishing business (e.g. Amazon publishing mysteries, romance, and sci fi/fantasy/horror), but in the company's role as a bookseller. McIlroy argues that Amazon has been able to take over too much control of the bookselling market, which in turn is affecting the publishing industry in several serious ways, not the least of which is how Amazon is driving down the price of books.
With the decline of brick and mortar bookstores and the death of Borders, the remaining booksellers are facing a market that is much smaller than it was several years ago. In fact, the bookselling market has become one with so few major retailers in it that McIlroy says it is in a sate of Oligopoly; which, for all of us who aren’t hip on economics terms, is a fancy way of saying that in the current market, any actions that companies take will both affect the price of what is being sold and will impact their competitors.
It’s no secret that Amazon is very good at selling books. And traditional print books aren’t the only corner of the market that Amazon is dominating. As of February 2010, The Wall Street Journal reported that Amazon was responsible for approximately 90% of all e-book sales. At the New York Times’ “Room for Debate”, the publisher of Melville House and the founder of the blog MobyLives, Dennis Johnson, weighed in on Amazon’s selling prowess saying:
“Can Amazon sell a lot of books? You bet. They really do know how to develop algorithms that can move just about anything. Good books, bad books. Beautifully edited, completely unedited, edited by chimpanzees – it doesn’t matter. The numbers, they brag, speak for themselves.“
And there’s no arguing that the publishing industry is already feeling the effects of the increasingly small bookselling market. Many of you may remember how just a few years ago Wal-Mart and Amazon engaged in a price war over the cost of highly-anticipated hardcover books — which subsequently drove down these books’ prices at Barnes & Noble and Borders stores. (If you’ve forgotten, jog your memory with this post from Huff Post.) Many of these titles went from being sold at a deep discount price of between fifteen to twenty dollars, and afterward the incident were sold at a price of nine to ten dollars. With this information in mind, it’s clear that Amazon is at the forefront of a Wild West-type of bookselling market where they can set their own prices.
But what is the actual effect that Amazon's prices have on the market? Well anyone who has ever bought books from the giant seller knows, Amazon’s prices are low, low, low. (If you are interested in seeing some actual figures, you can check out McIlroy’s pricing comparison between Apple, Amazon and Samsung Galaxy here.) And it’s no secret that the low cost of e-books has subsequently driven down the prices of traditional print books and Amazon is at the forefront of the move to continue cutting costs.
But are Amazon’s small pricetags for books — in either print or digital form — a good thing or a bad thing?
The small dollar amounts certainly seem good for readers. Today, those looking to buy books can take advantage of free and cheap reads at a rate that is unprecedented. Many e-books are priced from $.99 to $2.99, which is a great deal for those looking for inexpensive reads. Furthermore, the company boasts an almost site-wide special that gives shoppers free shipping on orders over $25.
And maybe selling books, especially e-books, below the prices that used to be industry standard, is not such a bad thing. J.A. Konrath offers that when it comes to self-publishing his e-books, he has, “reams of data that show how e-books under $5 vastly outsell those priced higher.” In the same discussion about the industry which Konrath had with fellow author Barry Eisler last March, the pair wondered if the big publishers were simply overpricing their digital content to avoid hurting the sales of their print books.
But many authors and industry insiders worry that Amazon’s extremely low price scheme will end up devaluing authors’ work. Discussing Amazon’s low prices, Carina Press’ Angela James tweeted, “Don't train readers to believe the full value of a book was in the paper it was printed on, not your creative content!” And author Moira Rogers replied via tweet, “Or the difference in prices between formats. I do think the devaluation of the story goes a lot deeper than e-books.”
The entire issue leaves us wondering, does the value of an author’s work get lost when the resulting books are priced at a pittance or is Amazon doing a service to the reader? It’s up to you to decide and we'd love to hear what you have to say in the comments below!