e-books, competition and Amazon (and I still hate the Kindle)

An interesting report in this morning’s Financial Times says North American book retailers are refusing to stock Amazon-published titles (such as a forthcoming self-help book by Deepak Chopra) because Amazon is pushing authors to sign exclusive deals that prevent other retailers from selling digital versions of their books. The report comments: “Amazon Publishing is a more direct threat to publishers and agents, but their position is complicated by their reliance on its website to sell books.” ‘Complicated’ is a polite way to express their lack of market power.

This is fascinating stuff for a competition anorak like me. Amazon is doing the classic giant corporation thing of trying to leverage a strong market position in one market into neighbouring markets, and to control as much as possible of the entire vertical supply chain. The competition authorities should be keeping a watchful eye on this already.See Timothy Wu’s brilliant book

for past examples of concentration in these network markets.

Having said that, publishing is not short of massive corporations itself, and the big ones can probably look after themselves. Meanwhile, plenty of smaller publishers seem to be doing rather well, innovating to serve readers and authors better using the new technologies.

Then, while these two sets of titans – Amazon and the big publishers – slug it out, the retailers on whom they have all depended are struggling, facing a real margin squeeze. Readers are benefiting from variety and innovation but not from reduced prices – so there is successful exploitation of market power somewhere back up the supply chain. And the authors? A few superstars benefit from network dynamics and the rest are in the same weak position as ever, albeit with some new opportunities to self-publish and self-market.

I should add that all the links on this blog go to Amazon’s UK site, only because the associates programme allows me to make enough to offer vouchers to the occasional guest reviewer. If Abe Books or another online retailer were to launch a similar programme, I’d happily switch.

As another aside, I’m a fan of real books rather than e-readers, and definitely hate the Kindle specifically for its ugly greyness and small screen. Last night I was reading a delightful book by Susan Hill,

, and found she agrees: “No one will sign an electronic book, no one can annotate in the margin, no-one can leave a love letter casually between the leaves.”

[amazon_image id=”1846682665″ link=”true” target=”_blank” size=”medium” ]Howards End is on the Landing: A year of reading from home[/amazon_image]

I use postcards and concert tickets as bookmarks – it’s always a pleasure to pick up a book again and see what drifts out from between the pages. Yesterday it was a postcard from Balthazar’s on Spring Street in New York, a memory of brunch with dear friends.




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