Random penguins and platforms

In an interesting article about the Random Penguin publishing merger, John Naughton describes the dynamic of gigantism in publishing that paved the way for the clash of the Titans between publishers and Amazon. High street book retailers consolidated, causing publishers in turn to develop mass market blockbusters, which prompted agents to seek mega-advances for star writers, such that the publishers and retailers had to sweat those expensive assets….

As Naughton writes: “Thus publishing turned into an industry that was inordinately reliant on blockbuster products to deliver the results that Wall Street demanded. The result was a market characterised by what statisticians call a power law distribution – ie one in which a relatively small number of products sell in enormous volume while a “long tail” of other products sell in relatively modest quantities. The physical world of high street shops can’t handle a long tail for the simple reason that shelf-space costs money. Every book has to earn its rent. But internet outfits such as Amazon don’t have any problem handling the long tail; in fact, the company probably makes more from selling non-bestsellers than it does from blockbusters.”

He cites [amazon_link id=”0745661068″ target=”_blank” ]Merchants of Culture[/amazon_link] by John Thompson as a good sociological description of how publishing and bookselling have changed.

[amazon_image id=”0745661068″ link=”true” target=”_blank” size=”medium” ]Merchants of Culture[/amazon_image]

As I noted in a previous post about the publishing merger, though, Amazon is also interesting as a platform for smaller publishers, who would never be able to get shelf space in a high street store. I’m no fan of the Kindle, including because – as John Naughton and others have pointed out – you’re only renting the book. No doubt other already big publishers will also start to discuss mergers, so it will be intriguing to see whether Amazon does become a genuine platform for small publishers. Platforms are inherently few in number, so the acid test will be the terms on which it continues to deal with them will be the acid test, and one the competition authorities will no doubt be thinking about.