Amazon Print on Demand problem - from The Authors Guild

**G* R* <g*@tiscali.co.uk>**

Last week Amazon announced that it would be requiring that all books 
that it sells that are produced through on-demand means be printed by 
BookSurge, their in-house on-demand printer/publisher. Amazon pitched 
this as a customer service matter, a means for more speedily 
delivering print-on-demand books and allowing for the bundling of 
shipments with other items purchased at the same time from Amazon. It 
also put a bit of an environmental spin on the move -- claiming less 
transportation fuel is used (this is unlikely, but that's another 
story) when all items are shipped directly from Amazon.

We, and many others, think something else is afoot. Ingram 
Industries' Lightning Source is currently the dominant printer for 
on-demand titles, and they appear to be quite efficient at their 
task. They ship on-demand titles shortly after they are ordered 
through Amazon directly to the customer. It's a nice business for 
Ingram, since they get a percentage of the sales and a printing fee 
for every on-demand book they ship. Amazon would be foolish not to 
covet that business.

What's the rub? Once Amazon owns the supply chain, it has effective 
control of much of the "long tail" of publishing -- the enormous 
number of titles that sell in low volumes but which, in aggregate, 
make a lot of money for the aggregator. Since Amazon has a firm grip 
on the retailing of these books (it's uneconomic for physical book 
stores to stock many of these titles), owning the supply chain would 
allow it to easily increase its profit margins on these books: it 
need only insist on buying at a deeper discount -- or it can choose 
to charge more for its printing of the books -- to increase its 
profits. Most publishers could do little but grumble and comply.

We suspect this maneuver by Amazon is far more about profit margin 
than it is about customer service or fossil fuels. The potential big 
losers (other than Ingram) if Amazon does impose greater discounts on 
the industry, are authors -- since many are paid for on-demand sales 
based on the publisher's gross revenues -- and publishers.

We're reviewing the antitrust and other legal implications of 
Amazon's bold move. If you have any information on this matter that 
you think could be helpful to us, please call us at (212) 563-5904 
and ask for the legal services department, or send an e-mail to 
<s*@authorsguild.org?subject=RE%3A%20Amazon%20Tightens%20Grip%20on%20Long%20Tail%3B%20Info%20Requested>staff@authorsguild.org."

Feel free to post or forward this message in its entirety.

-----------------------

Copyright 2008, The Authors Guild. The Authors Guild 
(<http://app.bronto.com/public/?q=ulink&fn=Link&ssid=896&id=48jg31h03jwxtcddk7q98fa2egczq&id2=a0fo8m08n8uhhe4nlxy3xipqc5cet>www.authorsguild.org) 
is the nation's largest society of published book authors.

Amazon has been both good and bad for writers - this looks bad.

Graham
-- 
Website: http://GrahamRice.com
Blog: http://TransatlanticPlantsman.com
AHS Encyclopedia of Perennials: http://AHSPerennials.com
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