Amazon Squeezes Long Tail
Text of April 4, 2008 e-mail to members:
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 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 appears to be quite efficient at its 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 staff@authorsguild.org.
Feel free to post or forward this message in its entirety.
-----------------------
Copyright 2008, The Authors Guild. The Authors Guild is the nation's largest society of published book authors.
The Authors Guild is the nation's largest and oldest society of published authors and the leading writers' advocate for fair compensation, effective copyright protection, and free expression.
Regain Your Rights
Learn how to terminate transfers under § 203 of the Copyright Act (download PDF).
Copyright Forms
To register a manuscript, use Form TX. (If you are the only author and copyright holder and the work is new, you may use Short Form TX.)
Freelance journalists may want to register their collected work every 90 days and save registration fees. Use Forms GR/CP and TX to do this.
Download Forms.
You must file within 90 days of publication for maximum statutory protection, but even delayed filings provide valuable protection for your works.
The fee for filing either TX form is $45. There's no additional fee for filing GR/CP with a TX form.
For more than 90 years the Guild has been the authoritative voice of American writers...