Amazon VS. the Dinosaur

Can anyone compete with Amazon?  That’s the question that’s been flying around the publishing world; especially now that Amazon’s contract negotiations with Hachette Book Group have reportedly turned nasty.  Publishers fear Amazon because of the apparent monopoly they have as an ebook retailer.  Because of their position in the ebook marketplace, Amazon has the ability to set the rules and strong-arm publishers into deals beneficial to Amazon, publishers say (read:  the ability to offer lower ebook prices).

So what’s the publishers’ master plan to compete with Amazon??  Here are some suggestions posed at BookExpo America by the CEO of Codex-Group, Peter Hildick-Smith. Though these are the opinions of one man it is clear that much of the major publishing world is in agreement with him.

When the federally imposed restriction prohibiting agency pricing is lifted, Publishers need to go back to agency pricing.  … because that worked so well for them before?

Hildick-Smith is referring to the Department of Justice antitrust settlement prohibiting Hachette, Harper Collins, Simon & Schuster, Random House, and Macmillan from entering into contracts that restrict a retailer’s ability to set their own pricing.  That restriction is in place for two years starting December 18, 2012.  That means the aforementioned publishers would not be able to act until December of this year.  Well maybe his next idea will be more actionable?

 Publishers should “window” their book releases.  Windowing is the practice of releasing hardcover books before the “cheaper” ebooks are released about 6 months later.  Hildick-Smith notes that the film industry has had great success with this.

OK ...  in a world where instant gratification has become the norm, he wants to make people wait several months to read a “new” release.   Does he really believe that limiting access to ebooks will help publishers compete with Amazon?

It’s clear that publishers do not understand their customer, the appeal of ebooks, and the state of the industry as a whole.  They assume that the hardcover buyer is the same as the ebook buyer.  Yes, ebooks tend to be cheaper for the consumer than buying a hardcover book, but the draw of ebooks does not end there.  Ebooks appeal to a wide variety of audiences including commuters, the environmentally conscious, the impulse buyer, people who require large print etc. Limiting access will not increase hardcover sales, but I’m certain it will hurt ebook sales. People want to read bestsellers when they’re new -- not when they’re 6 months old;  by that point they’ve moved on.  Besides, where does Hildick-Smith think consumers will buy these hardcover books? 

Falling back on old business practices and blaming the competitor is not a winning strategy.  Amazon has great selection and they’re convenient, but they also have something else … great customer service.  They are constantly providing new and innovative things to keep their customers hooked.  They are supporting self-published authors and creating a medium in which authors can grow and learn from each other.  Meanwhile, the publishers are planning on getting more money from their customers the only way they know how:  by backing them into a corner.  No wonder Amazon is winning.


Written by Reference Librarian Stephanie


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