Should Major Publishers Abandon Amazon?

Bob Kohn, New York Times columnist and author, suggests that perhaps the only way for major book publishers to break the Amazon Habit is for them to go cold-turkey. They might, he suggests, want to open a competing online bookstore in which they all have a stake and yank all of their titles from Amazon.com.

bookshelvesThat “nuclear option” is pretty drastic but according to Kohn, so is the action Amazon.com is trying to force these publishers to accept as a price for remaining available on Amazon.com. He says, “Amazon is now wielding its monopsony power, beginning with Hachette, to drastically lower what it pays for e-books. A 30 percent take off the top, it seems, is not high enough.” Hatchette, as Kohn points out, is so far holding firm in opposing the new model.

(I should point out that Kohn is an attorney with a long-standing gripe against Amazon. He filed a friend-of-the-court brief in the famous Amazon-Apple litigation and disagrees strongly with the court’s findings in that case.)

The publishers clearly have a chance here, with re-negotiation of contracts on the table, to force the issue of who needs whom more. Without the publishers, Amazon’s book-selling business becomes pretty sad. Without Amazon, publishers lose access to a channel that presently has something like 65% of the American market for printed and electronic books.

But the key word in that observation may well be “presently.” If the publishers worked together (assuming they can find a non-monopolistic way to do so, no mean feat) to create an Amazon.com alternative where all their books were available online, they could probably eventually replace Amazon.com in their market space. The questions are whether they can do this legally and how long it would take for them to accomplish that objective. In other words, would it by a Pyrrhic victory?

Assuming Amazon doesn’t simply get its way — an outcome that seems most likely — readers and book buyers will suffer the most, at least during any interregnum during which Amazon wouldn’t sell their books and there would not be a central bookstore. Perhaps one of the subscription-model services such as that recently launched by Scribd and Oyster could sneak into the resulting breach and offer a suitable replacement. That in turn could shift the entire bookselling model yet again. (And once again Apple would find itself perfectly positioned to be disruptive.)

 

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