Is Amazon Giving Up on Books?
I’m sure that most people reading that blog title will think it’s click bait. It’s not, it is a genuine question. I’m asking this based on an article by Mark Williams I read this morning titled, Amazon’s Dismantling of its Book Operations Continues. Mark is not someone to yell “the sky is falling.” He’s been following and reporting on book operations around the world for more than a decade. I highly recommend every author read this article and ask yourself: “Are all my eggs in the Amazon basket? Is that where they need to be?”
Those who follow me, or have worked with me, know that I’ve never been an Amazon-only book distributor. I’ve lived through major corporation failures throughout my childhood and adulthood. My father used to work for one of the largest national trucking firms. It had corruption in the top ranks and eventually it failed completely. It no longer exists. I remember when private corporation retirement funds were invested primarily in the energy sector (a lot in Enron) and the telecom sector (Worldcom). Those bankruptcies completely ameliorated by father’s and mother’s retirement accounts. Once again it was all about fraud. “Enronomics” was a fraudulent accounting technique used by criminal executives at long-dead Enron Inc. that involved hiding losses in subsidiary books. WorldCom was a U.S.-based telecom company that underwent one of the largest bankruptcies in U.S. history following a massive spate of criminal accounting fraud. (hmm…sounds like what is happening with the current news…criminal accounting fraud).
I lost much of my own 401K investments during the 2009-2012+ recession when there were “Banks too big to fail.” Not that I had invested in those banks, but the recession’s impact on the national economy coincided with a loss of my job and the inability to get another job because employers were cutting back, facing their own economic difficulties. No one was hiring, and it remained that way for about three years.
I am NOT claiming that Amazon is doing criminal accounting, nor that there is fraud. However, my point is that whenever I advise someone not to go all in with Amazon they say things I’ve heard earlier in life. “Amazon is too big to fail.” “They began with books and will never give up on books.” “They are the biggest book distributor in the U.S.” “There is no reason to distribute elsewhere when 90% of my income comes from Amazon.” “I don’t want to learn other systems. Amazon is easy.” Some of these harken back to both of those major economic changes in my past. “Invest in energy and telecom because you’ll make money faster.” “Take out ARM loans when you can’t afford a mortgage.” “I don’t want to learn about investments, so I’ll let someone else pick them for me.”
I DO understand the short-term view that making as much money as you can now is preferable to devising a long-term career plan. After all, at age 69 I do ask myself how much longer I really have. But I also ask myself, what happens if I live to 100? What happens if I put all my eggs in the Amazon basket and at 75 Amazon is out of the book business? Then I suddenly have no income outside of social security for the next 25 years, a time in my life when it’s likely I’ll be working slower, producing fewer new titles.
What is the Amazon “Crisis” This Time?
Amazon, who owns BookDepository, has decided to close it April 26th. Why so sudden? They purchased it in 2011 and twelve years later seemingly suddenly decide to close it down. (I’m sure it wasn’t a sudden decision, but to the public and the employees it appears that way.) Why less than a month’s notice? Amazon says something to the effect of “tough times.” Of course, they could have sold it–but that’s not their style. They don’t want competition. In Mark William’s article he talks about his bet is that Amazon is moving to all subscription services in the near future. In other words, you won’t be able to sell a book or audiobook on Amazon if you aren’t exclusive.
This approach wouldn’t surprise me. After all, Amazon has been working very hard to convince authors and publishers that there is no reason to go anywhere else. There is no reason to want your books to be sold without subscription services. And many authors have bought into that because its easier to only have one distribution point and they are happy with making more money now (in some genres) instead of thinking of their long-term career. Also Amazon has expended a lot of energy to convince authors and publishers that the way to get ahead is to do two things 1) lower the price of the book, including making it free on some regular basis; and 2) expand your reach through subscription services which allow readers to believe they are getting “free” books. Oh, and the authors/publishers royalty on that book is not 70% like on a regular sale, it is some changing amount that is decided monthly based on total participation and a pool of money. It usually equals less than a penny. But don’t worry because you will sell much more. At least that is the pitch.
What is frightening to me is how this multiplies. Do you know where all the Amazon tentacles are in the book business? The closing of Book Depository may be only the beginning. What about Goodreads? Amazon owns that. Why would they want to let you buy a book on Goodreads from anyone other than Amazon? I’ll bet they don’t want that. Will they close it? Or will they simply limit it to only linking to Amazon sales pages? If they are only going to link to Amazon then why bother maintain the website when they could simply make everyone go to Amazon anyway?
What Else Does Amazon Own?
According to Wikipedia: “As of 2023, it is the world’s largest online retailer and marketplace, smart speaker provider, cloud computing service through AWS, live-streaming service through Twitch, and Internet company as measured by revenue and market share. In 2021, it surpassed Walmart as the world’s largest retailer outside of China, driven in large part by its paid subscription plan, Amazon Prime, which has over 200 million subscribers worldwide. It is the second-largest private employer in the United States.”
Since its beginning Amazon has been on an acquisitions run. The idea is to buy up emerging competition and software technologies to run the business. Amazon currently has 115 subsidiaries, most of them are NOT books-related. The twelve acquisitions that do relate to books, including audiobooks, have been to purchase technologies that automate the book production and distribution/sales process. They also purchased a couple of publishing companies to start their own imprints. Here are some of the major book-related acquisitions to they’ve made.
- Booksurge (became Createspace)
- Brilliance Audio
- Abe Books
- Shelfari (became Goodreads)
- Lexcycle (ebook software that ran on Apple devices)
- The Book Depository
- Yap (speech to text transcription)
- Avalon Books (part of Amazon publishing)
- ComiXology (comic distribution)
- Rooftop Media (now part of Audible)
However, as Spotify has made a huge entry into the audiobook space (by buying Findaway), I suspect you will see an even stronger move to subscription services in the near future for Amazon audiobooks. I also wouldn’t be surprised if you see Amazon moving more toward video and gaming, which is a large part of its portfolio now (again through acquisitions) and the revenue is much stronger. Is it possible that to be distributed by Audible you will have to be exclusive? Is it possible Amazon won’t distribute your book or audiobook unless you agree not only to exclusivity but also to the subscription service option? I DO think that is possible, currently exclusivity does mean subscription services and one-off sales. Of course the Big 5 publishers will bolt with that contract. I suspect Amazon might make an exception on the exclusivity for those publishers, as they still control the bestseller lists. However, the option would not be available but anyone else who does not control major bestselling assets.
In the past I’ve said that the book business is less than 10% of Amazon’s revenue. That seems to still hold today. Surprisingly, the audiobook business is only 4.2% of Amazon’s book revenue. Yes, it is true they are still making billions of dollars on books. I’m not saying that books will disappear from Amazon’s sales revenue. However, because it is a smaller revenue generator it is more likely that they will make major changes to how that works–changes that allow for fewer employees and more automation. Changes that heavily encourage exclusivity or one day it may be the only option. Become exclusive with Amazon or you get no distribution with Amazon. What would you choose if that were the case?
Consider the Future and What Bets You Are Willing to Make On Your Career
For me, I’ve been distributing wide from the beginning. When I was traditionally published (1998 to 2004, and again in 2011), my publishers did not do exclusivity with Amazon. They did distribute with them. Since then, I know a number of small, primarily genre-specific publishers who do exclusivity with Amazon. I was shocked to learn this.
I don’t like exclusivity with anyone (except my husband). It’s not an Amazon hate thing. I do distribute through Amazon and Audible, but not exclusively. It is one of more than 50 places where I distribute. When Kobo started their subscription services a few years ago, they required a six month lock-in to distribute. I tried it for one book and got nothing out of it. So, I didn’t put in any other books and got out as soon as the 6 months expired. In the beginning it wasn’t in the U.S. I didn’t want to lock in my books to that six-month promise in markets that weren’t that strong for me. Kobo is now moving that model to include the U.S. and Canada. I’ll probably bite now that they are in the U.S. (it’s competition for Amazon’s subscription services). The key is that Kobo DOES NOT require me to be exclusive to participate. There is a commitment to leaving the selected books in the subscription service for six months, but I can still distribute them everywhere else as well. If they required me to be exclusive to take advantage of their subscriptions services (like Amazon does), I wouldn’t do it.
I have love/hate relationship with subscription services in general. On the one hand I know that on a per-book-read basis I get paid a lot less. However, I also have a commitment to reaching many readers who may have difficulty paying $3.99 and $4.99 or more for a single book. Of course, there is also the possibility that I pick up new readers who didn’t know me before. Even libraries now have a cost-per-checkout model which pays less per read but also allows for more reads than a single book checkout does.
That said, I don’t want my books in only ONE company’s distribution network. I want to be able to take advantage of new players or the rise of old players. I want to have the ability to sell direct and to use a variety of distributors. I want the ability to get the best reach around the world as possible. I want to participate in the different genre ups and downs of different distributors and locations.
Could I make more money today if I went exclusive with Amazon? Maybe. But I know a lot of people who are there and aren’t making much money. Let’s face it 80% of your revenue which is a total of $100 in a year is not worth it to me. I do know a few people who do well in Amazon exclusivity. They do well because they make a huge investment in ads ($1,000 or more per month) to make their books stand out among the 20 million+ books in the catalog. That’s money I don’t have and am not willing to spend. I’m also not willing to give Amazon control over my career. What would happen if Amazon made a decision in a couple years that they are going to pay less royalties or require more loyalty, or cut out distribution of ebooks because they make more with paperback, I would be in big trouble.
I know it takes a minimum of six months to build up a following in any distributor. That’s just the reality of metadata and keywords and sales. So, by going exclusive to one vendor, if/when I were to change, I have a minimum of a six month period with little to no sales while I build up a reputation in a new vendor. I don’t know about you, but going 6 months with no sales would be very difficult and impact my ability to pay bills.
As always, each author has her own reasons for being exclusive or being wide. Each author has her own timeline of writing, selling, making money, investing in or giving up on her career. Each author has her own concept of how long she wants to write, promote, continue creating and selling books. For me, I would be very happy if I died in the midst of creating a new book. I don’t have a plan to stop writing new books. It is an important part of my life. It is something that brings me joy.
In the 2012 to 2016 time frame I tried a lot of marketing and advertising and grew increasingly wary of the idea that to have a career you must write to juice the Amazon algorithms. Write the genre book that is most popular, that matches the down the middle tropes, that looks exactly like popular author X. This is something I’ve never been capable of doing. I tried in 2012-2013. Tried two novels matching all the criteria. I couldn’t finish them. They were meaningless to me and did not bring me one wit of joy. The reality is I don’t like reading those kind of novels, so I find them hard to write.
This is not a judgment on those novels. I know millions of readers do love them. I know there are many people, including some of my author friends, who do write those books and love writing those books. But I don’t. Writing, for me, has always been a way to express my voice around issues that concern me. I write about difficult relationships, love and grief, learning how to move, survive, and thrive in a world that is often very difficult for people. My joy comes from telling a story that is important for me to tell–a story that will reach out to a specific type of reader looking to see their problems, their life represented in a story. That type of reader also happens to be me. Me as a child. Me as a teen. Me as an adult. My life was never easy. It has always been one of problem-solving, reaching and failing to get ahead to only try again. I believe this is the life of the majority of people. These are the same people who don’t read a lot of books but value books that make a difference in their lives. I hope to reach them.
I realize that some people, including some of my family members, live that same life I did and don’t want to read about it. When they read (many of them do not), they want to escape from their troubles. That is where pure entertainment or escape fiction works for them. But there are other readers, like me, who read to learn how to survive and thrive. They choose to read books that reflect their real problems in some way. The read to follow the character who does find a way forward and still make their place in the world where they can recognize and use their past experiences to help them become something more.
I applaud all those who can write commercial books. I admire writers who can be given a brief for their novel and then happily write it in three or four months. In the past, I have beaten myself up for not being able to do that. At this stage of my career, I want to reach MY type of readers, not everyone. I want to reach readers who value certain types of books. I’m not interested in readers where, for them, books are interchangeable widgets. I don’t write “escape” fiction, though I know it’s really popular. I don’t write purely entertainment fiction, though I know there is a big market for that. My books do have adventure, and fantasy, and love, and grief. But they aren’t escapist. It’s not why I write. It’s not what brings me meaning and joy.
That is why I need to be wide, I need not to be in an ecosystem that values the lowest cost books first, or that treats books like interchangeable widgets. That is all to say, my choices may not be yours. What brings you joy is different than it is for me.
Make your own decision. But make it with knowledge of what is going on around you, not with your eyes closed and ears covered.