It’s not a conspiracy: Explaining the economics behind eBook market trends

publishing.pngI think the backlash against independent publishers and authors has already started, and will continue to get worse over the next twelve months.

Once again, this isn’t a conspiracy theory, but economics. There are several factors in play here, by rather large players. [EDIT: As another instance of this, go look at Scalzi’s entry about similar stuff – but with a different takeaway – which published about forty minutes before mine… even though I wrote this post on Tuesday.]

1. Amazon set itself up to dominate the eBook market.
2. Amazon promoted independent authors and self-published authors.
3. Each of the biggest eBook retailers was tied to a specific device, and tried to make it hard to buy from another retailer.

These facts are really all you need to explain a large portion of the economic maneuverings that have happened around eBooks. As many have pointed out, without authors, booksellers don’t have anything to sell. But without distribution, authors can’t get their work out there.

It was easy to see that Amazon’s strategy1 was designed to tie readers to not only a specific device, but a specific store. Realistically, the only limitation (aside from convenience) was – and continues to be – DRM.

DRM was sold to authors and publishers as anti-piracy measures – but has failed spectacularly, and continuously. But by continuing to stoke author and publisher fears of being pirated, DRM continues to be the norm. This is the equivalent of saying you could only use DVDs bought at Wal*Mart in a DVD player you bought at Wal*Mart. Obviously, that’s not the case. The movie industry would strenously fight any such limitation, for one simple reason. It would put Wal*Mart in control of the market for their product.

Authors and publishers have willingly gone along with Amazon’s plans – including plans where you could get more money by making your eBook exclusively available at the Amazon store. All for one simple reason: Cash.

It’s extremely, extremely rare for authors to become rich. Most of us don’t make enough to live on from writing alone – so having the opportunity to make more from what we love to do? Of course you jump at it.

And now the screws start to tighten. Amazon has been trying to play hardball – and has basically been testing to see who it can push around. Doing so with the Big Six didn’t get them anywhere. Then it waited a while before trying again.

Just in this year alone: It discovered that its exclusivity (and publishing arm) aren’t enough to really make people cower. So then (whether intentional or not) Amazon saw if people would gripe loud enough about some “accidental” price changes (and royalty changes)… at about the same time. It demanded more money (and different royalty rates) from IPG.

Folks, those of us who are nowhere near the weight class of IPG or B&N should be very, very nervous… because readers already have those store-specific readers.

And now, Paypal has started to make some moves against folks that it finds too “smutty”… and the steps it has taken impact small and independent folks far more than the Big Six.

The big folks have finally noticed that there’s a lot of activity going on that they’re not a part of. And they’re not happy about being excluded.
1 And really, all the rest of them. It’s just more obvious with Amazon.

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