April 02, 2008
IT'S NOT OVER! Amazon Tells Publishers, Pay Us To Print Your Books...Or Else | printable version
Tuesday, April 1st, was the rumored deadline Amazon.com gave to some POD publishers to sign an agreement allowing their printing division, BookSurge, to print each publisher's book to be sold through Amazon, or risk having their "buy" buttons turned off on the Amazon.com website. Publishers, authors, and even book buyers were outraged by this apparent power-grab by Amazon. Attorneys and government officials are still studying the legality of their actions. How could they demand such a thing and what publisher in their right mind would agree to their ridiculous terms? While a band of POD publishers stayed together, refusing to sway to Amazon's demands, some did not.
Monday, March 31, 2008: AuthorHouse/iUniverse (owned by Author Solutions) announced they had reached an agreement with Amazon to allow Booksurge to print their books.
Monday, March 31, 2008: A Lulu representative posted a cryptic announcement that suggests they, too, likely signed the Amazon contract.
We are in possession of the Amazon contract and, while I'm sure AuthorHouse/iUniverse and Lulu negotiated special terms for themselves, I can tell you that the confidentiality clause in that contract is the tightest I've ever seen. Don't expect anybody at those firms to ever talk about what they had to give Amazon to keep their "buy" buttons turned on.
It's been reported that some other publishers signed the contract as well and that others are still considering it, believing they have no choice.
HOW COULD THEY CAVE?
We think we figured out why AuthorHouse/iUniverse and Lulu felt they had to sign an agreement with Amazon/Booksurge. Of course, since nobody's talking (Ken Weiss at AuthorHouse never returned my call on Monday and Bob Young's people gave me a humorous run-around, before finally admitting they didn't want to comment), we can only speculate. But, I think the keys to the cave-ins can be found on the publishers' websites.
You see, I've always felt that having our BookLocker books listed in the online bookstores was a privilege. You can't promise your authors something that involves another company if you don't have a contract with that other company. Our BookLocker contract states, "Sales channels can be added or removed at the Company's discretion and without prior notice. While the Company provides listings to Ingram for print books, online bookstores, such as Amazon.com, are not required to list these titles for sale. Listings offered by online bookstores are at the discretion of each particular store." Furthermore, we don't up-sell authors on marketing services. If an author wants us to add additional content to their Amazon.com page, we do it for free. If an author wants their book in the Search Inside the Book Program, we show them how to submit it (our authors get copies of their files for no extra charge) or we do it for them.
Unfortunately, somewhere along the way, some POD publishers decided to start charging for these services. And, perhaps their greed has now forced them to start using Amazon's printer.
AuthorHouse charges authors an extra $75 to submit their book to the Amazon Search Inside the Book Program. If an author has paid for that service, they would, of course, expect and demand that Amazon have their book available for direct purchase by Amazon customers (have the "buy" button turned on). Since AuthorHouse charged authors for that service, they may have inadvertently put themselves in a bind with the threat of having the "buy" buttons turned off.
Lulu has third party service providers (that pay Lulu commissions) that offer Amazon listing enhancement services for a fee to Lulu authors. One Lulu author surmised on their forum, "Lulu will just have to supply Amazon with books..." So, perhaps they found themselves in the same bind as AuthorHouse.
The deadline given to some publishers was rumored to be April 1st and AuthorHouse/iUniverse and Lulu both announced agreements with Amazon on March 31st. That leads me to believe Amazon may have had them both by the...well, you know.
No word yet from Xlibris. I left a message on John Feldcamp's voicemail on Monday but he hasn't yet returned my call (tap, tap, tap). I've met John and found him witty and charming...yet he absolutely does not appear to be the type of person you can push around, even if your name is Jeff Bezos.
We were already in contact with POD publishers who had received the "buy button threat" before last week's story ran. After we broke the story, several other small publishers contacted us as well. Some didn't mind giving their names but many begged us to not reveal their identities, hoping to stay under Amazon's radar.
WORLD DOMINATION OF THE PUBLISHING AND PRINTING INDUSTRIES?
Tongues have been wagging (okay, fingers have been typing) online for a week now, speculating about Amazon's future plans. Many guffaw the idea that, after taking over POD titles, Amazon might dare to go after traditional publishers, too. What most don't understand is that it's already happening. Booksurge is already printing POD versions of back-list, out-of-print and large-print books for HarperCollins, John Wiley & Sons, McGraw-Hill, Pearson, Springer, Gale, Oxford University Press, and others.
Last week, the University of Pennsylvania Press contacted us, reporting they'd received the Amazon ultimatum, too. She said, "I work at a medium-sized university press, where most of our titles are conventionally printed via offset. However, Amazon called our director about two weeks ago, telling him that soon we would be required to use Booksurge."
If Amazon does ramp up, and can process all those files and print books in every one of its facilities, those huge, expensive, maintenance-monster warehouses may become obsolete. They will, instead, be printing and shipping facilities.
It wouldn't surprise me at all if Amazon's ultimate goal is to print every single book they ship. I bet Walmart's sorry they didn't think of it first!
WHY THIS IS BAD... VERY, VERY BAD
Publishers who sign Amazon's contract must let Booksurge print their books.
These are results that pop up if you Google the words booksurge complaint without any quotes.
"...the binding of the book isn't that great as one of my pages fell out."
-Review by Robert Young
(This is an Amazon page and they might yank it after this article is published.)
"The majority of books produced were defective: pages falling out, discolored covers, white splotches on the covers, etc. Of the 135 books I purchased, over 100 were defective. It was a huge embarrassment and headache for our organization."
"Additionally, the book is poorly constructed. The book fell apart (literally, the pages falling out) before I made it to page 24."
(This is another Amazon page that may get yanked after this article is published.)
"Please be patient, and if you do happen to get a book with pages falling out, kindly return it to BookSurge for a replacement."
(This site is tied to the Amazon.com bookstores so it, too, might disappear!)
"April McDonald is suing Amazon for 10.5 million dollars and its vanity press, BookSurge, claiming that the book was full of typos and other errors."
(The article above includes direct quotes from the book's author.)
"Koziol alleges that the trade paperback copies he received were 'riddled with misspellings, jumbled text, mismatched pages and other errors,' according to TimesUnion.com."
"I POD'd my book in spring of 05 and my first 250 copies had the cover so violently off center as to make me return ALL of them. Booksurge replaced them, but with the back 4 pages missing! Ugh!"
I purchased a Booksurge book last night and had it shipped overnight. It did indeed arrive this morning. It has a cover that isn't centered (the back is off-center by at least half an inch - very noticeable and very unprofessional) and a glue smudge on the back as well. I won't even get into the interior formatting. It looks like somebody designed this in their garage (my apologies to anyone who actually does write in their garage) and, on the first page of the forward, the drop cap ink is bleeding into one of the sentences. If the author paid Booksurge for editing, he needs to ask for his money back. I won't mention the book's name here because I don't want to embarrass the author. It's not his fault. I will keep it, however, in case Amazon tries to deny my claims. Frankly, there is no denying how crappy this book looks.
IF THE BOOK IS CRAPPY, WHOSE FAULT IS IT? YOURS!
If your customer gets a book with loose pages, or upside pages, or a crooked cover, or a cover that isn't centered, or a glue smudge on it, or bleeding ink, who's going to get the blame? The publisher and author, that's who. The customer isn't going to blame the bookstore (Amazon), even though Amazon printed the book. Readers will very likely have no idea the publisher had to let Amazon print their book.
IT'S ABOUT THE MONEY
Less $ for Publishers + Less $ for Authors + Less $ for Book Buyers = MORE MONEY FOR AMAZON!
Amazon's actions may force publishers to increase the price of all books for readers. Being forced to pay printing fees dictated by Amazon (that can increase at anytime), deep discounts dictated by Amazon (that can increase at anytime), and setup fees dictated by Amazon (that can increase at anytime) can mean higher prices for books (less money in the book buyers' pockets), less money for publishers, less money for authors, and, of course, higher profits for Amazon. Trust me. Despite their rosy statement, Amazon didn't do this just for "customer service." They're doing it to MAKE MORE MONEY.
GETTING IT FROM BOTH ENDS
It is our opinion that Amazon is creating an unfair competitive advantage for itself in two ways... possibly more.
1. Production and Printing - They force publishers to use their printer (who has a bad reputation for quality), which they profit from (cha-ching), and force publishers to give them a deeper discount (cha-ching), and force publishers to pay setup fees for new titles (cha-ching). All this is just for books being sold through Amazon directly. Amazon knows the publisher must also pay to have files formatted to different specs in order to get Ingram distribution (considered imperative for bookstore sales). In fact, all this expense and trouble could even make it more difficult and more expensive for Amazon's other competitors (bookstores) to obtain these books for their customers.
2. Amazon also competes directly with these publishers for authors. Authors can pay Amazon/BookSurge an average publishing package fee of over $1,000 to have Amazon publish their book. So, Amazon is competing directly with its publishing customers for authors' books and will, of course, even have access to the publishers' customers' (authors!) contact information. I wonder if their new contract protects publishers from Amazon going over their heads and trying to land contracts with the authors directly?
Remember, Amazon has a contract with Lightning Source (LSI), but has gone over its head and contacted LSI's customers (the POD publishers) directly. That's how all this trouble began!
THEIR OFFICIAL STATEMENT
Amazon did issue an official statement. It didn't say much. In fact, what made it interesting was what they left out. See this article on PaidContent.org.
CAN THEY EVEN DO IT?
There is much speculation that Amazon doesn't even have the man-power or the resources to quickly acquire and process all of these new interior and cover files from POD publishers (tens of thousands from AuthorHouse and Lulu alone) and that they also may not have POD printing machines in all of their distribution facilities. We're still waiting for Amazon to comment about that. One Amazon employee claimed (see link directly above) they had POD machines in three distribution centers. However, they have 10 centers in the U.S. alone. If they don't have POD machines in all their distribution centers, their statement about "marrying" products to save shipping and fuel expenses doesn't hold much weight. If they can't currently handle the influx of new book titles, and if they can't print POD books at all of their distribution facilities yet, why the rush to make POD publishers sign by April 1st?
*IMPORTANT!* POSSIBLE DIRE CONSEQUENCES FOR PUBLISHERS WHO SIGN AMAZON'S CONTRACT
Morris Rosenthal brought this up the other day and we're wondering if the POD publishers who have already or plan to sign the Amazon contract have considered it. According to The Robinson-Patman Act of 1936 (or Anti-Price Discrimination Act), if Amazon forces publishers to offer them a 48% discount, this action may, by default, force publishers to offer all bookstores a 48% discount. Many small publishers simply can't afford to do this. If they sign the Amazon contract and, thus, then have to offer all bookstores a 48% discount, they may go out of business.
Offering Amazon a 48% discount allows Amazon to discount their prices beyond what another bookstore could if they were not given the same discount. The competing store would, of course, be at a competitive disadvantage. Nobody knows for sure, but it sure seems to me (and this is MY OPINION, mind you) that this windfall of benefits to Amazon may have all been carefully orchestrated through Amazon's contract with POD publishers. They just can't lose no matter which way you look at it. What do you think?
THE GOOD NEWS
Despite all of this, the good news is Amazon has not removed anymore "buy" buttons from POD publishers' books pages. Maybe, just maybe, after such a large public outcry, and perhaps after some consultations with their attorneys, they're realizing that this wasn't such a great idea after all. And, as I noted earlier, attorneys and government officials are still studying the legalities of this situation.
We are posting frequent updates to the top of THIS PAGE. Please send your comments regarding this situation to richard - at - booklocker.com, and let us know if you write about it so we can add a link to your site.
UPDATE: YOU'RE NOT GOING TO BELIEVE THIS!
The print on demand (POD) book I purchased from Amazon/BookSurge yesterday is now listed as OUT OF STOCK at Amazon.com! It says: Temporarily out of stock. Order now and we'll deliver when available. We'll e-mail you with an estimated delivery date as soon as we have more information. Your account will only be charged when we ship the item.
Gosh, now what does that mean about their "print and bind a book in less than two hours" statement? Shouldn't their POD books never be out of stock? Hmmm....
We looked around some more and found several BookSurge books that are listed as "out of stock" and "usually ships in 2-4 weeks."
Personal P.S. from Angela: I want to personally thank every single one of you who has written to me, written to Amazon, contacted your state's attorney general and other government entities concerning this situation. When something is terribly wrong, each and every person who is courageous enough to stand up and shout NO truly can make a difference. We and our small POD publishing colleagues are humbled, blessed, and strengthened by your heartfelt words and immediate actions. Thank you!