Amazon as publisher: What does it mean?

With Amazon at the table, says one publisher, "the price of playing poker just went up."

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    Here Amazon CEO Jeff Bezos introduces the Kindle 2. Will the company's new publishing subsidiary put a squeeze on the rest of the industry?
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Ever since its inception, Amazon has brought seismic changes to the book world. Its e-commerce, mega book mall knocked traditional bricks-and-mortar booksellers off their feet. Its Kindle e-reader revolutionized the way Americans read – and buy – their books, with Amazon recently announcing it sells more e-books than print. And now, Amazon has signaled it will move into book publishing, leaving the major publishing houses holding their breath as they prepare to compete directly with the online behemoth.

Amazon recently announced that Laurence J. Kirshbaum, a literary agent and former publisher, will return to publishing to lead a new imprint for Amazon.

In an e-mail to agents sent last week, Jeff Belle, an Amazon executive, said Mr. Kirshbaum will be building the new publishing team.

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“Larry will be building out a publishing team in New York and will found new imprints under the Amazon Publishing umbrella, with a focus on acquiring the highest quality books in literary and commercial fiction, business and general nonfiction,” Mr. Belle said in the e-mail, according to The New York Times.

According to Bookseller.com, the move was no surprise to anyone in the book world.

“Everybody knew that an Amazon push into frontlist publishing was coming…. Highly-placed executives from New York houses have been migrating to Amazon for a while, and the company ratcheted up expectations after circulating a recruiting letter for various personnel a few weeks back.”

What does Amazon’s foray into publishing mean for the book industry?

Publishers, for one, aren’t happy about the move. Already squeezed, publishers are now worried the literary leviathan will use its influence and resources to dominate the publishing marketplace and could put a damper on competition.

Mike Shatzkin, CEO of Idea Logical Company, a consulting firm, put it this way.

“What essentially happened is you had six players sitting at the table playing poker, then a seventh player who has more money than the others combined, sat down at the table, and the price of playing poker just went up,” Mr. Shatzkin told the New York Observer. “I think it means that the agents are all celebrating and the big publishers are all crying in their beer.”

Agent and proprietor of E-Reads Richard Curtis had this to say:

“Because of Amazon's dominant retail position, their wealth and leverage could have a dampening effect on competition,” Mr. Curtis told Bookseller.com. “Barnes and Noble's publishing has had that effect: as an agent, I'll call a publisher and pitch a non-fiction project. ‘We'd love to do it,' they'll tell me, and then add, ‘but we know [Barnes & Noble's subsidiary] Sterling will undercut on price for the same kind of book.' ”

Dominique Raccah of the independent Chicago-based book publisher Sourcebooks had dire predictions about Amazon’s effect on publishing. “We will lose 50 percent of publishers,” he said in a recent International Digital Publishing Forum round table.

Booksellers, who are already dealing with Sterling, don’t seem bothered by the news. Amazon will still need booksellers for their bricks-and-mortar distribution.

“It didn't surprise me,” said outgoing American Booksellers Association president and indie bookseller Michael Tucker, to the Bookseller.

“It’s of more concern to publishers than to booksellers at this point,” said Rick Simonsen, of Seattle’s legendary indie seller Elliot Bay. “Remember, most booksellers have to deal with B&N's Sterling already. And Amazon will now get trapped in the real world!”

But how about writers? Might this be good news for them?

Some are arguing that it will.

Writing for Forbes three years ago, technology and strategy consultant Srmana Mitra was already anticipating Amazon's move toward "vertical integration" – and seeing it as a form of salvation for authors. Ms. Mitra lambasted the publishing industry, calling it "[a]rchaic beyond belief ... an industry that treats its most important asset – the author – badly," returning only a fraction of any profits made on a book to its creator.

She envisions a world in which "Amazon becomes the retailer, marketer, publisher and agent combined and takes 65% of the revenues, offering 35% to the author" and calls that "a much better, fairer world."

Given Amazon's current reputation as the company that has accustomed readers to the $9 book, it seems a bit of a stretch to also envision Amazon as a white knight. But in a business changing as fast as this one is, perhaps anything is possible.

Husna Haq is a Monitor correspondent.

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