Why Amazon’s Rivals Are Making Inroads

The book publishing world has been undergoing a big shift. In the beginning, there was Amazon with its world’s largest bookstore. Then came the Kindle, which catapulted Amazon into dominance over e-books. This month, Amazon signed up its first star author, self-help celebrity Timothy Ferris, highlighting Amazon’s aspiration to be a publisher, not just a bookseller. But this story is still unfolding, and Amazon’s dominance is eroding.
Google, Barnes & Noble, Kobo, and Apple have been fighting back in a variety of ways. Their efforts are leveling the playing field and restoring consumer choice. No small part of success comes from Apple’s introduction of an agency model, which gives publishers the right to control pricing as opposed to the traditional wholesale model in which the bookseller can set the price to the consumer. Five of the size largest publishers signed immediately with Apple as have many other publishers. Paradoxically, Amazon’s closed approach insisting that the Kindle would carry only books purchased at Amazon has helped spur competition.
This unfolding story is well-told in the most recent edition of On the Media, one of our favorite shows on public radio. Also on the same show are two other interesting stories. One story covers the possible rise of advertising in e-books through an interview with the CEO of WOWIO, a company that sells discounted e-books with ads. The second story is about the experience of Deborah Read, a would-be novelist who found success publishing with Amazon after many major publishing houses had rejected her works. It’s all worth a listen.

About Lee Greenhouse

Longtime strategy consultant focused on the business of information content, applications, and services.
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