Clash of the Titans

So this past week saw Amazon's thus far unabated surge to dominance in the e-publishing market finally challenged and turned back by Macmillan publishing.  It seems like Amazon has up until this point been aiming to be just under the level at which anti-trust laws can really apply to a company.  By selling e- books at a loss, Amazon had sought to drive away competition in the market, becoming sole producer, distributor, and vendor of e-books created in the eDocs format.  Macmillan challenged their dominance by refusing to supply books to Amazon if they continued to short sell the product.  Amazon fought for a while, but finally capitulated under the pressure and bad press.  The question we are discussing today is what problems may publishers face in the future if the Amazon hegemony continues to grow, and how can this actually be advantageous to some publishers?

The downsides of an Amazon hegemony should be fairly obvious.  Publishers would continue to be unable to create any sort of direct sales support online, as they would simply be unable to compete with Amazon's prices.  Furthermore, Amazon's short selling of e-books may lead to an impact on sales of physical books as more people begin to shift formats.  New devices like the iPad and the Adam make the e-book market more accessible to traditional readers than ever, and it is likely that the e-book format will become a major competitor to watch out for in little time.  Publisher's are wise to be leery, as watching the fall of the newspaper industry should be taken as a lesson of what can happen if publishers don't approach the growing demand for electronic material both strategically and aggressively.  Amazon's hegemony threatens the options these publishers have and unless the publishers get control over the evolution of their business and work closely with the technology companies that are pushing it forward, they will find themselves going extinct.

The upside to Amazon's work has been the general opening up of the industry to make all of this possible.  As more and more people are becoming exposed to electronic publishing, the medium is becoming more and more desirable and advanced to keep up with the developing market.  This provides a great opportunity for book publishers to work with Amazon as a distributor to get their books to a wider market without having to deal with the costs of printing and shipping distribution.  With overhead costs cut, smaller publishers now have the potential to get their material to a wider audience.  In addition, with Amazon now on the defensive following the dispute with Macmillan, publishers may have an opportunity to negotiate a new distribution model for e-books that provides a greater profit for small publishers than the current model in which more than 50% of the money a book brings in goes to the vendor and distributor.