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Strategic insights
The Future Role of Publishing: Think VC for Authors

Two choices: You can either be the influencer of a community, or help those who are. You cannot be a random distributor of books for a mass-market.

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Written by on February 29, 2012

Amazon pulled several ebooks from their store when they couldn't come to an agreement with 'Independent Publishers Group' about ebook prices. Amazon wanted to lower it to a point that simply wasn't sustainable for the distributer, so when IPG said no, Amazon responded by removing all their books from the store.

This, as you can imagine, created quite an uproar in the book distribution world, with claims like "Amazon is out to kill us" and "Amazon is trying to take over everything!"

Is Amazon trying to get rid of the book distributers and partly the publishers? Oh yes, absolutely! And here is why:

The mess in the middle

When we think of the book industry, we usually see it like the illustration below. We have an author who is working with a publisher to write a book. The book is then being distributed by a number of distributers to the book stores - one of which is Amazon.

It seems like a very suitable system, and each party is doing what they are good at. The author is good at writing the book. The publisher is good at shipping the product, the distributer is good at spreading it to as many markets as possible, and Amazon is really good at selling.

But, It isn't as simple as this. In the disconnected world, the most efficient way to spread a product is to have distributors in every market. It's very hard for just one company to distribute a book outside their region.

In the connected world, with no geographic boundaries, this model no longer works. On the internet, you have 'local presence' by default. It doesn't matter if a person is living in the US, Canada or South Africa. How you engage with that person is the same.

The problem is that the publishers aren't changing their distribution paths to fit the connected world. They are still insisting on sub-licensing and regional distribution deals.

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Thomas Baekdal

Thomas Baekdal

Founder of Baekdal, author, writer, strategic consultant, and new media advocate.

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The Economics of Individual Media »

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