MidAtlantic Book Publishers Association

Publishers’ And Writers’ Organizations Kick Out Immediate Reaction To Amazon.com’s New Bully POD Policy

If you haven’t heard about it yet, you will.

On April 1, Amazon.com issued a new policy aimed at publishers who use print-on-demand technology to sell directly on Amazon.com. (A statement of this policy may be found on the Amazon website at http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-printondemand.)

Most of the significant writers’ and publishers’ professional organizations are expressing concern that this new policy could cause significant financial hardship for small and independent publishers, and the authors whose work they publish.

PMA, The Independent Book Publishers Association (http://www.pma-online.com), wasted no time in responding to the online bookselling behemoth’s new policy, which smacks of monopoly practices and a neighborhood bully attitude.

Terry Nathan, PMA Executive Director, issued a press release on April 3, speaking out against Amazon's directive that publishers either must print their books on demand exclusively at BookSurge—Amazon's subsidiary printer—for fulfillment of orders placed with Amazon, or incur additional cost to print elsewhere and maintain inventory with the online retailer.

“This policy imposes a significant financial burden on tens of thousands of small and independent publishers who can least afford it,” Nathan points out. “Without the opportunity to benefit from competitive pricing, small publishers risk at best an expensive and needless overhaul of their manufacturing process, and at worst, the loss of their livelihood. On behalf of all the small and independent publishers whose businesses are in jeopardy, we urge Amazon to reconsider its position.”

Indeed the move comes as a surprise to many who have perceived Amazon as a friend to small and independent publishers.

“Over the years, Jeff Bezos and his company have given small and independent publishers a level playing field to compete with the largest of companies,” Nathan continues. “Suddenly, this magnificent playing field has been converted into a 'members only' club, to the detriment of those very publishers who have contributed to Amazon's success. We will continue to monitor developments in the weeks ahead.”

Similar views have been expressed by other publishing and writers’ professional organizations. Small Publishers Association of North America (SPAN - http://www.spannet.org), like PMA, is a nonprofit trade association. It represents more than a thousand book publishers and authors. SPAN’s Executive Director, Scott Flora, issued his own statement on the heels of that from PMA.

“Our members are POD publishers, authors who use POD publishing, and traditional independent publishers,” writes Flora. “Most of our members are vendors of Amazon.com through one your programs. It is fair to say that almost all of our publishers and authors who use POD to distribute through Amazon.com will be negatively affected by this new policy.”

Flora echoes the surprise at Amazon’s new unfriendly policy in a letter to Amazon founder and CEO Jeff Bezos.

“I have always liked Amazon and have found you a good partner to independent publishers. SPAN has had an Amazon representative at our last three national conferences and currently have an Amazon Advantage discount program as a benefit for our members.” Flora’s letter goes on to detail mainly concern about SPAN members’ documented concerns over BookSurge product quality and potential for financial hardship caused by the strongarm tactic.

The Authors Guild (www.authorsguild.org), the nation's largest society of published book authors, has also taken a strong stance against the rigid new policy. This group calls into question the sincerity of Amazon’s motives for the move.

“Amazon pitched this as a customer service matter, a means for more speedily delivering print-on-demand books and allowing for the bundling of shipments with other items purchased at the same time from Amazon,” says the rganization’s press release. “It also put a bit of an environmental spin on the move -- claiming less transportation fuel is used (this is unlikely, but that's another story) when all items are shipped directly from Amazon.

“We, and many others, think something else is afoot. Ingram Industries' Lightning Source is currently the dominant printer for on-demand titles, and they appear to be quite efficient at their task. They ship on-demand titles shortly after they are ordered through Amazon directly to the customer. It's a nice business for Ingram, since they get a percentage of the sales and a printing fee for every on-demand book they ship. Amazon would be foolish not to covet that business.

“Once Amazon owns the supply chain, it has effective control of much of the "long tail" of publishing -- the enormous number of titles that sell in low volumes but which, in aggregate, make a lot of money for the aggregator. We suspect this maneuver by Amazon is far more about profit margin than it is about customer service or fossil fuels. The potential big losers (other than Ingram) if Amazon does impose greater discounts on the industry, are authors -- since many are paid for on-demand sales based on the publisher's gross revenues -- and publishers.”

The group is reviewing the antitrust and other legal implications of Amazon’s move. They invite input from those who believe they might be affected through phone calls to (212) 563-5904 (ask for the legal services department) or e-mail to staff@authorsguild.org.

The American Society of Journalists and Authors (ASJA - www.asja.org), the nation's trade association for freelance nonfiction writers, has expressed disgust with Amazon’s announced move, stating on its website that, “at first, Amazon representatives denied threatening small booksellers with having the "buy it" buttons for their books turned off if they didn't sign on the dotted line. Later, Amazon admitted the move, as reported in Writer's Weekly and The Wall Street Journal. The contract being offered to print-on-demand publishers, which ASJA officers have seen, also includes a confidentiality clause forbidding disclosure of not just specific contract terms, as is typical, but any discussion at all. Thus, small publishers who have signed the contract may not say so, much less reveal the pressure they were under.”

ASJA also revealed that, “In addition, Amazon is punishing publishers who sell their books at a discount from cover price directly on their publisher's websites. It is taking that discounted price as the book's "cover price" and then applying their own discounts accordingly.”

This group is taking an aggressive stance on the issue, promising to urge the Washington state attorney general's office to investigate whether Amazon's move constitutes restraint of trade or otherwise violates anti-trust laws.

"We applauded when Jeff Bezos and Amazon gave small publishers and even writers who self-published a way to get their books before the public," observed ASJA President Russell Wild. "With these grabby, strong-arm tactics, Amazon negates all that -- and the years of goodwill it has built up with writers, who ultimately will bear the brunt of any price increases in the printing of independently published books."

It’s shaping up to be a real David-and-Goliath fight, sure to be the talk of the BEA show floor and a hot topic at the upcoming PMA University in California next month. Stay tuned as MBPA follows developments, which we’ll report right here.

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