Kindle, A New Way To Read

Monday, April 7, 2008

Authors Guild Looking at Antitrust Issue of Amazon’s POD Plan

By Jim Milliot -- Publishers Weekly, 4/6/2008 10:03:00 AM

Saying it is reviewing the antitrust and other legal implications of Amazon’s “bold move,” the Authors Guild sent an e-mail late Friday to its membership questioning the motives—and implications—of the e-tailer’s new position on print-on-demand that makes publishers use its BookSurge division if they want the sell their titles on Amazon in the traditional manner. While Amazon is pitching the move as a consumer-friendly change that will improve the speed of shipping books and other products, the Guild says it suspects the motivation has more to do with profit margin than customer service.

If Amazon is successful in wresting a large chunk of pod business away from current leader Lightning Source (which the Guild says does a good job), they will have taken a huge step in controlling publishing’s supply change and thus control much of the industry’s long tail business, the Guild said. “Once Amazon owns the supply chain, it has effective control of much of the "long tail" of publishing,” the statement reads. “Since Amazon has a firm grip on the retailing of these books (it's uneconomic for physical book stores to stock many of these titles), owning the supply chain would allow it to easily increase its profit margins on these books: it need only insist on buying at a deeper discount -- or it can choose to charge more for its printing of the books -- to increase its profits. Most publishers could do little but grumble and comply.”

If Amazon does impose deeper discounts, the big losers, other than Lightning, will be authors, since many are paid for on-demand sales based on the publisher’s gross revenues, as well as publishers, the Guild says.

The statement closes by inviting anyone who has information that could help the Guild investigate the matter to contact it by phone at 212-563-5904 or through its site,