An article on Yahoo Finance, entitled, “Amazon Advertising Is Just a Toll in Disguise,”has generated a lot of controversy in the indie publishing community. Below is a key paragraph:
Amazon’s growing cut from its merchants is one reason why the company’s revenue is increasing more quickly than its merchandise sales. Amazon is extracting a bigger share for itself. Like other powerful tech companies, Amazon is able to charge more to the partners that rely on it, because they don’t really have a choice. Yahoo Finance
This applies to all varieties of vendors, of course. (Thousands of merchants, both small and large, sell everything on Amazon from used books to lawnmowers.)
But the issue has especially resonated within the indie author community of late. (Here on Edward Trimnell Books, my post about Amazon ad inflation is one of the more trafficked pages on the site.)
The new divide in the author community: Is Amazon good or evil?
Ten years ago, the writing/author community was more or less evenly divided between trad pub vs indie.
About half of all authors were eager to embrace indie publishing (or some hybrid publishing model). The other half insisted that the only viable way to publish your book was in the passive tense: i.e., to have a New York publisher publish it for you.
In 2019, serious denunciations of independent publishing per se are extremely rare. Aside from literary fiction (which has a very small market), and the mega-bestsellers like King and Patterson, indie is the wave of the future. (This is especially true in genre fiction like science fiction.)
Today, if authors are arguing about something in an online discussion forum or Facebook group, they are probably arguing about Amazon.
Specifically, the new division is between those authors who want to rely wholly on Amazon (the Amazon as benevolent parent faction), and those who resent Amazon (the Amazon as evil slavemaster faction).
Authors and their dogmas
The current divide over Amazon tends to be as dogmatic as the divide over indie vs trad was a decade ago.
I mean: If Random House called me up tomorrow and offered me a $5 million contract, with lots of television promotion and whatnot, I’d say, “Hell, yeah!”
But short of that, I have no intention of routing my stuff through the antiquated, byzantine New York publishing system, when I can go direct to my readers.
Indie publishing isn’t (and shouldn’t become) an ideology. Neither should traditional publishing.
Nor should pro-Amazon sentiment…or anti-Amazon sentiment.
Authors: Amazon is neither your benevolent parent nor your slavemaster.
Amazon, rather, is a profit-seeking corporation. And based on what they’ve done through competition to Borders and B&N (not to mention your local shopping mall), Amazon is pretty good at this whole retail thing.
Another thing you should know (if you don’t already): Amazon wants a bigger share of the global ad market. Now that they’ve eaten Borders’s lunch, Amazon wants to eat Google’s and Facebook’s lunch, too.
But how does this shake out, specifically, for authors?
A few years ago, someone in Amazon must have noticed that indie publishing was becoming just a bit too popular. In other words, more books were being published than the market could absorb.
A glut, in other words, of indie-published books.
This was back in the days when gurus like Joanna Penn were saying, “Everyone should write a book!” (That’s a bit like saying, “Everyone should start a rock band,” or “Everyone should start a corner restaurant.” It’s fuzzy economic thinking.)
I’ve noticed that Joanna Penn doesn’t say this anymore.
Amazon probably wanted to tame the irrational exuberance in the indie publishing space. (And this isn’t even taking into account all the scammy books from plagiarists and get-rich-quick artists.)
Amazon’s solution to the glut of self-published books: paid ads
For a long time, I figured that Amazon would start charging authors to publish, along with an annual hosting fee for every book on the platform. Not a huge sum, mind you–maybe $25 per year, per title. That would be a reasonable amount for any serious author. But the nuisance fee would eliminate the plagiarists and the get-rich-quick artists, at the very least.
But Amazon came up with a better idea: The company changed the algorithms on the website, and transitioned to a pay-to-play marketplace.
It’s still free to publish on Amazon. But now if you want to actually sell any books on Amazon, you have to buy ads. You can no longer rely much on organic discovery or also-boughts.
This has led to AMS ad inflation, and business opportunities for enterprising authors-turned-advertising-gurus, like Mark Dawson. It has also created opportunities for AMS ad aggregators.
Economics is inexorable–even for writers
It’s fine for Mark Dawson to sell a $749 course on advertising for authors. (A note of clarification is in order here: Despite my tone, I have a lot of respect for Mark Dawson. Mark Dawson is a sharp, ethical fellow. I took one of Mark Dawson’s other courses. The course I bought was worth every penny. If I were going to take a course on ads, I would take his course.)
It’s also fine for the ad aggregators to do their thing. There is inherently nothing dishonest about any of that. These players are all responding to market demands.
But the larger problem–the one that no one wants to talk about, really–is that more books are being published than the market can absorb.
The current bidding war over AMS ads is leading to pessimism in the indie author community, which is putting a damper on all that irrational exuberance of a few years ago.
Almost no one is now giddily saying, “Everyone should write a book!”
(By the way, I have a lot of respect for Joanna Penn, too. She has great insights on book distribution and marketing. But she was wrong about the basic economics of publishing.)
The endgame: balance
There will probably always be more books than the market can–or will want to–absorb. That’s the nature of the arts. But I would wager that as the irrational exuberance of indie publishing continues to wane, the imbalance will become less extreme than it currently is.
That will lead to a fall in Amazon Marketing Services PPC prices–at least for books.
In the meantime, though, Amazon is going to make a mint off many authors who will ultimately lose money on the AMS platform. These authors will not necessarily pull their books off Amazon, but they will cease to aggressively market them. They will also write fewer books in the future.
Many will resign themselves to day jobs–in perpetuity.
They will stop saying things like, “Everyone should write a book.”
This will all happen not because Amazon is evil…but because Amazon knows how to make money from supply-and-demand.
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