For the past three weeks or so a lot of digital ink has been spilled weighing the pros and cons of Amazon's announced decision to require publishers to store POD titles with BookSurge if they want Amazon customers to rely on 24-hour shipment for fulfillment on demand rather than from inventory.

Let me say at the outset that there is a lot more here than meets the eye – and in my opinion under-utilized market forces that can restore confidence among publishers are still alive and well, and need to be dusted off and activated. Amazon's move may represent opportunity rather than threat.

What is clear so far is that conglomerate and mid-range publishers are not seriously affected by the Amazon move since very few rely on POD for book-at-a-time fulfillment; rather they follow demand printing and short run strategies. Nonetheless it is known that Amazon had been pressuring and/or negotiating with selected publishers to commit their pod lists to Book Surge.

It also seems to be the general consensus that along with this requirement publishers are having to negotiate unfavorable arrangements and uncertain quality without the option of a competitive choice or else place titles, at addtional expense, with more than one POD printer to gain the distribution advantages that might accrue.

Those who are – or will be – affected are smaller publishers, self-publishers and author-publishing services who have relied both on not having to maintain inventory and also on the shorter discounts they could offer, making it possible to keep their retail prices competitive or to increase their margins while absorbing the increased unit cost of print on demand. Of course, at this writing I have no idea who is in or out. Many are complaining, few are talking.

For the demand publishing community the wake-up call is that there are other online channels and retailers to which they can direct their customers – Barnes and Noble is probably the best positioned because of their full service B&N.com web site as well as their network of stores.

B&N provides the same transparent 24-hour shipping service to its online customers for any titles placed with the Lightning Source. POD publishers who no longer have the "order now" status with Amazon can be referring customers to B&N instead of to Amazon. Other retailers have an opportunity here to step into the breech.

There are at least a half dozen viable online retailers in addition to Amazon who can also create "in stock" arrangements with Lightning Source. There are at least a half dozen other significant digital demand printers who also serve as repositories for the title libraries of demand publishers or for long tail lists of conventional publishers. Online retailers should also offer sales fulfillment arrangements with these other POD printers.

In my opinion the publishing industry trade associations  – PMA, SPAN, ASJA, Authors Guild, AAP, AAUP,ABA, BISG – should create a working committee to develop a best practices code for keeping the internet marketplace open to POD fulfillment and to facilitate for other online retailers and digital demand printers who want to open up sales opportunities similar to the one that Amazon had been offering.

I think it would be a more efficient expenditure of funds for legal advice to activate such a group than going to court to sue Amazon.

There is no doubt in my mind that Amazon is improperly bundling its wholly owned printing service by limiting non-inventoried 24-hour POD shipment to publishers who place titles with Book Surge – especially as it is commonly known that they are doing this selectively and that they continue to drop ship direct from digital printers anyway when they need to.

I also think we don't have a fair trade situation in the retail distribution of POD titles generally. I am told that different kinds of deals are being negotiated with different publishers by Amazon that are not justified by variations in cost or other logistic considerations. Whether that is in fact so is hard to verify since there is no communication here. Nonetheless it is the demand printers like Lightning Source who determine the efficiency of service, not the small one-title or mid-range many-title publisher.

While Amazon remains opaque and elusive after a brief effort to explain itself and respond to the explosion of negative reactions from the publishing community –  I do not believe they are immune to market forces nor to the benefit of maintaining good relations with the people who produce the books they sell. (Of course I don’t have any evidence of this at the moment, since from what I have been able to discover they have been cherry-picking their publishing targets for BookSurge and make no plans public.)

For the moment they have the upper hand, earned by their success in building a fabulous marketing and sales channel for books, although they have been wielding it crudely and unilaterally. With the major exception of bundling their own printer selectively, their moves are within their rights to determine who they will do business with, what discounts they are willing to pay, and now they will ship.

The most efficient antidote is to activate immediate market alternatives such as I have suggested above. There are also longer term strategies. For example, Michael Cairns writes on his blog (April 1 http://personanondata.blogspot.com):

"Perhaps it is time for publishers to be more aggressive in becoming retailers as well as content producers. If so, it’s not as simple as setting up a store front that looks like a mini-version of the Amazon bookstore (obviously) since no one would switch. However, publishers do have the direct relationship with the author and can use this exclusivity to build a more robust presentation of the content. On Amazon you get the Buick version but on the Publisher site you get the Cadillac. None of the added or supplemental content would be made available elsewhere. What that extra content would be I don’t know. Maybe every author is twinned with an additional writer and site designer that builds/creates websites focused on the authors work but with far more expansive material about the works, process, background details, audio, video etc., any of which could be purchased by a consumer. This becomes the new marketing and promotions approach or the way to spend money that is traditionally allocated to print advertising, book tours and launch parties."

As Tim O'Reilly said recently, "Amazon has, so far, created huge value for the publishing ecosystem. Now, as they become more powerful, they need to be especially watchful that they don’t irreparably damage an industry on which they, too, depend."

In the past three weeks or so I have spent a fair amount of time networking with trade association people, industry analysts, distributors, wholesalers, publishers, digital demand printers and, yes, a few go-rounds with Amazon's Director of Corporate Communications, Patty Smith (psmith@amazon.com), until she fell silent.

In fact, falling silent seems to be the default position for the main actors in the demand printing and distribution chain. Until now, Amazon's powerful presence and occasional arbitrary moves had by and large been viewed in the industry with tolerant appreciation for the value it has added to the reach of booksellers and the search of readers.

The new silence is a self-imposed defense by major players in the distribution chain who have just seen how Amazon can wield its power at will and threaten the many business models built around its marketing gateway. Amazon sees it differently - as a reasonable move to improve efficiency and customer service.

Our trade organizations should rise to the occasion and collectively seize the initiative to activate marketplace options for an industry that seems for the moment frozen in fear, anger or frustration.

Posted by: Eugene Schwartz, Editor-at-Large

Conventional, self publisher, author services, subsidy press, or vanity press?

We are once again challenged to define what makes a publisher a “legitimate” publisher by the recent dust-up – as yet unresolved – created by the Romance Writers Association’s disqualification of Tsaba Press authors for its award competitions. It did so because it decided the Press is a “subsidy” house.

This writer is satisfied beyond doubt that Tsaba is the archetype of a small independent commercial publisher that fulfills all of the requirements for such a classification. It is neither a vanity, self-publishing or author-services enterprise. It does not charge authors a fee to be published. It is accepted by the Library of Congress for cataloging in publication (which does not accept subsidy publishers), and it is distributed by STL, the largest Christian publishing distributor in the U.S.

So, what is the problem? It may rest in the democratization of the industry due to technologies that have made it easy for thousands of new publishers to come on line each year and hard to identify their business standing.

There was a time, say twenty five years ago, when the book industry recognized in the main three kinds of business models: conventional publishing, self-publishing and vanity publishing. These in turn could be grouped as top tier commercial publishers (the “big ten” with revenues of over $500 million in today’s dollars) , second tier (the next 750 with revenues of over $50 million), and some 10,000 independents, non-profits and vanity with revenues from $50,000 to $50 million.

Vanity publishing was a no-no, and still is, as far as the commercial book industry is concerned: a no-no because the business model exploits authors who seek a commercial market by implying commercial outcomes that they can’t deliver, and by requiring large investments in pre-press and first printings with no screening for literary merit or prospects of reaching any market.

Self-publishing was, and is seen by some to be in a gray area of legitimacy because of the lack of an arms-length risk investment by a third party entrepreneur and of an editorial quality-control gateway that will critique an author’s manuscript without fear or favor.

The up-side that tilts self-publishing on the side of legitimate commercial publishing is that the self-publisher often engages professional editorial and design outsources, risks an investment and takes on promotion and marketing with the intention of commercial success, or the expectation of absorbing losses, and with full knowledge that it depends on his own promise . Occasionally a self publisher will also build a diversely authored publishing list around his or her titles.

Both self-publishing and vanity publishing are variants of “subsidy” publishing, along with author investments and partnerships that otherwise conventional, third-party publishers will occasionally make to bring costly works with limited sales potential into the market. These “subsidy” models, however, do involve host publisher risk, as they require the full devotion of the publisher’s infrastructure, and they also reflect upon the quality of the publisher’s overall list.

Now, in the era of electronic and demand printing, the barrier to entry has lowered substantially – it is possible to bring a title into print electronically with virtually no infrastructure investment or inventory – sell first and print later.

As a result, a significant industry niche has emerged in the form of author services or author-driven publishers such as Author House, iUniverse, Lulu, Book Surge, Infinity, XLibris, to name but a few. Their business models offer authors a complete publishing service at low cost, using the sell first print later model. They do provide a legitimate marketing and internet distribution model which is not exploitive. They have provided logistical backbone to the thousands of aspiring author/publishers who enter the lists each year, using professional outsource consultants and services, and joining PMA, SPAN or the many regional independent publishing groups for support and education.

They contribute to the flood of some 200,000 or more new titles published each year. (As staggering as this figure may be, good books do emerge and often later get picked up by conventional publishers. They also win book awards from time to time.)

So, one imagines that the Romance Writers Association, as sponsors of the RITA and Golden Heart awards, for published and unpublished writers respectively, would be concerned over how to screen in advance whether candidates had passed professional muster in the industry.

The RWA criterion for entry is that “Books must be published by a publisher that is a non–Subsidy, non-Vanity Publisher. An eligible entry must meet these criteria:” With so many new and therefore relatively unknown publishers entering the lists each year, an entry’s provenance may not be self evident relying simply on the entrant’s claim. So, in the case of Tsaba, RWA asked for backup demonstrating they Tsaba was, indeed, not a vanity of subsidy publisher.

Tsaba submitted a copy of its boilerplate contract which included the traditional provisions requiring authors to cover the costs of any artwork or additional manuscript copies, indexes, author changes to proofs, and revisions to a new edition if the author was unable or unwilling to provide the revision.

RWA classified Tsaba as a subsidy publisher on the basis of these provisions. A quick trip to the Authors Guild Model Trade Book Contract and Guide would have confirmed that provisions such as these are part of every standard publication agreement.

Tsaba’s grievance, beyond having its romance authors disqualified from competition, is that to be deemed a subsidy publisher by a reputable professional organization is demeaning to its business standing and its ability to recruit authors. As I have shown, given the way “vanity” or “subsidy” publishing is viewed by the industry, RWA clearly has good reason to impose its filter. Having exercised that right, RWA also has a responsibility to exercise it prudently and fairly. It does not appear, on the surface, that they have done so.

Various appeals have been made to RWA to reconsider its designation of Tsaba as a subsidy press, including one by this writer in behalf of ForeWord Magazine. It will be interesting to learn of their response when it is forthcoming.

Posted by: Eugene Schwartz, Editor-at-Large