Friday, October 14, 2011

Exclusive Deals Exclude Consumers, Threaten Publishers & Stores

Barnes & Noble is removing 100 graphic novels from its store shelves because the books’ publisher, Time Warner, Inc., signed an exclusive deal with Amazon to make the titles available for Amazon’s new Kindle Fire tablet.  B&N says it never has done this before.

Is this the beginning of a war amongst booksellers?

Amazon, in the past couple of years, has signed authors to sell books exclusively with them, meaning other sales outlets can’t sell them. And now Amazon is inking high-profile authors such as Hollywood’s Penny Marshall (last week) and Timothy Ferris (last month), who wrote the 4-Hour Workweek.  

So what do all of these exclusives mean? It’s bad news.

Here’s why:

First, if there are fewer competing sales outlets the price of a book will remain artificially high – bad for the consumer.

Second, if you’re an author and consumers can only get your book from one outlet it is likely you won’t sell as many books than if it was available elsewhere – bad for the author.

Third, any exclusive for Amazon means B&N and independents lose out.  We all want bookstores to survive so anytime a book can’t be purchased in a store there is a chipping away of the brick and mortar business – bad for all.

Fourth, if it gets to the point that you can only buy an e-book from a single vendor and as a result, must use its exclusive reading device, we’ll create separate societies of haves and have nots – we all lose.

So why do people sign exclusive deals with Amazon?

The authors are promised special marketing and are given favorable terms, so they are convinced it will work out.

Because it’s still news to do an Amazon exclusive as a big-name author, the author gets some PR out of the deal.

The authors are possibly misinformed on how many books Amazon can sell for them.

Traditional publishers got too greedy and haven’t adjusted to doing special deals for authors who can otherwise leave for perceived Amazon riches.

Amazon will do what it takes to kill book stores and then printed books, so it will sign a big author and even sell the books at a discount, using it as a loss leader. Amazon wants more customers and for them to shop online for more things. It also wants to win the e-reader wars and any incentive it can give to get people to buy a Kindle will not be missed.

Now, there is one good thing to come from exclusive deals.  They will force publishers to do things differently and give more favorable terms to authors they don’t want to lose.  But the more Amazon publishes books, the more likely stores will close, fewer printed books will be sold, book prices will rise, and literary agents will move closer to extinction.

Brian Feinblum’s views, opinions, and ideas expressed in this blog are his alone and not that of his employer. You can follow him on Twitter @theprexpert and email him at He feels more important when discussed in the third-person.

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