What will happen when Amazon grows up? At the moment the Seattle Godzilla is still firmly entrenched in adolescence. Revenues may be massive but profit remains a shaky concept and too much emphasis is still placed on disruption. Even if it no longer seems all that disruptive any more.
Above all, the self publishing revolution, which was created by Amazon and has been a crucial stick in their fight with traditional publishers as it has given them a vast reserve of cheap books, is now beginning to feel like a quite mature and established area within publishing. Like almost all revolutions, it has heralded a great deal of change but hasn’t been quite as radical as it might once have seemed.
However, it would seem that Amazon, by playing hardball with Hachette, are banking on self publishing to continue to grow significantly and therefore to continue to eat into traditional publishers share of the pie.
Certainly, given how rapidly the rate of growth of the ebook market has slowed, it would seem that Amazon’s dominance of the publishing industry isn’t going to grow all that significantly in other areas.
If however self publsihing does not continue to grow as it has, then Amazon are wasting vast amounts of potential revenue in a meaningless war over territory. They are also running the risk of alienating authors and readers – the very people they’ve done such a brilliant job of befriending.
It is impossible to calculate the real cost of sale to Amazon of an e-book. However given how hard everyone needs to fight for internet real estate, it is undoubtedly not nothing. E-commerce is expensive. Bestselling books priced at less that a dollar are a negligible revenue stream for Amazon. Perhaps more importantly they are a waste of some of the internet’s most valuable real estate.
There are no pound shops on Bond Street and Amazon’s interest in giving away loss leading product will wane when there is little market growth to be derived from it.
So, the big question is, are there big transitional battles still to be fought, or have we arrived at the new paradigm? Amazon’s whole raison d’etre is based on being the most aggressive proponents of the new on the planet, so the one thing we can say with some certainty is that they may well be the last people to be able to spot that we may (thank god) have stopped living in interesting times.