James Gill cites a report from Business Insider that claims publishers will eventually become dependent on Amazon as a result of its growing lock on distribution. He then draws the obvious implication for self-published authors:
“…if you’re a self-published writer, you are the content owner; you are the publisher. Imagine that–a distribution company making better deals for itself with authors and publishers.
Could that happen? Of course. Will it happen? Almost certainly, because Amazon has done it for almost every other product and content type they sell.”
I’ve heard this claim many times before, and I don’t dispute it’s something the doe-eyed Amazon-boosters ought to reflect upon. But Amazon will never enjoy the dominance formerly enjoyed by the “Big Six” paper publishers. The reason is simple, and it has to do with what economists call barriers to market entry, which have vastly changed as a result of the internet and ebook technology.
Barriers to market entry are fairly simple to understand. When anyone starts a business, he’ll need a certain investment to open shop. A lemonade stand is relatively cheap to start up: all you need is a table, lemons and a hot day. Hence, the barriers to market entry are low. Getting in the automotive manufacturing industry, on the other hand, is a tall order, requiring years of development, rare expertise and billions of dollars just to produce a single product.
The kind of money required to buy presses and hire the personnel required to run a publishing house makes traditional paper publishing closer to the automotive industry than the lemonade stand. But online book retailers are closer to the lemonade stand, since virtually anyone can open an online shop for next to nothing. Sure, you and I might not have the dough to go head-to-head with Amazon, but thousands of us doing a little online business will cut into its sales. More importantly, a titan like Google has the muscle to wedge itself into precisely this market on the back of its search engine whenever the pickings look good.
What does this mean for self-published authors? Well, it doesn’t preclude the possibility that Amazon will start squeezing you as its share of the market continues to grow (assuming it does). It’s just that it’s far less likely to happen in the case of ebooks because the wolf is always at the door when anyone can get into the online retail business.