Following the ongoing word storm about the Amazon – Hachette fight is very frustrating for me because many of the participants are writers I admire. They are articulate, intelligent and thoughtful but so incredibly blind to the realities of the current situation that I want to pound my head on the desk. This blog post and accomanying discussion of Chuck Wendig’s ‘Terrible Minds’ site is all too typical – http://terribleminds.com/ramble/2014/08/01/discussion-why-is-self-publishing-trying-to-save-the-big-five/ . None of the participants seem to have noticed that there is a third force operating in the book-o-sphere – the so called Pirate sites, those operators who facilitate the distribution of perfect digital copies of books and make their money off of user fees or advertising or simply run these sites for the hell of it. I’ve seen estimates that over 50% of ebooks are distributed through Pirate sites. I can’t say how credible those estimates are because, well, they’re PIRATES!. Certainly, however, the number is not 0%. Factoring in this third force changes the picture radically.
The traditional publishers are value added remarketers, they take a raw product, add value to it and then copy, distribute and sell it. When copying and distribution were a choke point they were able to take revenue there but now that copying and distribution of ebooks require only a personal computer, an internet connection and a web page it’s not that simple. Amazon is a distributor that takes a finished product (yeah, I know they’re busting into publishing but let’s not go there), sells it and makes their money on retail sales. The Pirate operators are distributors who make their money (when they make money) from advertising and site user fees. And, like the Hydra, when one head is cut off a la Napster, another springs up. The key points here are; that there is today a viable business model that does not rely on profit from retail sales and is therefore able to undercut those models that do and that Amazon and traditional publishers are fighting for control of something that doesn’t really exist anymore. Amazon’s actual competition isn’t the publishing houses but the Pirate Bay and traditional publishers should fear the proliferation of small and self publishing service operations that provide services in editing, production assistance, graphics and advertising that are their real assets. Amazon will certainly survive this but I think only those existing publishing houses that adapt quickly will make it.