On the death of book publishers and other middlemen

Hot on the heels of Amazon signing publishing deals with authors, and thus doing an end-run around their publisher partners, another major e-reader company says it plans to do the same: Kobo is launching its own publishing arm and looking to sign deals with authors directly. All of this is more proof (as if we needed any) that the Internet is potentially lethal to middlemen. Does this mean that traditional publishers will soon be extinct? No. But it does mean that they are going to have to work harder to try to do what Amazon (s amzn) is already doing — namely, making it easier and more profitable for authors to reach their readers.

For months now, Amazon has been busy ramping up its publishing unit, which it beefed up earlier this year with the hiring of publishing-industry veteran Larry Kirshbaum. It has signed deals with popular authors like Tim Ferriss, as well as thriller writer and former CIA operative Barry Eisler, who turned down a $500,000, two-book contract with a traditional publisher to self-publish and then accepted a deal from Amazon instead. Although Kobo is a relatively small player in the U.S., it has a strong presence in Europe, and CEO Michael Serbinis says adding publishing services for authors is now “table stakes” for a digital-book distributor — which raises the possibility that number two player Barnes & Noble (s bks) could be the next to join the fray.

All that matters is connecting writer with reader

As I described in a recent post, Eisler said that what made the decision to go with Amazon easy was that the web giant promised to not only get his books to market faster — both in print and electronic form — but also offered to sell them at a lower price than the traditional publisher, and apparently (although the terms of his deal weren’t released) gave him a bigger share in the proceeds to boot. He told the CBC that he has been making “far more per unit than I would ever make with a legacy publisher, and I’m also selling the book in far more volume than I would have with a legacy publisher.”

Amazon executive Russell Grandinetti gave the most succinct comment about the new world that publishers find themselves in: a wakeup call that should be posted in giant letters in every publishing house and agency. In an interview about Amazon’s moves into signing authors directly, he told the New York Times: (s nyt)

[T]he only really necessary people in the publishing process now are the writer and reader. Everyone who stands between those two has both risk and opportunity.

Much like newspapers used to control the channels through which news flowed before the web came along, book publishers have always been the gatekeepers who stood between authors and their readers — for the most part, they determined whose books would be published, how much attention they got, how much they would be sold for, and so on. The web has disrupted that to some extent all by itself, but Amazon has poured fuel on the fire with its Kindle self-publishing platform, which has allowed authors like Amanda Hocking and John Locke to bypass traditional industry channels. Why wouldn’t an author want to sign up directly with the retailer who actually delivers their books to readers?

Amazon could find itself disintermediated as well

What’s interesting about Grandinetti’s comment, however, is that it doesn’t exclude Amazon itself — or other book retailers — from being disrupted. We’ve already seen what that can do to real-world booksellers like Borders, which had to enter bankruptcy liquidation, but Amazon and Kobo (which is part owned by Canadian book retailer Chapters Indigo) also have to prove that they offer something extra for authors too. Otherwise, some writers might decide to take a cue from Tim Pratt and use Kickstarter to finance their books and sell them directly to readers. Amazon gets a cut of Kindle sales like Amanda Hocking’s, but likely not as much as it does by signing an author to an exclusive publishing deal.

So what can publishers do? The same thing Amazon is doing: give authors what they most want and need. It’s a quick and painless way of reaching their readers — as many readers as possible, in as many different ways as possible. Also, make sure they are really adding value to that relationship with an author, not just counting on the former gatekeeper status to keep authors in their stables.

Simon & Schuster made an interesting move recently by offering its authors more sales data and other information about their books, as a way of providing something they couldn’t get elsewhere. That’s smart; many authors are looking for more of that kind of data, so that they can take charge of their own fates, instead of just waiting for a publisher to do everything for them. Amazon is also trying to add services for authors, like its @author program that makes it easier for writers to connect with readers. Those kinds of features are likely to become even more important selling points as books become more social.

It’s also worth noting that Amanda Hocking, who became famous for making millions by self-publishing her books for young adults on the Kindle, signed a deal with a traditional publisher earlier this year. In a blog post about her decision, she said that publishers can still provide some necessary things, even for a self-published author — including a strong editor, as well as some marketing muscle and the ability to help writers move from just being successful to being global superstars. Unfortunately for publishers, Amazon and other e-book distributors like Kobo likely have their sights set on providing most of those services too.

Post and thumbnail photos courtesy of Flickr users Frederic Della Faile and Marya