Amazon Tightens Grip on Printing
March 28, 2008; Page B4
Amazon.com
Inc., flexing its muscles as a major book retailer, notified publishers
who print books on demand that they will have to use its on-demand
printing facilities if they want their books directly sold on Amazon's
Web site.
The move signals that Amazon is intent on using its
position as the premier online bookseller to strengthen its presence in
other phases of bookselling and manufacturing. Amazon is one of the
biggest booksellers in the U.S., with a market share publishing experts
estimate to be about 15%. Amazon doesn't comment on sales.
News of Amazon's new policy was posted on several Web sites on Thursday, including Fonerbooks.com and WritersWeekly.com.
Print-on-demand is a rapidly growing printing
technology that allows publishers to quickly produce copies of books.
Instead of printing a large quantity months before a title goes on
sale, publishers can print copies in response to requests from
retailers or other customers.
The technique has been embraced by more than half of
the country's university presses and virtually all of the major
consumer publishers in the U.S. for some titles, said Albert N. Greco,
a professor at the Fordham Graduate School of Business who studies the
book industry.
"You can print and bind a 256-page paperback with a
cover in under ten minutes, which means publishers can replenish their
inventory within a few hours versus going to a traditional printer that
might need weeks to prepare the same order."
A number of companies offer print-on-demand services
to publishers, including Amazon's BookSurge unit, which it acquired in
2005, as well as rivals such as Lightning Source, a unit of closely
held Ingram Industries Inc. A spokesman for Lightning Source said the
company has printed more than 50 million books for more than 5,000
publishers world-wide since its founding in 1997.
Amazon's decision means that any of those publishers
who want their books sold on the giant Web site will have to use
BookSurge. Not only will that squeeze rivals like Lightning Source, it
will reduce publishers' bargaining power.
Publishers will "have to abide by Amazon's pricing,"
said Bob Young, CEO of Lulu Inc, a print-on-demand publisher based in
Raleigh, N.C. Mr. Young said he believed BookSurge's prices to be
"slightly higher" than other printers. An Amazon spokesman declined to
comment on that issue.
"A significant number of our authors do request for
their books to be available on Amazon," said Mr. Young, who hasn't yet
decided whether he will agree to Amazon's terms.
The move will likely generate significant profit for
Amazon, which has evolved into a fully vertical book publishing and
retail operation. Most recently, Amazon acquired audiobook seller
Audible Inc. Amazon also sells its own ebook reader called the Kindle.
"It's a strategic decision," said Tammy Hovey, a
spokeswoman for Amazon. What we're looking to do is have a
print-on-demand business that better serves our customers and authors.
When we work with some other publishers, it's not truly a
print-on-demand business." Ms. Hovey, who said Amazon began to inform
publishers of the new policy at the end of February, declined to
provide specifics. She said she doesn't consider the move an ultimatum.
Write to Jeffrey A. Trachtenberg at jeffrey.trachtenberg@wsj.com
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