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Amazon's impact on publishing transforms the book industry

Amazon changed the way we publish, purchase and read books. Publishing experts said they expect more industry disruption to come.

It's been 25 years since Jeff Bezos founded Amazon as an online bookseller in his parents' garage. During the past 15 years, the company has used its enormous power to change not just how customers buy and read books, but how books are published as well. 

Book sales represent less than 10% of Amazon's revenue today, but that's still 10% of a massive annual income -- $280 billion and climbing. Publishing experts expect more changes on the way as Amazon applies its market power and data-driven decision-making to an industry where both factors tend to be in short supply.

A tradition of creative destruction

Though not every experiment Amazon undertakes results in success, some have profoundly disrupted the entire publishing food chain, from writer to editor to publisher. Amazon's impact on the publishing industry includes the following notable shifts.

  • The introduction of the first popular e-reader, the Kindle in 2007, ushered in a digital reading revolution. In 2019, 25% of the U.S. public read a book on an e-reader in the past year, according to the Pew Research Center.
  • In 2008, Amazon purchased Audible, a recorded book startup that took advantage of the growing capacities of smartphones to download and store data. Audible made it possible for people to listen to book recordings anywhere. Today, nearly 20% of people in the U.S. have listened to an audiobook in the past year, according to the same Pew Research Center survey.
  • In the long run, one of the most significant shifts may prove to be the rise of Print-on-Demand publishing. Amazon popularized Print-on-Demand services that made it possible for anyone to write and publish a book or e-book. Print-on-Demand books can be purchased in any country where Amazon operates, without taking on the inventory risk traditional publishers face.

In the last decade, Amazon championed the self-publishing model through CreateSpace, now called Kindle Direct Publishing. This move led to an entirely new publishing industry, including a few hits and millions of new titles. In 2019, the number of self-published titles reached 1.7 million, almost half of the more than 4 million titles published, according to Bowker, a book distributor.

Meanwhile, the technology means that few recent books ever go truly out of print. All that supply is making it increasingly difficult for books to attract attention. The average title now sells 200 copies in a year and 1,000 over its lifetime, according to Berrett-Koehler, a business publisher.

This might not sound like a great business opportunity, but Amazon found several ways to cultivate editorial power.

The limited Kindle Unlimited

Perhaps the biggest way Amazon expanded its editorial power is with Kindle Unlimited, Kindle's subscription library, which includes books published under Kindle's own imprints as well as self-published work.

The Kindle Unlimited platform is estimated to have around 3 million subscribers, but structural problems in the market may have curtailed its growth.

Bill Rosenblatt, founder of GiantSteps Media Technology StrategiesBill Rosenblatt

One reason is the nature of book rights, according to Bill Rosenblatt, founder of GiantSteps Media Technology Strategies, a media and content consulting firm. Unlike song rights, self-published book rights are typically held by the individual writer, which makes negotiations difficult. The five major publishing houses aren't interested in joining an Amazon-led initiative at this point, Rosenblatt added.

Another reason is the nature of an all-you-can-read pricing model. "Most readers don't buy all that many books in a given year," says Richard Nash, a New York-based publishing consultant and coach. "The clear advantage a music streaming service like Spotify has, in eliminating the need to buy a song every three minutes, is not so clear with a product you might buy 10 or 15 of in a given year."

Even so, Kindle Unlimited offers Amazon several advantages over selling by title.

Revenue is steadier. It is easier to convince readers to try new books when subscribers perceive they are making a free choice. And, the company locks in a self-selected group of voracious readers with Kindle Unlimited.

Many of Kindle's self-published books are in the fiction genre, mostly mysteries or romances. These parts of the book market have fans who know what kind of stories they like to read and writers who know how to deliver that specific story, whether it's a Regency romance or a cozy English mystery.

Jane Friedman, editor of the The Hot SheetJane Friedman

But Jane Friedman, editor of The Hot Sheet, an industry newsletter based in Charlottesville, Va., sees Kindle Unlimited primarily as a way for Amazon to sell and market its own books, she said.

Amazon publishes roughly 1,000 books a year under its own imprints, making it as large as one of the five major publishers -- but they approach it differently. "It's data-driven; it's not driven by the instincts of an editor," she said.

Kindle Unlimited is designed to show not only which books readers choose, but also which ones they stick with all the way through. Self-published authors and authors commissioned by Amazon's imprints who enroll their titles in Kindle Unlimited are compensated per page read, based on their share of a pool of subscribers' revenue. This gives Amazon unprecedented insight into how and what subscribers read. Such an enormous pool of detailed data about readers did not exist before.

More changes to publishing practices ahead

Ultimately, the window into reader behavior that Kindle Unlimited provides may be Amazon's biggest impact on publishing. This insight replaces the traditional gatekeepers -- agents, editors, reviewers -- with a more market-driven approach in which stories that are catching on are adopted and nurtured by Amazon. Think of it as Moneyball for manuscripts.

Kindle Unlimited enables Amazon "to make relatively inexpensive, data-driven decisions about what to acquire," Nash said.

This might sound like science fiction but it's already an established publishing practice in China, where most successful writers are discovered on online platforms, after work they post begins to develop a following.

"In China, now we have two major models," said Daikon Wang, a writer. "The first model is to write novels in websites like Jinjiang or Qidian, and if the novels become popular, then movie companies will reach out to you or to the websites. Secondly, some big companies, like Tencent, own complete industrial chains. You sign up with the big company, then they will popularize your novel, adapt it to comic, television, cartoon, movie, game … almost everything," she said.

Now a third model is coming, she adds. "Big companies hire writers to write novels, but the copyrights don't belong to the writers. Instead, they become the properties of the big companies."

About the author
Bennett Voyles is a Berlin-based business writer and a regular contributor for TechTarget.

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