Weekend Mix: Newest Story in the Book

January 17, 2020

When it comes to its video streaming platform, Amazon has not been afraid to go up against the major studios and networks in writing big checks to lure A-list talent for its own original shows, even as it continues to license programming from those same studios and networks to fill out its library.

When it comes to books, however, Amazon has been far more cautious in its approach to original content.

While Amazon Publishing as 16 imprints in the U.S. churning out books, short stories and e-books, few of the authors it publishes had track records on the best-seller lists before signing with Amazon.

One reason for the difference is Amazon’s relative position within the two markets. It’s the 800-pound gorilla in the bookselling business, particular in e-books, where it controls the dominant publishing platform. Any move it makes there that could affect its competitors, on either the retail or publishing side, is likely to draw unwelcome scrutiny from antitrust regulators.

In video streaming Amazon is a player, but by no means the largest, a crown that still belongs to Netflix. It’s more second banana than 800-pound gorilla, and not in a position to affect the overall competitive structure of the market.

There is also a difference in the role that exclusive content plays in the two markets. Exclusive original programming has become the sine qua non of the video streaming business, as everyone scrambles to sign up and hold onto subscribers.

Retail exclusives have not traditionally been a feature of the publishing business. And, while Amazon does not set out to create exclusives, apart from certain types of e-books, many brick-and-mortar retailers, including Barnes & Noble, refuse to carry Amazon-published titles, turning them into de facto Amazon exclusives.

Up to now, few front-list authors have wanted to risk hardcover sales by signing with Amazon. But as the Wall Street Journal reminded us this week, that is starting to change.

Perennial best-selling author Dean Koontz is scheduled to release his first full-length novel under a publishing deal he signed with Amazon last year (he released an e-book collection of short stories through Amazon in November that racked up over a million downloads). In an interview with the Journal, Koontz acknowledged the risk with a novel, but weighed it against the changing nature of the business.

“Maybe I won’t be in some stores or make the New York Times best-seller list, but I’m willing to take that risk and I think we’ll sell more books in all formats,” he said.

Koontz isn’t the only best-selling author to take a chance with Amazon. Crime writer Patricia Cornwall is currently working on her second novel under a two-book deal she signed with Amazon in 2018.

Amazon itself, meanwhile, is getting less bashful about its ambitions.

Amazon Publishing is “aggressively hunting big-name authors,” VP Jeff Belle told the Journal, and is willing to “write checks for great content.”

How Amazon’s thrust into best-selling territory will play out remains to be seen. Cornwall’s first Amazon release sold poorly in hardcover, after earning generally poor reviews. But brick-and-mortar retailers may not be able to sustain a boycott on all Amazon-published titles much longer.

New Barnes & Noble CEO James Daunt suggested last month that the chain may revisit it’s current blanket policy against Amazon titles.

Koontz has over 100 book titles to his name, and has sold over 500 million books worldwide over the years. That’s a lot of sales to forgo to make a point.

Publishers are also warily eyeing Amazon’s moves.

For many publishers, Amazon is already their largest and most feared customer, and could soon become a major competitor as well. And as the studios were nearly too-late to discover with Netflix, having your best customer as your biggest competitor can be very awkward.

Also expensive. The studios are now pouring billions into building their own direct-to-consumer content and distribution platforms, in part to counter Netflix and its ilk, including, perhaps not incidentally, Amazon Prime Video.

As one unnamed senior exec at a major publisher said of Amazon, “They are playing a long game with a lot of authors, and yes, it worries me.”


End of an era

Universal Pictures and Warner Bros. announced this week they are forming a joint venture to handle DVD and Blu-ray distribution for both studios in the U.S. and will split distribution duties overseas.

The move is designed to save costs as sales of physical media continue to deteriorate. Disc sales decline 9.4% in 2019, to $5.9 billion, and are down by nearly 35% from 2011.

The move also comes as both studios are pouring millions into rolling out their own direct-to-consumer digital distribution channels, heightening the need to cut costs elsewhere.

In another sign of the times, the Entertainment Merchants Association (EMA), which began life in VHS days as the Video Software Dealers Association (VSDA), this week officially changed its name to OTT.X, which stands for Over The Top Exchange.

“The new vision positions the organization to more broadly support the business of bringing audio-visual entertainment to the consumer through all OTT means, including TVOD, SVOD and AVOD,” the group said in a press release. “The organization will support digital retailers, channels, content providers, networks, platforms, and MVPDs.”

Old-timers (like me) might remember a few over the top VSDA shows from back in the day.


Notable

Outfoxed

Speaking of name changes, Disney said this week it is changing the name of the 20th Century-Fox movie studio it bought last year to just 20th Century Studios. The move is an apparent effort to erase any association with the parts of Fox Disney did not buy, mainly Fox Television, which includes Fox News. Can’t imagine why you’d want to shake off that association.

MLC names CEO

The Mechanical Licensing Collective, the agency created by the Music Modernization Act to administer the new blanket license for mechanical rights, named long-time music industry exec Kris Ahrend to be its first CEO. With less than a year until the law’s deadline for compiling a comprehensive database of mechanical rights from the chaos of the music industry’s archaic bookkeeping, Mr. Ahrend has a job of work ahead of him.

Terminated

Who says the music business has nothing to worry about from artificial intelligence? iHeart announced this week that it is cutting more than 50 jobs, including many DJ jobs as part of a restructuring that “takes advantage of the significant investments [the company has] made in technology and Artificial Intelligence.”

Closing the harbor

Former VP and current Democratic presidential front-runner Joe Biden said in an interview this week that Section 230 of the Communications Decency Act should be revoked “immediately.” The provision provides a safe harbor for technology platforms from liability for content posted by third parties. But it is increasingly seen as a legal hurdle to forcing Facebook and other UGC sites to do more to limit the spread of fake news and violent content. “The idea that it’s a tech company is that Section 230 should be revoked, immediately should be revoked, number one. For Zuckerberg and other platforms,” Biden said. “It should be revoked because it is not merely an internet company. It is propagating falsehoods they know to be false.”