Who fancies playing chess with Jeff Bezos?

Not exactly a pleasant thought, is it?

Bezos has once again shown that he is a formidable strategist. A Grandmaster.

I am, of course, referring to Amazon’s purchase of GoodReads, which was announced on Thursday.

Much has been written about the deal. (I’ve linked to the best articles below). Depending on which article you read this deal is either wildly important to the book business or totally inconsequential.

Either way, what is beyond doubt is that Bezos’s latest strategic move takes him one step closer to his main goal – to become the best online retailer in the world. He set out a strategy almost 20 years ago which he's revised only slightly over the years – always playing the long game.

Many asked why publishers didn’t think to buy GoodReads - despite the price allegedly paid by Amazon it wasn’t about not having deep enough pockets - as Nick Harkaway said on Twitter ‘they chose not to afford it. Different’.

After examining the board, Amazon made their move, a move that not only brings them a whole raft of immediate easy business wins but also removes one of their competitors’ few remaining tactical options from the game.

Amazon has been talking to GoodReads for 2 years. Let’s remind ourselves this is only a 6 year old business. And GoodReads fulfilled two basic tenets for Amazon. Namely, will this enhance Amazon customers’ experience? Tick. Will this close a door to a potential competitive threat? Tick.

The digital transformation of the industry, mostly driven by Amazon, has put publishers firmly on the back foot, making them sometimes seem reactive and scared to commit for fear of getting it wrong. The most stark difference between Bezos and the publishing industry? Bezos is playing a strategic game, moving slowly and relentlessly towards his goal, publishers are playing a tactical one. Just to rub salt in the wound despite what some commentators would have us believe, Bezos isn’t an evil genius devoting all his efforts to crushing the publishing industry - like any good Grandmaster he is playing half a dozen boards at once.

Personally, I think publishers care deeply about what they do, about readers and authors but they often seem to look inwards, concentrating more on their competitors (other publishers, as they see it) and less on truly understanding and meeting their readers’ needs. As Hugh Howey puts it in a comment on his own blog: "The day publishers approach their jobs by asking what they can do for readers is the day they turn it all around."

But God knows Amazon is a master at the PR game too. It doesn’t matter how many happy, shiny Amazon staff walk around with I HEART authors on their T-shirts, we know this is a conceit. They are simply pawns willing to be moved around at Amazon’s whim.

As is everyone else in the book food chain.

The true master stroke of Amazon’s strategy is to manipulate everyone by playing to their self-interests. Publishers happy to sell books through gritted teeth while they stand uncomfortably with their businesses clasped in Bezos’s hands.

Authors arguably get the best deal out of Amazon but they still reacted overwhelmingly negatively to the GoodReads deal. Will they leave en masse? Their anger has switched rapidly to realising it’s probably not in their best interests. So, no, I predict no mass exodus.

Now booksellers and libraries are allowed to watch the game played out from the sidelines at the same time as the rest of the industry laments their steady demise. Yet unwilling to act decisively to support them. In theory everyone understands the great need for both (not least to prevent an Amazon-only world), but unable to act strategically to make this happen.

Let’s look at Amazon’s tax avoidance. Did this prevent customers from buying their good value Xmas presents and having them delivered efficiently the next morning? No. Not if their uplift in sales is anything to go by. As consumers we are happily shopping online, buying 20p ebooks, using their apps and extolling their virtues at the same time as lamenting boarded up shops, multi-national domination and unattractive city centres.

Amazon strategically playing to our self-interest at every turn.

Our FutureBook digital census survey showed that, 72% of the 2500 book trade folk said they buy their ebooks most regularly from Amazon. At the same time as 58% saying they are concerned that the e-book market will become dominated by one or two global companies. So, as an industry we are, like all other consumers, allowing convenience, price and service to win over any long-term fears for our industry (or our high streets).

So strategy versus tactics and principles versus self-interest. Whatever your view, it’s hard to argue that Grandmaster Bezos seems to understand the rules better than anyone else and has strategically positioned himself for the endgame.

GoodReads/Amazon articles:

Announcement – http://www.goodreads.com/blog/show/413-exciting-news-about-goodreads-we-re-joining-the-amazon-family?auto_login_attempted=true

http://www.salon.com/2013/03/31/amazon_buys_goodreads_were_all_just_data_now/

http://entertainment.time.com/2013/03/29/amazons-acquisition-of-goodreads-execs-and-users-weigh-in/

http://www.magellanmediapartners.com/index.php/mmcp/article/exit_strategies/

http://www.the-digital-reader.com/2013/03/30/theres-a-reason-that-no-one-in-publishing-bought-goodreads/#.UVjb5b9g418

http://www.forbes.com/sites/forrester/2013/03/29/why-didnt-someone-else-buy-goodreads-before-amazon/

http://jwikert.typepad.com/the_average_joe/2013/04/goodreads-amazon-winners-and-losers.html

http://paidcontent.org/2013/03/30/the-deal-goodreads-shouldve-struck-hint-it-wasnt-with-amazon/

http://www.hughhowey.com/amazon-and-goodreads/

http://publishingperspectives.com/2013/04/ether-for-authors-goodreads-badreactions/

Comments

response

Decrying the Evil Empire of publishing while piloting one of its battle cruisers?

http://writeitforward.wordpress.com/2013/04/02/decrying-the-evil-empire-...

Size and niche matter

Peter Turner's picture

One of the things that always concerns me how often “publishing” and “the publishing industry" are used as a synonym for the Big 5/6 trade publishers. There are, of course, thousands of small and medium-sized trade publishers, as various at Chelsea Green, Chronicle Books, Sourebooks, Dover, Graywolf, and on and on. And the way in which the Big 5/6 are effected by such events as Amazon’s purchase of Goodreads is profoundly different from how it might affect the rest of the publishing world. For many nonfiction only publishers, for example, the move is largely irrelevant, except to the extent that the threat to the Big 5/6 might affect them secondarily. And conversely, for smaller publishers—who tend to know their readers better, even often selling direct—the disruptions facing the big 5/6 offer opportunities that aren’t there for the largest publishing corporations. 

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