The Self-Publishing Market Is a Lesson in Amazon Platform Dynamics

Author Solutions

Penguin Random House has sold off Author Solutions, its self-publishing platform the company bought in 2012.

Quartz:

Analysts told the Financial Times that Penguin Random House likely sold the company for a fraction of the $116 million it paid in 2012.

But whether driven by sinking profits or negative publicity, Penguin Random House’s exit from self-publishing is also an admission of defeat: The giant self-publishing market essentially now falls largely to Amazon, which already churns out an estimated 85% of self-published titles via its various platforms.

Self publishing is by far the most vertically integrated market Amazon operates in. Amazon is publisher, distributor, retailer and even the provider of the medium itself (the Kindle device). This could literally only go any further if Amazon would also be an Internet service provider. Amazon is using this uniquely dominating position to not only do what everyone els does but also to establish new, potentially network effects generating, services like Kindle Worlds.

What can you possibly do as a competitor in a situation like this?

Here’s a thought: Today came the news that Amazon is killing Shelfari, a social book reading network like Goodreads, also an Amazon company since 2013. The important aspect here is not that Amazon is killing a service where the company owns another one of a similar kind, but that the book publishing industry allowed Amazon to aquire not one but two social networks related to books.

Imagine, for example, what Penguin Random House would have been able to do in self-publishing if it would have owned GoodReads as well; or Barnes & Noble with its Nook e-reader integrating GoodReads.

Social, as it is community, communication and discovery, is always an entry point. Especially in a market as dominated by one company as e-books and self-publishing specifically. This market has still (maybe because of this constellation) weak discovery mechanisms.

This makes you wonder why no one has bought Wattpad yet, a popular self-publishing community, and wether the industry again turns a blind eye towards Amazon’s few weak points on the books front.

On the other hand the evolution of the online book market shows how far you can get as an online retailer by deploying genuine digital strategies.

The incumbents can not follow.

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