Diversification is good. Amazon’s market share must be kept in check. This is something self-published authors and the Big 5 publishers seem to agree on. Self-published authors stress the importance of placing titles with every available distributor, while publishers and their pundits worry about how much of the book market Amazon currently controls. If these two parties agree, they can’t possibly be wrong, can they?
Not so fast.
There are costs to diversification. The greatest cost is the loss of impetus for change. If we celebrate diversity simply for diversity’s sake, that means we will publish with anyone, no matter what. So our eggs go into and reward shitty baskets.
Discrimination is an ugly word when it comes to people, but it is an absolute necessity when it comes to markets. As self-published authors, we are the customers of retail and distribution platforms. We are the customers. We agree to pay ~30% of our earnings in exchange for the delivery of our goods. We are also paying for a reader review architecture, technical infrastructures, recommendation algorithms, customer service for our readers, and various other services.
We are not paid a royalty. Royalties are doled out by publishers or producers who provide creative inputs. What we offer is a fully-constructed product ready for sale. We are publishers. Every distributor we do business with lures us in with their payment splits, user base, and merchandising opportunities. We pay them for these services. They aren’t paying us for manuscripts.
Grasping this is essential to understanding the problem with indiscrimination. Distributing e-books to every market or retailer, no matter what, is the exact same thing as purchasing all products in a certain retail category. It’s the same thing as giving a dozen candidates one vote each. There is no market improvement without discrimination. There is no signal that some policies are appreciated while others are abhorred.
What the diversity crowd is suggesting is that, presented with a wide field of products with varying prices and build qualities, we should elect to buy all of them. Spread our dollars evenly. That is not competition. Competition is the existence of various markets, not our participation in them. It is our choice to participate in only some of those markets that gives force to competition.
Calls for diversity are really calls for indiscrimination. Again, this is awesome when we’re talking about social diversity, but not when we’re talking about economic diversity. If there’s a basket that pays twice as much in exchange for voluntary exclusivity, I’m going to go with that basket and watch the other weavers shore up their offerings. When conditions improve elsewhere, I’ll move my eggs back. This is the beauty of digital eggs: They are unbreakable, and I can lay an infinite number of them.
Most importantly, with the click of a button, I can move my eggs to any basket anywhere in the world. This is a critical point to grasp—and it is the reason that no retailer can amass such a lead that they can then abuse their customers. Remember: We are the customers.
Right now, most self-published authors put all their marketing weight behind Amazon and their KDP service. Links to books are usually Amazon links. Shared reviews are Amazon reviews. This one company’s lead perpetuates itself. But imagine what happens if Amazon increases the distribution fee we pay down to 80% from the now very reasonable 30% (remember that these aren’t royalties). The fear seems to be that Amazon might in the future leave us with as little profit as publishers do today. Ignoring the strangeness of this fear, let’s look at how tenuous a market these basket weavers hold:
Amazon’s e-book market share has plummeted from 90% to something around 50% – 60% in just a handful of years. For a parallel, look at how Google’s Android OS overtook Apple’s unbelievable dominance in smartphone operating systems in just a few years. Or what became of MySpace, Internet Explorer, Yahoo, and AOL. No lead is safe. You could start with an absolute monopoly today, crack the door just a little, and someone is going to kick that door in and raid your fridge.
Why? Because if a market leader abuses their position, authors will immediately switch to sharing iBookstore links or Kobo links to their published works. All promotional energies will move to another digital basket. We will upload somewhere else first and point every customer in that direction.
I get emails from readers asking where they should purchase my books so that I earn the most. You don’t think every author and their mother will be blogging about which company to move to if Amazon changes their rate? You don’t think readers will care? Millions of customers will change their buying habits overnight. Again, ask MySpace how quickly eggs can jump from basket to basket. All of these digital basket weavers—the retailers and social media platforms—live in constant terror of the fickleness of consumer choice. And that’s a good thing.
I don’t feel bad for companies that go kaput on the basis of customers exercising their free choice. I’m not a fan of diversification for diversity’s sake. That would mean supporting badly behaving companies because it’s nice to have some variety. This is one of the primary arguments against allowing Amazon to have too much market share: “Sure, they are awesome today, but what if they become less awesome tomorrow? We should support as many less awesome companies as we can right now, just in case.”
I have no problem going all-in if a company is making decisions that I believe in and support. I can move my eggs with the press of a button. These calculations are vastly different when you own the rights to your eggs, and those eggs are digital.
Mark Twain’s Pudd’nhead Wilson said it best: “Put all your eggs in one basket — AND WATCH THAT BASKET!”
I love this sentiment. Especially in a day where my eggs can’t break, where I can print or have a computer spit out an infinite number of them, and where thousands of weavers are sitting around, fingers on keyboards, able to concoct new baskets the moment an industry leader screws up. As for diversity? When we have a number of companies all fighting to pay artists a fair wage and charge customers a fair price, spread the love. Those are the only baskets I’m interested in. Offer me that, and you can have my eggs.