David M. Brown's Blog

October 18, 2011

Instapundit’s concern about possibility that Amazon could become a “choke point” is misplaced

Filed under: Economics,Society and culture,Technology,Writing — davidmbrowndotcom @ 11:22 pm

“That’s a good point,” Instapundit Glenn Reynolds says in response to a reader’s concern that Amazon’s new publishing venture might be the first step in gobbling up major book-publishing. “I like Amazon, but if they become a chokepoint that would be bad. Right now their platform is very open to self-publishers and others, but if that were to change it would be a bad thing. There would probably be antitrust issues, too.”

I think that this concern is not warranted (except for the possibility of fedgov’s intervening, which it can do any time, for no good reason, against any super-successful company). What happens if Amazon stops being open to self-publishers, for example? Suddenly Barnes & Noble or some company we haven’t heard of yet has a chance to make a killing.

But Amazon gets a cut of the revenue of each copy of an author’s self-published ebook that it sells through its web site. Amazon’s marginal costs for set up and delivery are very low now that its system has been set up. I don’t see what Amazon would gain by shutting down a big source of revenue that will only grow bigger as more authors try out epublishing.

Part of the reason big legacy publishers are having trouble is that they’re not adapting, at least not quickly enough (or honestly enough, if the complaints of many authors about the current state of the book-publishing world are to be credited). The Apples and Amazons “adapt” by creating the technology and avenues that everybody else has to adapt to. If the great innovators become staid dinosaurs, their lapses only make things easier for the next upstart innovators.

The reader to whom Reynolds is responding wonders “when all the publishers are gone, who will publish the books critical of Amazon?” This concern is worse than overblown. It’s nonsensical–even impossible, unless fedgov ordains another USPS monopoly (United States Publishing Service). But fedgov can’t even make the postal monopoly stick any more.

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