Last Friday the Wall Street Journal reported Amazon has notified publishers that they must use the company's own on-demand printing facilities if they want their books sold on amazon.com.
Although Amazon doesn't give out its sales numbers, it's estimated that the company's market share of book sales is around 15%. This new policy is designed to strengthen its presence in other phases of the book industry.
In 2005 Amazon acquired its P.O.D. unit, BookSurge. BookSurge has numerous competitors, such as Lightning Source, a unit held by Ingram Industries. Since it started in 1997, Lighning Source has printed over 50 million books for over 5000 publishers worldwide. As a whole the P.O.D. industry has been embraced by over half the country's university presses and just about every major consumer publisher for certain titles. A 256-page paperback can be printed and bound in under ten minutes, allowing publishers to replenish their inventory within a few hours, versus weeks through a regular printer.
Amazon's new policy means all those books now have to be printed by BookSurge if they want to sell on amazon.com. According to the Journal, this will surely hurt rivals such as Lightning Source, as well as reduce publishers' bargaining power, because Amazon will set the price for each book, according to its own costs for printing. Bob Young, CEO of Lulu, Inc., another P.O.D. publisher, said he believes Amazon's prices are "slightly higher" than other P.O.D. printers. Amazon wouldn't comment.
According to Amazon spokeswoman Tammy Hovey, this is a "strategic decision" to "better serve [Amazon's] customers and authors." She does not view it as an ultimatum.
Anyone out there self-publishing with another company and wanting to sell through Amazon? Better check out this new policy.