The politics of domination

Peter Kilborn | 03/12/2010

Increasingly the future of digital publishing is being dictated by three or four organisations – Google, Amazon, Apple and maybe Microsoft - with a clear wish to secure market domination. It is not necessarily the same market they want to dominate, but the tactics employed are similar. The quandary for publishers here, as elsewhere, is how to deal with these so-called ‘frenemies’.

Publishers have something all these organisations want or need - access to content – and this makes friends of them. What they do with content and the terms on which it is licensed is liable to make them enemies.

Amazon and Google, in particular, are two companies with very different objectives and strategic visions. Amazon has chosen to force the market to its will: setting proprietary standards for Kindle, trying to impose pricing on the market, creating barriers to print-on-demand sales with BookSurge, developing an acquisition strategy which eliminates competition rather than produces gain in market share. Its ‘defeat’ by Macmillan US in the last couple of weeks in the matter of pricing of e-books still leaves it with higher per unit revenues than before.

Google has repeatedly denied any wish to be a bookseller. As we noted last time its altruistic-sounding mission is to ‘organise the world’s knowledge and make it available’. But despite its famously hippyish origins and working philosophy, Google exists to make money. It may not intend to make it out of selling books (not too much, at any rate), but it certainly intends to make it from dominating the market for search and the related advertising revenues; and that’s why it believes it can justify the cost of digitising all those books.

Amazon uses acquisition, Google its confessedly illegal digitisation of out of print but in copyright library books, as landgrabs to better their negotiating position when securing the flow of crucial content in the future. No wonder publishers are afraid.

This is the last in this series of blogs. In the six months or so since it began, though most of the digital action has been in America rather than in Europe, we have seen some critical changes in the landscape: the emphasis moving away from Kindle and other e-reading devices, now it seems largely commoditised, and a growing acceptance that multifunctional devices such as smartphones or the iPad are the way digital consumption is moving; seismic upheavals in the UK retail sector; the arrival of Apple as a potentially significant player in the future. What we have not seen here is spectacular growth in e-reading as an alternative to book-reading. We have not seen any sign of payback for publishers; nor have we seen much in the way of dramatic publishing initiatives. With hard times still here and still ahead, one wonders whether the industry is beginning to tire of its new toy.

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