Retail giant Amazon.com lost out big time in the auction for Amanda Hocking's new series. Veteran publisher St. Martin's Press won the auction for her series with a bid of $2 million plus royalties.
Amazon's bid was higher but reports indicate that Hocking and her agent were unhappy with the terms and potential difficulties. Amazon wanted Kindle exclusivity and brought in Houghton Mifflin on the bid to handle the print edition - in an effort to place the book in retail chain stores and indies.
Insiders were concerned that Barnes & Noble could still banish the book from their stores, ramping up their game of hardball with competitor Amazon.com.
The bid by Amazon marks a disturbing new entry into the publishing game. They've offered before on self-published titles, bringing them into pro-editions with their Amazon Encore line but this is the first time they've participated in a rights auction against the major publishing houses.
Like Wal-Mart or Apple have done in the music industry, a move like this from Amazon could spell trouble for the book industry - Amazon may win.. but the customer will lose.
Currently, almost all titles, and certainly major bestsellers are available to retailers equally, on essentially the same terms as everyone else gets. Yes, companies like B&N or Amazon get better discounts from the publishers and distributors based on their sales volume but the difference is not massively significant in terms of the bottom line. Amazon and others give massive discounts to the customers on new bestsellers but they do so by taking a loss on the sale.
Amazon's entry into the publishing side of the equation (in a major role) could result in new, potential bestsellers, being available "exclusively at Amazon.com" for ebooks - throwing an ugly wrench into the traditional retail models for publishers and booksellers.