Amazon to work directly with authors, bypass publishers

When costs are high and demand is low, it's time to cut out the middle man.

Published October 17, 201112:55 AM EDT2 minute read

When costs are high and demand is low, it's time to cut out the middle man.

That seems to be what Amazon is doing in their latest move to expand both their reach and influence as they will be publishing 122 books this fall directly from the writers' works. They're publishing program has been available for some time but this is the first time that they are actually threatening to do something with it.

To accelerate the move and bring credibility to the product, they hired veteran publisher Laurence Kirshbaum to run the program. Kirshbaum, 67. was CEO of Time Warner Book Group until 2005. He was hired earlier this year and began his duties in July.

Amazon's first direct book deal was with self-help author Tim Ferriss, while their most recent and highest-profile deal was last week when they announced a memoir by the actress and director Penny Marshall. The deal will be worth $800,000 to Marshall according to a source close to the matter.

The news is not sitting well with some current allies of Amazon. Publishers have been leaning more and more on the online retailer as the bread-and-butter brick-and-mortar stores are quickly falling away, leaving Amazon as the most attractive venue to sell books. Agents have relied on Amazon to generate both interest in their clients as well as direct sales. Now that Amazon will be working directly with authors, many agents and publishers are worred.

“Everyone’s afraid of Amazon,” said literary agent Richard Curtis. “If you’re a bookstore, Amazon has been in competition with you for some time. If you’re a publisher, one day you wake up and Amazon is competing with you too. And if you’re an agent, Amazon may be stealing your lunch because it is offering authors the opportunity to publish directly and cut you out. It’s an old strategy: divide and conquer."

Just as Google is criticized when its own properties and services rank well on the search engine, Amazon will be criticized when their own books are prominently featured on their website. Despite the affects this will have on the industry, two parties should be happier - authors and readers.