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Digital Self-Publishing Promoted by Amazon and Its Kindle e-Reader

Posted Jun 08 2010 12:00am

Information technology has caused large-scale disintermediation in a number of industries. The term refers to the process of elimination of middlemen previously interposed between buyers and sellers. Older readers may want to ponder for a moment their visits to record stores that have disappeared and been replaced by iTunes. Ditto many of the travel agents. Similarly, retail books stores are in serious trouble, having been slowly replaced by web-based booksellers like This latter company also pioneered the first successful wireless reading device, the Kindle. We are now seeing the successful debut of a competitor to the Kindle in the form of Apple's iPad. A recent article discussed how the success of Kindle and iPad is changing the book publishing industry (see: Vanity' Press Goes Digital ).  Below is an excerpt from it:

Much as blogs have bitten into the news business and YouTube has challenged television, digital self-publishing is creating a powerful new niche in books that's threatening the traditional [book publishing] industry. Once derided as "vanity" titles by the publishing establishment, self-published books suddenly are able to thrive by circumventing the establishment. Kindle Digital Text Platform lets publishers and writers upload books for sale on, and the e-books can be read on Amazon's Kindle e-reader or other devices that support Amazon apps. Starting later this month, Amazon will give 70% of the price of the book to authors. PubIt! system , coming this summer, lets publishers and writers upload books to Barnes & Noble's online e-bookstore, which can be read on the company's own Nook and other devices that support its format....Print and digital self-publishing company publishes approximately 20,000 new titles each month....Fueling the shift is the growing popularity of electronic books, which few people were willing to read even three years ago. Apple Inc.' s iPad and e-reading devices such as Amazon's Kindle have made buying and reading digital books easy. U.S. book sales fell 1.8% last year to $23.9 billion, but e-book sales tripled to $313 million, according to the Association of American Publishers. E-book sales could reach as high as 20% to 25% of the total book market by 2012, according to Mike Shatzkin, a publishing consultant, up from an estimated 5% to 10% today.

I am generally enthusiastic about the process of disintermediation, more properly referred to as reintermediation. The process actually involves the substitution of one set of intermediaries with another. The travel agents of prior times have been replaced by the IT specialists who design and support Expedia. For Delta Airlines, the cost of writing each flight reservation has declined because much of the labor of the transaction has been transferred to the customer. Digital publication makes such great sense because the cost of distributing e-books approaches zero. Many of these savings can be passed on to the buyers of the e-books.

With digital self-publication, who gains by the circumvention or elimination of intermediaries and the lower costs? For me, digital self-publication is analogous to blogging. It lowers the entry costs for communicating one's ideas to a large audience. It's another step in the democratization of publishing and knowledge transfer. Let's take the clinical lab industry as an example. I believe that there are managers and medical technologists across the country who have gained a wealth of experience and knowledge about the industry. Many of them have the ability to write e-books focusing on key aspects of lab management. I also believe that some of these books, particularly when promoted on-line, could sell as many as 3,000 copies at $10 each. Recall that we are considering global sales here. This would reward the author with more than $20,000 in royalties plus the pleasure of improving lab practices.

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