Cover Story: Amazon: The Elephant in the Room

In 1455 Johannes Gutenberg produced his famous "Bible"—the first book printed with moveable type—launching what would become in subsequent centuries the modern publishing industry. In 1995, Jeff Bezos sold the first book through Amazon.com, launching what would produce in less than 20 years the end of the modern publishing industry.

Hyperbole? Perhaps not, when the earth-shaking influence of the e‑commerce giant's recent moves in publishing are taken into account. Amazon's continuing refinement of the Kindle e‑book reader, its offer to authors for royalties of 70 percent of retail, its splashy launch of Amazon Publishing, its forceful pursuit of exclusives for its various publishing channels and its rumored plans for brick-and-mortar bookstores all add up to an impact that suggests Bezos' legacy may be as significant 500 years from now as Gutenberg's is today.

Whatever the future holds, in 2012 any moderately wide-ranging discussion of the book business must mention Amazon. The tenor of that touch ranges from terror to outrage, and includes calm acceptance as well as generally positive conclusions about the e‑commerce titan's impact.

(Representatives from Amazon, as well as several other book industry insiders, declined to comment for this story.)

"Amazon is certainly the most powerful single force for change in the industry. I think that's a safe statement," says Mike Shatzkin, founder and CEO, The Idea Logical Co. Inc., publishing consultant, industry observer and influential blogger. "And they've gotten that way primarily through great strategy and great execution. But having gotten to where they are, they constitute a threat in some way to every other player in the industry."

A similar note of alarm is sounded by Michael Norris, senior analyst with Simba Information, a market intelligence organization in media and publishing. "I've watched billions of dollars wiped out of the music industry, which is now controlled by only a few huge players," Norris says. "I don't see how the book industry will be healthy if there isn't a diverse number of retailers committed to the product."