When would-be-entrepreneurs ask me for advice, I always tell them the same thing: make sure you own some customers.
Amazon owns me; I make every purchase I can from them. I read their reviews and I’m addicted to one-click ordering and the Amazon Prime shipping program. I rarely look for an item from another online vendor if Amazon has it, and to get me to create a new account and order from your site instead of Amazon, you need to offer me at least a $10 discount.
Publishers and the traditional book distributors have let Amazon become the best place to research and purchase a book. And now that Amazon owns the customers, the other shoe is dropping. Amazon’s Kindle is winning (primarily because it offers 90,000 books), choking off hope for other e-book readers and distribution channels, and now Amazon’s squeezing out anyone but their own print-on-demand publisher.
Authors can already self-publish at Amazon in a way that makes their book nearly indistinguishable from a traditionally published title. With the Kindle, print-on-demand, an active user-review community, and a massive customer base with one-click ordering turned on… the publishers are in danger of becoming back-office operations for just one customer: Amazon.