Amazon.com: in the beginning, there was Mudie ...

Amazon.com—if you are a book reader, you probably worship the day that the company began to enable you to order books online; if you are/were a bookstore, probably less so. If you are/were a book publisher, you probably enjoy the distribution power of Amazon.com, but you rue its pricing power, both for hardcopy and e-books. If you are an author, you may enjoy the distribution power of Amazon.com even more than your publisher (if you have one) and you are probably less sensitive than your publisher to the issue of pricing power. Whoever you are in the ecosystem of the book industry, one thing is common to you all—Amazon.com is the 800-pound gorilla.

But Amazon.com is not the first entity to enjoy a leading position in book distribution and pricing. As The Economist reminded us last week in its extended essay on "The Future of the Book", the 19th century in England witnessed its own version of Amazon.com, Charles Edward Mudie's subscription library. The way that Mudie influenced the business of publishing and the act of reading in that century was arguably no less influential than that of Amazon.com today and bears recounting, as a cottage industry has arisen pondering what book -ublishing and reading will look like in years to come.

Mudie's success was built on the model of the commercial circulating library (the "Select Library"). It began in 1842, when he started the business of lending books to students at the University of London. For the annual price of one guinea, these commercial subscribers could borrow one book at a time. The business expanded beyond its original location in London and to other cities as well, such as Manchester and Birmingham. The background to this model was the fact that while an increasing number of 19th century Victorians wished to read books, the cost of purchasing them was prohibitive for many. The pioneering annual subscription fee model, which brilliantly separated reading from ownership of books, enabled readers to overcome that challenge, one book at a time.

But Mudie and the influence of the subscription library went way beyond expanding the scope of book readership. First, it led to the popular adoption of the "three-volume", or "triple decker" format for the novel, which in particular enabled him to realize the vast potential of fiction as a profit centre. Why so? As explained, given the cost of publishing, the aim was for Part I of the novel to whet the reader's appetite to continue on with reading Parts II and III. As well, the amounts received for Part I would cover the printing costs for the later Parts. From the point of view of inventory, it meant that three volumes, instead of one, could be put into circulation among readers. Indeed, Mudie increasingly came to demand from its publishers the triple-decker format for their novels.

The pricing structure for the triple-decker format was a form of publishing gold mine. As explained by Professor George Landow in his review of over 40 years ago of the 1970 book by Guinevere Griest, Mudie's Circulating Library and the Victorian Novel-

"[T]he three-decker novel provided the crucial factor in Mudie's success: by forcing publishers to price their novels at the artificially high price of 31s 6d for three volumes (for which the library paid only 15s), it effectively discourages several generations of British readers from buying novels — so much so that publishers claimed the British were not a book-buying people. Thus, while Moby Dick sold in America for $1.50, it cost the equivalent of $7.80 when it appeared as The Whale in Great Britain. The three-decker novel, in other words, cost at least five times as much as a standard volume of poetry."

Mudie came to dominate his relationship with publishers, enjoying unrivalled market power. He would purchase a large percentage of a publisher's run (this Kat found estimates ranging from 50% to up to 100%) for use by the company's outlets. For the reader, this stocks of books meant that readers did not have to wait for an extended period to obtain a copy of the book. However, the impact of this arrangement on the author could be far less benign. In the words of The Economist, if “Mr. Mudie chose not to stock an author's book, it could become an immediate dud." Mudie leveraged his market power over the purchase of books by advertising what was called "the principal New and Choice Books in circulation". Redolent of 20th century best seller lists, it had the effect of both fashioning the commercial market for books while at the same time having the power to make a reputation for authors fortunate enough to be included.

But Mudie not only changed the face of the book and reading business; he also is said to have been a primary influence on the very contents and structure of the Victorian novel as a literary genre. In the words of Landow:

"…by making sure that almost all novels appeared in three volumes, it had important effects on the structure, plot, style, and even imaginative worlds of the Victorian novel; and… by acting as a censor who demanded fiction suited to the middle-class family, it controlled the subject, scope, and morality of the novel for fifty years."

Moreover, Mudie played an important role in framing Victorian moral sensibilities. Most notably was his refusal to stock what he considered “immoral” books. Mudie and his subscription library model ultimately feel out of fashion by the end of the 19th century, even if the operation continued until the 1930s. Two main culprits were held to blame. The rise of government-funded lending libraries, which made books available for reading at a much lower cost, and the end of the triple decker format (which was apparently an decision made by Mudie).

Reflecting on the rise and fall of Mudie’s subscription library, one cannot help but be struck by the fact that then, as now, market power in the book industry is most powerfully exercised at the distribution level. Writers write, publishers publish and readers read, but the entity that controls how the book gets into the hands of the customer is potentially the primary actor in the commercial ecosystem of the book. Mudie was hardly the first to enjoy this role; even before there was the Statute of Anne, there was the Licensing of the Press Act, which regulated (read restricted) printing and publishing, as enforced by the Stationers' Company. Given the commonality between Amazon.com, Mudie and the Stationers about controlling distribution, it is appropriate to recall the words of the Biblical Book of Ecclesiastes (Kohelet) (1:9)--

“What has been will be again, what has been done will be done again; there is nothing new under the sun.”