In early 2000, Netflix founders offered to sell the company to Blockbuster for $50 million. The heads of Blockbuster turned them down. Eventually, Netflix triumphed over Blockbuster. Now in 2021, Amazon’s refusal to purchase a Black run digital publishing platform, SMS Novel Interactive, seems to be making a similar mistake. But unlike Blockbuster, Amazon far from the threat of extinction, with the non-move, is quickly becoming more irrelevant in the economic arena of racial equality for Black entrepreneurs. And now some Black authors are considering pulling their books from the platform.
Most small businesses now accept that Amazon will always be a competitor to their business. But the savvy owners have sought to make use of the platform by taking advantage of its drop shipping, merchant accounts, and near-instant delivery. But there is a growing segment of small businesses that believe that Amazon could do more as it comes to accepting Black businesses with the goal of racial equality.
THE SMALL BLACK BUSINESS/AMAZON QUANDARY
One such situation is the company SMS Novel. The interactive publishing company, started by Westminster Seminary grad, Joe Johnson, allows readers and authors to text and video chat with each other to read, discuss, or even roleplay interactive books and stories. This is a completely new way to read books and stories, goes even one step further than the recent release of Kindle Vella’s episodic publishing KDP platform. The SMS platform is interactive and live, making it both on-demand and a streaming service for books. What is unique about the SMS Novel platform is not only that it seems to have created a new distribution method for books, but also that the “non-tech tech” company is black-owned. Thus making SMS the only fully black-run and operated digital interactive publisher in America.
Amazon has a near non-existent history with the acquisition of Black-owned businesses. In 2016, the company Pic Part, a black-owned application that helped people match hardware parts, dissolved after only a few years. The original owners of the company ceased working with Amazon after 3 years.
Size does matter when it comes to acquisitions for Amazon. The Amazon Kindle digital publishing is a thousand times the size of SMS Novel, which was launched in 2018. So the argument of why SMS Novel was not picked up by Amazon, will remain a mystery until Amazon makes a statement.
AMAZON AND RACIAL RELATIONS
The CEO of Amazon, Andy Jassy, who is reputed to be a skilled strategist aware that a ubiquitous, super-fast internet would upend has been criticized in the past for not doing enough for Black business. In the light of a Recode investigation sharing allegations that Black workers faced an unlevel playing field in Amazon’s corporate offices, Jassy defended the company while also admitting, “We have a lot of work to do.”
It was the hope that much of that company, now valued at 386 billion dollars, would seek to divest into the cause of fostering and engendering black business. This was evident when they announced the Black business accelerator. The system allows Black businesses to add their business information to a database for coaching, seller account sign-up, and other features connected to the SBA and their small business portal. Yet here is the complaint. Even when those businesses are added to the database, data from the accelerator has been slow to fully show the impact of the program.
In its third year, SMS Novel has been slow to make a deal with a larger company. They have operated privately, and to the amazement, with only a few small investors in the platform. They have avoided the spotlight, allowing time to help them perfect their matching system to authors and readers. But after 2 years of positive sales and subscription growth, other digital publishers like SMR began to take notice.
THE BIG WHAT IF...
If Amazon had purchased SMS Novel last week, the goal was simple. Amazon would market, develop, and run SMSNovel.com as their online texting and live video storytelling platform. Think of this as a Netflix that allows you to stream “people” live to discuss, roleplay, or read almost any book in the world. This would the first new streaming platform that would be led by an African-American board.
The unique SMS platform, in essence, could revolutionize sectors of education and human connection, making it live and on-demand. And with the reach of Amazon, this new content would likely create a gaggle of new freelance laborers, able to work on their turns. But that did not happen.
But the bigger question was “How much would Amazon need to pay for SMS Novel?” The company, which has not yet released its 2021 sales report, could easily be swept up as an Amazon subsidiary and make SMS the first and largest Black interactive publisher on the platform. The lack of offer from Amazon to purchase from SMS Novel has some Black authors considering pulling their books from the platform to support a black-owned platform for authors.
The gulf between Amazon and small companies has thankfully gotten smaller since the recession. Most small businesses are no longer having to compete anymore. But for certain businesses, especially that of publishing and content creation, let’s hope that Amazon can take advantage of the opportunity in the future to both support and expand the role of Black businesses in America.