Entries tagged as ‘Amazon.com’
Sunday’s Wall Street Journal reported that Amazon has stopped selling Kindle versions of all Macmillan titles. John Sargent, Macmillian’s CEO, recently went to Amazon’s headquarters to try and negotiate new terms for the sale of e-books published by his company. In general, the publishing industry has been unhappy with Amazon’s insistence that most books be priced at $9.99. Apparently, the discussions resulted in Amazon pulling all Macmillan e-books from it’s website.
I am a firm believer that the historical knock on the social sciences is unwarranted and that many of the theories, frameworks, and concepts found in the various disciplines are widely applicable in the real world, business in particular. So when I read about the Amazon-Macmillan dispute I was struck at how a number of social science concepts shed quite a bit of light on these developments; namely Albert Hirschman’s concepts of exit, voice, and loyalty as well as signaling and the indirect use of force.
So what do these concepts have to do with e-books? Glad you asked. Continue reading
Categories: Uncategorized
Tagged: Amazon.com, Apple, e-books, Economics, political economy, signals, social science
January 19, 2010 · 1 Comment
My very first post back in August of last year examined Amazon’s attempt to disrupt the publishing industry through the release of their Kindle reading device. The irony, of course, was that while Amazon was looking to Apple and the iPod and iTunes as inspiration their plans were most likely to be thwarted (or, at least, complicated) in the long term by Apple:
Apple could very well launch an e-reader of its own, one that vastly improves on Amazon’s market-leading Kindle. Specifically, Apple could develop a reader that utilizes their leading touchscreen technology so that readers can intuitively flip through pages of magazines or books (a feature the Kindle currently lacks), develop their reader so that media is presented in color (the Kindle is gray scale), and provide a larger viewing screen. And while Steve Jobs has previously denied a desire to get into the e-reader market, Apple is apparently full-go towards developing and launching their own tablet computer. Such a device could be a “Kindle-killer”.
After months of speculation, it appears we will get our first look at Apple’s tablet on January 27th which will likely ship in March of this year. Additionally, the Wall Street Journal is reporting that HarperCollins is in negotiations with Apple to make their titles available in an enhanced electronic format for the release of Apple’s tablet: Continue reading
Categories: Uncategorized
Tagged: Amazon.com, Apple, e-books, e-reader
James Surowiecki from The New Yorker (and Wisdom of Crowds fame) discusses the recent ‘price war’ that broke out between Wal-Mart and Amazon:
[L]ike other price wars: all the companies involved got hurt. So you might wonder why Wal-Mart recently decided to start its own price war, taking on Amazon in the online book market. Wal-Mart began by marking down the prices of ten best-sellers—including the new Stephen King and the upcoming Sarah Palin—to ten bucks. When Amazon, predictably, matched that price, Wal-Mart went to nine dollars, and, when Amazon matched again, Wal-Mart went to $8.99, at which point Amazon rested. (Target, too, jumped in, leading Wal-Mart to drop to $8.98.) Since wholesale book prices are traditionally around fifty per cent off the cover price, and these books are now marked down sixty per cent or more, Amazon and Wal-Mart are surely losing money every time they sell one of the discounted titles. The more they sell, the less they make. That doesn’t sound like good business.
Except, of course, when the purpose of the price slashing is not to actually sell more of those particular books, but to attract more buyers to their on-line marketplace: Continue reading
Categories: Uncategorized
Tagged: Amazon.com, e-commerce, Loss leader, price war, Wal-Mart
Scott Berkun discusses what he sees as the highest impact innovation in terms of books prior to the Kindle:
The invention of cheap paperback books, Penguin makes books cheap enough for the average citizen (1935). This was a revolution in the U.S. as it made books cheap, portable and part of middle and lower class culture.
If anything I think paperback books are the best comparison as they were a revolution in distribution, access, convenience and portability much like the Kindle is. They also revolutionized the business model for authors, publishers and bookstores, much like Kindle will if it’s success continues.
I think he has a solid point here. Movable type was critical for making it possible to mass produce and widely distribute the written word. Paperbacks had a similar impact, by reducing the price and the physical characteristics of books, further widened their distribution. The Kindle has similarly impacted the ease with which books can be distributed, both in terms of geography and speed.
But I wonder if there isn’t another innovation, or significant change, that impacted the book more than either movable type or the paperback. My instincts tell me that the advances in literacy and its growth outside of elites would have had a major impact on the adoption and distribution of books. Was this due to compulsory education? Advances in economics, trade, etc.? Now of course there is a chicken-and-egg scenario here: did the increase in literacy rates make books more desirable or did the mass distribution and increased affordability of books contribute to increased literacy rates? I am sure someone has teased this relationship out, I’m just not aware of the literature.
Categories: Uncategorized
Tagged: Amazon.com, Innovation, kindle
The cover story in this month’s issue of Fast Company profiles Amazon.com and discussing the long-term strategy behind the Kindle and their push into the e-book market. The article is a great read, especially as it provides insight into Amazon’s larger strategic goal. Not only is Amazon looking to pull an Apple by disrupting and dominating the e-book industry, but CEO Jeff Bezos has his sights on a larger prize: to rewrite and dominate the entire publishing model.
Jeff Bezos is trying to do to book publishers what Steve Jobs of Apple did to the music industry. With its iPod and iTunes Store, Apple carved out a largely virgin market so fast that it was able to wrest control of the digital-music distribution system and thus dictate what the record labels could do. With Amazon jamming (its latest earnings are sky-high even as other online retailers are in a state of malaise), Bezos may sense similar opportunity, a moment when he, in true Jobs-like fashion, could colonize this growing niche for the Amazon ecosystem. Should that happen, book publishers would have more to fear than just being squeezed. Amazon could phase them out completely, treating them as the ultimate middlemen orphaned by a new technology.
Essentially, Amazon is looking to bypass traditional publishers through its massive electronic distribution channels (Amazon.com and the Kindle 
device) as well as its on-demand publishing technology. Rather than dealing with the publishers, Amazon could strike deals with the largest authors (those that provide the bulk of the revenues from ‘hits’ that traditional publishers require to keep operating) by offering wider distribution and increased royalties. This could fundamentally alter the publishing industry, if not destroy its current incarnation.
While this is interesting, there is another part of the article that deserves attention: the risk Amazon could face down the road from Apple. Continue reading
Categories: Uncategorized
Tagged: Amazon.com, Apple, Disruptive Innovation, e-books, e-reader, Innovator's Dilemma
