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
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
