Jeff Bezos’ letter to shareowners 2014

Jeff Bezos’ letter to shareowners 2014

There’s a lot of buzzy stuff in

Jeff Bezos’ 2014 letter to shareowners (filed at the SEC…U.S. Securities and Exchange Commission)

Bezos takes us on a tour (more on actual tours later) of the “…broad array of initiatives” at Amazon.

Prime

A million people joined Prime just in the third week of December of 2013. I thought at first that might be people opening up their new Kindle Fires (and getting a month free), but that was probably more likely to be the fourth week…unless they count you becoming a member when they ship it out.

The key thing here is that they aren’t “done” adding things to Prime. What might that be? Well, a streaming music service wouldn’t surprise me, and fairly soon. Separation of video from shipping (so you can pay for them separately) and installment payments or something other than an annual fee makes sense. Amazon bought comiXology: could they do something like adding comics to the Kindle Owners’ Lending Library? I also really think some kind of subser (subscription service) for adults (as opposed to FreeTime for kids) from Amazon this year…and could have the Prime name on it.

Readers & Authors

It’s interesting to put those two together, because traditional publishers would immediately think something needs to bridge the two…not surprisingly, they would say it was traditional publishers.😉

Bezos makes a point of mentioning some things which cut tradpubs out of the picture: “…Kindle Worlds, the literary journal Day One, eight new Amazon Publishing imprints”, and mentions expansion to other parts of the world for Kindle Direct Publishing.

I think they also  legitimately  take credit for getting Kindles (and other devices) cleared for using during more parts of commercial air flights.

The Kindle Paperwhite 2 is mentioned…and Kindle Fires don’t get mentioned under Readers & Authors (interesting, since I for one do a lot of my reading there, and I suspect that’s true for people who want color ((for magazines, for one thing)), text-to-speech, audiobooks, and multimedia enhancement…none of which the Paperwhite does).

A divider line in the letter takes us to this next section:

Prime Instant Video

Lots more titles, exclusives, original content…and growing rapidly. Prime Instant Video also expanded to the UK and Germany, and surpassed their expectations.

I’ve started using PIV more. The Kindle Fire has a better interface for PIV than my Roku or Tivo…and the Fire TV makes it even better (voice search helps).

Fire TV

Amazon Fire TV (at AmazonSmile: benefit a non-profit of your choice by shopping*)

Having been using it for a while now, I really like it. When we get a new TV (and we may soon…our family room one is quite old), we would probably get a second Fire TV for it. It was funny: AT&T just came by the house to try and get me to search internet, cable, and phone (they just put fiber optic cables in our neighborhood…which is tempting). They checked off a whole bunch of channels I could get…and I thought, “I don’t need all those channels…I have enough to watch on my Fire TV.”😉 I mentioned Fire TV to them…they hadn’t heard of it, which didn’t help their credibility. We also don’t have a landline, so they can’t help me there.

I’m considering writing a short guide to the Fire TV, but let me mention some cool things:

  • The photo part of it is cool and seamless! I have the Amazon Cloud Drive on my Samsung Galaxy S3 phone. I took some pictures today at the dog park. I came home, turned on my Fire TV, went to Photos, and BAM! They were already there. I started a slideshow…and it smoothly panned across each picture, adding a real dynamic aspect
  • The mirroring with my Kindle Fire HDX (at AmazonSmile: support a non-profit of your choice by shopping*) is astonishingly simple, even if it takes fifteen seconds or so to connect. I was already mirroring my Fire to my TV through a NETGEAR Push2TV (at AmazonSmile)…but this is much easier. My HDX doesn’t have to search for the Fire TV: when I go to the mirroring option (Swipe down from the top, Settings, Display & Sounds, Display Mirroring), it’s always sitting there. I can tap it while my TV boots up (this is a newer TV than the family room one, but still takes some time to wake-up, and that works). Why does mirroring matter? Anything I can see on my Kindle Fire’s screen I can see on my TV. So, for those of you worried about HBOGO and the FTV, you are fine if you have a Fire
  • The voice search really does work for Amazon content
  • It has some cool screensavers, although I don’t see them that much
  • You can remove items from the Recent listing! I wish I had that for my Roku. That is similar to the Carousel on the Fire…there are other similarities, too (including force stopping apps, and resetting to factory defaults)
  • The ASAP things, which makes some videos start pretty much instantly, is very nice! That doesn’t sound like much, but not having to wait for a video to load is like the first time you used a microwave oven…for those of you who remember when those were new😉
  • The free AOL ON app gives me decent news coverage, and the stories will autoplay from one to the next
  • I haven’t even tried the games much, but the one I did was fun…oh, and your coins are available for shopping from the Fire TV

Amazon Game Studios

Interesting to me that they put this under the Fire TV. That’s who should be scared by the FTV more than video distributors, I think. It’s a backdoor way to get people into gaming through Amazon…and they could really cut into console sales that way. One box to rule them all!😉

Another dividing line, bringing us to what I guess we could consider miscellaneous content:

Amazon Appstore

It tripled in size and is now in 200 countries…no, there aren’t as many apps as Apple or Google, but I would bet that on the average, these are more reliable.

Jeff talks about several innovations this last year. I do still have what I think is a good idea for an app…if anybody out there is a developer, I’m interested in partnering. I could probably learn to program myself (I used to teach some programming), but that doesn’t make sense to me at this point. I can largely write the content of the app, someone else can build it (and market it), and I’m fine with a royalty arrangement. Let me know if you are interested.🙂

Spoken Word Audio

I’m not really an audiobook person (I prefer text-to-speech, because I don’t like the reader interpreting the characters for me), but Audible apparently had a great year (no mention of Brilliance, which Amazon also owns). They mentioned 600 million listening hours downloaded last year…that sounds like a lot, but it’s about two hours per person in the USA, right? That’s a lot less than one audiobook (on average…there are some shorter things at Audible) per person.

Fresh Grocery

They are expanding this service…slowly. Jeff has a great line, here: “…no one accuses us of a lack of patience”. This $299 a year grocery (and many other things) delivery service is expanding and may come to more cities. This year, Amazon is introducing the “Amazon Dash”, which is sort of like a barcode reader for home…that ties into Fresh.

Amazon Web Services

The average consumer may not think much about this, but it is crucial for Amazon’s success. I would say they are much less reliant on the success of the Kindles than they are on AWS. It’s been expanding…with more than four times the number of “significant services and features” added in 2013 as in 2010.

The next section has to do with employees…

Employee Empowerment

Amazon has some public relations challenges with their management/employee relationships, with legal actions over unpaid time while going through security lines, protests in Europe, and allegations of unsafe conditions.

Jeff does a good job of mentioning some of their strong points:

  • Career Choice is a program where we pre-pay 95% of tuition for our employees to take courses for in-demand fields, such as airplane mechanic or nursing, regardless of whether the skills are relevant to a career at Amazon.”
  • “Once a year, we offer to pay our associates to quit. The first year the offer is made, it’s for $2,000. Then it goes up one thousand dollars a year until it reaches $5,000. The headline on the offer is “Please Don’t Take This Offer.”” This probably generated the most headline out of the letter, although it’s been around (it came from Zappos…which Amazon owns now). I think this makes a great deal of sense. $2000 isn’t really enough to quit, unless you were planning to quit anyway. If you were, it’s not good to have you around…you are bad for morale, and probably aren’t as productive as people who want to be there. Once you’ve invested in the job (by turning down the $2,000), I think you’ll be less likely to consider quitting in the future
  • Virtual Contact Centeremployees provide customer service support for Amazon and Kindle customers while working from home.” For many people, that would be a “Yes, please!” Great when you have young kids around the house…and the dogs are a lot happier when I’m home.😉 The only real problem I have is that one of them likes to lick the Kindle Fire screen…and it registers it as a capacitative touch! 

They also make a point of their good record in hiring veterans.

I would consider the next section…infrastructure:

Fulfillment Centers

Jeff talks about all of the improvements here…but where is the mention of the Kiva robots? Is that not working out? Are they afraid that people won’t like the idea?

I teased you with tours at the beginning of this post…you can take a tour of an Amazon fulfillment center!

http://www.amazon.com/fctours

It’s not every FC…unfortunately, the one nearest me doesn’t do it. I was surprised when my Significant Other thought it would be fun to go.

Urban Campus

There are several points made in this letter about the environment, and yes, it’s true that an urban complex is probably more ecological than a suburban one…because the infrastructure already exists around it. They are adding 420,000 square feet…and building a lot more.

Fast Delivery

Sure, part of this is Sunday delivery by the Post Office, but this was probably the second buzziest thing in the letter: “…The Prime Air team is already flight testing our 5th and 6th generation aerial vehicles, and we are in the design phase on generations 7 and 8.” That’s right…drones, my little flightless kiwi competitors!😉 I think this keeps getting raised in the public consciousness to get the FAA to approve their use…

The next section is really the miscellaneous one:

Experiments and more experiments

Instead of mentioning Lab126 for R&D (Research and Development), Jeff talks about “Weblab”. This is for the websites…but also for products. I’ve been part of one of these innovations: “Ask an Owner”. I got an e-mail from Amazon asking for some information about a product we had purchased. That came from a question from another customer. We were happy to answer it (it had to do with ingredients on something…just had to read the label). That has apparently happened millions of times: have you gotten an e-mail like that?

Apparel and Shoes

Waaay beyond Zappos.🙂 I thought this was a mind-blowing statistic: “We opened a new 40,000 square foot photo studio in Brooklyn and now shoot an average of 10,413 photos every day in the studio’s 28 bays”. That’s 371 photos per bay…each day.

Frustration-Free Packaging

Somehow, we don’t usually seem to get products wrapped in easy to open packaging from Amazon, although some are. I suspect part of that has to do with the next section…

Fulfillment by Amazon

Amazon has built this incredible way to get things to customers (see Fulfillment Centers above…and drones). FBA lets other sellers pay to hitch a ride. Does it work? It grew 65% last year…

Login and Pay with Amazon

Do I want to use my Amazon payment methods when I’m shopping other places? You betcha! More convenient, and fewer people get my data.

Amazon Smile

This should get a lot more recognition than it does, in my opinion. I promote it a lot. You shop at a mirror site to Amazon, and as you buy things, Amazon donates money to a non-profit of your choice…and there are many tiny non-profits on the list! If you aren’t doing that, I’d be curious as to why…

Mayday

I have said that I think Mayday, the live onscreen tech help on the Kindle HDX line, may be one of the greatest innovations in Customer Service in my lifetime. I’ve said that

“Having a tablet without Mayday is like having a car without a windshield: it doesn’t matter how fast your car is, or how cool it looks, if you can’t see how to get where you’re going.”

Jeff also told us some fun things about Mayday:

“Mayday Tech Advisors have received 35 marriage proposals from customers. 475 customers have asked to talk to Amy, our Mayday television personality. 109 Maydays have been customers asking for assistance with ordering a pizza. By a slim margin, Pizza Hut wins customer preference over Domino’s. There are 44 instances where the Mayday Tech Advisor has sung Happy Birthday** to the customer. Mayday Tech Advisors have been serenaded by customers 648 times. And 3 customers have asked for a bedtime story. Pretty cool.”

That’s a lot of things to cover!

Amazon is great at surprising people with innovations, though, and the CEO (Chief Executive Officer) says:

There are many programs I’ve omitted in this letter that are just as promising, consequential, and interesting as those I’ve highlighted.”

Yep…how about that 3D phone that might be coming soon, for example?😉

I’ll be interested to hear what you think about Jeff Bezos’ 2014 letter to shareowners. Feel free to let me and my readers know what you think by commenting on this post.

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. :) Shop ’til you help! :) 

** Does Amazon pay royalties when one of their employees sings Happy Birthday over Mayday? Is that a commercial use…or, collectively, a public performance? I don’t know that they should, I just think it’s a possibility

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

2 Responses to “Jeff Bezos’ letter to shareowners 2014”

  1. Edward Boyhan Says:

    Great summary!

    On the Kiva Systems front you may find the following article from a couple of weeks ago illuminating:
    http://www.scdigest.com/ontarget/14-03-31-1.php?cid=7944

    It turns out that Amazon is moving great guns with Kiiva in new FC’s in the US. Their internal rollout is totally consuming Kiva’s production such that Kiva will not sell to non-Amazon users for at least two years.

    In my own reading of Bezos’ comments regarding FC’s, I saw nothing to indicate that they are backing away — he mainly talked about software innovations they are making in their supply chains — much of Kiva is in fact all about software innovations.

    The fact that Kiva was even present at a supply chain trade show was implied to be a recruiting foray for new Amazon FC’s — it appears that Kiva-ized FC’s will require a special kind of staff that as you allude may not sit too well with existing FC workers. The article implies that so far Kiva is only being employed in new FC’s and not in retrofits (I’ve heard that Kiva requires a complete rebuild/reorganization of warehouse internals).

    The new kinds of FC staff requirements for Kiva FC’s may put a more sinister light on the financial incentives Amazon is offering to quit🙂 .

    • Bufo Calvin Says:

      Thanks for writing, Edward!

      Excellent points! I hadn’t thought about retrofitting…I sort of assume the robots would work in human-designed environments, and of course, that is more difficult for them.

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