The Amazon universe expands

The Amazon universe expands

What happens at Amazon affects us Kindleers.

I’ve said in the past that I was more confident that my e-books from Amazon would be available to my descendants in a couple of generations than my p-books (paperbooks).

As for the latter, it simply isn’t terribly logical to expect my now adult kid and my now adult kid’s hypothetical future kids to dedicate a room in the house to a floor to ceiling library as we have.

Ownership is becoming far less important than access. That may have some positive impacts, especially environmentally. If you don’t have all that “stuff” to store, you can live in a much smaller space. A smaller space can have a smaller footprint in more ways than one.

I was confident that my e-book library would be around 100 years from now. It wouldn’t surprise me if Amazon lasted that long, but if they don’t, I expect that there would be some sort of migration of the library…either to another company or to the customers.

I still am confident in Amazon, but recent moves make their future much harder to calculate.

 As was made abundantly clear at the last Amazon financials call, the

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

cost them a lot of money this year…and didn’t generate a lot.

I was apparently one of the very few people to buy one for $199, locked to AT&T. They’ve really changed that (both the price and the lock), but the launch was bad enough for Amazon to suggest that maybe they would choose the chances they took more carefully…

NOT!

😉

In the weeks since, they’ve announced all sorts of speculative ventures.

There are so many that I’m just going to do them as bullet points:

[Aside: I’m in the San Francisco Bay Area, and yes, the power went out while I was writing this.🙂 We are expecting a very large storm…no, we don’t get snow, but we get a lot of rain and flooding, and power outages are pretty common. Our dogs have never seen a storm like the one that’s been predicted: hopefully, they’ll be okay with it]

  • The Amazon Echo: while this could be seen as a Fire Phone like risk, I think it has a huge potential upside. I can’t buy one from Amazon right now: I do think they are keeping them out of the hands of tech writers until the device has matured. It’s learning every day. I said on the Amazon forums that it’s like a child right now, and you wouldn’t send a child out for a job interview (which is sort of what a review by a tech writer is, for a gadget)…you’d probably wait until they’d at least graduated high school.😉 This could be a market defining device, and allow Amazon to be the way that most people interact with the internet at home. Controlling that, and monetizing it on the business to business side, could be an incredible opportunity. People are making the mistake of judging what it can be by what it is. Right now, it has to be plugged into the wall, for example. No reason why a mobile item (wearable, perhaps?) running off the base station couldn’t exist in the future…it already does, a bit, with the apps and remotes. I like the way they are introducing it, frustrating as it is to a small group of potential customers. They aren’t approaching the Echo like the Fire Phone: they are getting a lot of user feedback before going wide. Also, they aren’t going to be entering a mature market…they are going to be defining one. And if it fails? Hey, it would just a Bluetooth speaker😉
  • Amazon travel services: sure, why not? I’d book through Amazon as an Amazon customer. They’ve made paying for things easy, and they already know everything about me.🙂 That’s one of the big pots o’ glue for Amazon: customers consider it low risk and convenient. Would you book Amazon travel if you weren’t an Amazon customer? That’s a hypothetical, of course…is anyone not an Amazon customer?😉
  • Amazon bike messengers delivery service. My guess is that they are bringing something they’ve been using in China into the USA. Get your goods in an hour? Possible. That goes along with the drone delivery they’ve mentioned…but it will face a lot fewer regulatory hurdles. Combine that with Kiva robots to get the right thing to the bike messengers’…um, bikes, and this could really “roll” (by the way, I’m glad I’m not writing in China, where apparently, the government has recently started to crack down on puns, on the basis that they are confusing…sometimes, confusion is the only path to true clarity)
  • Amazon Elements: Amazon branded products…and there are those diapers and windshield wipers I keep talking about! Well, diapers anyway…yep, Amazon brand diapers. At this point, you need to be a Prime member to buy them…and they are talking about how “transparent” the new Elements line will be. You’ll know where they were made and how. I have to say, though, “transparent diapers” doesn’t really sound like a good idea😉
  • Consumer Services: this one makes sense to me. If I want a gardener, I’d rather go through Amazon then hunt on the internet, or join yet another group to get their recommendation
  • Bargaining on products: one of Amazon’s failures in the past was an auction site, but this could work. Basically, some sellers of certain types of items (like collectibles) put up a price, but say they are willing to negotiate. Consumers make offers
  • Gaming (social and competitive): Amazon spent nearly a billion dollars on Twitch, a social videogame site, and they just bought GoodGame, a sort of talent agency for competitive gamers. Gaming is a giant market, but my intuition here is that Amazon is more interested in controlling how that market develops than being really passionate about it for its own sake. I could be wrong, though: Amazon does make some games now

Those are just some of their consumer facing investments lately. They are paying tons more to license content, and there is a lot more happening away from the consumers.

If investors thought the big A would slow down after the Fire Phone, they need to start sweating again. Oh, and rumor has it that a Fire Phone 2 is on the way…

Jeff Bezos seems to think some people are too blinded by the present to see the future. I think it’s worth noting, though, that if you time crossing the street based on what the traffic will be five years from now, you might get run over.😉 I do have a great deal of confidence in Amazon: it’s just that it’s getting so much harder to define what Amazon is.

What do you think? Should Amazon have just stuck to selling books? Were you one of the many people who thought that the Kindle was a bad idea for Amazon, since hardware wasn’t their area? When is investing too much for them? When do they need to show a profit for the investors…if ever? Are you more or less confident in Amazon’s future than you were a year ago? Feel free to let me and my readers know what you think by commenting on this post.

Bonus deal: Amazon has started their “12 Days of Deals in Kindle Books” at the

Kindle Daily Deal (at AmazonSmile…benefit a non-profit of your choice by shopping*)

page. Today, that includes one from the “100 Books to Read in a Lifetime” and one (really two) from the “Best Books of 2014” for $2.99 each.

The 100 Books title is The Immortal Life of Henrietta Lacks. I’ve been interested in that one since I first heard about it on the radio years back. However, the publisher has made the decision to block text-to-speech access, so I won’t buy it**. It seems a bit ironic to me to put that on a list of “100 Books to Read” when one significant way to read the book is being actively blocked.

The other books are the Miss Peregrine’s Peculiar Children books by Ransom Riggs: Hollow City came out this year.

 Join over a thousand readers and try the free ILMK magazine at Flipboard!

* 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! :) By the way, it’s been interesting lately to see Amazon remind me to “start at AmazonSmile” if I check a link on the original Amazon site. I do buy from AmazonSmile, but I have a lot of stored links I use to check for things.

** A Kindle with text-to-speech can read any text downloaded to it…unless that access is blocked by the publisher inserting code into the file to prevent it. That’s why you can have the device read personal documents to you (I’ve done that). I believe that this sort of access blocking disproportionately disadvantages the disabled, although I also believe it is legal (provided that there is at least one accessible version of each e-book available, however, that one can require a certification of disability). For that reason, I don’t deliberately link to books which block TTS access here (although it may happen accidentally, particularly if the access is blocked after I’ve linked it). I do believe this is a personal decision, and there  are legitimate arguments for purchasing those books. 

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.

9 Responses to “The Amazon universe expands”

  1. Harold Delk Says:

    I’m sorry you’ll miss “The Immortal Life of Henrietta Lacks” as it was a very good book. My wife and I had the pleasure of meeting Rebecca Skloot, the author, at a talk she presented at Hollins University. She is a delightful, engaging, and witty person. Henrietta Lacks is from Roanoke, VA where we live so there was lots of interest in the book locally. A strange coincidence is that my wife is a knitter and has pattern books authored by Ms. Skloots mother and I have a book of poetry written by her father. We learned this in a chat with her after her talk. One of those “are you related to … and … by any chance?” Hopefully TTS will become available for the book soon.

    • Bufo Calvin Says:

      Thanks for writing, Harold!

      I’m sure I’d enjoy it: it’s the principle of the thing for me. Interestingly, I’ve also lived in Roanoke (but not for some time). I do check it to see if the block has been removed…not yet.

  2. Erin-Joi Says:

    You might want to check the price of the Whyspersync update for “The Immortal Life…”. It is available on Audible. I have both the Kindle and Audible formats, so I cannot check the conversion price. The book is really worth the read/listen. Having worked with the cells, it was really nice to “meet” the person they came from.

    • Bufo Calvin Says:

      Thanks for writing, Erin-Joi!

      Getting the audiobook is an interesting suggestion! I don’t usually listen to fiction audiobooks, but non-fiction is a different thing. I happen to have a couple of credits at Audible right now…I’ll check into the possibilities.

  3. Lady Galaxy Says:

    I admire your stand on books without text to speech. It’s unfortunate that it is causing you to miss out on a bargain. The trouble with boycotts is that unless a lot of people with signs converge in front of cameras, the intended target of the boycott doesn’t get the point. Have you contacted Amazon to suggest that in addition to the “I’d like to read this book on Kindle” link provided for customers to click on product pages for those rare books that are not yet available, Amazon might also have a link saying “I’d like to listen to this book on text to speech on my Kindle.” ?Then, Amazon could provide feedback to the publisher about why a book might not be selling quite as well as it could. Just a thought.

    Meanwhile, I’m sending positive thoughts that the storms will calm down, your dogs will stay calm, and your electricity will continue to flow! I once had a Sheltie who was one of the best behaved dogs ever, but she would freak out during storms.

    • Bufo Calvin Says:

      Thanks for writing, Lady!

      The “boycott”, in my case, isn’t to change them…I know that’s unlikely and I don’t think enough people make the choice I make. It’s because I don’t want to give my money to them…or get money from that book (which is why I don’t link to ones I know block text-to-speech). I do write directly to publishers and authors, although I haven’t done that in this case.

      The storm really didn’t turn out to be as bad as they thought it might…knock virtual wood.🙂 We lost a limb off a tree, but that seemed to be it…and the dogs did okay.

  4. Phink Says:

    Since you mentioned other Amazon services I will as well. I got my first delivery Saturday from Prime Pantry and I am so happy about it. I am handicapped from a motorcycle wreck 12 years ago at 37 years old. There are tons of benefits of only having one leg such as never having to help anyone move ever again but there are drawbacks too. I went to the store today to get bottle water and it was a mess. It was horribly difficult. But our tap water is almost undrinkable. That’s why I buy 6 cases at a time so I don’t have to do it again for a while. Anyway, Prime Pantry is a God send for me. Walmart has started to deliver….let’s call them Panty items and I’ve been doing that to a degree for a year now but they do not make it that easy and it’s shipped in multiple boxes and takes up to 10 days it seems. With Prime Pantry, everything got here about 60 hours after order, and in one box. The prices were really good but I did have to pass on some things that were quite high. Most items however were in line with our local grocery stores such as name brand green beans in a can for 50 some-odd cents. That seemed really cheap. I sent Jeff Bezos a thank you note but I doubt he’ll ever see it. I hope they can make a profit from this enterprise.

    • Bufo Calvin Says:

      Thanks for writing, Phink!

      I’m not sure how much that is supposed to make a profit, as opposed to being a “glue” to keep people with Amazon…we’ll see how it goes.

      I’m glad it works so well for you!

  5. Edward Boyhan Says:

    I guess I’m more optimistic (hopeful?) about Amazon than you. As several articles have pointed out Amazon makes a ton of money. What it doesn’t do is report much net profit. Over the year ending Sept 30, 2014 Amazon’s gross margin was 33%. That means that the amount it gets for the goods and services it sells is 33% higher than the costs to Amazon of those goods and services.

    Amazon is a bit like the pre-divestiture AT&T where as a regulated monopoly it’s net income percentage was set by the FCC at a fairly low rate (I seem to recall it was around 6%). AT&T of course set phone rates fairly high (by today’s standards) and they actually also made a ton of money — most of which they plowed back into Bell Labs so that they could stay under the FCC’s 6% cap.

    Amazon is similar. They could report any profit they like — instead they plow it all back into various R&D activities. Conventional wisdom is that Amazon is therefore sticking it to shareholders — and to a certain extent that’s true. But as the below Harvard Business Review Article from their November issue shows, Amazon has done a very good job (over the long term) of increasing shareholder value.

    Incidentally, that same article ranks Bezos as the number 1 CEO among the top 100 CEO’s in the world! Interestingly, he only ranks 66 in terms of CEO compensation — so he’s doing a great job somewhat (relatively speaking :grin) on the cheap.

    https://hbr.org/2014/11/the-best-performing-ceos-in-the-world

    Much has been made of Amazon’s “terrible” results in their most recent quarter. One would expect some kind of shareholder revolt. However, before the Q3 report the stock was trading around $320; after the report it fell to a low of $280, but since that low, the price ratcheted up to a high of around $340 at the end of November before falling to a little bit over $300 presently. If a shareholder wanted to mount an attack, it would be expensive at those prices. Also other than Bezos there are no large blocks held by any particular group — so Bezos is free to go on ignoring investor unhappiness.

    As to the phone, Bezos made some general comments that they’ll try again — there have been a smattering of articles saying that Amazon is working on gen 2 and gen 3 versions of the Fire Phone. One item of interest: it has been discovered that Apple has filed for a patent on something similar to Amazon’s Dynamic Perspective — so at least Apple doesn’t think 3D for a phone is useless??

    A less positive item: Amazon is reportedly increasing the Amazon Fresh subscription price to $299/year.

    Amazon has finally started to open the kimono on their use of Kiva robots. Presently the robots automate almost all of the “picking” function in a warehouse; “packing” is still done by humans — although I expect that to be automated in the fullness of time as well.

    Amazon has moved far beyond the books realm — thinking of them as primarily a bookseller is way out of date. In the scheme of things, books are probably less than 15% of revenues and that percentage is expected to decline even more as Amazon broadens its reach.

    IMV Amazon’s strength is not in prices or anything else save that it’s a single place where you can buy almost anything, and not have to leave home to do it. Yesterday, I was looking for some rather esoteric communications and computer rack accessories — the kind of stuff in the past I would get from Newegg.com or Tigerdirect.com — I found almost everything I needed on Amazon, and the one thing I got elsewhere, I was still able to pay for it using Amazon payments!

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