Wednesday, June 30, 2010

Amazon Continue On Their 'Mission'

Remember those early Amazon days when people said they wouldn’t make profit and that they could continue to run at a loss. Amazon stuck to their task and came through and those of us who believed and the understood what positive cash flow meant, customer service and virtual inventory, the power of global branding and what a golden egg was knew they would. They then moved into ebooks and Kindle and once again the doubters surfaced. Even we hated the Kindle device but could see past its limitations to what Amazon was doing. It was if every step that Bezos makes there is an army of publishing cynics trying to pull him down.

So it was interesting to read the interview with Jeff Bezos in Fortune this week.

Bezos quite rightly says that he ‘thinks there are going to be a bunch of tablet-like devices. It's really a different product category. The Kindle is for readers and his strategy is one of 'buy once, read everywhere.' Bezos says , ‘ We think of it as a mission. I strongly believe that missionaries make better products. They care more. For a missionary, it's not just about the business. There has to be a business, and the business has to make sense, but that's not why you do it. You do it because you have something meaningful that motivates you.’

This is a very sensible strategy and clearly sets Amazon apart from the real contenders Google and Apple.

However the interesting points Bezos makes are with respect to pricing where he understands the market is diverse and there are ‘as many opinions about what the right thing to do is as there are publishers.’ He believe that proactive low pricing will prevail and those with low pricing will win share over those who elect to keep the prices high through the agency model. He claims it’s already happening and it no surprise that Amazon wins. Then there is his self publishing offer and compelling case to the authors locked into a royalty model based on preserving the status quo.
The status quo is somewhere Amazon doesn’t live. This week they announced e-books that come embedded with audio and video and a free Kindle application for Google Android phones. Now it continues it news by announcing “Kindle Previewer for HTML 5″ that will allow readers to view samples of books directly from within a Web browser via a “Preview” button on a books Amazon Web page. When the button is clicked a window will open enabling customers to read the sample chapter of a book. They then have the option to purchase the full book for a Kindle device or platform.

Amazon claim that the pages will offer “complex layouts and graphic design, embedded audio and video where useful, and enhanced user interactivity.”

We wait to hear their next move but are certain that they are not going to be rolled over easily by Google or Apple.

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