In a related note to the story I posted an hour ago, FutureBook’s Philip Jones has a piece taking a look at Amazon’s business practices. The company seems to be continually coming up with new innovations to outmaneuver competitors or invent new methods of doing business.
For the last few years, Amazon has been scaring a lot of people and businesses in the publishing industry, and it doesn’t seem to show any signs of stopping. “Amazon doesn’t just want to eat our lunch, is the theory,” Jones writes, “it also wants to cook it and deliver it to us piping hot for a cost that is less than it would be if we did it ourselves.”
But Jones points out that Amazon isn’t some kind of unslayable ogre:
Like any business Amazon will face economic cycles, its shareholders will grow unhappy, and inevitably even the regulators will take an interest. Most important, Amazon does not have a secret formula for success: it is simply very good at what it does and incredibly driven to continue doing it better and better. If companies wish to knock Amazon off this inexorable course then they simply have to improve how they go about competing with it. And no, selling the Booker winner at twice the e-book price that Amazon was selling it was not an example of this.
Publishers, Jones notes, could do a number of things to compete with Amazon better, and many are starting to do some of those things already. He suspects that 2012 will be the year Amazon finally starts to see some serious competition.
I hope that he’s right—not because I think of Amazon as evil or anything, but because a healthy marketplace really needs more than one most-powerful company in it. Competition is the best way to keep prices down across the board. (Or at least it would be if not for agency pricing!)
To which I’ll add: Amazon’s “unstoppable” success is mostly a matter of them applying effort against a near vacuum.
When competitors take off their blinders and actually try to, you know, *compete*, they tend to do reasonably well as witnessed by B&N’s 29% share of the ebook market.
There is simply too much whining and not enough cold, hard thought going on in the ABA camp. Amazon is simply the one-eyed man in the land of the (willfully) blind.
Yes, times are changing.
More precisely, consumer behavior and values *have* changed. Amazon took note and saw those changes as an *opportunity* to make a buck, not a sign of the impending apocalypse to be bemoaned.
Instead of fretting over what Amazon is doing, competitors need to be asking themselves what *they* are doing and *why*. If the answer is “because that’s what granpappy did”, they probably need a rethink.
Amazon is a smart tough competitor but there is nothing preternatural about them. Some of their opposition, though…
Felix – Well said. You are completely right. Elsewhere today here we have seen Rich Adin ranting against Amazon. As far as I can see, there is no basis to his rant except his resentment at Amazon’s success.
Adin writes: “whatever Amazon does, it has carefully thought about how it will ultimately benefit Amazon and further Amazon’s dominance interests”
Since when is it a sin for a business to apply itself to benefiting it’s own interests ? And the truth is that there is absolutely no evidence that Amazon has done anything to further it’s ‘dominance’. They haven’t acted to prevent competitors getting into the market or competing against them.
It’s dominance has come about exactly as you have said – it is the result of total lack of competition from anyone else ! It is utterly risible to criticise Amazon for that ! 🙂
And that doesn’t mean I am any kind of Amazon fanboy. I abhor the Agency crap. I abhor the DRM/Kindle lockin. But what we need is not another attack on Amazon. What we need is the Publishing industry and others to get their fingers out and offer some competition !