Amazon the Phoenix
February 20th, 2006This weekend I killed Amazon, and then I got smarter, and it rose like a Phoenix, and it looked a LOT more profitable a couple of years from now.
I thought I’d share my thoughts about Amazon because I want to take frequent opportunities to encourage our Manager Tools community members to read. If you need help, go to our book list (which we are updating with comments shortly). Heck, even fiction. Read Tom Wolfe, or John D. MacDonald, or JK Rowling, or Carl Hiassen.
Or, Drucker.
Okay, long story. I was readying several books for mailing to the winners of our recent “Boss Communications” question. As I was doing that, and musing on the INCREDIBLE value of The World is Flat, I came across an article about Sony’s new (book) Reader. I’m thinking: BIG FLATTENER of the future.
There are several reviews which seem to suggest that we are past the Newton stage - this version might work. Their earlier version shared other Sony products’ issues with “overly” tight copyright protections, and apparently died.
But the product they are set to introduce has been getting a lot of good press. They might have it just right. Basically, it can hold thousands of books, and apparently the electronics are such that it’s fairly easy to use - read: easy to read from.
If you’re a professional, you should be reading constantly. Maybe you don’t have the problem of toting new hardbacks on planes (try Tom Wolfe or Tom Clancy or Jonathan Strange and Mr. Norrell), but still! Books today, compared to the miniaturization of my phone and address book and laptop and boom-box… They remind me of the original laptops, with the appellation “luggables.”
So, a digital reader, with all the books on it I’m reading… wow. I do love my bookshelves, but can come up with other decorating ideas.
Now, here’s where I got stupid and then slightly smarter. I thought to myself, WOW. Think about it. We’re going to be able to buy books digitally. No more shipping costs. No more value in the Amazon model! Amazon is in trouble! (Sony will be selling from their own site).
I panicked a bit. You’re probably thinking, but wait, not everybody can afford north of $300 for a reader… and you’re right. But I would have submitted at that moment this weekend that this device would be the beginning of the end, if not the end, of Amazon.
All of you smart reader/listeners have already figured this out, of course. People are still going to go to Amazon for books… but NOW, Amazon’s costs just went WAAAAAAY down! Suddenly, Fawkes flies, and Amazon sells off warehouse space it doesn’t need, and it’s as if the “new” economy, the digital one, ends up going through a shake out just like the “old” economy did with the leaning out of supply chains. Because I am happy to pay $20+ for a book, in whatever form. If they can still do that, and the marginal cost of producing a second one is ZERO… WOW.
No, they probably won’t be able to charge what they charge now. There may be a race to the bottom. But costs will have gotten there first.
Digital books are coming. That, to me, is both a flattener, and a RESULT of flattening.
There’s so much more to this (travelling with laptops replaced by reader and smartphone with email)… I’ll recur to this theme soon.
Mark
(Yes, mine will be one of them. “The Effective Manager” is the working title. And yes, I AM working on it.)
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February 20th, 2006 at 3:56 pm
I have to agree with your opening premise - Amazon getting more profitable - because I can see myself buying /two/ copies of a lot of books now — one for the reader, and one for the shelf.
As much as I like and use electronic references, I don’t think anything will ever replace the feel of paper in my hands, or the (many!) shelves at my home or office.
I /have/ flown with a hardcover Clancy though, and I won’t miss that - I think that alone was a major part of my in-flight baggage allowance!
Gary
February 20th, 2006 at 10:19 pm
Gary-
Hadn’t even thought of the multiple purchases. But here’s the scary part. I hadn’t even thought of that ramification til you mentioned it… even though last night I bought TWIF as an e-book.
They SAY self-awareness is a core part of emotional intelligence…
Mark
February 22nd, 2006 at 11:56 pm
The last time I checked, which I admit was 10 years ago now, a large portion of the price of a book went to cover marketing/promotional costs. So the price might not bottom out as far down as one might think.
February 23rd, 2006 at 10:20 am
Hey JP!
You may have me there! I will have to do some research and understand what the cost structure of the book industry are. These kinds of efforts are always interesting and rewarding.
It’s a privilege to serve you,
Mark