Wednesday, November 30, 2011

Amazon's Long Reach

by Sandra Parshall

Wow.

I knew Amazon had its fingers in a lot of different pies, but I didn’t realize how long its reach is until I read the interview with Jeff Bezos in the December issue of Wired magazine. Amazon is not only the biggest bookseller in the U.S. and a media powerhouse; it is also the power behind a huge chunk of the internet. Even if you’ve never held an e-reader in your hands or ordered a print book from Amazon, the company has probably affected your life in some way.

What writers and publishers obsess about, of course, is Amazon’s hold on bookselling. Even with publishers resisting its steep discounts, the company has surged ahead of brick-and-mortar stores to become the number one source of books for American consumers. With a little piece of hardware called the Kindle, coupled with its offering of digital content, Amazon quickly accomplished what Sony and other companies had failed to do: it made e-books wildly popular. Now, through its Kindle Direct Publishing program, it’s making self-publishing respectable, as everyone from unknowns to bestselling authors rushes to make previously unpublished and out-of-print work available in digital format. 

Some people cling to the memory of what the book world was like before November 2007, when the Kindle first appeared, but those days are beginning to feel like ancient history.

Now Amazon is a publisher, and fully intends to shake up publishing the same way it has shaken up bookselling. Bezos believes $9.99 is “really the highest price that’s reasonable for customers to pay” for a book. He also believes writers should get a bigger chunk of the income from their work. He cautions the publishing industry that others – such as Amazon – will eagerly move into the vacuum if traditionalists continue “leaning backward” instead of adapting to the changing market.

Amazon is getting into the movie business too, working in partnership with Warner Bros. Pictures. Bezos describes this project as, what else, a “completely new” way of making movies. We’ll no doubt be hearing more about Amazon films before long.

These are the visible ventures, the Amazon activities everybody knows about. Behind the scenes, the company provides an internet base for a broad array of businesses and institutions, attracted by Amazon’s low fees and obsession with giving flawless service.

Here are some of Amazon’s web services customers, as listed in Wired: Foursquare (10 million users worldwide, three million check-ins a day); Harvard Medical School’s vast database for developing genome-analysis models; NASA’s processing of hi-res satellite images to guide its robots; Netflix, a video-streaming service that accounts for 25% of U.S. internet traffic; Newsweek/The Daily Beast (one million page views every hour of every day); PBS (more than one petabyte of streaming video per month); SmugMug’s storage for 70 million photos; the USDA’s geographic information system for food stamp recipients; Virgin Atlantic’s crowd-sourced travel review service; Yelp’s storage for 22 million-plus reviews.

Most of us know Amazon as a store that will sell us anything, including a lot of stuff we can’t find elsewhere. I’ve even used Amazon to locate a particular flavor of feline hairball remedy that nobody seemed to be selling anymore. If it exists, Amazon can find it for you. But beyond the mundane merchandising transactions, Amazon connects us to the rest of the world in many ways every day.

Oh, and did I mention that Bezos owns a company called Blue Origin? It’s a space exploration program. Bezos thinks access to space costs too much, and he’s going to use Blue Origin to bring down the price.

As I said: Wow.

23 comments:

Sheila Connolly said...

Should we be afraid? I hadn't realized how many fingers Amazon had in all those pies. Wonder when they'll take on politics...or maybe they already have.

Polly said...

Interesting, Sandy. It's nice that Bezos who's rich beyond comprehension, has the consumer in mind. Too bad others don't feel the same way.

Diane said...

Sheila, if they do take on politics, it can only be cheaper. After all, most of the polticians are already bought, one way or another:)

I don't really know if this is a good thing or a bad thing. Bezos is right about publishing. Books do cost way too much (way over $30 in some cases for a hardback novel, not a text book), while most authors get a very small percentage of that. And, let's face it, it's the authors work. They should be getting more.

Maybe he does have a point overall. And - like Sandra - I too have found things on Amazon that I haven't been able to find anywhere else. So, guess the vote is still out. Wait and see. What else is there to do?

Patricia A. Guthrie said...

It's gotten to the point where I don't even go into the B&N site anymore. Gift certificates: If you give someone an Amazon gift certificate they can purchase a myriad of different products. They're linked to everyone.

Whenever I've ordered anything from Amazon, I received it in a few days.

And,as someone pointed out, they'remaking self-publishing respectable.

Amazing company--positive or negative. I do have a small problem with monopolies though.

Patricia A. Guthrie

Peg Brantley said...

We have had nothing but the best service from Amazon, and I don't have any reason to doubt that the best interests of Amazon are also my best interests.

Except this is all just a little scary. Do they increase my freedom or make me more dependent?

Time will tell.

Sandra Parshall said...

This is a capitalist society. The company that provides the best service at the best price is the one that will stay in business.

Demonizing Amazon is a popular sport -- they're blamed for everything from the failure of local stores to the implosion of the traditional publishing industry. Personally, I'm tired of being scolded if I say I bought something from Amazon. What Amazon is doing is GIVING CUSTOMERS WHAT THEY WANT. Satisfied customers put Amazon where it is today. I don't see anything corrupt or horrifying in that process. It's the American way of life. If you love a local store and want it to stay in business, shop there. If/when all you care about is making a quick, inexpensive purchase, you shouldn't be made to feel guilty for shopping with Amazon.

There's a lesson in Amazon's rise for other businesses, don't you think? The businesses that don't take that lesson to heart are the ones that will fail, while Amazon grows bigger.

Patg said...

Thank you Sandy for a great post about a company that proves the American dream. I didn't know about all their services, got hang on to that bit.
Sheila, the whole fear factor is the reason we sit on this planet at 6 billion heading to 7 with no way to feed them. Oh that Amazon did have a way of electronically taking over everything those fools in Washington do and displaying it on huge reader boards at every session.
Good luck Mr.Bezos!!
Patg

cncbooks said...

I've used Amazon just like nearly everyone (rarely for books--no guilt trip for anyone else, just my choice) but it's largely because of the monopoly Bezos is creating. I KNOW a lot of what he says and does is a good thing but I can't believe it will still be a good thing when Amazon controls our lives. And I'm not entirely kidding---Patg's scenario frightens me.

Anonymous said...

Amazon is simply filling a need by giving consumers what they want--selling the titles that the brick-and-mortar stores refuse to carry and making small press books accessible around the world for authors who can't afford the massive publicity machines. Bravo!
Sally Carpenter

P.A.Brown said...

Very interesting, and I hope he succeeds in his space venture because that is the future (if there's going to be one) for the human race.

But I also worry about the monopoly Amazon strives for. I also am confused how Amazon can be a publisher and a book seller -- or a better question why hasn't there been an antitrust claim made against them. I just looked up what is considered anti-competitive practices and Amazon has done most of them.

And if it becomes firmly entrenched in the publishing business, how can we ever trust the infamous Amazon rankings or even the customer reviews. No one understands how books are ranked on Amazon, so it would be easy for Amazon to ensure their author's books are always in the top. Bad reviews could be removed or put so far down on the list that no one reaches them.

Amazon's already pulled stunts to force publishers to bow to their wishes. They've pulled the Buy buttons off certain books when they didn't get their way. They tried to force small publishers into using their CreateSpace printing and would remove the Buy button for those who didn't comply. And maybe everyone else has forgotten it, but there was the 'accident' where Amazon delisted every single book on their site that dealt with homosexuality, fiction or non fiction.

Amazon as publisher and seller can control what we can read. That's a horror story I don't want to read about in a future owned by Amazon.

P.A.Brown said...

Amazon is doing is GIVING CUSTOMERS WHAT THEY WANT. True. Until they decide not to give you something because they have decided it's inappropriate.

I don't want any one company to control what I have access to and they have already removed books from their site, usually without much explanation.

Monopolies are the antithesis of consumer capitalism. If there's no competition who sets the prices then?

Patg said...

There have been many monopolies in the past: At&T, IBM even Chevy, and they have all fallen. Much due to being top heavy with overpaid execs, too much confidence in their old ideas, and refusal to change their management plans. So be it! Consumers are very savy, our little group of writers talking about what's going on is nothing like the eBook, techy, geeky groups that keep after all things tech and come down on Amazon for every little glitch. Even when Amazon is apologizing and working hard to fix things.
There has been a lot of control over us in the past, heck the oldest generations alive today have all been bamboozed with mind control to believe and honor some nonsense or other, and it isn't going to stop any time soon. Especially the attempts in consumerism. Bring it on, we are a much more aware and willing to complain bunch these days. We can handle it and overcome!
IMHO, the fear of a product corporation taking over my life, is very near the bottom of my list of fears.
Patg

Sandra Parshall said...

The New York publishers have controlled what we can buy and read for more than a hundred years. I hear complaints from writers all the time about NY imprints publishing nothing but garbage that's guaranteed to make money -- they don't care about writers, they don't value good writing,blah blah blah. How is Amazon any worse than that? They are all in it to make money, Amazon included. If you don't make money for them, they couldn't care less about your beautiful writing.

If you don't want to buy anything from Amazon, don't. Find an independent bookstore and spend your money there. If all of us put our money where our mouths are, we wouldn't be seeing so many wonderful indie stores folding. Amazon didn't do that. Customers who preferred online bargains did it.

As I said, demonizing Amazon is a popular activity for many people, but I think the blame is misplaced.

Sandra Parshall said...

As for Amazon removing books, have you looked at a B&N lately? Do you see many small press books there? DO you see more than a tiny, tiny fraction of what is published? B&N has so much power over major publishing that publishers show their reps proposed book covers before going to press -- and if the B&N people hate a cover, it's scrapped. The books they display favorably are displayed that way because the publishers have PAID for that placement. Only a very small number of writers will ever see their books on any bookstore shelf anywhere. But Amazon has a vast selection, all the time.

L.J. Sellers said...

Amazon also owns a dozen other internet retail companies that continue to operate under their own names. Meanwhile, my Amazon ebook sales pay my mortgage, so I'm a big fan of the company.

lil Gluckstern said...

I think what L.J. is referring to, among other sites, is abebooks which is theoretically a used book site. Amazon owns them, as well as The Book Depository which is a very popular site for Europe only published books. Recently, The Book Depository had been selling its entire stock of a new book on abebooks. this gives me a squeamish feeling since it starts to feel that Amazon is controlling a whole of book buying. But I use them all. Amazon also has the best prices on many other goods. I think it's a matter of two sides of a coin. I still buy a little from my local because I want them to stay in business. And they will order anything for me, no muss, no fuss. Just not the ones published in England.

Sandra Parshall said...

Amazon also owns Zappos, the shoe company, but apparently hasn't changed its operations at all.

P.A.Brown said...

I divide my book buying between Amazon, Powells, eBay and local bookstores. And since I have an iPhone, I also have some iBooks. And that's the way I want it. Choice.

jenny milchman said...

I agree that Amazon provides products in an easy, convenient way, and has paved a road that allows many more authors to flourish than did in traditional publishing. That's the good, to my mind.

The bad is that I feel local businesses, walk in locations, physical browsing and human interaction (this is for books and other products) are the bedrock of our communities. And even linked to our humanity. Convenience and price are important, but we have to look at thing the hidden costs--such as the loss of any of the above.

I'm hoping we can retain the best of both these worlds.

Brad Geagley said...

The publishers in NY have controlled it and now the power shifts to Amazon... interesting article, thanks!

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