Bezos and the future of books

 

Amazon boss Jeff Bezos discusses the Kindle Fire HD

Now that Steve Jobs has gone, who is the most powerful and influential CEO in the technology world? My nomination is Jeff Bezos, founder of the first e-commerce business to make a real splash, and still running Amazon 18 years on.

Not only has he shown real tenacity and long-term vision in repeatedly starting risky ventures amid investor disquiet, he is also a charming and interesting man - not something you can say of every tech CEO. Kind enough too, when we met him in London, to warn us about his explosive laugh which can rattle windows, and send the needles on recording equipment into the red zone.

"We love to invent, we love to pioneer, we even like going down blind alleys," he told me when I asked what his company was about these days. So after pioneering online retailing, Amazon has moved into selling all manner of goods including clothes, into providing cloud computing services, and now hardware to give users access to all sorts of media content.

Mr Bezos was in town to promote, among other things, one of those innovations which some thought might be a blind alley, the Kindle Fire. Amazon's colour tablet, which has been out for a year and selling very well in the US, has been slow to arrive in the UK, though we are now getting the Fire HD. Meanwhile, a clutch of other Android-based 7" tablets, notably the Google Nexus, have been grabbing consumers' attention - and if the rumours are right, Apple is about to launch a mini-iPad.

But Amazon has two things going for it - price and that fashionable word ecosystem. At £159 it is hard to see how the firm is making any money on the device - in fact Jeff Bezos says it isn't. "We sell the hardware at cost," he explained. "We want to make money when people use our devices, not when they buy them."

So the idea is that Kindle Fire users buy books, apps, films in huge and profitable quantities. Unlike Apple, its margins will remain wafer thin, but the sheer quantity of goods sold should keep revenues flowing and investors happy.

A closer look at Amazon's Kindle Fire HD

This strategy has worked well in the US and is likely to be just as successful in the UK, where Amazon is a familiar brand, and the Kindle can be spotted on just about every commuter train or bus in the land.

But however nice Jeff Bezos may be, not everybody is happy with the huge power he now wields over our culture and our publishing industry. Not only are independent bookshops closing down across the country, but the biggest force in the UK book trade is now almost certainly not WH Smith or Waterstone's but a company headquartered 5,000 miles away in Seattle. With the Kindle a relatively closed device, once consumers have started building a library of ebooks that they cannot read elsewhere, they are locked into Amazon's world.

I suggested to Mr Bezos that some thought him ruthless in his pursuit of his vision of the future of books. "When we bring new things to the market and consumers like them it does create change," he said, "and if you're an incumbent change is scary but you have to lean into the future and embrace change."

One big player in the UK market appears to have heeded that message. Waterstone's, once hostile to Amazon's advances, has now decided to sell Kindles in its bookshops and work with the company.

Jeff Bezos says we worry too much about change - Kindle owners read more books and recent figures appeared to show that physical book sales were not being harmed by the digital switchover.

But however benign a figure Mr Bezos cuts, his power over what gets written and read grows by the day. That means anyone with an interest in the future of books will have to watch his every move from now on. Mind you, with that laugh, there is no danger of not hearing him coming.

 
Rory Cellan-Jones, Technology correspondent Article written by Rory Cellan-Jones Rory Cellan-Jones Technology correspondent

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  • rate this
    +1

    Comment number 54.

    So Amazon may not make any money on Kindle sales, that's ok as they make considerably more money on kindle book sales.
    Authors generally on the whole get less money for selling a digital copy of their book than they do a physical copy.
    That's how Amazon can "give" them away at cost

  • rate this
    0

    Comment number 53.

    #48 - Really? What about all the trees that are cut down & pulped to produce the paper for books, the chemicals used in the ink and covers, The distribution costs (storage, fuel, etc) to get the bulky things to a store? The cost of the store itself? Digital reduces all of this.

  • rate this
    0

    Comment number 52.

    One of the most amazon things about amazon I find is there pricing policy, the prices change so often! Like daily sites like www.huge-river.com show historical graphs so you know if you are getting a good deal or not!

  • rate this
    0

    Comment number 51.

    One of the most amazon things about amazon I find is there pricing policy, the prices change so often! Like daily sites like Huge-River Amazon price tracker show historical graphs so you know if you are getting a good deal or not.

  • rate this
    0

    Comment number 50.

    I use Amazon quite a bit, but agree that their tax avoidance must be urgently tackled by the Government. I use e-books when possible, for their great convenience. I have my Kindle wherever I go, and many, but not all, books can be obtained for it. It is a very well engineered business. I would love, though, if buying a paper books would include the e-book for free.

 

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