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
    +7

    Comment number 14.

    I have purchased from Amazon for several years. Their overall service level is exceptional.
    I also have the "Love Film" service which I initially didn't realise was an Amazon company. This company is a pleasure to rent film's and games from.
    If the product, price and service are to the highest standards then they deserve to be successful. They currently set the bench mark for others to aim at

  • rate this
    -1

    Comment number 13.

    As a Kindle author, Amazon's policies in rewarding Kindle authors are far from generous. Not only do they lock in buyers, but they lock in authors as well, esp. if you want to get the maximum royalty rates. Combined with payment procedures that penalise US sales if you're based outside of US, Amazon is not very much of a benefactor.

  • rate this
    +1

    Comment number 12.

    Maybe Bezos isn't as smart as some think he is. He releases the Kindle Fire in the US but not here. Then he releases the (smaller and non 3G) HD here boasting how much more it can do compared to the original Fire... like we would have known this? Then he compounds it by releasing the original Fire here after all, along with the HD. Original won't sell now! Not with the price of the HD!

  • rate this
    +1

    Comment number 11.

    I do most of my shopping - by value - online. I use Amazon, but only when it's cheaper than any apparently British online shop (and there are plenty). Google shopping search is a good way to find the cheapest supplier of a single item, but I won't believe online shopping has really come of age until there's a way to find the cheapest supplier(s) of a *basket* of shopping.

  • rate this
    -8

    Comment number 10.

    Bezos isn't fit to lace Steve jobs trainers, he's a jumped up Derek Trotter who managed to corner a market, no true tech innovation at all. You also don't need a kindle to read kindle books, would wager there are more people registered via iPhone than via a kindle device.

  • rate this
    +1

    Comment number 9.

    It ten years time there will only be Amazon. They are profitable enough to price reduce in all markets and not worry, even if they end up selling at a loss. They do not have to pay the same taxes as UK companies so they have an unfair advantage.

  • rate this
    +6

    Comment number 8.

    I buy a lot from Amazon, but strongly disagree with the tax advantages it is allowed to exploit. It and online retail companies with similar business models should be taxed not based on their country of registration or operation, but per item delivered to UK addresses.

  • rate this
    +1

    Comment number 7.

    Any company that dominates the market is not a good idea.

    I suspect that amazon keep a tight control over any competitors.

  • rate this
    0

    Comment number 6.

    Seeing as Bezos couldn't care less about anything outside the US I doubt he'll be looked at as fondly as Mr Jobs.

    Why is Amazon still only giving the UK the older tech while the US is given the newer stuff. I don't want to buy a tablet that's already a year old just because it's new in our country!

    Yet the press act as if we should be grateful that Amazon are allowing us to buy their gear.

  • rate this
    +8

    Comment number 5.

    Would be a great day when Amazon pays corporation tax and VAT in the same way as UK companies. It is a corporate parasite and a bad citizen.

  • rate this
    -4

    Comment number 4.

    considering its only selling in 4 out of the 27 eu member states I think paper books are quite safe>

  • rate this
    0

    Comment number 3.

    Amazon is fantastic. I use it for all types of reading material - e-books, hardbacks and softbacks - service is great, prices no more than high street, often less (thankfully) and I don't have to cope with a surly 'don't want to be here' student at the till...

  • rate this
    +7

    Comment number 2.

    Amazon is amazing - shame for other retailers, but it is true.

    He really has changed the landscape, much as Jobs did, leaving others trailing (at least for a while!)

  • rate this
    +8

    Comment number 1.

    Amazon offers a choice of books that were previously only available in one or two major university bookshops, likewise for music. If the major high street vendors failed to grasp that opportunity, or read the writing on the wall, why should we consumers regret it?

 

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