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 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.

  • rate this
    0

    Comment number 49.

    I do care whether they pay tax or not because I feel that they are bullying their way to force us to accept that they don't have to contribute.

    I haven't shopped from Amazon for a long time because of this.

  • rate this
    0

    Comment number 48.

    Books should remain in paper.To mass produce mobile electric pads which use: electricity from nuclear plants,batteries acids,screens so easily blurred needing chemical cleaners and the low emitting radiation constantly at your side is for the lowest of intellect and the most needy of attention.Desktops/laptops are enough, trees can be farmed.Amazon no profit, I hope that was for the right reasons.

  • rate this
    +2

    Comment number 47.

    Low paying bad conditions tax avoiding capitalist of the worst kind.

  • rate this
    +1

    Comment number 46.

    I don't know if Bezos is the new most influential CEO in technology, although I doubt it, but I'm sure the BBC, or more to the point Rory, will continue to advertise on behalf of Amazon to ensure that Bezos is portrayed as such, as they continue to do for Apple (and as they did for Jobs prior to his death).

  • rate this
    0

    Comment number 45.

    As a customer, I love Amazon: I buy at least 1 book a week through them, sometimes more.

    But as a small publisher, I refuse to deal with them. They take a whopping 60% of any profit. People who complain about Apple's industry average of 30% don't know the meaning of the word "greed". As a small publisher, we couldn't survive if we entered Amazon's candy-covered house...

  • rate this
    -2

    Comment number 44.

    Amazon is the ultimate market place...Jeff Bezos invented the supreme business model start off small from selling things from his own garage to growth and embracing other merchants to join with him to create one of the biggest market places online, therefore Mr Bezos should be admired for how far he has come today. But amazon kindly needs to remember their workers are their customers too :).

  • rate this
    0

    Comment number 43.

    @#34 - you can read kindle books on your PC. And on your iphone, ipad, mac etc. All you have to do is download a free Kindle app from the Amazon website and you can access all your kindle purchased books on all those devices and on your mac/PC. It is so seamless that if you stop reading on one device and pick up on another, it will even sync to where you left off!!

  • rate this
    +1

    Comment number 42.

    @41, Vampire : I would have invested in many companies had I had two necessary conditions: the foresight to know which are going to grow and some money. Sadly, I have never had either.
    I have no grudge against those who do, but I never have. Like many people, I have enough to live on but not any spare to chance losing on stocks.
    I'm not poor but I am too lazy to ever get rich.

  • rate this
    -2

    Comment number 41.

    "..unbelievers are dead or converted.."... Dredna, the Wicked Summer Dress god is a peaceful, patient deity and is quite willing to wait for *aeons* for his people to outlast the infidels. He encourages his people to be too lazy to bother spreading The Word.
    And he loves the One World idea.
    Dredna supports Science, Technology and brown sauce on chips.

  • rate this
    -1

    Comment number 40.

    Instead of whining about tax, why not invest in Amazon? If you'd done that 10 years ago, you would have had a ~600% return.

  • rate this
    -3

    Comment number 39.

    None of the lack-witted inanity of the Church of Dredna is less rational, less credible or less sane than any of the others. Nor less sensible than the needless waste of nationalism and borders and tribalisms and a million separate tax regimes.
    If a company is run by people smarter than the politicians who set up the tax laws, they are not to blame.
    The tribal chiefs are.
    All Hail Dredna.

  • rate this
    -3

    Comment number 38.

    "With religions relegated to the status of children's stories".
    I believe in Dredna, the Wicked Summer Dress God who crated the world and who will uncrate it only when *all* the unbelievers are dead or converted. So I should be allowed to avoid taxes,burn heretics, make inane laws about which hand to wash with and sit in the Parliaments of Man?
    My god has a nicer dress than yours so I rule!

  • rate this
    -2

    Comment number 37.

    ...wars over which end of the boiled egg to open first. Wars over which spooky big daddy in the clouds is the best spooky big daddy in the clouds.
    Wars over which sets of laws apply to which group of people where.
    And the endless, futile, wasteful confusion of a thousand sets of tax laws.
    One world, one nation, one people, one law.
    With religions relegated to the status of children's stories.

  • Comment number 36.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    0

    Comment number 35.

    They trade in the UK so they should pay tax here. Amazon have a large centre on the edge of Swansea, South Wales. So they have premesis and staff etc. etc.
    They even time their staff going to the toilet at the Swansea site... seriously... it's a bit like Charlie Chaplins' "Modern Times"!

 

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