Design Theory Reference: Evolution of Amazon

There is no doubt that this is the best story I've read about Amazon in the past year--and we can almost say it's the third-star technology industry after Apple and Google, though it's still a distant third. Very interesting, it is good because it did not get the official Amazon interview. This forced the author to conduct a full-scale survey, which presents a dangerous relationship between Amazon and the book industry, as well as its future rivalry with Apple.

Originallinks; Author: Adam L. Penenberg Translator: Wang Xin Rice; proofreading: Zhang Liang



To explain the present and predict the future, Jeff Bezos, Amazon's founders and chief prophets, often turn to the past. Based on historical similarities, Bezos once likened the rise and bust of the dotcom bubble to a 1849-year gold rush, comparing today's broadband network to the invention of electricity, comparing printed books to horses and comparing the Kindle to cars. His most bizarre analogy, perhaps, is to compare the Internet's impact on business to the Cambrian 550 million years ago. When the first multicellular organisms evolved from primitive mollusks, the earth experienced an evolutionary explosion that produced and perished at an unprecedented rate. "Unusually dangerous," Bezos concludes, "is not evolving." 」

"Evolution" is not just a theory for Amazon, but a blend of tissue blood. Since July 1995, the advent of a "single cell" online bookseller, Amazon has grown into a giant online mall in its 14-year history, offering millions of goods and gaining more than $34 billion trillion in market capitalisation. It sells everything from music, movies, video games, to clothing, gadgets, gardening tools, laboratory equipment, health and beauty supplies, and even "mini chimneys" like sex toys and rock nails. During this period, Amazon has incorporated real user feedback into the product pages, inventing the "Look inside" feature--which allows readers to read books, and Amazon also created "market" marketplace products that allow Third-party sellers to sell new or second-hand goods on Amazon inside.

But none of this has sparked public imagination, as kindle--Amazon's E-book reader. Now that the Kindle is in its second generation, it is not the first handheld library, nor is it the first tool to use electronic ink technology to achieve the effects of paper readings, but the Kindle is the first of its kind to be successful and has sold hundreds of thousands of since its inception in November 2007. It is also the first ebook to use a built-in 3G wireless connection, which makes downloading full volumes of e-books (one Kindle can contain more than 1500 e-books), as long as less than 1 minutes, usually less than half the price of traditional hardcover books. To expand its product reach, Amazon has released a larger and more expensive Kindle DX for reading textbooks and periodicals, a product that will test the university student market.

Bezos recently announced that it would normally increase sales of 35% of traditional books as long as the Kindle version is released. In other words, Amazon sells 3 copies of printed books, such as Malcome Gradiville's "Alien", while selling a Kindle version--accounting for 25% of its total sales. Citigroup analyst Mark Mahaney estimates Amazon sold 500,000 Kindle units last year and expects all its e-book sales, including books and equipment, to reach $1.2 billion trillion in 2010 years. Amazon has reported that there are 275,000 books in the Kindle edition, including all 112 books that the New York Times best-selling. Amazon has made no secret of its plans, on the Kindle's web page, saying: "Our vision is to make every book that has ever been published, no matter what language, users can read in 60 seconds." 」

In the eyes of Bezos, the Kindle is a logical evolutionary result of a 500-year-old analog technique (the translator's note: Print publishing). The idea spooked the 24 billion-value book industry, which has long been allergic to Amazon's growing clout. They were afraid to play the role of trilobites in the Cambrian example of Bezos, the first creature to have evolved their eyes, but, like most of the same age species, suffered massive extinctions when they were unable to adapt to environmental changes. There is no need to look back 500 million years ago to find a suitable analogy. More realistically: Bezos, a former hedge-fund manager with a shiny forehead and a marine's physique, may be stealing from another tech genius.

What Jeff Bezos is doing to book publishers is exactly what Apple's jobs have done to the music industry. Through the IPod and ITunes Store, Apple quickly tapped a fresh market to control the distribution of digital music and dominate the record companies. With Amazon's accession (where other online retailers are in a slump, and Amazon's recent earnings are still high), Bezos may be aware of the same opportunity that, at some point, he will be able to incorporate this growth segment into Amazon's ecosystem, as Jobs did. And once this happens, publishers will have to worry about not just being 挤轧, but Amazon being able to phase them out like middlemen abandoned by new technology.

In a situation like Dan Brown's latest novel, there is one person who can save them, Steve Jobs.

1.

In some ways, the book publishing industry runs some five-year plans like Joseph Stalin. In the former Soviet Union, the government estimated how many combs, soaps and cars people needed. Too much production leads to a glut of goods and too little to a intermittent shortage. Estimating future demand may be a fool's errand, but it's certainly what publishers do--usually ridiculously wrong, with a return rate of 40%, 50%, or even some time to 60%. The book industry is one of the few stores in the retail industry where goods can be returned entirely to manufacturers and repaid, an irrational way of operating from publishers ' need for booksellers to sell republication books. Storing thousands of Low-margin books requires a shelf position, after all, the booksellers pay the rent. In order for the guarantee to appear in the bookstore, so that readers can read and buy, you must reduce the risk of the book business to accumulate goods.

All attempts to restructure this extremely inefficient distribution system have failed in the past 20. Too many vested interests, the most famous of which is Barnes&noble (a famous American bookseller), in resisting the change of mode, it proceeds from the existing mechanism obviously. The advent of the internet as a marketing channel has added a powerful new force to this struggle. While most books are still sold in huge sales chains like Barnes & Noble, Borders (struggling on the brink of bankruptcy), Wal-Mart and Costco, Amazon dominates the online marketplace, which only accounts for about 10% or 15% of the total book sales share, But it accounts for 80% of the online market share. The kingdom of Bezos has gradually gained enviable user loyalty through its "soft face", which is embodied in its competitive price, user-friendly network experience and excellent after-sales service.

For publishers, the era of Karl Perkins, a Marxist-style editor-cheering with writers and lunch at a posh restaurant-is gone. Now, "Publishing is sales and PR," says Marion Maneker, a former publisher of business classics, "All you have to do is get the books into the bookstore and get the buyers in and buy them." But Maneker believes the Kindle can help Amazon bypass traditional publishers. Amazon can reach a deal directly with big-name writers to minimise prior risk and solve the return problem once and for all. In fact, when it launched Stephen Gold's latest novel "UR" (priced at $2.95), it did so. The Kindle (unlike most of the other works of gold) appeared in the novel's plot, and it had a good ending.

The book industry is very fragile, its success and failure in the once: a few best-selling books ("Harry Potter" series, "detonation of the popular", "Twilight", etc.) feed other books. Once you take away the best-selling part of the publisher, it leaves a pile of lost money. But writers such as Dan Brown, Malcome Gradiville, Stephen, Stephanie Meille and J.K are likely to benefit from such a system: they can choose not to pay in advance for higher royalties. A star writer, the standard royalty on a traditional hardcover book is 15%, while Amazon may only take 20% of the cost of sales, leaving the rest to the author himself. In this model, "You are the provider of intellectual property, you get the biggest share of the income after deducting the expenses, not the publisher." "maneker said. If the E-book model comes in, Amazon can pick out the best-selling authors, and publishers will find that they suddenly lose their most popular source of revenue.

And the threat is not just about e-books. This is the doomsday scenario for the traditional publishing industry in the eyes of E-reads's founder and independent electronic book publisher Richard Curtis: Imagine you are publishing the latest Dan Brown works, the Lost Symbol. The first edition printed 5 million copies, and Amazon accepted 500,000 subscriptions on its website. Random House may send the 500,000 books to the Amazon and then send it to consumers, "but isn't it more reasonable for Amazon to say," Look, don't ship these books to us, waste shipping and fuel, why don't you just give us Dan Browning documents, and then we're in BookSurge Publishing presses on demand 500,000 copies to send to our customers? "Random House Saves the printing cost, freight, fuel, almost all overhead." This approach is so efficient that it is irresistible. 」

Not only irresistible, but actually irreversible. "When Amazon can be your buyer and seller at the same time,"curtis asks, "Why do people need traditional book publishers? "In this way, Amazon not only controls the sales channels of books, it also controls the content, and a change in the rules of the game is completed."

2.

The battle over the military arteries is enough to explain why Amazon has been able to deal with stubborn publishers outright. While the friction between publishers and book dealers is inevitable, the relationship between the publishers and Amazon is particularly controversial. In fact, their relationship is so tense that many publishers ' agents, advisers and editors are anonymous, but don't want their names to appear (and Amazon refuses to comment on this article). Last year, in an effort to punish booksellers who did not want to share their profits (unwilling to submit to the demands of the BookSurge printing business for small publishers to use it), Amazon canceled a portion of the books in the United States and Britain to "click on orders". The tactic was dubbed the "nuclear option" by the New York Times. In a pungent letter to his author, Hacht Publishing house chief executive Tim Hely Hutchinson slammed Amazon's "growing demands" and said that if this continued, "Soon Amazon will occupy the present by authors, publishers, retailers, Total income shared by printers and other participants. "

Amazon has a long way to go to achieve this level of hegemony. To do this, Bezos needs to win the competition for E-book sales and turn this into a mass market phenomenon. The first step should be attributed to his success in promoting the development of E-books from a novel concept into a mature consumer product by introducing the Kindle. By contrast, Sony's E-reader and E-readers (both on the IPhone and on the Internet) have been around for some time, but before the Kindle there were few consumer talks and E-books. It soon began to integrate the market-as Apple and IPod did for MP3 and MP3 players. In some ways, the problems faced by Bezos are more difficult because music and books are fundamentally different. IPod buyers can digitize all the music CDs they've collected and listen over and over again. Kindle users cannot scan their existing collection of books into their devices-and most people don't read more. In addition, a digital downloader can buy only one song at a time, but most book buyers don't buy only one chapter at a time.

In order to control digital channels, Bezos must set prices low enough to motivate readers to give up hardback and paperback and choose the Kindle version. Apple imposed the price of the famous "99 Cents a song" on the music industry. While Apple has given up some of its powers over the years--prices are now layered, from a minimum of 69 cents to the most popular 1.29 dollars--Mr. Jobs still achieved his goal. He established a real monopoly on the online digital music market, which has accounted for 87% of its share of downloads up to the recent days. In the process, he launched the ipod--, which occupies 70% of the MP3 player market share, and the IPhone, which is inspired by the IPod, adds up to 40% of Apple's total revenue.

In the past few years, the cobwebs must have been watching the drama. Amazon, as a successor to the music download industry, has gained only a small share of the market, even though it is cheaper than Apple's. Through personal experience, Bezos understand how important it is to have a firm grasp of marketing channels before another rich opponent enters. Even if Amazon is established as a major online CD seller, he is still too late in digital music downloads. It is unlikely that he will make the same mistake again for an ebook.

When the Kindle was launched, Amazon's first axe was to impose a 9.99 dollar price per ebook on publishers. But in the end, Apple was able to earn a few cents on every song it sold (after deducting bandwidth and infrastructure costs), and Amazon was losing money on most of its books, and publishers were able to make 12-13 of dollars from each ebook. You might think that this is because publishers can profit from this arrangement-they don't have to pay for paper, ink, manufacturing and warehousing and transportation, and no longer have to bear the depreciation losses, they should be satisfied, but in fact they don't. Amazon has changed consumers ' expectations of book prices, redefining a "book" of costs, as Apple did with music. In fact, there is a protest going on on Amazon right now, and every Kindle book with a price above 9.99 dollars will be labeled by thousands of users. Once a book buyer and Amazon form a price union, publishers are bound to lose.

"If you can control your price, you are not far from dominating the market," ",curtis said. In this case, Bezos may return to the negotiating table and force the other side to make more concessions. Why would Amazon pay 12.99 dollars for the Kindle version of each hardcover book? How about a 50 percent? Like record companies, if publishers don't want to get out, they have to play by the rules.

So far, early reviews have argued that Bezos's strategy is succeeding. The Kindle has a large number of fans, and they usually buy more books than the average reader. The electronic book process is still in its early stages-e-books account for only 1% to 3% of book sales-and Amazon is not the only player in the field. The Hearst group is planning to do a magazine E-reader, and Murdoch is also planning to invest in News Corp. Plastic Logic, based in Mountain View, Calif., and another Dutch company polymer Vision also plans to launch its own E-book reader later this year.

Don't forget about Google. It has an astonishing market capitalisation and a partnership with Sony, offering copyrighted books from Dickens to Tolstoy to Mark Twain, which can be accessed via the Internet, or downloaded in PDF format or through Sony's new E-book reader. Google and the American Writers ' Union also reached an agreement last October to scan, index and display as many as 6 million copyrighted books, in exchange for some advertising revenue. Google's action on public-sector content is clearly not of interest to companies that make money. The strategy is a bit like Google's takeover of YouTube. It was rushing to get all this content and didn't think about how to make money out of them. As a sign of the rapid evolution of the market, in June Google announced that it would sell some electronic versions of new books by the end of the year – priced by publishers.

Perhaps the biggest weakness of Amazon is that E-book readers are destined not to be a stand-alone product. "When we end up with a technology product that can run around with it, I want it to include the Kindle's functionality," Judith Regan, a former publisher of "regonbooks Publishing house, said:" I like it, but how many people want to memorize it again? " Kindle, plus iPod plus iPhone, laptop, blackberry, wallet, comb, lipstick--my shoulders are so sour. "It's not the money that's spent on buying these stand-alone devices," he said.

This is the weakest place in the Amazon, where the company has little experience in designing and manufacturing electronic products, which is what Apple threatens to Bezos's wishful thinking.

3.
Rumors that Apple will launch a touch-screen multimedia tablet have been around for years, though Jobs famously said: "It doesn't matter what the Kindle is doing, it's important that people stop reading." 40% of the people in the United States read less than one book last year. The whole concept is wrong from the beginning, because people no longer read. 」
For Steve Jobs, this is a clear hint of what he is planning to do as an e-book reader, because the Apple mogul is best at diverting attention. He downplayed the video features on his iPod, insisting that no one would want to watch a movie on a two-inch screen, refusing to admit that Apple was developing a mobile phone, and claiming that any laptop that wasn't fully configured was not in his plan-until last year, when the MacBook Air was launched. When Mr. Jobs criticized competitors ' products, downplayed their importance, or released a smokescreen saying that he was not pursuing a particular market, it was usually when he was preparing his killer.
There is also more evidence that Apple is planning to enter the E-book market. Last year, Apple submitted a trademark registration application, modified the Itune Store trademarks to provide products and services, for the first time added a book. A recent patent application included a multi-touch ebook technology, the IPhone's multi-touch screen patent author Steve Hotelling and Steve Jobs ' design guru Jonathan Ive listed among them. United States Patent Application number 20080204426 (gesture of the touch input device (gestures for touches sensitive input Devices) describes a method that "can simulate finger flipping pages". The invention also makes it possible to "quickly flip" a thick book. Another patent for a docking dock similar to a flat-panel device also covers E-books.
Of course, the blog is flooded with predictions that Apple will launch multimedia tablet devices in the coming years. A 10-inch color multi-touch screen device with Wi-Fi and even 3G functionality dwarfs the Kindle's grayscale screen, its keyboard-and-notebook features. Apple will use existing iTunes to sell E-books-it's already selling audio books. Perhaps this explains another lively rumor from Andy Ihnatko of the Chicago Sun, who says that a truck full of books keeps moving into Apple's headquarters and then empty out. "I got the same message from a very reliable source," said Thomas Maja, senior vice president of "hachette Book Group Digital and Audio Publishing. But she and other publishers were unable to confirm whether Apple had obtained permission to sell the books in the itunes store. (Apple declined to comment on this article.) ）
In any case, Steve Jobs can use judo tactics to deal with Jeff Bezos. Amazon has struggled to open up the idea of e-books into people's brains, creating an unprecedented market, and then began to control distribution channels, Apple can be forced to squeeze into the market with color multi-touch screen tablet equipment. Apple's devices can not only read, watch videos, listen to music, surf the internet and send and receive emails, but also have the power of ITunes and the app Store, even plugged into a desktop docking dock with full-sized keyboards. The book is only a small part of its function, and it will have a wider audience than the Kindle.
Crucially, Apple is first and foremost a hardware company, and as long as it sells ipod--or multimedia tablet devices, it is less concerned about making money from content. Bezos is struggling to sell a relatively primitive technology. If his strategy is to work, either the Kindle will win the hardware competition, or it will have to make money from the Kindle book, or both. He is not afraid to lose money when it comes to new markets-the first five years of Amazon's founding did not make money-but that cannot last forever.
Unfortunately for Bezos, Apple is not only more experienced in designing beautiful products that people are eager to buy, but also as a partner for publishers. While Apple is desperate to haggle over the price of its publishers, unlike Amazon, it has no interest in replacing publishers or controlling content-historically not. All of a sudden, hunters become prey, and if e-books are developed, Amazon may find itself at the end of a dismal exit.
This does not mean that Amazon will decline. The survival of the fittest in evolution, the shift in the book industry takes time, and Amazon can leverage its online presence to eliminate wasteful returns (the return of book sales), pushing publishers to take on-demand printing, and to converge on money while implementing their digital book strategy. It is also launching a Kindle DX, developed for teaching materials and newspapers, that has a screen that is about one-fold larger than the existing Kindle, and has been implemented in five universities.
In addition, unlike Apple's closed hardware design, Amazon can also follow Microsoft's (open) E-book application. Earlier this year, Amazon launched a free IPhone Kindle app, and a company spokeswoman said it planned to provide the software for a "range of phones". To further expand, Amazon recently acquired Lexcycle, a company that invented Stanza, a popular electronic-reading software based on the EPUB format, a standard that competes with the Kindle. Bezos is always a pragmatist, and ultimately he wants people to buy Kindle-style books, even if they're not reading them on a real Kindle.
For book publishers, they benefit from a finely fragmented market that does not have a single entity to control distribution channels. The more intense the battle between Amazon and Apple, the greater the benefits they get. At the very least, they can take a breather, as at least two will compete for the sale of E-books-and every book writer knows that there are more than one choice at the negotiating table.
4.

In the long run, when readers gradually switch to e-books, the form of books is likely to change radically. This process has begun since the Internet began to change the way people get information, content, and entertainment. Evan Schnittman, vice president of Global Business Development at Oxford University Press, believes that continuing online can be a potential threat to "immersive reading". "I love reading, but I know that now I have less time to read-even if I'm in the publishing industry," he says, "The ebook is just a digital version of the print book, and my question is, is that enough?" Is this really what we want to do? 」

If history has any guiding significance, the answer is: No. The extinction of printed words is a predictable development model. A new technology initially tended to mimic things before, until innovation and consumer demand drove it far beyond its predecessors. The first field tanks appeared to be very suspicious of armored tractors loaded with cannons; early cars were called "horse wagons" for a reason; When the news media began to report on the Internet, its content was not the same as the print version. But just as an engineer does not dream of designing a new sports car from the raw material of a wagon, the book leaves the paper and the ink as it persists.

Given our current online behavioral habits, the book may soon become a multimedia event, driven by a wave of rapid innovations in the screen and microprocessor. In this mode of deformation, the book industry can actually get a good position. Publishers can combine authors and multimedia manufacturers to create a new channel for dynamic E-book design, more than a single word. They may provide a mix of text, video, audio interviews, and three-dimensional maps-a complete ecosystem of content built on a book basis. For Stephanie Meille's teen vampire novel Twilight, multimedia can include video games, biographies, maps, music, and discussion topics included in the book. Interactive elements allow readers to create their own story lines, or even their own use of the characters in the book's animated short films. Inevitably, this experience will also link to some of the peripheral products included in the game: T-shirts, animated models, vampire toothbrushes. Suddenly, a book-only book looks very barren. This is not limited to books, magazines and newspapers.

This does not mean that traditional books will completely stop printing. "Every night, I read five or six children's books to my daughter, and what could be better than what I hold in my hand?" Siva Vaidhayanathan, associate professor of media Research and Law at the University of Virginia, said: "When my daughter sits on my lap, what kind of media is better suited to the story of Dr. Seuss than the book in my Hand?" I can't figure it out. "Of course, they have said similar things to vinyl records, CDs, and now digital downloads." Today's young people who are accustomed to entertainment are brought up in various digital nutrients. Multimedia books are a very omnivorous taste for them.

It just shows how subtle evolution is. One minute you're at the top of the food chain, the next minute you're someone else's lunch--like the biggest carnivore of the Cambrian period, 6-foot-long anomalocaridid. It looked like a mixture of giant shrimp and stingray, flapping its fins, culling its prey with razor-sharp teeth. But in the end it became extinct, replaced by another sea of carnivores, giant mollusks. The latter chapter of the descendants of fish still roam the seabed, using ink-jet as a protective mechanism.