Thursday, June 28, 2012

Is Amazon Eating Its Children?

How Much Time Does Amazon Have?

There is a lot of talk in the media about Amazon becoming too great a force in the publishing industry.  I think there is a much better case for Amazon becoming a much lesser force.

After Amazon helps kill the paper book (and the paper book will die as disposable eReaders make paper books unprofitable) no one is going to need Amazon to buy eBooks.

Amazon’s big advantage was in delivering real books at low prices avoiding the state sales tax. An author can sell her eBooks directly from her website. However, it is more likely that a site like AbeBooks will be formed to sell all eBooks at the lowest prices. Google might come in as a partner to provide the affinity software (if you like this book, then you’ll probably like these books). Google could also just set up the universal eBook sale site itself.

It’s only a matter of time before internet sales become subject to state sales taxes.  Of course, Amazon is trying to diversify as quickly as possible. Amazon is trying to sell everything. It might even become the Sears Catalog of the Twenty-First Century. However, there is nothing special in doing that. Amazon might also become a seller of their own content. This is especially true for selling their own eBooks.  Amazon is working hard to stay alive.

Nevertheless, the future does not look all that good for Amazon. Ebook Readers will become simple comedies in the future. Sales taxes will rip away a big advantage that Amazon currently relies on.

Publishing itself is endangered by self-publishing opportunities. Even more important than publishers will be ‘endorsers’ and ‘designers’ – individuals and organizations – who will give their ‘Good Housekeeping’ seal of approval to eBooks of proven quality.
The publishing industry has a lot more to worry about than Amazon. In fact, Amazon may well be remembered in the same way we now think of Alta Vista. You do remember Alta Vista, don't you?

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