THE AMERICAN TECH TITAN SEEMS SET ON BEING A DOMINANT PLAYER IN THE LUCRATIVE EBOOKS MARKET. PRESENTING TO YOU PART 4 OF THE AMAZON SERIES.
Analyze. Enter. Price War. Outlast competitor. Monopolize. Conquer. Repeat. This seems to be the Amazo mantra of dominating countless market segments. Be it e-commerce, web services, its own private label brands or the topic of today's article: Ebooks..
FROM PAPER TO DIGITAL
Since its inception in 1994, Amazon has been obsessed with books. It has started its online store with books first. It seems rather ironic now that Bezos & Co. have been actively trying to disrupt the publishing industry by strongly pushing for ebooks through its Kindle & Audible platforms. To say that Amazon is a dominant player in the ebooks market would be a gross understatement. The company has a staggering market share of 83% in the American market!
THE MYSTIC ALGORITHM
The famed algorithm also comes into the picture here. Amazon has a treasure trove of consumer data which gives it quality insights about what's selling, who's selling & to whom it's selling. It is a well-known fact that Amazon has used this data to underpin its competitors and use it for its own unfair advantage. This algorithm also helps in boosting its sales, the elusive "buyers also see" & "recommended" working its magic to lure consumers to buy more!
THE EBOOK ECOSYSTEM
If you are a regular reader, you would be aware of my obsession with business ecosystems. Apple has one of the best hardware-software integrated ecosystems. Google's app ecosystem seems like an essential these days due to the network effect. Amazon too has created a sort of mini-ecosystem of ebooks. The in-house creation of the Kindle was a watershed movement. The easy to use device popularised ebook reading across the United States, creating new consumers for ebooks almost every day. The market survey by Statista below highlights how Kindle pioneered a culture of ebooks away from traditional paperbacks.
The acquisition of Audible was another shrewd move. Acquired for a mere $300 m (by Amazon's standards) in 2008, a new niche of books is being augmented. In this segment too, Amazon has a respectable market share of 41%. In a nutshell, Amazon has captured a dominant market share in two strategic segments of books. It has created a healthy system to attract consumers & cater to the new modern age buyer.
SELF PUBLISHING GIANT
Amazon Publishing was started in 2008 with the aim of discovering bestsellers. However, after some colossal losses, the company shifted its business model. The company launched Kindle Direct Publishing through which anyone could sell ebooks on Amazon's platform. The writer would get royalties ranging from 35% to 75%. this self-publishing model has proved to be more sustainable & successful. Independent writers & freelancers have flocked to Kindle churning out quality content on a regular basis. This model is a bit like the App Store envisaged by Steve Jobs & Co, for their iOS platform.
The future looks bright for Amazon's ebook aspirations. It looks set to dominate the industry for decades to come. It now faces two stumbling blocs to super profit: Will consumers embrace this new niche of books over paper books? & How will publishers react to these monopolistic practices? For now, it hangs in the balance.
ON A PERSONAL NOTE, I DESPISE EBOOKS. THE SMELL & FEEL OF A TRADITIONAL PAPERBACK STILL ENTHRALLS THIS AVID BOOK READER. WHAT'S YOUR TAKE? COMMENT BELOW!