Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.
It’s 2016. We are landing rockets on floating platforms in the ocean. Engineers are developing high-speed transportation systems in which pressured capsules ride on air cushions facilitated by linear induction motors. A network of high-altitude Wi-Fi balloons is being designed to float on the edge of space so that everyone on the planet can connect to the Internet.
And ebooks turn pages.
What happened to the exciting digital future of ebooks?
As the leader in the digital book space, Amazon is doing very little to innovate around ebooks. Last week, ZDNet ran a series of articles titled “Why Amazon is the king of innovation.” As it pertains to Prime, drone delivery, and Amazon Web Services, Amazon is exceptionally innovative. Arguably the best. But finding one ebook in a vast digital store and reading it on an e-ink device is archaic compared to Amazon’s other initiatives. “It reads in the sunlight” is about as innovative as “It’s called a fax machine.”
Why are our friends in Seattle so slow when it comes to the future of reading?
Don’t let Jeff Bezos fool you into thinking this was an oversight on his company’s part. It wasn’t. Bezos ties his shoes and eats his breakfast with ruthless intentionality. Amazon’s lack of innovation in the ebook arena is not by accident. It is by design and choice. And here are just a few reasons why the company is dragging its heels:
1. Ebooks Don’t Move the Needle — Amazon’s annual revenues in 2015 were $107B, which make it larger than the gross domestic profit of the 59th largest country, Morocco. But its estimated ebook revenue is only $530M, which is miniscule in comparison. Investors can argue that Amazon isn’t profit-sensitive enough, which is why they continue to eek out a small (or negative) profit quarter over quarter.
But the company is exceptionally margin-sensitive, and it’s wise enough to know that it can make considerably more money selling you flat screen televisions, energy drinks and Nike gear. These other products add much more to the bottom line than ebooks do, which the top publishers only provide 30 percent on each book under agency pricing. Bottom line: Amazon likes money, and ebooks don’t do much for the bottom line.
2. Amazon Is Still Faster than the Publishers — Amazon may not be moving quickly to usher in the future of ebooks, but it is still moving faster than its publishing partners. In the last month alone, I’ve witnessed a publisher price an ebook higher than a hardcover, a senior executive tell me that ebooks are a fad, and an imprint admit that it doesn’t know all the places where its ebooks are sold.
Amazon doesn’t need to move at break-neck speeds to stay ahead of this type of behavior. There are certainly innovative people in publishing, but the industry as a whole still likes the smell and feel of print.
3. Innovation Means Breaking the Status Quo — “If its not broken, don’t fix it” is a popular phrase, and one that is highly applicable to Amazon. The company controls 60-75 percent of the retail ebook market, so it has no incentive to change anything.
Things that would truly be innovative—like allowing authors to build audiences, gathering data on reading habits, providing sales and marketing tools, and allowing brands to incorporate digital content—would all shatter Amazon’s primary goal of controlling the end user. Amazon has zero interest in helping content creators or providing transparency into buying or reading habits.
I’m still going to buy my toilet paper from Amazon because the fluffy stuff always arrives on time and the delivery is free with my Prime membership. But I care too much about authors and content providers to continue to feed the Amazon ebook monster and watch it devour creativity. If Amazon has any weakness, it’s the lack of innovation in ebooks, which is an opportunity for a few forward-thinking groups in and around publishing to take advantage of.
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