Alexa: Amazon’s Operating System – Stratechery by Ben ThompsonIn short, Amazon is building the operating system of the home — its name is Alexa — and it has all of the qualities of an operating system you might expect: All kinds of hardware manufacturers are lining up to build Alexa-enabled devices, and will inevitably compete with each other to improve quality and lower prices. Even more devices and appliances are plugging into Alexa’s easy-to-use and flexible framework, creating the conditions for a moat: appliances are a lot more expensive than software, and much longer lasting, which means everyone who buys something that works with Alexa is much less likely to switch
Echo as hub came 'as a lark'Connecting the Echo to Internet-enabled lightbulbs and thermostats made by other companies hadn’t been a focus within Lab126 until late 2014. On a lark, an engineer had rigged the speaker to work as a voice controller for a streaming TV device. It was a forehead-slapping moment for Bezos, according to one employee who worked with him directly. “It was something he grew to embrace, aggressively,” the person said. Amazon’s vision for the Echo now relies heavily on the speaker serving as a hub for the so-called smart home. Limp jokes that it’s only a matter of time before some enterprising developer writes a program to use the Echo’s voice controls to flush the toilet.
Alexa 'always almost ready to ship'Even as these fundamental changes went on, the lab’s leadership was convinced the speaker was almost ready. For three consecutive years, the product was expected to ship within six months. The $50 target price seemed more and more far-fetched.
Amazon's secret patentsAmazon kept its fingerprints off the original patent applications. Instead, Rawles LLC was named the assignee—the organization that would own the patent. Rawles had been incorporated in Delaware just two weeks before Amazon started filing patent applications related to augmented reality. In the years since, Lab126 employees have applied for dozens of patents listing Rawles as the assignee, all relevant to augmented reality or voice control. No one has ever claimed Rawles as an employer on LinkedIn, and its correspondence with the U.S. Patent and Trademark Office has been handled by lawyers based in Washington state, where Amazon is headquartered.
What The New York Times Didn’t Tell You — Amazon strikes backWhile we were talking, I also realized that you were envisioning a story that is basically a stack of negative anecdotes from ex-Amazonians. But if we were using that story form, we’d just come to you for responses and be done.
Fake Amazon Book Reviews Are Hurting My BookMy book is the one in the lower right, and the the three I've outlined in red are rather interesting. Without them, I'd be in the number 9 slot. I realize that when you're not number one, other books are in front of you (well, duh), but why are three books in front of me in the Perl category about Swift, HTML, and PHP?
Bezos built Fire phone for himselfBezos’s guiding principle for Amazon has always been to start with the needs and desires of the customer and work backward. But when it came to the Fire Phone, that customer apparently became Jeff Bezos. He envisioned a list of whiz-bang features, and the Tyto team started experimenting with a slew of promising technologies: near-field communication for contactless payments, hands-free interactions to allow users to navigate the interface through mid-air gestures, and a force-sensitive grip that could respond in different ways to various degrees of physical pressure. Perhaps most compelling was Dynamic Perspective, which uses cameras to track a user’s head and adjust the display to his or her vantage point, making the on-screen image appear three-dimensional.
Amazon products are born as press releasesLike every product created at Amazon, the Fire Phone began on a piece of paper. Or rather, several typed, single-spaced pieces of paper that contained a mock-up of a press release for the product that the company hoped to launch some day. Bezos requires employees to write these pretend press releases before work begins on a new initiative. The point is to help them refine their ideas and distill their goals with the customer in mind.
Amazon fosters a content glut to attract customers for other productsThe problem, says Aaron Shepard, elaborating upon his “party’s over” blog post, is competition: There’s an enormous amount, given how easy it is to upload a book onto the Kindle. Even a niche that seems specialized—like soapmaking, the subject of a self-published book by Shepard’s wife, Anne Watson—faces dozens of competing Kindle titles. Meanwhile, Shepard says, Amazon has conditioned readers to pay next to nothing for books. “You need enough books to compensate for the lousy payoff. And of course, that’s a perpetual invitation to produce a lot at a lower level of quality. It’s a treadmill . . . What they [authors] generally don’t realize is that their treadmill is actually a generator, and it’s mostly for powering Amazon.” He explains: “Books have always been a loss leader for Amazon, a way to attract customers for more profitable items. So it suits Amazon very well to have an army of self-publishing authors, mostly working for pennies per hour, supplying Amazon with dirt-cheap content to keep customers coming to the site.”
How Amazon promotes booksAmazon has “daily deals” and “monthly deals” in addition to countdown deals. It has its own “editors’ picks” and best-seller lists. All these regularly feature Amazon titles. Consumers who buy a certain type of book through Amazon, say a romance, will immediately get recommendations for similar books. Amazon Publishing romances are likely to be among them. Those who buy one will get an e-mail the next time its author comes out with a book. Like politicians who feel the press has betrayed them and want to bypass conventional means to get their message out, Amazon is largely bypassing traditional advertising and promotion that relies upon media and bookstores. “We’re focused on customers we can talk to directly,” Belle says.
NYT best seller list excludes Amazon ebooksIt has not helped Amazon Publishing that most of its authors have been unable to get on The New York Times’ best-seller lists. While the Times tracks e-books, it does not look at titles “available exclusively from a single vendor,” according to its written policy. It is presumed that’s because the Times does not trust Amazon to report sales figures on its own titles without independent verification.
The failure of Amazon Publishing (in NY)The goal, says one former employee with knowledge of Amazon Publishing strategy and its execution, was to bid for "big books. We were going to compete with major publishers.” That seemed obvious from the man Amazon picked to run the New York office: Larry Kirshbaum, a former CEO of the Time Warner Book Group and discoverer of such literary luminaries as James Patterson and Nicholas Sparks. His defection to Amazon, as it was seen, was big news in the literary world—as were the six-figure advances he started handing out. Kirshbaum signed a few well-known names—self-help guru Timothy Ferriss, actress Penny Marshall, singer Billy Ray Cyrus. But the books did far worse than expected. Although Amazon had partnered with Houghton Mifflin Harcourt to release print versions of these and other titles, many bookstores simply wouldn’t sell them. Barnes & Noble announced its boycott in January 2012, casting the move as a retaliatory strike against Amazon’s actions in the e-book market. Amazon was pushing publishers, agents, and authors into making their titles available only on the Kindle, thereby undermining Barnes & Noble’s rival e-reader, the Nook. Other booksellers followed suit, angered in particular by a price-check app Amazon developed for the 2011 Christmas season that encouraged consumers to use stores as showrooms before buying online. “He was really fighting with one hand behind his back,” consultant Shatzkin says of Kirshbaum. The big names he signed—Marshall, Cyrus, and Ferriss—all wrote nonfiction books, and those were hard to sell in the e-book market alone. As the former staffer explains, “The nonfiction buyer is more studious, more reluctant to take a chance”—the kind of person who wants to see a book before buying it.
Amazon Offers All-You-Can-Eat Books -- Authors Aghast.“Six months ago people were quitting their day job, convinced they could make a career out of writing,” said Bob Mayer, an e-book consultant and publisher who has written 50 books. “Now people are having to go back to that job or are scraping to get by. That’s how quickly things have changed.”For romance and mystery novelists who embraced digital technology, loved chatting up their fans and wrote really, really fast, the last few years have been a golden age. Fiction underwent a boom unseen since the postwar era, when seemingly every liberal arts major set his sights on the Great American Novel.Now, though, the world has more stories than it needs or wants to pay for. In 2010, Amazon had 600,000 e-books in its Kindle store. Today it has more than three million.
Bezos: books need to competeThe most important thing to observe is that books don’t just compete against books. Books compete against people reading blogs and news articles and playing video games and watching TV and going to see movies.Books are the competitive set for leisure time. It takes many hours to read a book. It’s a big commitment. If you narrow your field of view and only think about books competing against books, you make really bad decisions. What we really have to do, if we want a healthy culture of long-form reading, is to make books more accessible.
Amazon pays readers with books for editingAmazon wants to take some of the mystery out of predicting what books will sell with its new Kindle Scout publishing program, which lets readers vote on their favourite excerpts from unreleased books to determine what does (and what doesn’t) get published. Welcome to the court to common opinion, aspiring authors. In exchange for their participation in the program, Kindle Scout users will get free book credits, based on their ability to successfully pick winners. Those who nominate books that eventually get published will get a free Kindle version of the e-book a full week before publication day.
Amazon offends the elite by flooding their marketDespite my benefitting from it, I am unwilling to pretend that this system is beneficial for readers or for writers who lack my privilege. […]The reason my fellow elites hate Amazon is that Amazon refuses to flatter our pretensions. In my tribe, this is a crime more heinous even than eating one’s salad with one’s dessert fork.The threat Amazon poses to our collective self-regard is the usual American one: The market is optimized for availability rather than respect. […] If Amazon gets its way, saying, “I published a book” will generate no more cultural capital than saying “I spoke into a microphone.”
Two middlemen is too many? Try 3 or 4 layers in the book industry.An investor in oDesk once said, “Two middlemen seems like one too many.” It was a pivotal statement that solidified the early focus on providing direct connections between employers and freelancers anywhere in the world. Everything we did in the early days of oDesk to support and benefit these direct connections paid off. Everything we did to accommodate other middlemen in the process was a waste of time. I’ll be the first to confess that I know basically nothing about the book publishing industry and look forward to being enlightened by readers’ comments. Until then, this is how I see it as a marketplace investor with Sigma West. Hachette is a middleman. So is Amazon. There should be only one.
With an e-book, there’s no printing, no over-printing, no need to forecast, no returns, no lost sales due to out of stock, no warehousing costs, no transportation costs, and there is no secondary market – e-books cannot be resold as used books. E-books can and should be less expensive.
We've quantified the price elasticity of e-books from repeated measurements across many titles. For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000. […] the customer is paying 33% less and the author is getting a royalty check 16% larger and being read by an audience that’s 74% larger. The pie is simply bigger.
Amazon is not a “side.” Hachette is not a “side.” “Traditional publishing” is not a side, nor is “self-publishing.” Authors are not a “side.” Saying that any of them is a “side” is like saying cats are one side of mammals; it fundamentally misapprehends the nature of things.
While U.S. retailers took in more than $4 trillion in revenues according to the most recent U.S. Census, wholesalers brought in $7.2 trillion selling everything from Bunsen burners to toner cartridges. Even better for Amazon: Of America’s 35,000 distributors, almost all are regional, family-run companies pulling in annual revenues of $50 million or less, and only 160 have more than $1 billion in sales annually. […] Amazon, meanwhile, booked more than $74 billion in revenues last year, selling everything from beds to server time with a viruslike strategy that values opportunity and disruption above short-term profitability. […] AmazonSupply.com launched quietly in April 2012 with 500,000 items for sale. Two years later, with the site still officially in beta, that list of products has grown to more than 2.2 million–covering 17 product categories from tools and home improvement to janitorial supplies, stocking everything from 12-packs of Hawaiian Punch to schedule-40 stainless steel pipe. If 2.2 million products doesn’t sound like a staggering figure on its own, consider that the average wholesaler sells closer to 50,000 products online. […]
n 1951, the largest retailer in the world was the Great Atlantic & Pacific Tea Company, or A&P. Founded in 1869, the food chain seized upon the faster communications and more efficient transportation links of its era—a new transcontinental railroad and, later, automobiles and trucks—to build supermarkets with wondrous-seeming selection and lower prices. Throughout the company’s rise, as Marc Levinson describes in a fascinating history,1 it was a target of anger and lobbying by small-town grocers and producers, who protested that A&P was destroying not only their livelihoods, but also the quintessential place of small enterprise in American life. A&P perfected a “relentless squeeze on suppliers” and it “pioneered the practice of carefully dissecting manufacturers’ costs to determine what prices they should receive for their products,” much as Amazon is doing to book publishers today. Also like Amazon, the supermarket deliberately sold some items below cost to attract customers who, once in the store, would also buy profitable items.
The handset’s image-recognition technology, called “Firefly,” will let the device figure out what a customer is looking at so the user can buy the item online. It can recognize more than 100 million items, with consumers simply taking a picture of a book, DVD or other product to link back to Amazon’s store. The phone will also have audio recognition for movies and TV shows, which Amazon also carries. “I’m going to buy a whole lot more things with this technology than I ever have before,” said Ralph De La Vega, head of AT&T’s mobile business, at the event.
Amazon.com Inc later this year plans to launch a marketplace for local services, a broad term that encompasses anything from babysitters to handymen to birthday clowns, beginning with a single market, several people familiar with the matter said. Amazon aims to gauge demand and test logistics before rolling out nationwide, mirroring its approach to its grocery delivery service, Amazon Fresh. Fresh was tested in Seattle for years before expanding to San Francisco and Los Angeles last year.The move takes direct aim at consumer review sites Yelp Inc and Angie's List Inc as well as U.S. home improvement chains Home Depot Inc and Lowe's Companies Inc, which have both invested in ways to link customers with local plumbers, painters and other service providers.
Amazon.co.uk has taken down a dummy book on its website calling for the company to pay its workers the Living Wage. The stunt, organized this morning (11th June) by the Amazon Anonymous campaign, placed a "book" for sale on the online retailer, Living Wages for Amazon Workers!, valued at £7.65 - the general Living Wage for the UK – in order to put pressure on Amazon to pay its workers more. The page was live for nearly two hours before Amazon removed it, by which time it had already received over 100 "reviews" from supporters backing the campaign and calling on the retailer to pay more to its warehouse workers.
Sales were up in both of EDC’s divisions. In the publishing unit, sales rose 1.5%, to just under $11 million, as revenues were up 10.2% for smaller retail stores and 3.0% for inside sales, offset by a decrease of 5.3% for national chain stores. In the home business division, sales rose abut 3%, to $15.1 million, the first time sales in the unit rose in nine years, according to the company.The gain was led by an increase in the number of home sales reps selling the EDC line with that number rising to 5,900 at the end of the fiscal year from 4,700 at the conclusion of fiscal 2013. EDC said the company has been able to add more reps due in part to its decision made two years ago to stop selling its titles through Amazon.