Is It Possible That Amazon Is Not ‘All’ Bad News For Publishers?

Might Amazon’s debilitating effect on local shops be about to change?

For the past 20 years Amazon has disrupted the publishing industry from stem to stern. Could it be that much of the resulting adaptation and metamorphosis has actually been good news for publishers?

Depends on what you consider. What kind of publisher? What kind of book? Book audience location. Book platform. Book distribution system access. Digital technology, etc., etc.

Hell, many of these considerations weren’t even in existence 20 years ago! And while Amazon didn’t create or discover all of the above mentioned ingredients, they were the first to mix them in a masterful menu – creating a smorgasbord of possibilities – the understanding of which is still being deciphered today.

Tonight’s topic will discuss the how’s and where’s of some of the possible positive changes that Amazon has wrought within the publishing industry and the reaction/attitude of the big five publishing houses as well as others (Bowker’s, etc.) in the overall industry.

Key excerpts from tonight’s research/resource article:

“It has been presented as a David and Goliath battle. This is despite the underdog status of the largest publishing houses in the world. As Amazon has become the primary destination for books online, it has been able to lower book prices through their influence over the book trade. Many have argued that this has reduced the book to “a thing of minimal value”.”

“Despite this pervasive narrative of the evil overlord milking its underlings for all their worth, Amazon has actually offered some positive changes in the publishing industry over the last 20 years. Most notably, the website has increased the visibility of books as a form of entertainment in a competitive media environment. This is an achievement that should not be diminished in our increasingly digital world.”

Presenting:

Amazon is 20 years old – and far from bad news for publishers

By Simon Rowberry, as published in The Conversation (UK). Academic rigor, journalistic flair  

It has now been 20 years since Amazon sold its first book: the titillating-sounding Fluid Concepts and Creative Analogies, by Douglas Hofstadter. Since then publishers have often expressed concern over Amazon. Recent public spates with Hachette and Penguin Random House have heightened the public’s awareness of this fraught relationship.

It has been presented as a David and Goliath battle. This is despite the underdog status as the largest publishing houses in the world. As Amazon has become the primary destination for books online, it has been able to lower book prices through their influence over the book trade. Many have argued that this has reduced the book to “a thing of minimal value”.

Despite this pervasive narrative of the evil overlord milking its underlings for all their worth, Amazon has actually offered some positive changes in the publishing industry over the last 20 years. Most notably, the website has increased the visibility of books as a form of entertainment in a competitive media environment. This is an achievement that should not be diminished in our increasingly digital world.

Democratising data

In Amazon’s early years, Jeff Bezos, the company’s CEO, was keen to avoid stocking books. Instead, he wanted to work as a go-between for customers and wholesalers. Instead of building costly warehouses, Amazon would instead buy books as customers ordered them. This would pass the savings on to the customers. (It wasn’t long, however, until Amazon started building large warehouses to ensure faster delivery times.)

This promise of a large selection of books required a large database of available books for customers to search. Prior to Amazon’s launch, this data was available to those who needed it from Bowker’s Books in Print, an expensive data source run by the people who controlled the International Standardised Book Number (ISBN) standard in the USA.

ISBN was the principle way in which people discovered books, and Bowker controlled this by documenting the availability of published and forthcoming titles. This made them one of the most powerful companies in the publishing industry and also created a division between traditional and self-published books.

Bowker allowed third parties to re-use their information, so Amazon linked this data to their website. Users could now see any book Bowker reported as available. This led to Amazon’s boasts that they had the largest bookstore in the world, despite their lack of inventory in their early years. But many other book retailers had exactly the same potential inventory through access to the same suppliers and Bowker’s Books in Print.

Amazon’s decision to open up the data in Bowker’s Books in Print to customers democratised the ability to discover of books that had previously been locked in to the sales system of physical book stores. And as Amazon’s reputation improved, they soon collected more data than Bowker.

For the first time, users could access data about what publishers had recently released and basic information about forthcoming titles. Even if customers did not buy books from Amazon, they could still access the information. This change benefited publishers as readers who can quickly find information about new books are more likely to buy new books.

World domination?

As Amazon expanded beyond books, ISBN was no longer the most useful form for recalling information about items they sold. So the company came up with a new version: Amazon Standardized Identifier Numbers (ASINs), Amazon’s equivalent of ISBNs. This allowed customers to shop for books, toys and electronics in one place.

The ASIN is central to any Amazon catalogue record and with Amazon’s expansion into selling eBooks and second hand books, it connects various editions of books. ASINs are the glue that connect eBooks on the Kindle to shared highlights, associated reviews, and second hand print copies on sale. Publishers, and their supporters, can use ASINs as a way of directing customers to relevant titles in new ways.

Will Cookson’s Bookindy is an example of this. The mobile app allows readers to find out if a particular book is available for sale cheaper than Amazon in an independent bookstore nearby. So Amazon’s advantage of being the largest source of book-related information is transformed into a way to build the local economy.

ASINs are primarily useful for finding and purchasing books from within the Amazon bookstore, but this is changing. For example, many self-published eBooks don’t have ISBNs, so Amazon’s data structure can be used to discover current trends in the publishing industry. Amazon’s data allows publishers to track the popularity of books in all forms and shape their future catalogues based on their findings.

While ISBNs will remain the standard for print books, ASIN and Amazon’s large amount of data clearly benefits publishers through increasing their visibility. Amazon have forever altered bookselling and the publishing industry, but this does not mean that its large database cannot be an invaluable resource for publishers who wish to direct customers to new books outside of Amazon.

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Amazon Is Winning at Publishing – Here’s Some Reasons Why

Winning The Publishing Race

Tonight’s post will get into why Amazon is so much better at marketing and selling than the book publishing industry.

Briefly, the answer lies in push marketing versus pull marketing, timing (being late to the dinner table) and true innovation.

Tonight’s research/resource article is from The Digital Reader (Ink, Bits and Pixels) written by Nate Hoffelder:

 

The Ubiquitous Bookstore, Or Why Amazon is Winning at Publishing

Scholarly Kitchen posted an article yesterday which explains why Amazon is so much better at marketing and selling than the book publishing industry.

Joseph Esposito uses the post to lay out his vision for a new type of bookstore – one which could compete with Amazon. Describing Amazon as a destination site, Esposito sees its success as primarily due to pull marketing. In other words, Amazon draws people in by offering a huge warehouse of books and a great shopping experience.

To compete with Amazon, Esposito thinks publishers need to adapt to the new nature of the internet:

But the Web is now being brought to us; it’s evolving into a push medium. All that time we spend looking at the news feeds for Facebook, Flipboard, and Twitter point to where the Web is going and where new bookstores will have to be. To build a bookstore that goes head to head with Amazon is foolhardy. It would be easier to carry the ball into the defensive line of the Chicago Bears.

So a new bookstore is going to have to bring its offerings to where people are rather than the other way around; a new bookstore has to be ubiquitous. A recent example of this comes from HarperCollins,which has created an arrangement with Twitter to sell copies of the bestselling Divergent series of young adult novels from within individual tweets.

The fact that this is a topic of discussion in the publishing industry, in 2015 no less – folks, this is why Amazon is winning whatever war publishing feels it is fighting with the retailer.

It’s not that Esposito is wrong so much as that he is five years late to the discussion. Both Amazon and authors started push marketing at least 5 years ago.

 

Authors have been on social media since at least 2010, and they’ve been pushing people to bookstore to buy books. This concept is so well established that there are dozens of blog posts by indie authors which discuss the nuances of how to go about it.

What’s more, Amazon mastered the concept of push marketing even further back. I don’t know exactly when Amazon launched its affiliate network, but that was explicitly designed to give other websites a financial incentive to push customers to Amazon (h\t to Marshall Poe for making a similar argument in TSK’s comment section).

Tell me, can I make more money by pushing people to HarperCollins’ bookstore than by sending them to Amazon? No? Then why would I bother?

Speaking of HarperCollins, they are a great example of a publisher trying and failing to market and sell directly to consumers. Have you visited HarperCollins.com, and tried to browse, search, or buy an ebook?

I have, and so have several commenters on The Passive Voice. It’s terrible. If, as Esposito posits, direct retail is the future of publishing, then HC literally cannot build a retail site to save its life.

But never mind HarperCollins; let’s consider what Esposito wrote next:

From a conceptual point of view, the most interesting project I have stumbled upon for “post-destination” bookstores is that of Chris Kubica, who explained his work in two articles in Publishers Weekly, which you can find here and here. Kubica gathered a group of publishing people in New York to brainstorm about a post-Amazon bookstore. The conclusion was that each individual potentially could be the site or source of a bookstore–a bookstore of one. With seven billion people on the planet (and growing), that’s potentially seven billion bookstores. Now, how can Amazon compete with that?

Easy. Amazon thought of it first, they thought of it ages ago, and they do it better than anyone in publishing.

Folks, if you want to beat Amazon then you need to come up with an idea first. You can’t decide to adopt an SOP five years after it becomes an SOP. That’s not innovative; it’s reactionary.

 

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The First Crowdsourced Publishing Platform

John R. Austin Writes Publishing Industry News

AND, guess who is bringing it to fruition? — Amazon. In the form of its Amazon Kindle Scout program. Kindle Scout announced it will release its first set of 10 reader-selected titles next month.

Husna Haq of The Christian Monitor wrote tonight’s research/Resource article:

Will Amazon’s Kindle Scout democratize publishing?

Key excerpt: “Launched in October, the program lets readers vote for their favorite unpublished titles from a collection of manuscripts submitted for consideration by aspiring authors. Readers get to first preview an excerpt from unreleased books, then nominate up to three for publishing. The Kindle Scout team then tallies how many votes each the book received and decides which are suitable for publishing.”

Call it the American Idol of books, the democratization of publishing, the crowdsourcing of literature.

Amazon’s Kindle Scout, one of the first crowdsourced publishing platforms, announced it will release its first set of 10 reader-voted titles March 3.

The first set of books include science fiction, romance, thriller, and mystery novels, including “G1” by Rigel Carson (science fiction), “A Highland Knight’s Desire” by Amy Jarecki (romance), and “L.A. Sniper” by Steve Gannon (thriller).

Launched in October, the program lets readers vote for their favorite unpublished titles from a collection of manuscripts submitted for consideration by aspiring authors. Readers get to first preview an excerpt from unreleased books, then nominate up to three for publishing. The Kindle Scout team then tallies how many votes each the book received and decides which are suitable for publishing.

“Since we opened our doors we’ve been busy weighing the feedback of over 29,000 enthusiastic Scouts who have nominated the books they want to read next,” Dina Hilal, general manager for Kindle Scout, said in astatement. “These first 10 titles signal a new option for authors, who can choose to have their books discovered and supported by Amazon customers even before they are published.”

Authors whose books are chosen receive a 5-year renewable publishing deal, with a $1,500 advance, a royalty rate of 50 percent, and the ability to take back rights to the book if the author doesn’t earn at least $25,000 during the 5-year contract.

The approach benefits Amazon in many ways. As Geekwire points out, it leverages the company’s large customer base for market research, similar to the way that Amazon Studios asks viewers to weigh in on television pilots before deciding which will go into full production.

It also gives Amazon access to a slew of up-and-coming authors who will remember that Amazon, not a traditional publishing house, gave them their first opportunity.

And finally, it offers the company folks in publishing love to hate some good PR: Amazon Scout is, in effect, a feel-good story about a large corporation helping indie authors get published and get noticed.

Amazon today opened up Scout to more genres. The company is now accepting contemporary fiction, historical fiction, and action & adventure submissions in addition to romance, mystery/thriller and science fiction.

Here are the 10 titles chosen by Amazon Scouts for publication March 3:

• G1 by Rigel Carson – Science Fiction
• A Highland Knight’s Desire by Amy Jarecki – Romance
• Eddie & Sunny by Stacey Cochran – Mystery/Romance
• L.A. Sniper by Steve Gannon – Thriller
• Pit Bulls vs. Aliens by Neal Wooten – Science Fiction
• Royal Date by Sariah Wilson – Romance
• Running from the Past by Alan Orloff – Thriller
• The Game Master by William Bernhardt – Thriller
• The Omega Connection by Allan Leverone – Thriller
• Unpaved Surfaces by Joseph Souza – Mystery

 

Well, what do you readers think? Good idea or not?

 

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Amazon’s Bezos’ New Mission? Perhaps to Prove Print Isn’t a Dinosaur Headed for Extinction

Bezos interested in much more than just Amazon!

Most have heard by now that Amazon Head Honcho, Jeff Bezos, has bought The Washington Post newspaper for a cool $250 million smackaroos 🙂

I suspect that Mr. Bezos might have a nostalgic soft spot, as do I, for the dynamic, constant deadline publishing style of newspaper journalism; but, his interest in a print newspaper probably goes to a higher motive than just nostalgia.

He does want to become a big media player as evidenced by his current involvement in streaming movies available to its Prime members in an ongoing competition with Netflix — and Bezos’ Kindle has been delivering videos, music, news and books; a media-consuming tablet put in-place to push device sales.

BUT, can he save a print industry plagued by declining print advertising sales? OR is he going to redefine that revenue source with something entirely different (imagination needed here)? Remains to be seen.

Don’t forget, though, that Bezos is somewhat of an advertising guru himself — just look at the money he attracts with Amazon (which is detailed and tracked more by eMarketer in tonight’s feature news article drawn from USA Today).

He is also interested and has ambitions in many things outside of Amazon, retailing and books. Bezos is still heavily involved in his 2000 startup, Blue Origin, which intends to provide a human spaceflight company for space exploration — with a goal of developing space hotels, amusement parks and colonies for several million people orbiting the Earth.

High ambitions, indeed!

From Scott Martin, USA TODAY:

Amazon’s Bezos: Retail revolutionary, news tycoon?

Amazon founder Jeff Bezos has done a number on brick-and-mortar retailers, defied Wall Street for years in eschewing profits for growth, taken on Apple in tablets and now holds a new title: newspaper owner.

Amazon’s CEO agreed to acquire The Washington Post for $250 million today.

The 49-year-old Bezos — who is famous for a honking laugh and gregarious nature — is No. 19 on Forbes‘ list of the world’s richest people, with a net worth of $25.2 billion. Bezos started Seattle-based Amazon in 1994 as a bookseller and rapidly expanded its categories and has swallowed many more.

Bezos is not the first billionaire to become a major media player. AOL founder Steve Case merged AOL with Time Warner. Facebook co-founder Chris Hughes picked upThe New Republic. And IAC/InterActiveCorp CEO Barry Diller bought Newsweek, which ceased printing last year. Given how troubling advertising has been to publishers, Bezos has his work cut out.

“The Internet is transforming almost every element of the news business: shortening news cycles, eroding long-reliable revenue sources, and enabling new kinds of competition, some of which bear little or no news-gathering costs,” Bezos said in a letter to Washington Post staffers.

Bezos has already displayed a proclivity for endeavors far outside of the confines of e-commerce.

One of his interests is space exploration. He captured the public’s fascination with his startup Blue Origin, a “human spaceflight company,” with a goal of developing space hotels, amusement parks and colonies for 2 million to 3 million people orbiting the Earth.

Read complete USA Today article here

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Barnes & Noble is Really an Ally of Amazon

Barnes & Noble stores – lands of discovery for ALL readers – Even e-book readers!

B&N an Amazon ally? Many may not realize this fact; but B&N has helped Amazon succeed and Amazon should show a little respect!

B&N has had a recent spate of bad bumps caused by dings to themselves and the book industry in general — like the declining sales of Nook, the resignation of William Lynch as head of their tech side (due to a $177 million Nook loss), the big six downsizing to five with the Penguin/Random House merger and Apple losing it’s agency pricing case in court.

But, believe it or not, B&N STILL has solid business fundamentals as demonstrated by a 16% increase in earnings (EBITDA) even as sales declined by 5% – 6%.

The possible hidden power of B&N lies in the ability of the re-crowned head of the company (and the one who initially built B&N to a major bookseller chain), 72-year-old Mr. Leonard Riggio — who also loves the physical book stores. He also has a genuine respect for the new digital tech. Point is, he knows how to run a store with ambiance and panache!

Mr. Riggio wants to buy back all the B&N stores and take them private again. I think this is a good start as he won’t have to put up with a lot of investors and boards of directors that might not see his particular vision for the physical bookstore plus amenities that creates an intelligent respite from the cold, harsh world — You just can’t get this kind of ‘creation’ from a tablet.

So, just how is B&N an ally of Amazon? People just love to browse physical artifacts in a warm, restful space (Homo sapiens can’t live on-line ALL the time) — they look at books with neat covers, read the cover flaps and decide they want to buy — either in-store OR very often over their devices. B&N has probably acted as the catalyst for numerous digital buys!

Bookstores are ‘lands of discovery’, even for e-book readers.

So, B&N is still earning and publishers’ net revenue grew $1 billion in 2012, upping their take to $15 billion — much of it due to the wide margins provided by e-books (no manufacturing, no shipping and no remaindering) — If only they could get over the fact that Amazon’s concurrent growth makes them secondary characters in a business they used to control.

Really, there is room for everybody.

David Carr writes this for The New York Times:

Why Barnes & Noble Is Good for Amazon

On Thursday night in Clifton, N.J., Barnes & Noble was a way station, a third place between work and home where people sought respite and diversion. With its high ceilings, wide aisles and a large Starbucks, it is the kind of retail outlet that gives big-box stores a good name.

In one aisle, a father and daughter were having a spirited generational discussion over the side-by-side covers of “The Great Gatsby,” one of which bore an image of Leonardo DiCaprio. For reasons I wasn’t quite clear about but nonetheless found charming, an older couple used a book on vegetarian cooking to cover up a copy of “The Art of Seduction” on the shelf. Nearby, two apparent siblings, one sporting pink hair and the other purple, traded loud opinions over the True Crime display.

Watching the readers lounge in chairs with a view of Route 3, it was hard to reconcile the pageantry of retailing with the brutal recent headlines about the book business.

At the beginning of July, the Big Six publishers became the Big Five with the blending of Penguin and Random House. At the beginning of last week, the chief executive of Barnes & Noble left the company after a grim earnings report that highlighted a failed strategy to have the company’s Nook device compete in the crowded tablet space.

Then on Thursday, Judge Denise L. Cote of United States District Court in Manhattan issued a withering decision against Apple, writing that the company had conspired with the major publishers to fix the price of e-books in an effort to thwart Amazon’s momentum.

So far, what has been bad for the industry has not yet hit consumers directly. If they are among the many millions of people enthralled by CBS’s “Under the Dome,” and decide to read the giant Stephen King novel that inspired it, they can hop on Amazon and buy it with a click for $13.99. Or they could avoid its door-stopping heft and spend just $7.99 for the Kindle version.

Read and learn more

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Re Publishing: Single Platform Domination – Risk or Not?

Is the Kindle a challenge to book publishers?

Many print publishing business executives, authors, literary agents, editors, booksellers and distributors – as well as their counterparts in the digital publishing business – recently sat down at a roundtable to launch this year’s Financial Times and Goldman Sachs Business Book of the Year Award.

Purpose of the roundtable? To plot a publishing industry survival story! (Which begs the question: Do we even need one?)

Even within this inner circle of professionals there is disagreement (and total misinterpretation on the part of some) of what the changing publishing landscape actually means.

Do the churning changes spell disaster or opportunity?

The title of this post was suggested by a fear expressed by Victoria Barnsley, chief executive of HarperCollins UK. She feels that “single platform domination” will be bad for the publishing industry.

Doesn’t she realize that ‘print’ was the single platform domination for the past 500 plus years! And that we are just recently being offered a choice of venues?

This piece by Robert Budden in The Financial Times dot com allows us into the roundtable and the minds of the attendees:

 

Publishing industry roundtable plots a survival story

Serial entrepreneur and Financial Times columnist Luke Johnson could be excused for having a pessimistic outlook on the publishing sector, having “lost a fortune” following his purchase of the UK arm of Borders, the book chain in 2007.

At a roundtable discussion to launch this year’s Financial Times and Goldman Sachs Business Book of the Year Award, the co-founder of private equity firm Risk Capital Partners says he “passionately” hopes books continue to prosper.

But, in references to Google, Amazon and Apple, he warns that software “has become a very serious threat that may well eat” the publishing business.

Victoria Barnsley, chief executive of HarperCollins UK, probably speaks for many publishing executives when she highlights “single platform domination” as “the risk”. “I don’t think it was good for the record industry nor will it be good for publishing,” she says.

The conundrum for publishers is what to do about it.

Tim Harford, an author and also an FT columnist, says the industry needs to take action swiftly, especially in relation to the digital rights management (DRM) approaches of some ebook distributors that lock readers into their ecosystems.

“If you let Amazon and Apple lock in their devices, they are going to slaughter all of you,” he says, referring to book publishers and retailers.

Read and learn more

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DOJ’s E-Book Price-Fixing Case = Publishing Intrigue to the Max

 

Blind Justice

Intrigue, indeed — But, is the whole case based upon misconceived intentions, misunderstanding and misplaced justice?

And, just WHO is to blame for letting this price-fixing debacle spawn into a full-blown clusterfuck?

This insight is provided by Jonathan Berr in InvestorPlace.com :

Publishers Have Themselves to Blame for Amazon’s Triumph

The recent ebook price-fixing settlement clearly proves it

Amazon (NASDAQ:AMZN) CEO Jeff Bezos has won the e-book price wars and will leave his competitors in the dust. The publishers that are complaining now have no one but themselves to blame.

Last week, U.S. District Judge Denise Cote approved a settlement between three U.S. publishers — Hachette Book Group, Simon & Schuster and HarperCollins —and the Department of Justice over allegations that they were in cahoots with Apple (NASDAQ:AAPL) to fix the prices of e-books. Apple and two other publishers, Penguin Group USA and Macmillan, have refused to settle. Their case will go to trial next summer. Officials in the publishing industry, who urged Cote to throw the case against them out of court, were appalled by the ruling.

“To say the least, we are colossally disappointed that the judge failed to understand how consumers will be negatively impacted by a decision that does not take into account the realities of the book business in 2012,” said Oren Teicher, CEO of the American Booksellers Association, in a statement posted on the group’s website.

Indeed, the publishing industry argues that it — not Amazon — is the aggrieved party given the Seattle-based company’s dominant position in the e-book market by selling electronic books below cost. Though their fears were understandable, their solution to it was illegal. It’s not even a close call.

Both Apple and the publishers didn’t want to compete with Amazon’s $9.99 price point for e-books. In 2010, they agreed to switch to a new “agency” model whereby publishers would sell titles directly to the public as opposed to the “wholesale” model, in which electronic books were sold to retailers. Agreements between Apple and the publishers were in place ahead of the 2010 launch of the iPad.

Read and learn more

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Bookworld to Compete with Amazon

More intrigue in the publishing kingdom!

 

“The company says its new Bookworld.com.au site is aiming to compete with Amazon on price and delivery, offering free shipping with two-to-three day delivery to any capital city on Australian books. Bookworld has about 100,000 e-book customers and a total of 750,000 customers on its database.” — Global publisher Pearson

 

Pearson publishing bought failing Boarders (after Boader’s owner REDGroup’s collapse last year), turned it into ‘Bookworld’, and is taking the first step in providing what they feel will be real competition for Amazon.

 

Many who have visited the Bookworld site feel they still have some hurdles to clear.

 

I believe Bookworld is a good first step in bringing much needed, real competition to the digital book industry — and Bookworld should improve with time. 

Chris Zappone, reporting for Business Day in The Sydney Morning Herald, has this to say: 

Global publisher Pearson has internet giant Amazon in its sights with the launch of an Australian-based online bookseller.

The publisher has rebranded the Borders.com.au site which Pearson bought for less than $5 million after owner REDGroup’s collapse last year. The company says its new Bookworld.com.au site is aiming to compete with Amazon on price and delivery, offering free shipping with two-to-three day delivery to any capital city on Australian books. Bookworld has about 100,000 e-book customers and a total of 750,000 customers on its database.

“You’ve got to have a price that will get you to market and clearly Amazon are the benchmark,” said Bookworld chief James Webber.

“We compete with Amazon very effectively that includes no shipping costs.”

Mr Webber said that 50 per cent of Bookworld’s stock was sourced in Australia.

REDgroup was unable to compete with global retailers like Amazon and Book Depository because of higher book prices in Australia.

Under current pricing offers, the cost of Christopher Hitchens’ book Morality is $23.95 from Amazon with delivery taking up to a month. Bookworld offers the same book at $19.99 to its club card holders with three-day delivery.

Bookworld said it has sold more e-books than physical books in the past month in another sign of how quickly the book industry was changing.

Read and learn more

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Amazon: Exploding Revenue, Tiny Profit

Exploding Revenue

Amazon’s second quarter numbers reflected $12.8 billion in sales — but a chump-change net income of $7 million (now,I wouldn’t mind a profit of $7 million, but, against sales of almost 2000 times that amount I would be in the dumps 😦

Of course, for those that didn’t know (and I was one), these numbers are status quo for Amazon.

The reason ? Amazon is re-investing revenues in its future expansion plans. That’s a lot of do-re-mi for expansion, no ?

David Streitfeld, New York Times, has some interesting insights and forecasts:

Amazon Delivers on Revenue but Not on Profit

Leaping revenue, little profit.

That is the long-established Amazon story, and those who expected to hear it again Thursday were not disappointed.

The company reported sales of $12.8 billion, up 29 percent, in the second quarter while it eked out net income of $7 million, or a penny a share.

Those results essentially matched expectations. Analysts had estimated the Seattle-based retailer would earn 2 cents a share, down from 41 cents a share in the second quarter of 2011.

In what is becoming a routine warning, Amazon said that profit in the current quarter would remain elusive. Revenue might grow as much as 31 percent, the company said, but it was expecting a loss. Losses at Amazon were routine in its early years but in recent years it has made a profit, albeit a small one.

This would be devastating news from some Internet companies. But Amazon bulls were unfazed, saying the retailer was investing, as always, in the future.

“If they keep this up, there’s a good possibility that you’re looking at shopping malls going the way of the record store and the bookstore and the video rental store,” said Jason Moser, who covers Amazon for the Motley Fool investment site.

Amazon shares Thursday were up $3 to $220 during regular trading. The stock is trading only about 10 percent below its record high, with a stratospheric price-to-earnings ratio of about 170. In after-hours trading, shares continued rising.

Since its founding in 1994, Amazon has been focused on broadening its product and customer bases, not pumping up its profit margins. And the growth has been tremendous — it is now one of the country’s largest retailers. Even in North America, its most established market, it has been growing consistently more than twice as fast as the e-commerce market as a whole, a Forrester Research report released Thursday noted.

Read and learn more

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Amazon vs. Publishers – Round Two

Amazon vs. Publishers STILL

Amazon still has mucho shelves full of print books for sale. And they want desperately to clean up that stock with their print on demand capability. But, the publishers are reluctant to allow Amazon to use POD.

Do you know the reason ? Can you guess ?

Brad Stone, Business Week, explains :  

Amazon vs. Publishers: The Book Battle Continues

There’s a glaring anachronism at the center of most Amazon.com (AMZN) fulfillment centers: aisle after aisle of old-fashioned books. Amazon stocks these volumes for the many customers who still favor the tangible pleasures of reading on paper. Yet the company is relentless about increasing efficiency and has at the ready an easy way to remove some of those bookshelves: on-demand printing. With an industrial-strength printer and a digital book file from the publisher, Amazon could easily wait to print a book until after a customer clicks the yellow “place your order” button. The technology is championed by those who want to streamline the book business—and it might turn out to be a flash point in the hypertense world of publishing.

The book industry isn’t eager to embrace any more wrenching changes. The introduction of the Kindle in 2007, and Amazon’s insistence on a customer-friendly $9.99 price for new releases, has set off a multifront fracas. Efforts by the largest publishers to sidestep Amazon’s pricing strategy attracted the attention of the U.S. Department of Justice, which recently filed an antitrust lawsuit against Apple (AAPL) and five book publishers over their alleged collusion to raise e-book prices. (Three publishers have settled the lawsuit.) The issue of print on demand has taken a backseat as this e-book drama plays out.

Yet executives at major New York-based book publishers, who requested anonymity because of the legal scrutiny of their business, say Amazon regularly asks them to allow print on demand for their slower-selling backlist titles. So far they’ve declined, suspecting that Amazon will use its print-on-demand ability to further tilt the economics of book publishing in its favor. Asking publishers to move to print on demand “is largely about taking control of the business,” says Mike Shatzkin, founder of Idea Logical, a consultant to book publishers on digital issues. “It adds some profit margin, but it also weakens the rest of the publishing universe.”

Print on demand has been around for more than a decade. In 1997, the largest book wholesaler in the U.S., now known as Ingram Content Group, started a division called Lightning Source to serve publishers who wanted to print limited copies of certain books. In 2005, Amazon acquired a rival print-on-demand provider, BookSurge, and began offering publishers the option of supplementing inventory with print-on-demand copies when physical volumes of a title sell out. Now called CreateSpace, the Amazon subsidiary mostly caters to small publishers and self-published authors. The technology has gotten better over time, and print-on-demand books are now indistinguishable from most paperbacks.

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