The prospect of Amazon following its music route becomes all the stronger as Jassy runs out of easy options like cutting jobs – oops, sorry, role elimination – weeks before Christmas, and starts looking at how it can keep consumers handing over what little cash they will have to spend next year..
Last week Amazon CEO Andy Jassy announced, “Yesterday, we communicated the difficult decision to eliminate a number of positions across our Devices and Books businesses.”
It’s way too soon to second guess what that may mean for publishers who have allowed themselves to become dependent on Amazon for revenue and sales, but safe to say this is not good news for the industry.
Jassy concluded, “Amazon has weathered uncertainty and difficult economies in the past, and we will continue to do so. We have big opportunities ahead, both in our more established businesses like Stores, Advertising, and AWS, but also in our newer initiatives that we’ve been working on for a number of years and have conviction in pursuing (e.g. Prime Video, Alexa, Kuiper, Zoox, and Healthcare). The key will be to do what Amazon does best – obsess over customers and invent relentlessly on their behalf – and if we do that, we should all be very optimistic about Amazon’s future. I know I am.”
And no doubt Jassy’s and Amazon’s future is indeed secure. But the role of Books and Devices – which of course embraces the Kindle store, the print sales store, Audible, Kindle ereaders and the Kindlefire tablets, is clearly less secure than we would like.
As Jassy says, the “key will be to do what Amazon does best – obsess over customers.”
Customers, not service and product providers. Of course that’s always been the case, but things are about to get a whole lot more challenging for those of us who rely on Amazon as a business partner in some way.
Jassy cannot, to use the warm and cuddly euphemism, perform “role elimination” on its suppliers. It can however continue to squeeze the margins, and it can, when push comes to shove, take decisions that will be extremely unpopular with suppliers in order to maintain popularity with the consumer.
Earlier this month Amazon took the unilateral decision to put all its 98 million title music catalogue into Prime Music to bolster its all-important (to Amazon) Prime offering.
Music publishers had no say in the matter.
Might that happen with digital books? As discussed frequently here at TNPS, Audible has been gradually rolling out its unlimited subscription model in its core markets, either as the only option or as a partial option.
This from August 2021:
This from October 2021:
And this from last month (October 2022):
The prospect of Amazon following its music route becomes all the stronger as Jassy runs out of easy options like cutting jobs – oops, sorry, role elimination – weeks before Christmas, and starts looking at how it can keep consumers handing over what little cash they will have to spend next year.
As the global recession bites, less money is out there and Amazon cannot afford to forego its share. What better way of keeping consumers on board that extending its unlimited subscription options?
Ebook and audiobook publishers who have for so long been content to hand Amazon control of their destiny, may soon find out just what their options are if and when Amazon decides consumers would prefer all-you-can-eat subscription ebooks and audiobooks to a la carte retail.