Amazon: Already Toast

Amazon Accelerates Its Move to Digital

“The average consumer probably doesn’t understand whether music has or does not have D.R.M.,” Mr. Carr said. “The point should be that it’s a consistently good experience for them. What we need is for that word of mouth to grow and more people to try it.”

Perhaps so. But the average consumer does know that buying music through the iTunes Store is a hell of a lot easier than using Amazon’s clunky MP3 store.

What Amazon is hoping for is this equation: No DRM > ease of use.

That is, people will be willing to tolerate the frustrating effort it takes to search and buy and then move into the iTunes software the DRM-free tracks from Amazon’s MP3 store.

I don’t think so.

The Kindle electronic book reader, now four months old, is another primary cog in Amazon’s digital strategy. Sales across the book publishing industry are flat; e-books represent one possible future. But the first priority for Amazon is actually getting the device into people’s hands. The company has experienced constant shortages since the Kindle went on sale in December.

“We obviously want to get it fully in stock as quickly as possible,” said Mr. Freed, vice president in charge of the Kindle.

Forget it! Even if they get Kindles back in stock, there are already several million iPhones and iPod Touch devices out there that can do ebooks as soon as Apple offers them at the iTunes Store.

And when Apple introduces an iPod Air, the Kindle will automatically become an obsolete (and not at all quaint) antique!

Amazon is nothing more than a retailer. The Kindle illustrates its incompetence at designing slick, user-friendly hardware. The Sony Reader is better hardware and superior design.

Amazon doesn’t stand a chance against Apple. Bezos had better hope Jobs turns iTunes into a platform. Then it might be able to survive.

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2 Comments on “Amazon: Already Toast”

  1. Alan Pritt Says:

    If I were Amazon I would be investing heavily in Songbird. The iTunes experience may be the nicest method for buying music online at this time, but the bar really isn’t that high. Unlike with iTunes, other retailers would enter the Songbird marketplace, but Amazon has the brand recognition to flourish under those conditions (e.g. their classic affiliate scheme; which could become huge if they leverage a community experience within Songbird).

    The major hurdle would be getting the experience on the music players. Apple have upped the bar here by integrating their store with their portable devices, so there would have to be an open equivalent here. Difficult on such a closed platform as the iPod/Phone. You could at least make sure the experience is possible on as many rival devices as possible, but I also have to wonder where Apple stand legally if they refuse to allow iTunes competition on their devices.

    As far as video, maybe Elisa is the closest equivalent to Songbird as far as the above open business model is concerned. If I were a forward thinking studio I would be investigating it, at the very least.

  2. mikecane Says:

    I’d completely forgotten about Songbird. You could be onto something there.

    After all, iTunes wasn’t originally created by Apple. They bought someone else’s MP3 software and morphed it.


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