Amazon is buying Audible.com for $300mm: This changes everything. Audible is already a destination site for Audio books (and content) what more appropriate gateway exists to boost the growing (e-)book content that Amazon is selling via their Kindle? As I speculated a few weeks ago, the Kindle will be a delivery platform for content (not just e-books), and it doesn't take too much imagination to see how Audible's content fits very nicely with the Kindle strategy. Audible has also taught their users about the benefits of subscribing to content and have proven that this model can be successful. So, not only does the Audible acquisition have the potential to bring new customers to the Kindle platform (on the basis of a subscription model for content), Amazon.com will also gain the expertise of staff at Audible who has built up this program. Extending a subscription model to content presages the resurrection of the Book Club model. Didn't we all know it would come back? (Well maybe not, but Bertelsmann were spied coming out of Madame Radzwilli's House of Fortunes just the other day).
Strategically, this acquisition makes fundamental sense at the product level alone. Coupled with an increasing need for Audio versions of text (what with our aging population) with the already loyal Audible customer base there is little to argue about. And I do believe, it will escalate a change in business model for trade (consumer) publishing content.
How publishers react to the news will be interesting to watch. Most will not see the significance and many will be happy at the increased exposure that audio books will get as part of the Amazon.com empire. Where there is concern, it will orient itself around the realization that even greater market power will be exerted (either overtly or not) by Amazon. Given my comments above, this acquisition could represent an end-run of the order of I-Tunes. Look how music publishers are now tied to the $0.99 cents per song model. It just snuck up on them. Will the same happen to book content?
Which brings me to my last comment: It is all out war with Apple. (In fact, I would not be surprised to see a competing offer for Audible. I know Apple are not in the content owning business but they might do it to be mischievous or to protect a budding position in the book market). There has been some speculation about whether Apple would develop an e-reader device as part of the I-Phone. Despite his comments to the contary, I believe Jobs was planning some development here and I speculate that Amazon thought so as well. Amazon will do everything they can to keep Apple out of the content distribution/platform business. Apple for their part don't want Amazon's movie and music distribution (or the Kindle) to challenge iTunes. How this rivalry plays out will be very interesting to watch. They both come at the issue from completely different starting points.
NYTimes
2 comments:
Anything that ultimately benefits the consumer will turn out to be a good thing. Amazon is doing all of us a favor by offering us a viable alternative to an Apple-centric download world. Coupled with demands from music companies for a bigger cut of the margins which already leave Apple with little or no profit on the songs themselves as well as competitive pricing from other companies manufacturing players, Apple will be hard-pressed to continue their smoke-and-mirrors of a dominant download music model. I'm glad Amazon is offering us a well-backed alternative.
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