The next Amazon

This content has been archived. It may no longer be accurate or relevant.

From The Bookseller:

In June a bookseller briefly became the richest man on the planet. From humble beginnings as a successful Wall Street trader in the late nineties, he saw an opportunity to change the way that books are sold. At around the same time, the first Penguin books website launched, and readers could buy books direct from the website and have them delivered to their door. At the time, of course, this was revolutionary and ruffled booksellers. When I presented the site at the London Book Fair, the first comment from the audience was about “that Buy button on the screen”.

The site continues to sell books today, though through affiliates which is probably a more friction-free experience than when we had to print and fax the orders to the warehouse for fulfillments. Amazon meanwhile side-stepped the dotcom crash and continued its growth towards dominating the world’s retail online as it does today.

But let’s rewind history back again to the late nineties. Would it have been possible for the Penguin website to compete with the Amazon website? Was there an opportunity that was missed at that time, and is there one that publishers and booksellers should be investing in today?

Possibly there was a play that publishers could have made coming together to create a single online retail brand that used all the benefits of existing warehousing and distribution. They could have bought the UK’s leading online bookstore (then The Internet Bookshop, subsequently sold to WHSmith for £9.4m in 1998). But they didn’t. It would have been too contentious a move for publishers to get so deeply involved in “that Buy button”. Politics, relationships with retailers, and a focus on core business stopped publishers’ involvement in digital media just as it was getting started.

So what are the opportunities today?

. . . .

Behind the public and visible hype around virtual reality is the growth of the technology strand known as artificial intelligence or machine learning. In relation to publishers and booksellers, this allows a lot of information to be analysed and interpreted in interesting new ways. It is useful for publishing because there are already significant quantities of useful information that can be looked at. Trends such as adult colouring books could have been anticipated, dynamic recipe books can be compiled based on consumer habits and indeed AI could anticipate fiction trends based on combinations such as sentiment analysis, sales trends and general entertainment industry movements.

Link to the rest at The Bookseller

PG says if you’re going to be one of the leaders in a breakthrough technology, you have to attract, hire and retain really, really smart techies. During this process, you will be competing with lots and lots of other prospective employers, including the aggressive giants like Facebook and Google who give employees meditation rooms, free lunch, immediate coolness and a very impressive line on their résumé, and bleeding-edge startups where success means everybody who got in early will get crazy rich.

Exactly why would such tech talent be interested in working on artificial intelligence in the publishing or bookselling businesses?

Wealth? Nope.

Fame? Nope.

Coolness? Nope.

PG says for smart techies, the only good publishing or bookselling jobs are with Amazon.

That will change some day, but Random House and Barnes & Noble won’t be the ones who build the next Amazon.

15 thoughts on “The next Amazon”

  1. As the qig5 still can’t figure out/understand that Amazon knows how much people are willing to pay for things like ebooks, I don’t see any type of technology saving them from themselves.

  2. I recently read “Everybody Lies”, an overview of big data mining. One section described a method of examining big data called a “doppelganger search”. Pretty much what they do is to search their data for personal profiles (including, but not limited to purchase history) of people who are similar to you – your doppelganger(s). Then they examine what those people purchase to enhance the suggestions they make to you.

    While you might initially think there are lots of ways that could go wrong, apparently it’s one of the things Amazon does, and it was said that it improved their recommendations (however that is measured) by some significant amount. An anecdote in the book says that Bezos met with the data scientist that implemented the system at Amazon, got on his knees and genuflected.

    This tells you a lot. It tells you that Amazon is doing things you haven’t even thought of to make the shopping experience better for you, and it says that the president of the company understands those things, encourages them, and appreciates them when they are done successfully. You can’t overstate the importance of that.

    • Amazon is pretty good at suggestions, no doubt about it, but sometimes it fails miserably.

      For instance, a while back I bought a spark plug for an old lawnmower and Amazon started suggesting random spark plugs, over and over and over again.

      Perhaps there’s a community of spark plug collectors out there who want to own a full set, but I’m not one of them. 🙂

      With respect to B&N, I got the sense that there were some good programmers working on the Nook at first, but that most of those people have either left or given up hope.

      • One thing that annoys me is how I can buy the complete series on blu ray from Amazon, and they still fill my recommendations with individual season DVDs. I wish it would recognize multiple variations on the same thing and stop recommending that you buy things twice (or more) because it thinks you need it in every release/format.

  3. The big money doesn’t lie in being the next Amazon but rather in being first in a new and different area.

  4. Basically, yes. Any single one of the Big 10 publishers could have set up a web site and cut Amazon off at the knees.

    There was considerable discussion about that at the time. And the universal answer from the management involved was, “we’re in the book business, not the internet business.”

    The survivors are still in the book business… but so is Amazon, now.

    • It’s interesting when the innovations are recognized and applied by someone entirely different than whom you think they emanate.

      The big publishers, distributors, and retailers all had an opportunity to do what Amazon did but couldn’t see the forest for the trees.

      Along those same lines, Sears, who in many ways was the Amazon of the last century couldn’t or wouldn’t see the change that the web would provide. Consequently, the company is a mere shadow of what it once was.

      Funny that.

  5. I was in epublishing in the late Nineties before Amazon, and so many options seemed open to get rid of the funnels like Ingram and the major bookstores and go directly to the consumers. The small epublishers, almost none of the big publishers had any ebooks, had their own shops for their ebooks and their paper books, and some banded together to form conglomerate sites. At the same time, the first serious ereader, the Rocket, banded with B&N to sell ebooks from most of the small guys and a few more adventurous big publishers. At the same time, an ebook site that specialized in Palm Pilot and other PDAs stared up. With the only exception being a huge erotica site, the buyers went to the Rocket and Palm site to buy their books because they were lazy or didn’t want to spread their credit card info to too many sites. Then came Amazon which continued the trend. The epublishers dropped their sites’ shopping carts and accepted the inevitable. The price of ebooks went up to make up for the chunk of change these middlemen took, the royalties to authors were lowered dramatically, and once again, we were back to being under the thumb of middlemen who took the majority of the profit. Thanks, readers.

    In other words, it didn’t work then, and it won’t work now because of human nature.

  6. Publishers’ strategic advantage was in manufacturing and distributing paper books to retailers. That’s what they did better than anyone else.

    The internet eliminates that strategic advantage. There is nothing else they do better than anyone else. Worse, the skills that gave them that advantage are not the skills necessary to create online commercial enterprises.

    Publishers compete with online retailers in the market, but it’s a case of two different businesses bringing their product to the same market.

    Amazon is in a similar position with online retailing. Nobody does it better. They will fall when someone meets the same consumer need from a different direction.

    Anyone smart enough to know the directions VR will be take over the next 15 years?

    • VR?
      VR is going mostly nowhere until somebody solves the vestibular problem.
      Until then it will be just a display tech for gamers with strong stomachs.

      Now, AR is a different proposition but it won’t really have much impact on retail. That one is headed for the practical segments of the education markets.

      • Thanks, Felix. I had to look up vestibular, which I really should have known. In my (poor) defense, my balance is bad enough without trying VR.

        • It’s an old issue. And not just for VR.
          Some people can’t even play first person games on a regular display without getting dizzy. I didn’t use to get unbalanced but it felt weird until I figured out I had to lower my viewing angle to line up with the center of the display. Turns out there’s a reason so many gamers lie down on couches.

          Vestibular mismatch killed the 90’s VR hype and so far it is holding back VR gaming enough that Microsoft’s new XBOX One X, which has power to spare to drive VR didn’t even bother to list it on the spec sheet. Sony has a VR option for their console and they backburnered it right from launch, pulling most of the ad money planned for it and shifting it to other products. PC gamer usage barely registers.

          There are ways to minimize the effects for some users but the only way to really make VR work is with motion tracking and a large empty floor space for the user to move in. The next generation headsets are aiming for tetherless connections so it might work in backyards or front lawns.
          At least it’ll get some gamers off the couch. 🙂

          Human factors pop up where you least expect them.

          • What people really want are holodecks: fake environments that look and feel real and don’t rely on tricking the mind/eyes. Until they can do that, VR probably won’t become much of a thing. (I suppose a VR that exists entirely in the mind, where the body remains unmoving, could also work, but I think you’d have to deal with the whole concept freaking a lot of people out. Then again, people adapt in ways we don’t always anticipate. Jules Verne thought no one would want to ride in underground trains because it would remind them of the grave.)

  7. “Trends such as adult colouring books could have been anticipated…”

    Goodness! Not with the adult coloring books again! Give it a rest, please! They act like they invented the steam engine. The “trend” won’t last as long as PopTarts.

  8. My husband, who is an amazing programmer (not that I’m biased or anything) has been recruited by Amazon at least three times. They’ve called him, asking him to come in and meet with them. He always says no because we’re not interested in moving to Seattle (the house prices alone are much higher than my current location; all our family is here). So I believe that they’re actively seeking out the best programmers for their system.

    BUT…I think whatever they’ve got in place currently is in dire need of an overhaul. The problem is that when you have a system that was designed/created a long time ago (long being relative when it comes to IT) at some point it becomes about putting out fires and keeping the whole thing together with gum and duct tape. The fact that the page counts weren’t accurate and the system could so easily be duped is a major indicator. Said amazing husband has told me how easy it would be to design something that would keep track of this on various devices; the fact that it wasn’t already in place says something about what they’re working with.

Comments are closed.