Jeff Bezos: Amazon Makes No Money On Sales Of Kindle Ereaders Or Tablets

Jeff Bezos, CEO of Amazon, recently confirmed what I'd always assumed, that Amazon doesn't make any money on its ereaders or tablets. Bezos said:

"We want to make money when people use our devices, not when people buy our devices."

This differs markedly from Apple's strategy. My question: Can it work? I've always wondered how much more, on average, a consumer buys through Amazon after purchasing an ereader or tablet.

Well, now I know! Bezos remarked that "users' appetite for media appeared to grow once they owned one of his devices." (Is it just me, or does that sound ominous? Makes me think of alien mind-altering technology. You will buy more. No? Just me? Okay ...)

"What we find is that when people buy a Kindle they read four times as much as they did before they bought the Kindle.

"But they don't stop buying paper books. Kindle owners read four times as much, but they continue to buy both types of books."

People read four times as much! Wow.

Read the entire BBC article here: Kindle Fire HD and Paperwhite sales make Amazon no profit.

Thanks to PG for mentioning it.

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Photo credit: James Duncan Davidson from Portland, USA

Nook Readers And Tablets: Barnes & Noble Lowers Prices

Barnes & Noble has lowered the price of their eReaders and tablets.

7-inch Nook Color: $150 -- 20 dollars lower
7-inch Nook Tablet: (8gb) $180 -- 20 dollars lower
7-inch Nook Tablet: (16gb) $200 -- 50 dollars lower

To see Barnes & Noble's selection of eReaders and tablets, click here: Nook

To read more about the price cuts and what they might mean, click here: (PCWorld) Barnes & Noble Cuts Nook Prices.

Before jumping at the chance to buy an eReader it's worth looking at the new tablets that are out, and are soon to come out.

Google’s new tablet is in the same class as Barnes & Noble’s Nook Tablet and the Kindle Fire. The difference for the Nexus 7 is that it’s a full-featured tablet and not just a low-priced reader designed primarily for content consumption. The Fire and Nook, on the other hand, are all about consuming content since they come up short on standard tablet specs such as cameras, Bluetooth, and GPS. The Nexus 7 is also missing a few features such as a rear-facing camera and a wireless broadband option. Nevertheless, spec-for-spec Google’s 7-inch tablet blows away the Fire and Nook Tablet.

Not only does the Nexus 7 offer better specs, but at launch Google’s tablet was priced the same as the Nook Tablet: $199 for the 8GB version and $259 for the 16GB model. Also, around the time of the Nexus 7 release, debut of a Kindle Fire 2 is expected -- so it’s no surprise that Barnes & Noble decided to cut its tablet prices.

Good reading!

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- What To Write About: Fiction That Sells

Photo credit: Unknown

WorldCat: Find Books In A Library Near You

This is a fantastic idea! Ever wondered if a certain book was in a library near you? I know I have. Here's a page that takes the pain out of your search, and it doesn't just work for books, you can use it to locate things such as CDs, DVDs and Articles. (If you'd like to try it out for yourself, go here: WorldCat: The World's Largest Library Catalog.)

To try it out I entered the city I live in and typed in the title of one of my favorite books, Lord Of The Flies, by William Golding. After hitting the enter key I was given a list of links to various editions and formats. I clicked the first link and was presented with a list of libraries in my area that have the book, what format the book is in, the distance to the library, and a list of links to information and services the library provides.

As if that weren't enough I was also presented with links to Amazon, Barnes & Noble and Better World Books in case I wanted to purchase the book.

Reviews
At the very bottom of the page I was presented with a smattering of reviews Lord Of The Flies has received and which rate it on a scale of 1 to 5. Which brings up the issue of how useful reviews are.
One reviewer on Goodreads.com gave Lord Of The Flies one star out of five and, which may be worse, 102 people agreed with that rating! Let me quote from this review:

See, I would have cared a bit more about the little island society of prepubescent boys and their descent into barbarism if you know, any of the characters had been developed AT ALL

As I say, the mileage you get from the reviews will vary. By the way, I can't give you a direct link to the review I quoted, but you can read it here, it's the last one on the page.

WorldCat: The Site For Mobile devises
WorldCat also has a site for mobile devises (WorldCat: Mobile Web Beta) so I thought I'd try it out on my iPad. This is terrific! It works just the same as the standard website but it seems more streamlined and user friendly.

WorldCat on Facebook
WorldCat also has a Facebook app, to learn more about that go here, WorldCat search plug-ins, or head straight over to Facebook's WorldCat application page.

Cheers!

Amazon versus the big-6 publishers

Is it any wonder that Amazon isn’t too worried about competing with Big Publishers? It’s like the Army Rangers taking on the Des Moines elementary school crossing guards.
- PG, Why Publishing is Like Baseball and Politics

PG has written an excellent commentary on Kris Rusch's post, The Way We Were.

Datastreams can be very valuable. Lots of people are working to parse Twitter’s datastream these days.

Passive Guy recently read an article that said news of the big East Coast earthquake south of Washington DC reached New York City faster by Twitter than it did via official disaster warning networks. Researchers are watching Twitter for everything from who’s rising and who’s not in Republican presidential politics to how the latest revolution is progressing in the Middle East.

At this point, the most valuable part of Amazon is the proprietary datastream it receives from its sales each day. An enormous competitor with bazillions of dollars could set up an online store, regional warehouses, etc., but it would be blind compared to Amazon because it doesn’t have the current and historical data and the ability to predict what customers will want next.

Wal-Mart was the first big retailer to actively exploit the value of its sales data. That was one of the reasons it beat Sears, K-Mart and some store chains that don’t exist any more.

Before widespread internet access, each Wal-Mart had a satellite antenna that beamed daily, then hourly, then real-time sales data back to the mothership in Bentonville, Arkansas. Bentonville is a fine place to operate the world’s largest retailer. When you’re digital, it doesn’t matter where you are located. Being in Manhattan is becoming a less and less valuable business asset, but PG doesn’t want to fight with any New Yorkers. He agrees it has a unique vibe and enjoys his trips there. He never heard a cab driver speaking Farsi in Bentonville.

Wal-Mart began to rearrange its stores based upon its sales data, featuring different items on its end-caps (displays at the end of aisle) each day depending on what it knew would sell best on Thursdays. One illustrative story has Wal-Mart putting diapers next to beer on the weekends. Dad’s at home. When he is sent to the store to buy diapers, he decides he deserves a beer for his sacrifice.

Unfortunately, PG heard the Wal-Mart data guru speak at a conference a few years ago and he said the beer/diapers story is apocryphal, but confirmed that Wal-Mart knew about a lot of products that sold better when they’re placed next to each other. With today’s technology, Bentonville data gnomes can drill down to sales made at individual cash registers located half-way around the world.

As Kris points out, sifting through a datastream the size of Amazon’s or Wal-Mart’s to discover important information about where customers have been and where they’re likely to go was impossible before the tremendous boom in computing power. The area is usually described as business analytics or data mining and smart companies do a lot of it. When PG was an executive in a business analytics software company a few years ago, he negotiated contracts with every big and rich firm on Wall Street.

But no contracts with publishers. As we’ve read, Big Publishing is having problems getting ebook royalty reports from Amazon and Nook plugged into their ancient royalty reporting software, a trivial programming job. PG doesn’t see them moving into data mining very quickly.

People sometimes believe that Amazon’s major advantage over traditional booksellers is its willingness to aggressively discount. That certainly plays a role, but the folks in Seattle are also much, much smarter about what sells and what doesn’t.

Amazon doesn’t discount everything every day. The people making pricing decisions know exactly how much money they make from selling a currently-available Kindle ereader. They have a very good idea of how much profit they’ll make from each Kindle Fire they sell for $199 even if Amazon pays more than that to buy the Fire.

Amazon is not just selling a tablet. They’re selling a tablet that will generate a stream of new purchases of ebooks, movies, music and almost everything else they sell. Whatever loss they take on the tablet itself is an investment in a future customer.

Is it any wonder that Amazon isn’t too worried about competing with Big Publishers? It’s like the Army Rangers taking on the Des Moines elementary school crossing guards.

Read more over at The Passive Voice.

2011: The year of the tablet

Looks like tablets are going to be the hot item this year. Nathan Bransford, a former literary agent, now an author and CNET employee, wrote yesterday that, "if there's one hot device out there this year it's the tablet. Tablet tablet tablet".

He makes the point, which I think is a good one, that once a person owns a tablet there is no further financial impediment to purchasing and reading an ebook.  Since ebooks are, in general, less expensive than hardcover books and even sometimes less expensive than paperbacks, this is likely to increase the number of ebooks purchased and read.

This could be the year that more ebooks than pulp-and-paper books and bought and sold.

How does it feel to live in the midst of a digital revolution?