Effect of Amazon's buying Audible?

[brecklundin]

I have been looking at what could happen now that Amazon owns Audible.

First it puts Apple in a funny position. Suddenly they are paying a competitor for iWhateverDevice content. Apple currently sells Audible content on iTunes.

Next Amazon is going to want to leverage that Audible content fast, as in yesterday kinda fast. I see the logical next evolution of the Kindle into a device for eBooks as well as audio Audible format books. Perhaps even something to read to you are you read the pages.

So, perhaps, and this is just some HUGE WAG...maybe there is something afoot between Amazon & Apple to meld the iTouch and the Kindle...maybe that annual rumor of a "new" Newton will see some life as an iKindle.

This is Amazon sells MP3 & video content in direct competition with Apple and that makes it look to me as if it could be a very complicated arrangement.

But if Apple drops Audible content then iWhateverDevice users are not going to be at all pleased. If Apple keeps offering Audible content then Apple is paying Amazon to compete with them for customer dollars.

Plus I am sure no small amount of Audible's revenue comes from sales via iTunes. Though likely not near as much as via their subscriptions. But I bet the iTunes Store sells more Audible content then Amazon did/does. So, Amazon is in a weird position too...Amazon's "hole-card" would be, as far as MP3 style audiobook content, Audible is the only real game in town. So, customers will follow the content to wherever they can buy it...I would think.

Anyone else wonder about what this means to the whole mess of eBooks, audiobooks and whatnot?

BTW, my reason for posting this here is I would think this deal almost dictates the next gen Kindle must also support Audible books...and sooner rather then later.

[AnemicOak]

Originally Posted by brecklundin

---snip---

Next Amazon is going to want to leverage that Audible content fast, as in yesterday kinda fast. I see the logical next evolution of the Kindle into a device for eBooks as well as audio Audible format books.

---snip---

So, Amazon is in a weird position too...Amazon's "hole-card" would be, as far as MP3 style audiobook content, Audible is the only real game in town.

---snip---

BTW, my reason for posting this here is I would think this deal almost dictates the next gen Kindle must also support Audible books...and sooner rather then later.

The current Kindle supports Audible, so I'm sure the next gen one will too.


While Audible is the major player for downloadable audiobooks, they aren't the only one & some of the others are starting to get more content. Audible is of course still the top supplier. Many audio publishers also sell their stuff on CD in MP3 format with no DRM too.

Who knows what Amazon will do. For now they'll probably just run it separately like they do MobiPocket. I just hope they don't increase Audible's prices. It'd be nice if they started offering membership packages with more than 2 credits again though.

[brecklundin]

oh, I din't catch that the Kiindle already supports Audible format...nice...

As to the comment about aidiobooks being available on CD....well, ummm...no-duh...hehehehe... The same could be said for music content yet there is iTunes, Amazon, and about a zillion other sites to d/l music. And

I agree about the price of Audible...the two credits/mo are well not that great a deal anymore. We buy two annual accounts so we get a bit better deal over monthly, I think we get 4 extra books or something like that. Still it's a fair amount of money/book. Mostly because, who gets to define the value of a credit? Look at many books that cost 2+ credits...Terry Brooks Shanara series was an example. As are a couple more that simply cost more for no reason. It's not like the printed versions cost 2x more than other authors. When I first joined there were no, or extremely few, multi-credit individual books.

One thing I hope they DO CHANGE is the awful way the site works. Even eBay's category listings pages load faster, using large gallery images. And I liked when they had the pop-up player for sample chapters. Now it seems I cannot keep shopping while I listed to a sample...unless I open it in a new tab.

I still like Amazon buying Audible because I really do think it might tweak Apple and maybe even get us another good source for audiobook downloads.

[Alderete]

Originally Posted by brecklundin

Next Amazon is going to want to leverage that Audible content fast, as in yesterday kinda fast.

You might want to check out Amazon.com some time. Look up a book that has a downloadable edition at Audible.com. You'll see Amazon is already leveraging Audible. Like, yesterday, and before.

Originally Posted by brecklundin

This is Amazon sells MP3 & video content in direct competition with Apple and that makes it look to me as if it could be a very complicated arrangement.

But if Apple drops Audible content then iWhateverDevice users are not going to be at all pleased. If Apple keeps offering Audible content then Apple is paying Amazon to compete with them for customer dollars.

There's a critical difference between music and audiobooks. With music, Amazon and Apple are competing to sell other people's content. When you buy a track from Amazon, Apple gets nothing, and vice versa.

But Apple's iTunes Store is mostly reselling Audible's content (the Harry Potter books are the only major exception). And the iTunes Store is almost certainly the biggest "customer" for Audible: When Apple sells an audiobook, Audible still gets a cut. The same will be true for Amazon.com.

Sure, the Kindle adds some complexity to the equations, but in the end, more audiobooks going onto more iPods translates directly into more money for Amazon. Why would they cut off their biggest reseller? That would make zero business sense.

[brecklundin]

Originally Posted by Alderete

But Apple's iTunes Store is mostly reselling Audible's content (the Harry Potter books are the only major exception). And the iTunes Store is almost certainly the biggest "customer" for Audible: When Apple sells an audiobook, Audible still gets a cut. The same will be true for Amazon.com.

Sure, the Kindle adds some complexity to the equations, but in the end, more audiobooks going onto more iPods translates directly into more money for Amazon. Why would they cut off their biggest reseller? That would make zero business sense.

I think you are forgetting that Amazon and Apple are competitors in other arena's. Jobs is an arrogant POS who does not play well with others. Then again he is a billionaire and I drive a '97 Ranger pickup. I was looking at it from that perspective. I never implied or said Amazon would drop iTunes but rather the opposite. Amazon is laughing all the way to the bank. They got into Jobs' pocket and it has to just have him frosted blue.

So, to me what I see is a sad irony for Jobs. He is in a way backed into a corner. His sales are actually keeping a competitor profitable and growing. And he really can't stop it from happening or he risks further alienating the few Apple users who are objective as to what gets them the best deal for their money. And audiobook people are like us readers we will go where the content is...

What happens when Amazon begins promoting that people can buy Audible books directly from them for less. Then Amazon grabs the price conscious customers plus Amazon still gets a cut from those status conscious sorts who like the "warm fuzzy" they get buying Apple at full price while Amazon likely makes the same either way. Ever see that episode of South Park about drivers of the hybrid Toyonda Pious the Smug almost killed the world. Apple gets to keep them, which is cool, because it puts money in Amazon's coffers.

My hope is this could work to decrease the price of audible content...or at least add value to the membership side of things.

[Alderete]

Originally Posted by brecklundin

I think you are forgetting that Amazon and Apple are competitors in other arena's.

They are less competitors than you think. About all that adds up to interesting money is the Amazon Music store, selling music MP3s. Which are, probably 90%, being played on Apple iPods.

The iTunes Store certainly makes money for Apple, but nothing, not even remotely close, to what they make on hardware. With music, most of the sale, from either store, is going to the record companies. Apple is secretly laughing at the record companies that think they are "screwing" Apple, by giving Amazon first access to music that isn't wrapped in DRM, but Apple is hardly hurt by that.

People who download music, the vast majority, own iPods; whether they buy their music from the iTunes Store, from Amazon, or on traditional CDs, it almost doesn't matter. Indeed, the Amazon store strengthens Apple, because it increases the quantity of downloadable music available that is compatible with the iPod.

Sure, having the iTunes Store do well gives Apple bragging rights, publicity, and a general aura of invincibility. They'll be happy to have all of the major labels represented in the iTunes Plus section of the store. But to think that Amazon's music store makes Apple and Amazon serious competitors is pretty seriously wrong.

Originally Posted by brecklundin

[Jobs] is in a way backed into a corner. His sales are actually keeping a competitor profitable and growing. And he really can't stop it from happening or he risks further alienating the few Apple users who are objective as to what gets them the best deal for their money.

(A) Apple and Amazon really are not competitors in any meaningful way, as I described above. (B) So many people think that business is a zero-sum game: for one company to win (sell more), another needs to lose (sell less). This is very 19th Century thinking. Today business relationships are much more complex, and while two (or more) organizations might have competitive interests in one arena, they are most often far less important than their mutual interests.

If your metaphor that Apple was screwed because Amazon was their source for audiobooks, wouldn't the same be true in reverse for iPods and Macs? After all, Apple makes them and sells them themselves, but also sells them through Amazon. Hundreds of millions of dollars of them. Way, way more money involved here than in the audiobooks arena. Don't you think that if Apple really was getting hurt by Amazon, they would apply a little pressure with that lever?

The reality is that both Apple and Amazon want downloadable entertainment -- music, audiobooks, movies, TV shows, etc. -- to succeed, and become more important than physical versions of the same. In a world where that is true, both companies are many times larger, making many times more money. So any expansion of that segment of the industry is good for both companies.

Originally Posted by brecklundin

What happens when Amazon begins promoting that people can buy Audible books directly from them for less. Then Amazon grabs the price conscious customers plus Amazon still gets a cut from those status conscious sorts who like the "warm fuzzy" they get buying Apple at full price while Amazon likely makes the same either way.

How is this any different from Apple's relationship with Audible today? Audible actually sells more audiobooks than the iTunes Store. They have a trusted brand, they do a lot of advertising and marketing, they're quite successful, and the business relationship between Audible and Apple is the same as the new one will be between Amazon and Apple (for audiobooks).

It will always be important for customers to have multiple ways to purchase goods. There's direct from the manufacturer, online stores, Best Buy, Costco, Walmart, etc. Apple doesn't care where iPod customers buy their content. They make a little more when they buy it directly from Apple, but the important thing is for the iPod business to continue to thrive. That will only be true while customers continue to find the devices useful or fun, and in that regard, Amazon is very much helping Apple, to their mutual benefit.