The 35 minute journey into the future
On November 19, 2007 at 9,40 in the morning, the book industry was essentially what it had been since 1945. There were hardcovers, paperbacks, bookshops, distributors, agents, publishers and finally authors. The authors gave the books to their agent who took the editor of the publishing house to lunch and, before paying the bill, handed him the manuscript of which he had magnified the content and commercial potential. The publishing houses controlled the market and gave large advances to the authors in whose talent they intended to invest. It was a well-oiled and efficient mechanism.
Gutenberg, back on earth after half a millennium, would have had no difficulty recognizing his invention of movable type printing in modern industrial forms. An invention that had truly been at the origin of the modern world and for this reason had lasted longer than any other. In reality he was now approaching the twilight of that era.
The only change in the book industry in 70 years - and of little interest to the general public - was this: the collective intellectuals and families who had founded the great publishing houses, at the beginning of the mass-media era, had gradually sold their shares to the large media conglomerates which had identified the book business as an anti-cyclical factor in the most cyclical of sectors, precisely that of the media.
However, the historic publishing houses kept their name and also their specialization and, in some ways, the aristocratic and elitist mentality. In more than half a century we had seen very little change and innovation is something that everyone preaches but nobody actually practices. The story of the music robbed us of sleep.
At 10,15 on that same morning of November 19, everything had already changed. Amazon presented the Kindle, or rather the Kindle platform, because there were already enough e-readers, even if few had noticed. Jeff Bezos had gathered journalists and bloggers at 9:30 at the W Hotel in Union Square in New York and in half an hour had shown the Kindle and talked about Amazon's new platform for reading books on a screen connected to the Internet.
In the six hours following the Union Square event, the Kindle sold out and the device remained unavailable for purchase until April 2008. The Kindle too had its iPhone effect: it instantly became a must-have. Everyone wanted it.
2007, a year of true technological epiphany
That 2007 had been a truly special year, a real watershed between "before" and "after". While the world was heading towards the great recession, on January 9, 2007 Steve Jobs presented the iPhone, which seemed to have nothing to do with books and content, but instead had a lot to do with it.
In September 2017, Facebook and Twitter began their global expansion, Hadoop released software to manage big data and analyze mountains of unstructured information, paving the way for cloud computing; Google, on November 12, presented the SDK (Software Development Kit) of Android; IBM began development of Watson, the first cognitive computer. Also in October 2007 the bodybuilder Brian Chesky together with friends Joe Gebbia and Nathan Blecharczyk opened Airbnb, after having struggled to find accommodation in San Francisco. Satoshi Nakamoto was working on the Bitcoin protocol which he would release the following year. And finally on January 16, 2007, Netflix launched its streaming program.
An exhaustive list of all the important things that happened in 2007 was traced by Thomas Friedman, the New York Times columnist, in an article, Dancing in a Hurricane, which appeared in the New York newspaper on November 19, 2016.
Let's go back to Amazon and the Kindle. It's interesting to examine what Bezos said about the Kindle to reporters gathered in Union Square. Unfortunately we do not have a video recording and therefore we have to rely on the report given by the reporter of "Tech Crunch".
The vision book-centric di Bezos
Bezos' keynote opened with an admission of profound deference to the book, which was billed as a technology in its own right, a technology that had held up beautifully for half a millennium. Bezos clarified this concept better. He said:
Books are the last bastion of analog. They have stubbornly resisted digitization. The book is so highly evolved and suited to its purpose that it is hardly replaceable… The book is already an incredible device.
Some time later he would have added “What can we add to War and Peace? Nothing!". He himself an avid reader and his wife MacKenzie, author of novels, had an absolute reverence for the book which, moreover, had been Amazon's core business for over 10 years. The passion for books is something that remains for life and a passion that always stands on the podium.
First pillar: the book form has a validity and vitality that must be preserved in the transition to digital. Where does this vitality come from? It stems from its content needing little innovation.
As all readers know, Bezos specified in his keynote, the physicality of a book (the paper, the pages, the binding, the shape, the smell of the paper) disappeared once it was consumed; in the end, only the author's world remained in which the reader had immersed himself and on which he had nourished himself. This was precisely what Amazon intended to preserve.
Second pillar: at the center of this whole industry is the author, the creative, not the technology. But technology can do something to support the author and help him make a direct deal with the reader.
So the question was:
Can we improve something of a technology as highly evolved and fit for purpose as the book? And how? By getting technology to do what the book can't do, like collect and share reader reviews, show readers what other readers have selected, rated, bought, and read. All things that cannot be done in a traditional library.
But, in the end, it was the content that was the heart of this world. Here the author's narrative world was truly central to Amazon's vision which tended not only to disintermediate commercially, but also to disintermediate culturally, tending to want to get rid of everything that stood between the creative act and its target audience. reference. For this reason, Bezos specified, the purpose of the Kindle was precisely to facilitate and promote, even ergonomically, the reader's emotional and rational relationship with the author's world. Thus the technological tool for accessing the contents of a book could not be any personal computer, but a more intimate, more personal, more specific device, an object that was, even physically, on the reader. A tool that didn't need software to install and that managed to start in a fraction of a second without putting time between the intention and the act of reading.
It was at this point that Bezos' keynote hit its "Steve Jobs moment," when he showed that from the Kindle, without needing a wi-fi connection, he could access the Amazon library and download a book in a fraction of a minute. An invisible connectivity, imperceptible because it is incorporated in the device itself, a connectivity provided and paid for by Amazon.
Precisely for this set of reasons, Bezos said he was convinced that once you get used to reading on the Kindle, "it will be terribly difficult to go back". A prediction that is only partially accurate. In 2007 Bezos could not have imagined, due to his own merit, the emergence of the hybrid reader, i.e. the reader indifferent to the reading medium that is chosen according to convenience. Even the Kindle will eventually succumb to the principle of diminishing marginal utility.
Third pillar: the Kindle it is much more than a piece of hardware, it is a vehicle for instant knowledge and entertainment, a terminal connected to an immense universe of contents. Its nature of hardware changes into that of a real media.
Connection yes, but fenced
The device, despite having a built-in wi-fi connection, gave limited access to the Internet. In fact, it offered each Kindle user a pre-installed e-mail box and allowed them to view the Wikipedia pages for which Bezos spent enthusiastic words. The Kindle also had the built-in New Oxford American Dictionary, which could be activated, in a pop-up window, as needed, directly from the text.
Fourth pillar: putting a connected device in everyone's hands, while avoiding the dispersion of attention, an almost inevitable consequence of a full connection to the web. The reader must remain confined to the world of Amazon and in this idea there is also the concept that Amazon devices must first of all be an e-commerce vehicle.
A principle that we will see widely in action in the Fire Phone, one of the few failures of the Seattle giant, and above all in the Prime program, the real engine of Amazon's planetary success. In this regard, how can we fail to mention Echo, the home digital assistant, introduced with great results by Amazon in 2014.
The breadth of the offer and the centrality of the price
The Kindle wasn't just another e-reader. In Bezos' words: "It's not a device, it's a service." Or rather, it was a complete platform on which third parties could develop a real business by publishing content and leaving Amazon the task of serving it to readers. Already from the first day, in fact, 90 titles were made available on Amazon.com already downloadable from the Kindle. Among these, all the bestsellers of the New York Times ranking. An offer that had never been seen in terms of breadth and concentration.
And pay attention to the proposed price, the land destined to become the Verdun of the duel between Amazon and the publishers. A bestseller Kindke version cost $9,99, when the hardcover edition had a cover price of over $25, which discounted, never dropped below $16–18.
One wonders the meaning of this extreme dumping operation. To establish the Kindle, Amazon decided to make a very risky investment. In other words, he decided to operate at a loss: he bought in bulk for, say, 12 dollars and resold in retail for 9,99. The publishers, who supplied him with the content, let it go because their margin remained unchanged and, at that time, there was a widespread idea that the disruptive potential of the Kindle was rather limited. But how wrong were they? Immensely. And soon they would notice.
Fifth pillar: the price ofebook it is the main lever to ensure the book an important market space in the new media scenario. In this new scenario, a book no longer competes with another book, as happened in the age of mass media where the market was divided by type of content, but competes to conquer the consumer's time. This time, which remains a constant, is also contested by other media, both by historically consolidated ones, such as cinema, music, television, and by completely new ones such as social media, video games and niche activities. All these media, like the book, reach the consumer through the same channel, the Internet, and tend to be consumed in the same way: through a screen of various sizes. Thus the price of a book is measured against the price of other services, the cost of a piece of music, a film, an episode of a series TV. The prices of these services have leveled off to the point of placing reading among the "luxury" activities, when, on the other hand, it has always been "popular".
Sixth pillar: sell more for less. Cutting the price of the book in half will double its sales in format ebook (and Amazon's data confirm this phenomenon) with an advantage for publishers and authors: if revenues and royalties remain stable, the content will be placed in the hands of twice as many people, thus increasing the chances of triggering the network effect which is the recipe for success in the new economy.
But this approach — selling more for less — was immediately rejected by traditional industry for strategic reasons despite the fact that it had had many opportunities to verify its validity. This is why, on the price of ebooks and on the principle of selling more for less, Amazon would have developed such a disruptive action as to put itself on a collision course with the intelligentsia and public opinion more sensitive to the future of culture. Amazon will thus be singled out as the hunger for creatives and producers of culture.
Unfortunately Amazon's culture didn't help much in public relations. Frugal, direct and unapologetically assertive, Amazon's institutional communication was the furthest you could imagine from diplomacy and savoir-faire. Also thanks to this communicative childhood of the Seattle giant, amazomachia became, and still is, a sort of Olympic discipline in the cultural debate. But, as Bezos recently pointed out, scapegoating Amazon makes little sense and doesn't help solve the problem of the digital transition of the cultural industry, “It wasn't Amazon that challenged the book industry — said Bezos -. It's the future that does it."
The personal library
Again in the wake of the platform concept: the books purchased from the Kindle store and for the Kindle were archived not only on the device, but also in an area linked to the purchaser's account on the Amazon.com site. Here's how Bezos commented on this possibility of building a personal library on Amazon: "The most important thing about the Kindle is that the book does not disappear so that at any time you can enter the author's world".
It was precisely the idea of the platform and its flawless implementation that distanced the Kindle from everything that came before, including competing e-readers that had nothing like it. Precisely this interoperability between reading device, content offer and content providers in a single, highly integrated and networked system was the paradigm shift that had been missing in the previous 70 years. The industry was at a crossroads and from then on, nothing would ever be the same again.
An acute observer like Steven Levy immediately grasped the extent of the novelty in an article in "Newsweek" entitled Amazon: Reinventing the Book. Levy identified an important nuance related to the introduction of the Kindle and connected reading. He was about the author's role and the content creation process. Levi wrote:
The possibility of interaction will redefine authorship […] Authors will have to rethink how to write for this medium […]. It's hard to think of the lone narrator walking out of Starbucks with a masterpiece written in total isolation.
Already, in these words from autumn 2007, the topic of content innovation emerged which ten years later would become a central factor for the development of the market. We will return to this theme extensively in the following chapters. Suffice it to say here that the Kindle has not fully delivered on the promises of writing innovation that keen observers such as Levy had glimpsed since its introduction way back in 2007. But Bezos had always been honest on this point: he had not and has never said that the Kindle would have unhinged the book form; he said the opposite and that is that he would have adapted it to the new digital age. “What can we add to War and Peace? Nothing!". And added nothing but a plethora of superb ancillaries.
Il Kindle, a disruptive choice for the core business of Amazon?
Just as for Apple the iPhone risked being a potentially disruptive choice towards the flourishing music business built around the iPod, so for Amazon the Kindle could be a device destined to damage the foundations of the main business of the Seattle giant, built in 14 years of investments and innovations, the online sale of books. If someone could download content in a minute, why wait a day or more to receive it at home by a courier? The threat was not indifferent. But Steve Jobs and Jeff Bezos, children of the same culture, shared the same vision. If the incumbent wasn't innovating and driving tech-driven change, someone else would, and then the disrupter-turned-leader would have to be chased. That's what's happening in 2017 at post-Jobs Apple with Spotify. This is what happens to Intel with Arm, to Microsoft with Google and it is what could happen to WalMart with Amazon or to Amazon with Alibaba and to Alibaba with Tencent.
But there was a difference. While for Apple the arrival of the iPhone lies in an evolutionary line consistent with the nature of its business, for Amazon the hardware and application software were in 2007 something absolutely outside its founding know-how which was essentially that of a commercial entity operating on the network. This is a big leap for Amazon and for all its management.
Bezos spoke on this issue in a 2008 interview with David La Gesse. This is precisely the innovator's dilemma and it is a concrete dilemma because it concerns the growth strategies of a company that operates in a highly competitive sector such as that of technology. In this interview, Bezos explained the choice of Amazon as follows:
Companies can expand in two different ways — said the founder of Amazon. One is to outward develop your internal skills and ask yourself, “What else can we do with these?” It is an approach that sees a purely quantitative extension. Another way is to start with the customers' needs and look back inward. You observe the behavior of your customers and ask yourself "What are their needs and how can I satisfy them even if this means developing skills that I don't have?" The Kindle is an example of the latter approach. We have a large customer base who love to read. What can we do to make reading even easier, even if it requires developing new ideas? To do this, you need to get out of your own field and go and look for people who have skills in the field of industrial design, hardware and software production and so on. If you start with the clientele, and then work internally to meet their needs, then you need to think and work long-term, forget about short-term results.
Short-termism did not and does not do for Amazon. Now it seems that investors have understood this and know how to reward the work of Bezos & co beyond all expectations.
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This article constitutes the first chapter of the volume by Mario Mancini, Amazon vs. Apple. Brief history of new publishing 10 years after Kindle, goWare (ebook: 6,99, book: 14,99). Available in all online bookstores and book stores.
