Outpacing our expectations – Reshaping traditional business models

Friday, May 15, 2009 | Posted by: Grant Thornton
Categories: Business, Technology | Tags: innovation, media, technology, science, amazon

“Jeff Bezos is outpacing our expectations,” wrote an analyst of Amazon’s CEO…

His much-viewed appearance on ‘The Daily Show with John Stewart’ was classic Bezos, nerdy, smiley, hyperactive. Struggling, just a little, to convince Stewart we’ll all read from slim digital screens in the future, he rocked back and forwards with laughter, like Spock on a rollercoaster.

“Jeff Bezos is outpacing our expectations,” wrote an analyst of Amazon’s CEO. Amazon’s subsidiary, Lab126, has been frenetically re-developing Kindle, launching Kindle DX, the latest platform to challenge print media. It’s an upgraded version of the e-reader, only two months since the previous roll-out.

Hyperactivity at Amazon comes as standard. As competitors faced melt-down; Amazon faced-off the slow-down with investment in customer service and tighter integration of their supply chain – the importance of matching customers’ lifestyle needs with purchase services is clearly understood by Bezos.

His much-viewed appearance on ‘The Daily Show with John Stewart’, in February, was conceived to hype the roll-out of Kindle. It was classic Bezos, nerdy, smiley, hyperactive. Struggling, just a little, to convince Stewart we’ll all read from slim digital screens in the future, he rocked back and forwards with laughter, like Spock on a rollercoaster.

Print media is bleeding like Romeo; cash is burning with recession-hit advertising revenues, and traditional bastions of the Fourth Estate are tumbling from the heights of the established lofty elite, washing up on shores of liquidation. In the UK, local and national titles are struggling. The Trinity Mirror newspaper group closed 27 regional and local titles in just a few months last year. Putting pen to paper has never been less rewarding, unless you include Henry VIII’s aversion to translated works.

So why is Kindle DX seen as the next step towards a new era? Kindle DX is not the perfect product, but it holds the baton in a race to market e-readers as the standard print delivery device of our generation. Pricing Kindle at $359 is unlikely to enliven the mass-market overnight, but it sets a bar to be lowered. The price includes discounted or free access to subscriber-only newspaper content.

This week, Rupert Murdoch announced plans to charge for content. Sceptics will point to the limited success of subscriber content in recent years, but they fail to see we have reached a tipping point in an unsustainable market, and it has collided, happily, with new technology.

Innovation has a time, a place. At a moment when our newspapers have aged by the time our latte is served, customers demand a more coherent, instant newsfeed. Laptops and desktops are limited in their social flexibility, clumsy to read in the car, on the metro, in the cafe. Push will come to shove as more content is charged for, and we sense being under the news curve; we will begin to pay for content, small amounts, regularly. 

As e-readers gain traction with consumers, the business models needed to sustain quality journalism will adjust; we will get a little closer to the era of our grandfathers, when news was new, exclusive, and not a retread of an agency wire. The homogeneity of the news era is diminishing too, and with it the rise of a new wave of definable niche markets. The USS Enterprise will be wrapped in star-spangled advertising. Warp speed, Captain?

Next Generation Literacy:

Jeff Bezos on The Daily Show
http://www.thedailyshow.com/video/index.jhtml?videoId=218392&title=jeff-bezos