Mother of all disclaimers to follow, but after seeing Amazon desperately pitching its Kindle Fire on ESPN, kinda have to comment.
Disclaimer: I’ve been buying puts against Amazon stock for weeks. After their earnings date, those puts went through the floor. I bought more; they recovered. With gusto. Despite taking some profits, enough that I’m, as they say, playing with house money, I still hold a bunch of puts, and will of course take other profits as they come along, given the fact that 99% of all puts expire worthless.
That said, the final straw that caused me to double down against Amazon was the Goldman Sachs it’s going to $300 nonsense.
I mean, maybe. Y’know, it isn’t every day you can score a company with 1% profit margins, fast-growing accounts payable, fluctuating cash positions, a couple bil. in debt and the need to keep buying its own stock every quarter just to offset employee compensation. But let’s look at what the company has done since its initial success with Kindle.
For me, the first sign of trouble wasn’t the whole #amazonfail censorship thing. Amazon had always censored. And it wasn’t even the Orwell deletion thing. That was just stupid.
No, first problem came when, after iPad debuted, Amazon decided to insult the intelligence of half their market.
Seriously. Who thought insulting men who liked iPad was a good idea? Did Suzanne research this?
The full force of Amazon’s bad Kindle decisions were only felt by the market beginning last summer. But it was pretty clear to me, given that I’ve five imprints, all of whose customers are 80% male, that Amazon was screwing up.
First sign that Kindle wasn’t quite going to plan came with Nook Color. As bad as Amazon has been for men, Barnes & Noble? Ever been to one? They’re like a hostile reading environment. But suddenly, guys who hadn’t set foot in a B&N in years started visiting, buying Nook Color, and then “hacking” them. And it wasn’t because they liked seeing chick lit or why he sucks, or whatevs, it was because though the idea of an ebook reader appealed, the Kindle… not so much.
B&N never figured out this advantage, started censoring a few months later. Amazon, of course, to get those male readers back, started censoring in earnest end of 2010, then, after denying the need for a tablet rushed Kindle Fire to market. Meanwhile Apple, whose sales of the 2011 iPad still beat B&N + Kindle handily this year, became the default reading platform with its newer, 2012 model (if it hadn’t been there already).
Saddest part of Amazon’s hail mary at ESPN? If they knew a damned thing about male readers, they’d at least be pitching the Kindle Fire on the MLB Network. Y’know, for those high income literate guys who find ESPN incredibly annoying and have been abandoning the network in droves. But, clearly, Amazon still works from a stereotype of dudes.
The joke is, all of Amazon’s nonsense with censoring, and removing buy buttons, and their own half-baked publishing initiatives, have only cost the supposedly foresighted company in the long run. Apple never cared, much, about consumer titles. They, already having things like the free Yale University open course works (which, umm, ask you to buy titles from somewhere, forget where, iTunes Bookstore or something), want the academic market. Which, interestingly, is about 10x the size of the genre market. And is just starting to grow.
But tell me again how Amazon sees the future. And, really, say it loud. Those 2014 puts can be a bit cheaper, to my eyes, even though Amazon is really a $30 stock at best, and perhaps worth the $5 premium some of those out-of-the-money puts are getting on the expectation that intervention in the market will end one of these days.
/Disclaimer. I’ve had drinks with Angela James of Carina Press, and my mother, a Ph.D. who’d always rejected traditional gender roles, was grateful to receive an inscribed copy of Beyond Heaving Bosoms from Sarah Wendell. I’ll be the first to concede that erotic romance outsells smut by 3-1, if not 10-1. But women were not the earliest adopters of ebooks, and if you’re doing anything to drive men away from your platform, as B&N + Amazon are, but Apple + Google + Kobo aren’t, you’re not controlling your future.