Its manifest destiny for Amazon (NASDAQ: AMZN )! What used to be little more
than the Internets biggest bookstore has transformed itself into a lumbering,
$88 billion market behemoth trading in everything from proprietary handheld
gadgets to shoes for the unusually tall. While Amazon has made the bulk of its
headlines at the end of 2011 thanks to its Kindle Fire tablet, a quieter story
about Jeff Bezos great machine has been unfolding one that has seen the company
returning to its roots in books. Amazon Publishing, the companys very own book
imprint, has been growing at an exponential rate over the past 12 months. The
latest territory taken by Amazon Publishing: childrens books. A Tuesday article
in The New York Times said that Amazon purchased the rights to more than 450
titles from Marshall Cavendish Childrens Books, a subsidiary of Singapore-based
Times Publishing Group. While Amazon has published a few childrens titles under
its Amazon Encore imprint Encores domain typically is reprinting titles that
were independently published in small print runs this acquisition represents
the companys first aggressive push into the category. Most significant about
Amazons new place in the childrens books market is what it represents for the
companys broader e-book business. Vice president of Amazon Publishing Jeff Belle
told the WSJ , (Childrens books are) a case where theres a great list of books
that have not been digitized. Hes right. While Amazon has had great success with
its Kindle e-readers and has helped set the standard for the market, a number of
book types have simply been blocked off from its e-book operation. The
black-and-white Kindle e-reader, and even color ink e-readers like Barnes &
Noble s (NYSE: BKS ) Nook Color, havent been able to properly reproduce the
large page format and bright coloring of childrens picture books. In turn, the
Kindle e-book business has been cut off from a huge part of the $1.2
billion-per-year childrens books market . The Kindle Fire and Nook Tablet
computers with their clear, back-lit LCD screens can better replicate the
vivid images that make childrens books such marketable products. This expansion
is just one more victory for Amazons publishing imprint in 2011. The company
staged something of a coup in landing exclusive publishing rights to self-help
author Timothy Ferriss new book in August . Between its Kindle business and
Amazon Publishing, the company could end up controlling 50% of the entire book
market by the end of 2012. Whats more, Amazon can continue expanding. With
graphic-heavy texts like picture books now within Amazons reach, it can begin
branching out its e-book publishing business into other image-intensive book
types. Amazon can acquire the rights to crafting books, photography books, even
coffee-table-style luxury books. And best of all? Amazon Publishing with its
growing domination of the entire book chain represents a welcome, low-cost
avenue of growth for the company. Part of what has kept Amazons stock down
lately is the companys massive spending over the course of 2011, including
acquisitions of other companies, TV and film content licensing for the Amazon
Prime streaming video service, and R&D and manufacturing costs for the Kindle
Fire (a device sold at a loss). In 2012, the company could use the chance to
scale back a little and watch its investments ripen. Being able to build part of
its company without breaking the bank will help. As of this writing, Anthony
John Agnello did not own a position in any of the stocks named here. Follow him
on Twitter at
No comments:
Post a Comment