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Dropping Profits Sends Amazon In Odd Directions 152

tabdelgawad writes "The Washington Post has a story detailing how Amazon has purchased the rights to turn a recently published book into a feature-length movie. The article also outlines other 'strange directions' Amazon has taken in response to declining profits and a plummeting stock price, including moving into the grocery business and producing original live webcasts and streaming shows."
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Dropping Profits Sends Amazon In Odd Directions

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  • by eldavojohn ( 898314 ) * <eldavojohn AT gmail DOT com> on Friday July 28, 2006 @03:52PM (#15801445) Journal
    The book, which was published in May by Nan A. Talese/Doubleday, a division of German media giant Bertelsmann AG, was slow to be reviewed by mainstream outlets. But Amazon sent galleys to 100 of the site's top customer reviewers, who lauded it. That helped propel the book to the top of Amazon's fiction list, much the way bloggers and other non-mainstream media outlets such as YouTube create groundswells of their own. Positive reviews followed, in The Washington Post, USA Today and elsewhere.
    Is it just me or does it seem like Amazon selected a book from an unknown author and made sure the public liked it. Most books are good--if they weren't, they wouldn't be published. The fact that it's sold only 30,000 copies and they're already seeking a movie deal tells you something. Hell, I've read Stanislaw Lem novels that have sold millions of copies world wide and only one has been made into a movie.

    They probably got him to sign over the rights for nothing and then started pushing the book to set up the movie:
    Amazon did not disclose how much it paid author Keith Donohue for the movie rights...
    Donohue would not disclose how much he was paid for the rights to his book, but offered, "I'm still here," meaning his day job.
    Poor guy. Sounds like another Anthony Burgess who sold the rights to make A Clockwork Orange into a movie to The Rolling Stones for around $5,000.

    This kind of reminds me of a media outlet gone wrong. Or American Idol informing people of what good music is. You really have to wonder if Amazon found this book and said "this is a really good book" or if they said "find me a book that will translate well to the big screen."

    You want to make money? Find an acceptable product or well known name and shove it down America's throat. Instant cash. Examples: Mission Impossible 2, corporate boy bands with music written by teams of people, any media that follows a standard high selling formula, etc. Next up? Amazon studios presents their new movie ... "A Revenue Stream We Hope to Tap."

    In TFA, they even admit it:
    No longer content to remain in the online retail market, is heading into the movie business...
  • 3rd party shippers (Score:1, Insightful)

    by Anonymous Coward on Friday July 28, 2006 @04:05PM (#15801535)
    i don't shop there anymore because your stuff dosen't come directly from them anymore. you now have to deal with shipping fees from 6 different companies to place one order. screw that!
  • by __aaclcg7560 ( 824291 ) on Friday July 28, 2006 @04:06PM (#15801548)
    If Amazon wasn't too concern about pursuing profits to please Wall Street, they wouldn't be doing all this weird stuff and have a more predictable business model. Maybe it's time that Amazon accept being a blue chip company like Microsoft instead of a being a king of the jungle wonder stock like Google.
  • by Roody Blashes ( 975889 ) on Friday July 28, 2006 @04:21PM (#15801643) Homepage Journal
    Crappy business model.

    I used to work at a company that did the same thing. What they did, they did poorly, because management had a poor attitude toward employees, customers, and partners.

    Rather than fix these things, which would have soiled their resumes by admitting error, they desperately attempted to cut costs to ridiculous extremes and move into new market segments that didn't in any way leverage their strengths.

    Last I knew, they were still losing money (now that they can't cut any further) and competent employees were fleeing for their lives to much better and more stable opportunities.
  • by vossman77 ( 300689 ) on Friday July 28, 2006 @04:27PM (#15801691) Homepage
    Amazon used to be so organized, but now its categories are vitually worthless. I search for USB thumb drive, I get 10,000 thing unrelated to it even when I'm in the correct category I get non-thumb drives and there are several nice thumb drive not in the correct category. For computer stuff now I go to, at actually organized.
  • by mind21_98 ( 18647 ) on Friday July 28, 2006 @04:28PM (#15801700) Homepage Journal
    Or could it be the slowing economy causing Amazon's profits to drop? I mean, having to pay for your McMansion and to fill up your 10mpg SUV has to dip into your discretionary income...but yeah. I can't imagine Amazon making movies. *shrug*
  • by Alex P Keaton in da ( 882660 ) on Friday July 28, 2006 @04:28PM (#15801703) Homepage
    Consider how many times you will hear "" in reference to this movie all over the news etc... Sure it seems strange, but considering the advertising budgets that corps. the size of Amazon have, it may be a good deal. And the movie may even make some money, to boot.
    I haven't shopped at Amazon in a loooooooong time (the whole multiple stores and sellers in the Amazon search, so when you go to check out you have 10 different shipping and handling fees, that drove me off...) but I have heard their name mentioned a bunch lately b/c of the movie thing....
  • by DaveInAZ ( 944478 ) on Friday July 28, 2006 @04:30PM (#15801714)
    Is it just me or does it seem like Amazon selected a book from an unknown author and made sure the public liked it.
    No, it's not just you. That's exactly what they did. It's a morally shaky practice, but it's SOP in the publishing business to generated hype by any means possible and falsify sales numbers by overshipping, knowing that vast numbers of those books will be returned. But once they're shipped, they count. So, while I hate all this b*llsh!t and deception, it's not just Amazon, either. If the New York Times bestseller list is b*llsh!t (and it is!), why should Amazon's top seller list be any different? (Damn, I'm getting cynical in my old age. Oh, wait...I've been cynical since I was 12. Nevermind.)

    Personally, I find it far weirder that they've gone into the Grocery business. I went to Amazon this morning, to see if I could hear a snippet of a new album, and there was Tony the Tiger, hawking cereal on the Amazon home page! What possible advantage could there be for the average person in ordering their corn flakes online, paying shipping charges, and waiting two weeks for them to show up? Are they going to order their milk from Amazon, too, and hope it get to them before turning into cheese or exploding in the back of a hot mail truck? I doubt it, so they're going to have to go to the store, anyway, so what's the point? And, what was Amazon thinking?

    As for American Idol, am I going to trust a bunch of "Reality TV" (an oxymoron, if ever there was one) watchers to tell me what's good music? I don't think so. These are people who probably aren't even aware that the sound from their TVs is approximately as good as the sound from a Dollar Store radio, and wouldn't understand how that's relevant, or why that's a bad thing, if they were told. But, hey, these are the same people who gave us our current President, so how wrong could they be? Right?

  • by Alex P Keaton in da ( 882660 ) on Friday July 28, 2006 @04:32PM (#15801742) Homepage
    2 possible paths:

    A. Make a big budget movie even though you are a retailer...
    B. ????


    A. Get rid of the whole thing where someone spends half an hour shopping on your site, filling their cart, thinking that they are getting a good deal, but when they get to the checkout they find that each item was from a different seller and all the shipping and handling is separate, so it adds like $60 to the bill.... Yeah, get rid of that, and then B may be:
    B. Profit!!!!

  • by NosTROLLdamus ( 979044 ) on Friday July 28, 2006 @04:50PM (#15801883) Journal
    Most books are good--if they weren't, they wouldn't be published.

    I disagree. Perhaps you've been unable to frequent a bookstore as of late. Find any book by L. Ron Hubbard, open it up to any page you wish, and gasp in horror. If you still remain unconvinced I implore you to inspect the contents of any celebrity written book, and hopefully you will find one that isn't ghost-written. Also, feel free to check out any of the ego massaging political books with titles such as "Lying Liberals and the Obease Conservative that Eat Them".

    Many books, and I'd say most books, are published because publishing houses need to make money, and not because the books are good, which leads me to your next comment...

    You want to make money? Find an acceptable product or well known name and shove it down America's throat. Instant cash.

    Which is a sentiment I totally agree with. Harry Potter anyone? Oh, my, did I touch a nerve?...

  • by kfg ( 145172 ) on Friday July 28, 2006 @04:56PM (#15801936)
    Lessee; we're doing worse and worse in our core competency, which we've been at for over a decade, but haven't even come close to recouping our initial investment yet, so we'll solve the problem by gathering whatever cash we can find under the sofa and plunge it into a horrendously expensive business in which we have no experience and know nothing about.

    Well, yeah, sure, if you put it that way it makes perfect sense.

  • by TopShelf ( 92521 ) on Friday July 28, 2006 @05:14PM (#15802069) Homepage Journal
    I have no idea why Amazon thinks they're uniquely positioned to do this, it sounds like panic and confusion to me.

    They're trying to leverage the expertise in their pool of customer reviewers, who gave enough positive feedback for Amazon to move forward with this. Really, this isn't a bad idea - circumventing traditional book critics and going right to a group of customers to try and get ahead of the "next big thing."

    I wouldn't overreact to this story, as it's prompted by a lousy 2nd quarter earnings report. Let's check back 6 months down the road and see how the story spins...
  • by bodrell ( 665409 ) on Friday July 28, 2006 @06:02PM (#15802435) Journal
    It has seemed to me for a while that Amazon is slipping. Their web site, long a model of clarity and usability, has become confusing with the proliferation of non-Amazon sellers. For example I recently did a search for a book and the top listing in the search results was only for used copies, while if I clicked the second listing I got the usual Amazon page for the book. Since you can buy used copies from the main page for the book, I don't even understand why the separate page existed, let alone that it was the first search result.
    You are certainly not the first, or only, person to complain about all the non-Amazon sellers at Am I the only one who really likes being able to buy used books and CDs, or having the option to buy strange products from Amazon without having to register my name and address with yet ANOTHER web retailer? I have never been confused about which products are eligible for free shipping and which are not. For used CDs, it is a very simple calculation: shipping is $2.49. If the price differential between the used CD and the new one is more than $2.49, I save money buying the used one. However, selection, rather than cost savings, is the main reason I like the Amazon Marketplace. I listen to a lot of foreign music that is simply not available, either new or used, in the US. Through the Amazon Marketplace sellers, I've been able to buy "import" CDs for less than I would pay for domestic CDs at the bargin bin in Best Buy. And for out-of-print books, I have yet to see a vendor with a selection even close to's.

    I must admit, though, that I wish there were an "advanced search" feature beyond the current offering, including the ability to limit results to products shipped by Amazon itself.

  • by hxnwix ( 652290 ) on Friday July 28, 2006 @06:13PM (#15802520) Journal
    Hear hear. Why did Amazon massively invest in distribution & warehousing infrustructure when they clearly hope to become nothing more than a gigantic Ebay Stores ripoff?

    They are ignoring their profitable core competancy to provide services that their customers neither desire nor expect from them. It used to be that I went to Ebay for used books & such and Amazon for new books, DVDs and popular consumer electronics. Now I buy new books from B&N, continue to purchase used items from Ebay and I have a netflix subscription for my DVD fix. Amazon couldn't hope to compete with Newegg for electronics. Bye bye, Amazon.
  • Tired of Amazon (Score:4, Insightful)

    by PizzaFace ( 593587 ) on Friday July 28, 2006 @06:16PM (#15802540)
    Sure, the inventory's huge, but Amazon is cumbersome to browse. More and more of their listings are obsolete and no longer stocked, and too many are just listings for 3rd-party sellers. Amazon's prices aren't that great, and the customer feedback is actually more limited than what some other sites offer. Customer support is bureaucratic too.

    In the brick and mortar world, a big department store can beat small specialty stores because one-stop shopping really saves time. But it doesn't take long to hop from one website to another. If Amazon's corporate goal is still growth through diversification, it could become a dinosaur and lose business to more-narrowly focused competitors, which often sell at lower prices (e.g. Bookpool []) and are easier to shop (e.g. Newegg []).
  • by monopole ( 44023 ) on Friday July 28, 2006 @06:21PM (#15802579)
    A great understatement. I've ordered books that are listed "usually ships next business day" with next day shipping, only to have the book ship 2 months later. Trying to cancel this order was impossible since it "was already being processed".

    Amazon used to have highly responsive customer service representatives, who had wide discretion. When they tried to organize they were fired and phone responses were outsourced to Belfast and e-mail responses to New Delhi. I assume that the webpage management has been similarly outsourced.

    Amazon has always been the vendor of last resort for me. They established themselves by dumping product below cost, decimating independent bookstores in the process. Now that they have to service this debt and compete on a level playing field, they pursue "odd directions" to cover up the weakness of their core business.

    I suspect that the ever overrated Jeff Bezos will eventually go down as notable failure similar to Kozomo but on a much grander scale.

Recent investments will yield a slight profit.