Amazon’s Half-Hearted Digital Business


Amazon (AMZN) is getting ready to to sell digital music and is making another attempt at e-books. But BusinessWeek predicts these efforts will be modest at best. Why? Because content owners don’t really want to sell their stuff in digital form — yet. Not while they continue to make the majority of their money selling books, cds, dvds, etc. through physical retailers. Which gives the Amazons of the world little incentive to sell them. 

“As long as digital music and e-books come with heavy restrictions on how and where consumers can use them, the market will be limited and rights holders will have the power to shake down sellers. That’s O.K. if you’re Apple Inc. and see music as a “door opener” for iPod and iPhone sales. But for Amazon, there’s still much more money to be made shipping real stuff.”

Case in point — while Amazon is preparing to launch an e-book store along with its Kindle — terrible name! — e-book reader, BusinessWeek points out that the store already sells e-books, via its Mobipocket unit it bought in 2005. But Amazon keeps the store, and its digital offerings, nearly hidden from consumers. BusinessWeek

Related: e-Books, Yet Again — Gears Up To Fail