Amazon’s Echo Chamber

Scathing and harsh, but probably pretty accurate.<p>&gt; No one makes money selling media for consumption anymore. That market is quickly and brutally dying. The media market is now so efficient that all profit is completely sucked out of the equation by the time you get to the consumption delivery system, to the point that it is barely possible to break even.<p>This part resonated with me a lot. The media market was always a race to the bottom. iTunes only proved there was a market, not that it could be profitable once there a multiple entrants with closed ecosystems competing for attention.<p>I think Amazon is full of smart people, but they need to focus on what they&#x27;re good at to increase their profits. Their core businesses simply aren&#x27;t profitable enough for them to try to compete with Apple and Google. They should fix that problem first and then turn to the more ambitious projects.

Echo seems really smart to me - the reason Amazon is in hardware is because they are terrified of &#x27;ok google, order me lighbulbs&#x27;, or &#x27;hey siri, i need a new pair of socks&#x27; becoming the way people shop for things online.<p>Amazon made Echo for &#x27;alexa, order me wheat thins&#x27;, and all the question answering and music playing is just window dressing.

There are a few ways of thinking about Amazon, here is one: they can invest back into new products in the same way Google do but at a larger scale since they don&#x27;t have the pressure of returning profits to shareholders and Amazon&#x27;s distribution and infrastructure is more likely to be complementary to followup hits than Google&#x27;s search ad business.<p>In this hit based model, they can afford more than a few misses and they have already had plenty of hits (AWS, Kindle).<p>As an investor your question is: would you rather Amazon invest $50-300M trying things out with the advantage of their brand, position and infrastructure - or do you want them returning that money, pay tax on it only for you to have to find somewhere else to park it?<p>&gt; No one makes money selling media for consumption anymore.<p>This couldn&#x27;t be further from the truth. Cable is dying and tech and media companies are currently running a multi-billion dollar race in working out who will own whatever platform is next (Amazon buying streaming rights, building tablets and phones etc. is part of their version of what they hope next platform will be - winner(s) take hundreds of billions in market cap).<p>It is so untrue that as soon as Time Warner dropped their print and cable businesses Murdoch offered $85 billion for the content business that remained <i>and they turned him down</i>.

&quot;No one makes money selling media for consumption anymore.&quot;<p>Is that really true? No one makes money selling music, apps, or books on iTunes? Netflix doesn&#x27;t make money selling a media consumption service? HBO doesn&#x27;t make money selling premium content?<p>Those are all examples of media. And they&#x27;re all capable of making money for their creators and distributors.

Despite the title this has nothing to do with the product from Amazon called Echo.<p>So I call it clickbait.<p>Maybe call it Amazon&#x27;s Echo Chamber instead.

Try being a small book publisher and dealing with Amazon. It feels like living in Google or Paypal customer service world(ie if you are an edge case we do not want you).<p>I&#x27;ve been helping a non-profit publish some books on Amazon and it has been rather trying.<p>It is silly, the book comes out great printed through Amazon Createspace and looks great on Kindle, but it gets taken off Kindle Direct Publishing because it is not using English or one of the handful of supported languages.<p>Why not let people use other languages if they mark the e-book appropriately?<p>The official Amazon answer has been that they can not guarantee quality in other languages and thus they do not support it.<p>The problem is that unless you are using one of the limited number of official language Amazon will delete your e-book. <a href="https://kdp.amazon.com/help?topicId=A9FDO0A3V0119" rel="nofollow">https:&#x2F;&#x2F;kdp.amazon.com&#x2F;help?topicId=A9FDO0A3V0119</a><p>Welsh writers managed to raise up enough of a stink about it: <a href="http://www.walesonline.co.uk/news/wales-news/amazon-sparks-language-row-not-2582850" rel="nofollow">http:&#x2F;&#x2F;www.walesonline.co.uk&#x2F;news&#x2F;wales-news&#x2F;amazon-sparks-l...</a><p>Still it seems ridiculous that only way to get decent CS is through PR.

Although the author is a bit harsh, I tend to agree with him on the aspect that Amazon is largely creating second rate products and ultimately wasting a lot of shareholder money (their inventory write down on fire phone inventory was $170M).<p>The markets have been punishing them for their tactic of throwing it against a wall and seeing if it sticks. Ultimately, I think what allows a company like Apple to get ahead was the ability to say &#x27;no&#x27;, &#x27;it isn&#x27;t ready&#x27;, &#x27;do this better&#x27;, &#x27;redesign that&#x27;, &#x27;this sucks - can the project&#x27;. Bezos does not appear to run his company that way. It seems like he has a bunch of lieutenants building things, but nobody telling them &#x27;NO!&#x27;<p>The author highlights one thing: Amazon is trying too hard to be everything to everyone, failing to excel in most ventures.<p>Don&#x27;t get me wrong, I love their core business&#x27;, use amazon prime, the web services have definitely been a game changer and the kindle makes my life on caltrain nice. But I&#x27;m certainly not going to invest in them until they start to show that they&#x27;ve learned to say &#x27;no&#x27;.

Great read and I agree with the majority of it.<p>This stood out though:<p>&gt;Amazon’s retail strategy of being allergic to profit does not translate well into hardware manufacturing.<p>Don&#x27;t most gaming consoles sell at a loss? The pickup for the console maker is on the publishing rights &amp; distribution channels and the fact they take a gamble that the hardware will get cheaper over the course of that hardware generation. I had always though that it what Amazon was trying to emulate with their hardware attempts.

&gt; They make a product, they market the product on Amazon.com, they sell the product to Amazon.com customers, they get a false sense of success,<p>Also called &quot;success.&quot;<p>You can make a business selling cheap crap with powerful marketing. It&#x27;s not noble, but it&#x27;s probably the norm.<p>Amazon just hasn&#x27;t realized yet that it needs to stop competing with Apple and Google and start competing with SkyMall, As Seen on TV, and the dollar stores.<p>(Half joking. But only half.)

Loved the Kindle from the beginning. Cheap plastic is part of its advantage. I take it places without the least fear for its safety. Cheap is good here.

I agree that their strategy is broken, but don&#x27;t believe it&#x27;s due a lack of taste.<p>I understood Amazon&#x27;s hardware to be the opposite of Apple. Cupertino makes their profit on hardware mark up, so it makes sense that everything you buy on iTunes is as cheap as possible - standard complementary products theory. Since Amazon has primarily got their (marginal) profits from selling you content, it made sense that their ebook readers, phones, and tablets are cheap.<p>I don&#x27;t get the Kindle Voyage. Premium priced hardware doesn&#x27;t fit into their model. And now the Echo. I can&#x27;t even guess how they think they will make money with this thing, or how it could generate more sales anywhere else in the org.

I kind of understand why Amazon makes mobile hardware. They control the software experience and push Amazon storefronts over Google&#x27;s. You get people into an ecosystem and they become comfortable in it, so they stick.<p>They author says &quot;No one makes money selling media for consumption anymore&quot;. But surely a properly executed (key word: &quot;properly&quot;) foray into mobile devices is better for Amazon than staying out of it? If they can create a good value proposition for the hardware and a good software ecosystem too, that would be better for them then missing out on mobile consumption of all that media they&#x27;ve put so much effort into.<p>Or am I just completely wrong?

This is why it makes sense.<p>There are a LOT of people that use Amazon to buy things.<p>A lot of people don&#x27;t know the difference between phones.<p>If Amazon has a giant splash screen saying it has a phone, naturally people will buy it just because they don&#x27;t know any better (eg. 65 yr old Grandmas in Arkansas).<p>Additionally, Amazon is a long term company and they know that if they want their foot in the phone game they need to start somewhere so they did.<p>They have never cared about hardcore techies or even their investors. They are one of the most long term focused companies alive right now. They believe in iteration like a religion and they understand the average consumer.<p>It makes sense because it will make cents.

As a previous employee at Amazon, I was extremely surprised at the quality of how they write software internally. When I heard about their new phone endeavor while still there, I was not expecting anything to come out of it quality wise, at least from the software side, and it seems they compromised on the hardware side as well (I never examined one up close). I think anyone that has worked at Amazon, and seen their internal processes would not be surprised at this either.

The article and the thread miss the point. Echo is a consumer &#x2F; market research device. It gets an always-on sensor into some small percentage of American households. This could be used to collect data on in-home behavior in unprecedented ways. The seven microphones could probably be used to echo-locate walls, movement, and furniture positioning. The rest is up to the &quot;always learning, in the cloud&quot; part.

where the author sees an echo chamber that portrays false success, i see a bias on behalf of the author that blinds him to some seemingly obvious truths. others have already pointed out the demonstrably false assertion that &quot;no one makes money selling media for consumption any more.&quot; a statement like that seems to only be able to come from a blind spot.<p>i bought 7 kindle fires for my household (i have 6 kids) largely because it&#x27;s the best deal you can get on a tablet and it performs it&#x27;s function extremely well (i.e. media consumption device coupled with some games here and there). i don&#x27;t think any objective measure of kindle fire can relegate it to failure just because it doesn&#x27;t have the premium experience you get with a tablet that is 6 times the price. i personally do not think the apple experience is worth 6 times the price.<p>i&#x27;ve no idea if the the fire tv stick is going to be a good device, but the fact that it cost me $20 coupled with the positive media experience i get on our multiple fire tablets was enough to get me to buy one and try it out.<p>similarly, i can get amazon echo for $99 and i just signed up to try it out. i&#x27;ve long wanted a device with the presence and interface of a star trek computer. i&#x27;m skeptical that the technology is there yet to provide the kind of experience that i know will enhance the life of my family, but it&#x27;s promise is exactly what i want and i don&#x27;t see anyone else out there trying it esp. at the price point.<p>i think it&#x27;s a bit myopic to relegate all of amazon&#x27;s hardware strategy to the failure bin just because they had a clear failure in the fire phone. the other devices all seem to offer compelling reasons to try them out (not the least of which is price point).

There&#x27;s some truth there but also some misses. Besides the phone, Amazon&#x27;s hardware has been at least decent and in the case of Fire TV, the best. The Kindles and tablets are more than usable. Even if only a speaker with a handful of voice commands (the complete Siri-like experience is a stretch; but, for example, voice search on Fire TV is excellent), the Echo looks to be a reasonable product.

Spot on.<p>A lot of people have recommended a Kindle to me but I&#x27;ve held off. I can&#x27;t get past the massive Amazon logo on it and the awful page turn.

The danger here is actually being so far inside the tech echo chamber you can&#x27;t see that they have an audience that really are buying their stuff. Yes, the Fire Phone is a misfire, but they have built an incredibly valuable high spending audience with the other Kindle devices.

I don&#x27;t see why the the author finds it &#x27;extremely hard for me to understand Amazon’s consumer hardware strategy&#x27;.<p>The strategy is simple: If 100 million people only have an Amazon device (and do not have a Google or Apple device) and one of those people wants to watch the latest James Bond film or English Premier League final, then Amazon can take a 30% cut of the price the user (or advertiser) pays.<p>Amazon&#x27;s execution may fail because their hardware is crap and are losing to Android and Apple, but their idea is sound.

Its curious that selling to one&#x27;s customer base amounts to an &quot;echo chamber.&quot; The Amazon Echo could be really nice. If I could tell it to play an audiobook, I&#x27;d be very tempted. It&#x27;s a truly new product in a world that has too few of those.

So you only used this title to piggy-back off the announcement of the actual Amazon Echo?<p>And you don&#x27;t even mention it in the blog post. Nice.<p>Edit: It appears the title has been changed. Sorry for the asshole tone above, but I don&#x27;t like clickbait.

I absolutely disagree with the Amazon Fire phone being terrible. It&#x27;s not the best in the market, but not terrible at all. Very harsh judgement on the part of the OP. I even suspect a malicious motive behind all the vitriol spewed against Amazon.