Jeff Bezos' annual letter to Amazon shareholders is a timely manifesto, unifying the company's expansive range of businesses, justifying its approach to established markets, and marking as a target anyone who stands in its way.
The letter, released Friday morning, begins with extensive quotes from customers praising Amazon Web Services, Fulfillment by Amazon and Kindle Direct Publishing. The unifying thread? All three platforms are "self-service."
"The most radical and transformative of inventions are often those that empower others to unleash their creativity – to pursue their dreams," writes Bezos. "These innovative, large-scale platforms are not zero-sum – they create win-win situations and create significant value for developers, entrepreneurs, customers, authors, and readers."
The only people and institutions who lose in this scenario, according to Bezos' logic, are the intermediaries: salespeople, lawyers, publishers. These interests, whether they realize it or not, only stand in the way of the innovation and beneficence Amazon's inventions help to unlock. At least, that's how Jeff Bezos sees it.
"I am emphasizing the self-service nature of these platforms because it’s important for a reason I think is somewhat non-obvious: even well-meaning gatekeepers slow innovation," writes Bezos. "When a platform is self-service, even the improbable ideas can get tried, because there’s no expert gatekeeper ready to say 'that will never work!' And guess what – many of those improbable ideas do work, and society is the beneficiary of that diversity."
This is why I call it a timely manifesto, arriving on the heels of the Justice Department's antitrust suit against Apple and five of the "Big Six" trade publishers, three of which have already decided to settle.
One can imagine Bezos and other Amazon representatives making the same argument contrasting Amazon's approach to e-books to that of the publishing establishment to the DOJ. If you read the DOJ's lawsuit and proposed terms of settlement, Attorney General Eric Holder and the Justice Department appear to agree entirely with Amazon. They argue that by moving together to an agency model and fixed e-book prices across stores, publishers and Apple robbed the American people of the social benefits of Amazon's innovation.
In fact, publishers are singled out for particular abuse in Bezos' letter. Kindle Direct Publishing, he argues, is better for both authors and readers than traditional publishing channels. The big trade houses, says Bezos, pay a lower royalty rate (a net of 17.5% of the sale price versus 70% for KDP) and gravitate towards authors who are already successful and established.
"[A]uthors that might have been rejected by establishment publishing channels now get their chance in the marketplace," writes Bezos. "Take a look at the Kindle best-seller list, and compare it to the New York Times best-seller list – which is more diverse?"
But Amazon's argument with the publishing establishment is old news. Another way to read Bezos' letter is as drawing a sharp distinction between Amazon's approach as a technology and media company and that of the ultimate "expert gatekeeper" in the industry: Apple.
Apple sells products; Amazon sells infrastructure. Apple, particularly under Steve Jobs, refined, edited and approved every detail of a customer's experience; Amazon only cares about the portal and its business terms. Apple approves every app that goes onto each of its devices; Amazon doesn't care what any of those apps do with the cloud services they buy from Amazon.
Taken to its limit, the contrast becomes ridiculous. Clearly, Amazon and Apple both seek to control whatever is in their ability and interest to do so. Amazon wants ultimate control over the price of everything in its store, including e-books; Apple created an entire new business model for e-books not least because as a company, it had absolutely no desire to assign even one employee to try to figure out what different books ought to cost.
Apple has its own argument as to how its approach benefited e-book customers, which its spokespeople sent to various journalists Thursday night:
Ironically, it's because Apple and Amazon actually aren't so different that it's crucial to draw philosophical contrasts between them. The narcissism of tiny differences is nothing new. But as Amazon continues to grow its way into Apple's way, as the other giant company straddling technology, media and commerce, it will become essential to both camps going forward.
"Amazonians are leaning into the future," writes Bezos. And he doesn't care whether Apple, publishers or anyone else stands in the way.
