Is Amazon going to take over the world of books? These slides illustrated my talk to the London Book Fair, April 2015, to look at • whether Amazon is the cause of bookshops closing • whether Amazon's media sales will keep expanding forever • if e-readers and ebooks will take over the market • what's happening to sales of Amazon's own hardware • the financial questions (not tax) about its business

1. A M A Z O N : A N O B J E C T I V E C A S E S T U D Y
C H A R L E S A R T H U R
Photo by hnnbz - http://flic.kr/p/qNtyAK

2. A M A Z O N : A N O B J E C T I V E C A S E S T U D Y
C H A R L E S A R T H U R
About me:
Technology journalist -
The Guardian (2005-2014),
The Independent (1995-2004)
Author: “Digital Wars: Apple, Google,
Microsoft and the Battle for the Internet”

3. Study of the UK
petroleum retail
market.
A Final Report for DECC
14 December 2012
C A L A M I T O U S !

4. D I S A S T R O U S !

5. Study of the UK
petroleum retail
market.
A Final Report for DECC
14 December 2012
A M A Z O N D O E S N ’ T S E L L P E T R O L
(Petrol filling stations)

6. A M A Z O N D O E S N ’ T R U N P U B S *

7. W H AT ’ S C A U S I N G W H AT ?

8. A M A Z O N H A S
T R O U B L E T O O
• Amazon might not be the
cause of all the problems
in the book industry.
(Depending what you think
those problems are.)
• In fact Amazon has its
own problems.

9. M E D I A S A L E S G R O W T H : S L O W I N G

10. K I N D L E U P TA K E
H A S S TA L L E D

11. E B O O K S H AV E
T H E I R U S E S
• Median reading 5 books
per year (4 for men, 6 for
women)
• “mean” is 10 and 14 - so
more women read more
books

12. A M A Z O N : A M B I T I O U S I N H A R D WA R E
tablet
smartphone
Kindle
Echo, Dash..

13. S TA L L I N G S A L E S M E A N S . .

14. S TA L L I N G S A L E S M E A N S . .

15. T H E F I R E P H O N E : B I G A M B I T I O N

16. T H E F I R E P H O N E : B I G A M B I T I O N

17. TA B L E T S S O L D P O O R LY
Total sold: about 30m

18. T I M E F O R
T H E G O O D N E W S

19. K I N D L E S E L F
P U B L I S H I N G !
• Yes, it’s full of rubbish
• It’s the world’s biggest
slush pile
• But with one key
advantage…

20. O T H E R S R E A D
I T F O R Y O U
• They find what they like
• It’s democratic
• It produces best-sellers
that turn into films
• Like this:

21. T I M E F O R
T H E B A D N E W S ( P E R H A P S )

22. • Amazon focuses on “free
cash flow”
• “the cash a company is able
to generate after laying out
the money required to
maintain or expand its asset
base.”
• “Earnings can often be
clouded by accounting
gimmicks, but it's tougher to
fake cash flow”
‘ F R E E C A S H F L O W ’
V WA L L S T

23. Q U E S T I O N S A R E C O M I N G

24. C O N C L U S I O N S
• Amazon’s media sales
growth is slowing down
• Ebooks and e-readers have a
natural sales ceiling
• Amazon doesn’t dominate in
hardware
• Ebooks bring possibilities
• Wall St may start questioning
Amazon’s accounting

25. C H A R L E S A R T H U R
T H A N K Y O U