Penguin - And More E-Lending Library Intrigue

I have been posting lately on the intrigue developing among some major players in the digital book selling and publishing industry since libraries have begun lending digital books (e-books).

And there have been varying and interesting points of view RE rather digital book retailers such as Apple and Amazon (now also a digital publisher with it's Kindle Fire) are positioning themselves in the best interests of the consumers, writers, publishers or gadget sellers :))) ... And at whose expense.

Here is a reaction by one major publishing house detailed in this article by Laura Hazard Owen for mocoNews.net (Mobile News):

Why Might A Publisher Pull Its E-Books From Libraries?

Following yesterday’s news that Penguin, citing security concerns, is pulling its new e-books from libraries—and making none of them available for library lending through Kindle—many are wondering why the publisher would do such a thing. (Penguin and Random House had been the only two “big six” publishers to offer unfettered access to e-books through libraries; now Random House is alone in doing so.)

Here are some possible reasons, none of which are “Penguin is stupid and is trying to make itself obsolete”—but all of which are a response to high demand for e-books in libraries, and I might argue that attempts to curtail or impede that demand are, at a minimum, counterproductive.
» Penguin is mad about Amazon’s deal with OverDrive and is retaliating. If you have a Kindle and have checked out a library book on it, you will notice that clicking “Get for Kindle” sends you to straight to Amazon’s website instead of having you check out the book from within the library’s site. Here’s how it looks:


When I click “Get for Kindle,” I’m directed to this page on Amazon’s site (click to enlarge):



Notice anything? Yeah, it looks an awful lot like an Amazon (NSDQ: AMZN) shopping page and I have to be logged into my Amazon account to get the book. Publishers Lunch notes, “Though OverDrive had promised in April that patrons’ ‘confidential information will be protected,’ in implementation their program is an engine for turning library users into Amazon customers.” (Publishers Lunch also notes that, since libraries had already bought the e-books from Penguin, it’s surprising that Penguin is simply allowed to withdraw access to them.)

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Amazon and the Underbelly of the Internet Economy

Amazon had a BIG drop in third quarter operating income ... To be exact, a whopping 71% drop over the same time last year!

The drop is mainly due to such business practices as expansion  and new products (Kindle Fire) designed to sell for a loss in order to boost sales of other tangental Amazon products such as e-books, videos and music.

When all the economists and business analysts delved into the reasoning for the Amazon third quarter decline they also found that the Amazon Behemoth had a dark side ... or underbelly if you will.

Ahhh yes, when sales are high the Greed Monster takes over and it pushes and pushes workers and equipment harder and harder until something, or someone, breaks!

What a horrible, stifling, stressful merry-go-round to be caught up in.

Here's more by David Streitfeld in the New York Times:

Amazon Suffers Big Drop in Income

Investors shrugged off Amazon’s warnings this summer that its third quarter would be weak.

Whoops.

Moments after the retailer reported Tuesday that operating income for the quarter had fallen 71 percent from 2010, the high-flying stock sank $25 in after-hours trading. Add the $10 that Amazon had lost before the earnings report, and its market cap shriveled in one day by about $16 billion.

If the past was weak, Amazon was cautious about the future, too. Despite the new Kindle Fire tablet’s selling so well that it was already increasing production, Amazon said it might lose as much as $200 million in the fourth quarter.

“There are times when investors shoot first and ask questions later,” said Scott Devitt, an analyst with Morgan Stanley. He remains a believer. “Does the company still have a strong ability to grow? I think the answer is yes.”

Revenue for the third quarter, which ended Sept. 30, came in largely on target. As customers swarmed to boxes of dried cherries, “Pirates of the Caribbean,” downloads of the Sims video games, diagnostic code readers for cars and the latest “Diary of a Wimpy Kid” — all Amazon best sellers in their categories — sales rose 44 percent to $10.88 billion.

Amazon has been stressing recently, as it has so often over its 16-year history, that it is investing for the future, not seeking immediate profit. With revenue rising about 40 percent each quarter, it simply needs more capacity. In a highly competitive and fragile retailing environment, that is an enviable problem to have.

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