Amazon is still plugging away at its digital media initiatives, but it remains to be seen if they will ultimately be successful. Amazon says it is "very happy" with the three primary initiatives in its digital media push. However, information on the results of these initiatives is very hard to come by, since Amazon has disclosed very few numbers on them so far. (An analyst from Deutsche Bank estimates that Amazon has invested $3 million in them, but that they have produced less than $100 million in revenue.) As a result, analysts will look for data in Amazon's quarterly earnings (released Wednesday) to provide some information on how the initiatives are doing.
The three digital media initiatives that Amazon is pushing are: a digial music store, a digital book service paired with a reading device called the Kindle, and a download service of TV shows and movies called Unbox. Analysts say that Amazon has either been too late to market (e.g. its digital music store came out after iTunes was firmly establised) or has tried to move into markets in which the consumer demand hasn't been established yet (e.g. digital books).
I think this poses an interesting predicament for companies such as Amazon, who are trying to make a foray into digital media. If you wait too long, then someone else has snatched up the market. On the other hand, if you're too forward thinking and come out with a service before consumers realize they want it, that won't help you be successful either. How do you strike that balance between being a pioneer with a good idea, and marketing that idea so as to make people want it? Apple was certainly successful in doing this with iTunes and the iPod....it'll be interesting to see what the next big thing in digital media will be.
Full article: http://online.wsj.com/article/SB120889788429535939.html?mod=todays_us_marketplace
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