Amazon Fires Up Digital Engines

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Over the last 14 years, Amazon.com has mastered the art of getting physical copies of books, music and movies to customers through the mail, a new ZDNet article reports—but now the company is trying to go digital:

“The overall market for entertainment and information is inexorably going digital. One day, most music, movies, and perhaps even printed words will be sent as bits over the Internet instead of in bulky boxes. More than half of the company’s $15 billion in sales last year came from CDs, DVDs, and books, shipped from Amazon’s 30 cavernous distribution centers around the world.”

That means that unless the company gets its act together quickly, it could stand to lose billions in sales as more customers move to digital media. At least in theory—only music seems to be making the jump virtually unscathed, now that DRM and low-bit rate MP3 downloads are on their way out of the picture.

“Digital is where the growth in music is, and other industries are likely to follow,” said Bill Rosenblatt, chief executive of GiantSteps Media Technology Strategies, a New York consulting firm, in the report. “Amazon needs to position itself to capture that.”

There’s a lot of good stuff in the article, showing how phase one of Amazon’s move to digital is now over, with the introduction of the Amazon Kindle eBook reader, the Amazon MP3 Store, a cell phone text service, and the Unbox video store, the latter of which stocks 30,000 titles for rent or download complete with TiVo compatibility.