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| DATE | 2009-07-20 |
| FROM | Ruben Safir
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| SUBJECT | Subject: [NYLXS - HANGOUT] Big Brother is Watching
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The Channel Wire July 20, 2009 Big Brother Amazon? No, Just A Rough
Week For Kindle It's a new week, and Amazon has to be relieved.
From a lawsuit over cracked Kindle screens to accusations that it
unceremoniously recalled Kindle digital editions of George Orwell's
1984 and Animal Farm -- not to mention plenty of screaming Kindle
headlines for both -- it had more than one reason to seek shelter.
Maybe all these arrows aimed at Kindle are a little too hysterical
at times, but that's what you get, Amazon, when your product leads
a hot technology area and retail segment such as e-books. Take a
lesson: You need to respond better -- and faster -- when you're
challenged. There's no harm in keeping Kindle in the news, especially
because those pesky 1984 accusations turned out to be a little
misleading anyway. But it would serve you and Kindle lovers everywhere
better to not stumble over your response.
To review: Late last week, most of the mainstream and tech press
seized upon a story that Amazon had zapped copies of Orwell's most
famous novels from its Kindle store and from Kindles themselves
everywhere, sending most folks into a tizzy over Amazon taking
control over its Kindle content in, well, a 1984 kind of way.
But as a number of observers, including CNET News' Peter Glaskowsky,
pointed out, the reason Amazon yanked the books, or at least made
them unavailable for purchase, is that 1984 in particular is,
although in the public domain in countries such as Canada and
Australia, still under copyright in the United States. Amazon
addressed the situation late Friday, telling The New York Times
via a spokesman that the Orwell books had been added to the Kindle
store by a company, MobileReference, that didn't have the rights
to publish them.
"When we were notified of this by the rights holder, we removed
illegal copies from our systems and from customers' devices, and
refunded customers," said Amazon spokesman Drew Herdener to the
Times.
Credit Amazon for taking steps to head off both of the Kindle public
relations difficulties it had last week, although it's yet to be
seen whether its response to an earlier lawsuit over the Kindle's
optional protective case cracking the e-reader is enough to sway
accusers. Earlier last week, a Seattle-based real estate executive
filed a $5 million class action lawsuit against Amazon over cracks
to his wife's Kindle. Amazon, which initially had said little more
than "Fix it yourself" about the problem, relented last Thursday
and said anyone who owned a cracked Kindle related to their use of
the protective cover could come to Amazon for a replacement.
At least one analyst, ThinkEquity's Edward Weller, theorizes that
Amazon is working overtime to protect the Kindle's biggest fans:
That is, the top 5 percent of Amazon customers who, according to
Weller's estimates, account for 20 percent of Amazon's business.
Writes Weller in a research note: "Kindle's most important benefit
to the company, one that may appear indirect and secondary, one we
view as utterly central: Kindle firms up and solidifies Amazon's
connection to its most important customers, and not just the heaviest
users, but a special class of heavy users who were at the beginning
-- and probably still are -- at the very heart of the franchise
..."
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