Amazon.com, Inc. (NASDAQ:AMZN) shares have been performing extremely well recently, as a result of the company's ruthless exploration of new digital markets and their expansionist approach to online business. However, new reports about the firm's future plans may change the way that digital commerce works forever.
Amazon.com, Inc. (NASDAQ:AMZN) has applied for a new patent that suggests it wants to open a market for used eBooks. That would be a profound change in the way the company does business. Right now the attitude of content distributors is that digital copies are sold once. That keeps margins high and publishers happy.
Amazon CEO Jeff Bezos doesn't care about profit margins. He cares about relentless expansion. The initiation of a market for used ebooks seems to be directly up that alley. The patent in question is designed to power an electronic marketplace for "used digital objects." It could undermine the foundation of many other online businesses.
A digital copy does not suffer from wear and tear. On the surface it is just as valuable if was bought ten years later. It is less valuable to someone who has already read it, or seen it, or heard it. This means customers would be happy to sell their old ebooks, or whatever, for cash, or more likely Amazon credit.
The system would probably lower the price of ebooks on Amazon as whole, and would probably bite into the company's new ebook sales. If it works for ebooks there's absolutely no reason Amazon.com, Inc. (NASDAQ:AMZN) couldn't expand the system to music, television shows, movies, games and any other type of digital product.
Consumers will want something like this, but publishers and competitors will have serious problems. If the system is ultimately not used to create a new market, it could easily be used for substantial leverage in negotiations with publishers. The same is true on the publishers' side if the system is implemented. The new market could be so detrimental to businesses, that content providers might cut their losses and pull out of the market altogether.
Amazon.com, Inc. (NASDAQ:AMZN) is truly playing a dangerous game with this patent, but as is known, very few patents ever make it into a real business setting, most are insurance rather than schemes. This piece of Intellectual Property is, without a doubt, one of the most interesting, and subversive, that has been filed in a long time.