AMAZON ECOSYSTEM COMPONENTS

AMAZON SEGMENTS

AMAZON SALES, INCOME, AND MARGINS

AMAZON METHODS OF COMPETITION

ANTI-TRUST ISSUES

 

Amazon is leaving a large pile of battered companies in its wake as it increasingly steals sales away from traditional bricks and mortar companies and decimates their market shares. Some of the better-known victims include: Barnes & Noble (books), Macy’s (clothes and home goods), Toys R Us (toys and baby products), Staples and OfficeMax (office supplies), Etsy (handmade products), and Best Buy (electronics).

In fact, there’s even an index, the Bespoke “Death By Amazon” index, that tracks the performance of 54 public companies most at risk from Amazon:

Bespoke publishes the “Death By Amazon” as a way to track performance of the companies most affected by the rise of AMZN. Companies included must be direct retailers with a limited online presence (or core business based on physical retailing locations), a member of either the Re- tail industry of the S&P 1500 Index or a member of the S&P Retail Select Index, and rely on third party brands. We view these attributes as the best expression of AMZN’s threat to traditional retail. The index is designed as both a performance benchmark and idea generation tool for our clients.

On July 17, 2017, Patti Domm reported in “Amazon's victims: These stocks have lost $70 billion so far this year” that the index is down 20% so far this year.

As Amazon’s seeks to dominate yet another market segment – the grocery business – through its plans to purchase Whole Foods, we must question once again whether or not Amazon is “too big” (however we choose to define bigness).

This analysis examines

• The various players in Amazon’s market ecosystem

• The extent to which Amazon covers its ecosystem

• How Amazon earns its money to finance its operation

• The methods Amazon uses to compete

• Other potential anti-trust issues

Amazon Ecosystem Components

Amazon’s ecosystem contains seven sets of players, as displayed in Figure 1, described in Figure 2, and listed in Figure 3.

Figure 1

 

Note: See Figure 2 for information on bracketed numbers

Web Services

Web services providers are described in row [10] of Figure 2 as

Companies that provide information technology services or products, including on-premises or cloud-based infrastructure and other services.

As indicated in in row [1] of Figure 3, Amazon provides web services to customers (column [D]), that is, it competes in this component of the ecosystem. However, Amazon presumably does not provide other web services providers with other Amazon AWS and non-AWS services (columns [B] and [C]), such as Amazon serving as a platform host for other web services providers to sell their services.

So, Amazon competes with other web services providers in this sector, but it does not compete in this sector with Amazon customers.

Platforms

Platform services providers are described in rows [7] and [8] of Figure 2 as

[7]: Web search engines, comparison shopping websites, social networks, web portals, and other online and app-based means of discovering, using, or acquiring goods and services, either directly or in collaboration with other retailers;

[8]: Companies that provide e-commerce services, including website development, advertising, fulfillment, customer service, and payment processing;

As indicated in row [2] of Figure 3, Amazon provides platform services to customers (column [D]), that is, it competes in this component of the ecosystem. Amazon also provides AWS services (and might provide other Amazon non-AWS services) (columns [B] and [C]) to other platform services providers.

So, Amazon competes with other platform services providers in this sector, some of whom are also Amazon customers.

Manufacturers

Manufacturers, which also include content providers, artists, and developers, are described in rows [2], [3], [4], [5], [6],[8], [11] of Figure 2 as

[2]: sellers

[3]: developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions

[4]: authors and independent publishers … authors, musicians, filmmakers, app developers, and others

[5]: Online, offline, and multichannel retailers, publishers, vendors, distributors, manufacturers, and producers of the products we offer and sell to consumers and businesses;

[6]: Publishers, producers, and distributors of physical, digital, and interactive media of all types and all distribution channels;

[8]: Companies that provide e-commerce services, including website development, advertising, fulfillment, customer service, and payment processing;

[11]: Companies that design, manufacture, market, or sell consumer electronics, telecommunication, and electronic devices.

As indicated in row [3] of Figure 3, Amazon provides manufacturing products and services to customers (column [D]), that is, it competes in this component of the ecosystem. Amazon also provides AWS and other Amazon non-AWS services (columns [B] and [C]) to other manufacturers.

So, Amazon competes with other manufacturers in this sector, some of whom are also Amazon customers.

Retailers

Retailers are described in row [2] of Figure 2 as

sellers

As indicated in row [4] of Figure 3, Amazon provides retail services to customers (column [D]), that is, it competes in this component of the ecosystem. Amazon also provides AWS and other Amazon non-AWS services (columns [B] and [C]) to other retailers.

So, Amazon competes with other retailers in this sector, some of whom are also Amazon customers.

Fulfillment Services Providers

Fulfillment services providers are described in row [9] of Figure 2 as

Companies that provide fulfillment and logistics services for themselves or for third parties, whether online or offline

As indicated in row [5] of Figure 3, Amazon provides fulfillment services to customers (column [D]), that is, it competes in this component of the ecosystem. Amazon also potentially provides AWS services (column [B]) to other fulfillment services providers.

So, Amazon competes with other fulfillment services providers in this sector, some of whom may also be Amazon customers.

Delivery Services Providers

Delivery services providers are described in row [9] of Figure 2 as

Companies that provide fulfillment and logistics services for themselves or for third parties, whether online or offline

As indicated in row [6] of Figure 3, Amazon provides delivery services to customers (column [D]), that is, it competes in this component of the ecosystem. Amazon also potentially provides AWS and other Amazon non-AWS services (columns [B] and [C]) to other delivery services providers.

So, Amazon competes with other delivery services providers in this sector, some of whom may also be Amazon customers.

Buyers

Buyers are described in row [1] of Figure 2 as

[buyers of] hundreds of millions of unique products sold by us and by third parties across dozens of product categories. Customers access our websites directly and through our mobile websites and apps.

[buyers of] electronic devices, including Kindle e-readers, Fire tablets, Fire TVs, and Echo, and media content.

[buyers of] Amazon Prime, an annual membership program that includes unlimited free shipping on tens of millions of items, access to unlimited instant streaming of thousands of movies and TV episodes, and other benefits.

As indicated in row [7] of Figure 3, Amazon does not compete (column [D]) with customers of non-AWS services (column [C]). Finally we have a piece of Amazon’s ecosystem in which Amazon does not compete!

Figure 2

Figure 3

 

So now we see that

• Amazon operates in six out of the seven components of the Amazon Ecosystem (rows [1], [2], [3], [4], [5], [6] in Figure 3), and

• Amazon competes with its customers in five of the six components in which Amazon participates (rows [2], [3], [4], [5], [6] in Figure 3).

 

Amazon Segments

Amazon Private Label Segments

Figure 4 displays the different non-AWS market segments in which Amazon provides goods and services to customers and competitors (column [A]). Figure 4 also indicates in which of Amazon’s market segments Amazon, through its private labels, (column [C]), competes for buyers with other non-Amazon brands (column [B]). Figure 5 provides more detailed information on Amazon’s private label products.

Figure 4

 

We see from Figure 4 that Amazon provides good and services in 15 different non-AWS market segments, and Amazon provides its own (private label) goods and services in 11 of the 15 categories. In other words, Amazon competes with other sellers for buyers in most of the market segments that Amazon hosts.

Figure 5

 

 

Profitability of Brand Names vs. Private Labels

This section provides a brief primer on how private labels work. The textual information presented below is also illustrated in Figure 6.

Brand Name Products

• Manufacturers produce brand name products and sell them to retailers for resale to customers.

• The goods produced by manufacturers are theoretically of higher quality, and thus cost more to produce, than generic products.

• Manufacturers spend a lot of money advertising their brand name products to customers. This advertising is used to convince customers that brand name products are of higher qualities, thereby justifying the higher prices of brand name products to customers.

• The price at which Manufacturers sell their products to Retailers for resale to customers include the higher costs (than generics) of higher quality products plus the Manufacturers’ costs of advertising their brand name products to customers.

• Retailers take the costs of purchasing brand name products from Manufacturers (costs of manufacture plus costs of advertising), add a mark-up as their profit, then resell the brand name products at retail prices to customers.

Private Label Products

• Retailers buy particular formulations of non-brand-name products from manufacturers at lower costs (and presumably lower qualities) than those for the manufacturers’ brand name products. Retailers may specify higher qualities, and thus higher costs, than those for generic products.

• Retailers put Private Label (e.g., store brand) labels on these “non-brand-name products” and add larger mark-ups than those on brand name or generic products. So Private Label products sell for lower prices, but higher retail margins, than those for brand name products.

• Essentially, Private Label products are Retailers’ own brand name products, as opposed to the manufacturer’s brand name products.

Figure 6

 

 

Amazon Sales, Income, and Margins

Amazon reports sales, costs, and income for three separate segments: (i) AWS, (ii) non-AWS Domestic, and (iii) non-AWS International; and for each of the non-AWS segments, three sub-segments: (a) Media, (b) Non-Media, and(c) Other. Sales by segment and sub-segment for recent years are displayed in Figure 7, and income by segment is displayed in Figure 8.

Figure 7

 

Figure 8

 

Taken together Figures 7 and 8 indicate that

• Amazon is generating the most revenues by far from its sales of non-media merchandise, which are larger domestically than internationally, but

• Amazon is generating the most profits from much higher margins on AWS revenues than on revenues of non-media merchandise, and

• Amazon is losing money on International sales.

Figure 9 provides Amazon’s domestic and international operating expenses as a percentage of sales. Figure 9 indicates that

• Together with Figure 8, we see that Amazon is losing money on international sales of media and non-media merchandise.

• Amazon’s largest cost segment, cost of goods sold, has been decreasing slightly over time, from 74% in 2014 to 71% in 2016.

• Both (i) fulfillment and (ii) tech and content costs have been increasing over time as a percentage of sales.

Figure 9

 

Figure 10 provides sales and cost information on Amazon shipping operations. The data indicate that Amazon is losing money on its shipments of merchandise to clients.

Figure 10

 

So, what Amazon’s financial information tell us is

• Amazon generates the largest portion of its sales from non-media merchandise, but much higher profit margins in its AWS segment lead to higher overall income from sales of AWS services than from sales of non-media merchandise.

• Amazon is losing money on international sales.

• Amazon’s largest cost segment, cost of goods sold, has been decreasing slightly over time, possibly as sales shift away from third-party brands to Amazon private label brands.

• Amazon is subsidizing shipping costs to customers, presumably as a means of promoting sales.

 

Amazon Methods of Competition

This section describes a few of the more significant methods Amazon employs to win customers away from Amazons’ competitors.

Customer-Focused Orientation

In Amazon’s 2016 10K Report, Amazon emphasizes how it “obsesses over customers”:

From the beginning, our focus has been on offering our customers compelling value. We realized that the Web was, and still is, the World Wide Wait. Therefore, we set out to offer customers something they simply could not get any other way, and began serving them with books. We brought them much more selection than was possible in a physical store (our store would now occupy 6 football fields), and presented it in a useful, easy- to-search, and easy-to-browse format in a store open 365 days a year, 24 hours a day. We maintained a dogged focus on improving the shopping experience, and in 1997 substantially enhanced our store. We now offer customers gift certificates, 1-ClickSM shopping, and vastly more reviews, content, browsing options, and recommendation features. We dramatically lowered prices, further increasing customer value. Word of mouth remains the most powerful customer acquisition tool we have, and we are grateful for the trust our customers have placed in us.

Ratings and Recommendations System

One of Amazon’s earliest services that provided value to users and which helped Amazon build up its base of users was its ratings and recommendations system. When it was first founded, Amazon provided a ratings system, whereby users could rate both products and sellers. Eventually, Amazon’s system created a virtuous cycle: As more products and sellers received ratings, prospective buyers felt more comfortable with the quality both of the products they were buying, as well as with the sellers from whom they were buying. This attracted more buyers and sellers, who provided more ratings of products and sellers.

Amazon subsequently implemented a recommendation system to help users better find products suited to their particular needs. The recommendation system employs machine learning to draw upon data incorporating a particular user’s browsing and shopping behavior, together with all other users’ shopping behavior. Whenever a user accesses Amazon’s home page the system draws upon all this information to generate customized recommendations in each Amazon sales category for each of the following potential types of purchases:

• “Inspired by your shopping trends”

• “Inspired by your browsing history”

• “New for you”

• “Frequently bought together”

• “More top picks for you”

So Amazon’s ratings and recommendations systems work together to increase the value of the users’ shopping experience generally (i.e., the technology value of the platform). And the ratings and recommendations systems also increase the value of having more product offerings (i.e., the value of indirect network effects) by better matching products to buyers. Amazon’s use of its ratings and recommendations systems has been wildly successful, as shown by its continually strong sales growth. JP Mangalindan provides further details in “Amazon’s recommendation secret.”

At root, the retail giant's recommendation system is based on a number of simple elements: what a user has bought in the past, which items they have in their virtual shopping cart, items they’ve rated and liked, and what other customers have viewed and purchased. Amazon calls this homegrown math “item-to-item collaborative filtering,” and it’s used this algorithm to heavily customize the browsing experience for returning customers.

…

A lot of that [Amazon’s sales] growth arguably has to do with the way Amazon has integrated recommendations into nearly every part of the purchasing process from product discovery to checkout.

Dynamic Pricing and Buy Box

When a potential buyer clicks on an Amazon product, Amazon uses algorithms to make two key determinations:

(i) The choice of which vendor’s product to automatically place in the “Add to Cart” or “Buy Box,” that is the selection of the “default vendor” (my term) for the potential buyer. Since most buyers simply click on the Buy Box, the choice of default vendor is critical.

(ii) The order of placement of different vendors’ offerings on the page. Vendors are usually, but not always, sorted in ascending order of price, that is, the lowest-priced vendors get top billing. Potential buyers usually choose a vendor near the top of the list, so the order of placement is critical.

In “How Amazon's Pricing Algorithm Is Designed To Hurt Consumers,” Julia Angwin describes what a monitoring of the placement algorithms in action revealed. Amazon claims to use an impartial algorithm to determine vendor placement in the Buy Box and in the list of offerings.

Erik Fairleigh, a spokesman for Amazon, said the algorithm that selects which product goes into the “buy box” accounts for a range of factors beyond price. “Customers trust Amazon to have great prices, but that’s not all— vast selection, world-class customer service and fast, free delivery are critically important,” he said in an e-mailed statement. “These components, and more, determine our product listings.”

However, it appears that that’s not actually what happens. Rather, Amazon tends to favor (i) its own products, that is, products Amazon sells in competition with third-party vendors, and (ii) products sold by vendors who “pay Amazon for its services.” It appears that these “pay Amazon for its services” vendors are “Amazon Vendors,” that is, vendors who sell their products directly to Amazon to be sold later to customers under the “Fulfilled by Amazon” label.

We looked at 250 frequently purchased products over several weeks to see which ones were selected for the most prominent placement on Amazon’s virtual shelves – the so- called “buy box’’ that pops up first as a suggested purchase. About three-quarters of the time, Amazon placed its own products and those of companies that pay for its services in that position even when there were substantially cheaper offers available from others.

That turns out to be an important edge. Most Amazon shoppers end up clicking “add to cart” for the offer highlighted in the buy box. “It’s the most valuable small button on the Internet today,” said Shmuli Goldberg, an Israeli technologist who has extensively studied Amazon’s algorithm.

Amazon does give customers a chance to comparison shop, with a listing that ranks all vendors of the same item by “price + shipping.’’ It appears to be the epitome of Amazon’s customer-centric approach. But there, too, the company gives itself an oft-decisive advantage. Its rankings omit shipping costs only for its own products and those sold by companies that pay Amazon for its services.

We found that the practice earned Amazon-linked products higher rankings in more than 80 percent of cases.

…

An Amazon customer who bought all the products on our list from the buy box would have paid nearly 20 percent more -- or about $1,400 extra -- than if they had bought the cheapest items being offered by other vendors.

So Amazon uses its placement algorithms to give preferred placement of listings to its own products and products sold by pay-to-play vendors.

Unique Products

Amazon is able to attract visitors to its sight by offering unique products that visitors can only find on Amazon’s site. as described earlier and displayed in Figures 4 and 5, these products include increasing numbers of offerings of

• Amazon private label products

• Amazon Original videos

• Other Amazon Services
  • Home Services
  • Prime Photos and Prints
  • Subscribe with Amazon
  • Credit & Payment Products
  • Treasure Truck

Amazon Prime

Amazon Prime is a subscription-based program offered by Amazon that provides Prime members with a very long and increasing list of services from Amazon, including, but not limited to unlimited free access to

• Prime Delivery: Two-day shipping on all orders

• Prime Video: Streaming movies and TV shows

• Prime Music: Streaming music

• Audible Channels: Streaming audio content

• Prime Reading: Books, magazines, and other reading materials

When a customer subscribes to Amazon Prime, this increases the customer’s loyalty to Amazon products and services by decreasing his sensitivity to price. That is, once a customer purchases a membership to Prime, he becomes more willing to buy products and services on Amazon, rather than from some other ecommerce provider, and he’s also willing to pay higher prices for products and services on Amazon, even though other ecommerce sites might offer those same products or services at lower prices. Studies show that Amazon Prime members spend much more money on Amazon products and services than non-Prime members. For example, Rebecca Borison reports in “Amazon Prime Members Are Even More Valuable Than You Thought”,

Prime members generated 57% of Amazon's North American revenue, according to ITG analyst Steve Weinstein.

Research firm Millward Brown estimates Prime members are almost five times more likely to make a purchase in the same shopping session compared to non-Prime members.

But what's even more exciting for Amazon is that these Prime members spend more each year they remain Prime members.

Non-Prime members spent less than $1,000 in 2015, according to Weinstein. In contrast, customers who joined Prime in January 2014 spent on average $2,147 in 2015. And customers who joined Prime in January 2012 spent on average $3,091 in 2015.

 

Anti-Trust Issues

This section discusses a few potential anti-trust issues associated with Amazon’s business methods.

Vertical Integration

Vertical integration by Amazon into multiple market segments, as displayed in Figures 1 – 3 and described previously, enables Amazon to beat its competitors in the marketplace using both legitimate and questionable means of competition, including

• Subsidizing losses generated in non-AWS market segments (i.e., International sales of products and services and deliveries of non-AWS products and services) using profits from its AWS segment (described in the “Amazon Sales, Income, and Margins” section above);

• Favoring its own products in its product placement algorithms;

• Forcing vendors to purchase Amazon fulfillment services in order to be able to achieve a favorable placement in Amazon’s product listings; and

• Pirating successful products from Amazon vendors and selling them under the Amazon label; and

• Subsidizing the provision of accessory products and services (e.g., all the various services provided with Prime membership) using profits from its AWS segment.

Amazon Product Placement Algorithms

As noted above in the section “Dynamic Pricing and Buy Box,” while purporting to use unbiased algorithms to determine product placement on the page, Amazon’s algorithms actually favor its own products. This practice has gotten companies such as Google into trouble in the past. As Julia Angwin notes,

Tech companies’ practice of favoring their own listings has occasionally earned regulators’ scrutiny. The European Commission, for example, has accused Google of violating EU antitrust rules by favoring its own shopping service over those of other vendors.

Amazon Pay-to-Play

Amazon’s “pay-to-play” scheme, as described in the section “Dynamic Pricing and Buy Box,” is reminiscent of Yelp’s alleged practices of manipulating posted reviews of businesses in an attempt to get the businesses to advertise on Yelp (see my previous blogpost on the subject, “Playing the Yelp Ratings Game”). While Yelp hasn’t been found guilty of any unfair business practices, its methods have earned it a tremendous amount of ill-will from the public. Similarly, Amazon is generating a lot of ill will from customers using its pay-to-play scheme. Angwin describes more specifically how Amazon’s practices are hurting its vendors.

Through its rankings and algorithm, Amazon is quietly reshaping online commerce almost as dramatically as it reshaped offline commerce when it burst onto the scene more than 20 years ago. Just as the company’s cheap prices and fast shipping caused a seismic shift in retailing that shuttered stores selling books, electronics and music, now Amazon’s pay-to-play culture is forcing online sellers to choose between paying hefty fees or leaving the platform altogether.

Consider BareBones WorkWear, a Sacramento clothing retailer that has been selling on Amazon since 2004. This year, the company removed nearly all of its items from Amazon, and shuttered a warehouse and call center that were devoted to Amazon sales.

“Competition between us and Amazon is just insurmountable,” BareBones chief operating officer Mason Moore said. The profit margins for most clothing items were too low, he said, to allow for the company to sell through the Fulfilled by Amazon, or FBA, program. But, he said, “FBA is really the only avenue that we see as any feasible way to do business with Amazon.” This week, BareBones has just five items listed on Amazon -- all of them fulfilled by Amazon.

By selling its products and services for low prices, Amazon is forcing other vendors who wish to compete with Amazon for sales to buyers to lower their prices and thus margins as well. To the extent that Amazon is subsidizing its own low prices using profits from its AWS segment, it seems to me that Amazon is leveraging its power in one market (AWS) to unfairly force independent vendors in another market (non-AWS products and services) to sacrifice profits. Moreover, this is another way that Amazon is transferring value from content (product) providers to itself (see section below on “Transfer Value from Content Providers to Platform Owners” for more details.)

Pirating Successful Products from Vendors

A practice I find to be particularly heinous is Amazon’s practice of pirating successful products sold by its vendors and undercutting them on price. Matt Stoller describes this practice in more detail on The Return of Monopoly.

Then there’s the way Amazon exploits the conflicts of interest inherent in its business model. Writing in the Yale Law Journal in January, policy analyst Lina Khan recounts the case of an independent merchant who used Amazon to sell Pillow Pets, a line of pillows modeled on NFL mascots. Sales were booming—until the merchant noticed that Amazon had begun offering the exact same product on its own, right before the holidays. Undercut by Amazon, which gave its own Pillow Pets featured placement on the site, the merchant’s sales plummeted. Khan calls this “the antitrust paradox.” As one merchant observed, “You can’t really be a high-volume seller online without being on Amazon, but sellers are very aware of the fact that Amazon is also their primary competitor.”

Monopsony Power

The sheer size of Amazon has accorded it monopsony power when dealing with vendors. The leverage that Amazon is using to force certain practices on Amazon vendors is similar to what Wal-Mart has long been doing with Wal-Mart vendors. While certainly not illegal, these types of practices do cause damages to other players in Amazon’s ecosystem. Matt Stoller provides more detail.

But the lower prices offered by monopolies come at a steep cost. A corporate giant like Amazon is able to use its economic advantage to eliminate jobs, drive down wages, dictate favorable terms to its suppliers, and even set the price the postal service is permitted to charge for the privilege of delivering its packages. In 2012, Amazon bought a robotics company that automates warehouse labor, and then blocked its competitors from using the technology. If robots are going to take all our jobs, Amazon wants to make sure it owns all the robots.

Forced Boycott of AWS

An interesting wrinkle for Amazon is Wal-Mart’s use of monopsony power to force Wal-Mart vendors to use web services providers other than AWS, such as Microsoft Azure or Google CloudPlatform, for the vendors’ web services. Joseph Tsidulko provides more detail in “Partners Grapple With Conflicts Between Retail Customers And Amazon.”

A common practice by large retailers, most notably Walmart, of pushing their cloud technology vendors away from using Amazon Web Services (AWS) is one that partners increasingly must be prepared to confront.

Large customers insisting suppliers boycott technology from rivals is nothing new across industries and platforms. But Amazon's uniquely dominant position in both online retail and cloud computing makes that inclination more pervasive, creating potential pitfalls for AWS partners, and business opportunities for those selling services from cloud rivals Microsoft and Google.

Transfer of Value from Content Providers to Platform Owners

Another issue involving monopsony power is the rise of the large platforms – Amazon, Google, and Facebook – and the effects of the leverage they have amassed. The platforms’ business models require them to supply users with huge, ongoing volumes of cheap content (books, movies, music, etc.). In order to accomplish this, the large platforms have been able to leverage their monopsony power to force lower prices on content providers, that is, to negotiate lower prices paid to authors, artists, and other providers for content (and other products as noted above in the “Amazon Pay-to-Play” section). These actions have essentially transferred the value of the content from the content providers to the platform owners. Jonathan Taplin describes this phenomenon in “Can the Tech Giants Be Stopped?”

I would date the rise of the digital monopolies to August 2004, when Google raised $1.9 billion in its initial public offering. By the end of that year, Google’s share of the search-engine market was just 35%; Yahoo ’s was 32%, and MSN’s was 16%. Today, under Alphabet, Google’s market share is 87% in the U.S. and 91% in Europe. In 2004, Amazon had net sales revenue of $6.9 billion. In 2016, its net sales revenue was nearly $136 billion, and it now controls 65% of all online new book sales, whether print or digital. In mobile social networks, Facebook and its subsidiaries (Instagram, WhatsApp and Messenger) control 75% of the American market.

This shift has brought about a massive reallocation of revenue, with economic value moving from the creators of content to the owners of monopoly platforms.

…

The precipitous decline in revenue for content creators has nothing to do with changing consumer preferences for their content. People are not reading less news, listening to less music, reading fewer books or watching fewer movies and TV shows. The massive growth in revenue for the digital monopolies has resulted in the massive loss of revenue for the creators of content. The two are inextricably linked.