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It was a winner. The problem with this strategy is that it requires Amazon to blunder. But Amazon is not sitting still. Print is not just a format; it is an ecosystem. As the world of books moves online in digital form, a new ecosystem is arising. Heck, they invented much of it.
MCI was the upstart. Both companies had an interest in getting as much as they could from every customer, from each and every phone call. This plan allowed a customer to create a circle of people with whom you could get discounted phone service. This was a radical and cunning idea. MCI was cannibalizing its own business by offering its own customers lower prices. Why would they do that? The reason they did it was that they were 2 and had developed a strategy that exploited that market position.
This round went to MCI. It took mobile telephony and the Internet to change the playing field again. Dominant players in any mature market say, STM journals publishing, to take a random example should think hard about what happens when the former MCI marketing head takes a job with a scholarly-publishing start-up.
They should also think of the consumer book business as the canary in the coal mine for all publishing segments. Amazon is bigger in books on a global basis and bigger everywhere when other merchandise categories are taken into account. For all the talk of the democratization of the Internet and the Long Tail, network economies tend to be winner-takes-all.
Amazon is fast approaching a position where it becomes a virtual monopoly like other tech giants before it — Microsoft with Windows and Office, Facebook with social networking, Google for Web search, and Apple through iTunes for music consumption.
All of these monopolies reach a plateau at some point, where other products and services begin to restructure the paradigm e. Windows is not declining because people prefer Macs or because programs written in Java can run on any operating system or because Linux is technically superior and inexpensive; Windows is declining because the paradigm has moved off the desktop to the Cloud and mobile devices.
The first area to develop is publishers as direct-marketers of their own e-books. Few publishers have brands that attract users in trade books, authors are the brands , and the technical infrastructure of online bookselling is not trivial. This means that a site that has rich metadata about its books can cajole Google to send traffic its way. A well-designed site plus a good search engine makes D2C commerce possible. The Nook family can be configured to allow any seller of books, including Amazon, to make an app available on it.
This would make Nook e-readers into universal devices and bring more buyers to it. I just went through the exercise of looking for a new e-reader myself, as the backlit screens of my smartphone and iPad tire my eyes.
But no e-reader allows you to purchase and read books from any source. In the absence of such a device, users flock to the market leader, which is Amazon. I thus recently became the owner of a Kindle Touch. This is not a game of control, but of friends and family. And on the Internet, anyone can be your friend. Joe Esposito is a management consultant for the publishing and digital services industries. Joe focuses on organizational strategy and new business development.
He is active in both the for-profit and not-for-profit areas. This is not a bad scheme, except that Amazon already makes all this possible with their e-commerce affiliate tools.
Any Amazon affiliate can create their own customized and branded store, getting 6 percent or more commission on purchases. An idea whose time has come again? Couple other options that I as a reader would dearly love to see: Resell option on ebooks. Give the publisher and author a percentage on every read. Make these moves at the same time that they make the Nook app-agnostic.
They corner the library market for sales and everyone buys a Nook because they have the option of the public library. Changing the terms of those licenses will be difficult because you would have to get thousands of publishers to agree to them.
I think that there will be evolving solutions for making ebooks available to libraries, but I am not sure how retailers can play a role in this. On the other hand, if libraries built virtual bookstores directly into their OPACS thereby creating , new bookstores , publishers would pay attention and be more accommodating about library ebook licensing.
Great post and also comments. However, some of the tactics you suggest are flawed:. The idea was to provide a white-label bookstore to companies as an employee perq. What do you think? Offer better, random things for promotions. Turn the Nook into an impromptu geocaching tool in the store.
Turn the Nook into a better in-store guide. Both nook and kindle — let me browse your entire store. Amazon, this is a drop of the ball. Turn the Kindle into a virtual shopping kiosk. Not a huge deal but it is a useful feature at times.
We learned in the city recently NOT to take Internet access for granted or as a given in hotels…they can and will sometimes charge you outrageous fees to go online. Use the Nook as a payment system.
Not a feature for the security conscious but it can be handy to just barcode-scan your nook at the starbucks to deduct from a standing account. Make it so I can put orders right on the nook and pick them up at the counter. Or have it used to check out at the front desk with your books to cut down on waiting times. Secret messages for kids. Show the nook to this person for free cookies or balloon. The Nook could be a digital coupon. The problem I did see is that there were times the prices were significantly different.
Most of them were about the same. Amazon is still cheaper! What Amazon has going for it is a huge potential selection at low price, and a reputation for customer service. If something is wrong with the Kindle they will take it back supposedly without harassment, and they have a decent selection of titles, with low prices. The interface is a little klunky though. The Nook can actually leverage that behavior.
It would be nice if it had 3G and GPS, so you could have the Nook tell you where the nearest store is, for example. I want something that holds books and periodicals, not a device that can web browse and email and read books and stream movies and sort of does these things okay but not great jack of all trades, master of none.
The Kindle Fire screams compromise and I find the android interface to be cobbled together. I definitely wanted to read things with long battery life and does the reading thing well. If that means getting a book light to read at night, so be it. My conclusion is that they have decent prices, but the interface is klunky, far klunkier than it needs to be.
They need to stop staring at the iPad and drooling over ways to imitate the iPad and start watching their customers and asking what their device can do that would enhance the customers shopping experience. Bezos clearly wants an Amazon customer to be able to shop for most anything on amazon. Worse, Amazon uses its Kindle Singles and aggressive author exclusives to distinguish even ebooks from BN.
Those same smaller or online — e. I still prefer my 1st gen Nook to other ereaders inc Kindle; though I was specifically looking at non-Kindles for an ereader, I did test all. Joseph Esposito josephjesposito Joe Esposito is a management consultant for the publishing and digital services industries.
View All Posts by Joseph Esposito. However, some of the tactics you suggest are flawed: Lots of great insight here. I love Amazon, but a monopoly is good for no one. Technology, Law, and Education: