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Old 03-03-2012, 01:27 PM   #1
stonetools
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One Store to Rule Them All? or: Can Anyone Stop Amazon ?

In his latest column, consultant Mike Shatzkin asked two questions :

Quote:
When will the growth in Amazon’s share of the consumer book business stop?

Who will be left standing when it does?
He then goes on to give a nice analysis of Amazon's rise, focusing on Amazon's strategic vision :

Quote:
Amazon was not the first online bookseller. But they appear to have had several distinctions from all others from the beginning. One is that they always saw bookselling as a springboard to a much larger business. That meant that bookselling was, perhaps primarily, a customer acquisition tool, not an end in itself. A second is that they saw, long before it was accepted general wisdom, that perfecting the “customer experience” online was the core requirement for success. And the combination of those two things, in concert with the ubiquitous availability of capital for promising Internet propositions that characterized the late 1990s, fueled growth powered by aggressive pricing that has had their trading partners and competitors agape for nearly two decades.
and its execution. RTWT.

LINK

So far the efforts of the publishers, Apple, Google, et all, have only slowed down, not stopped, Amazon's rise. It maybe that there will be NO ONE there at the end, save Apple . Apple will be dominating the "enhanced" ebook end-the book apps, electronic textbooks, etc. But for straight narrative text, it may be just be Amazon and a few niche booksellers.

Last edited by stonetools; 03-03-2012 at 03:31 PM.
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Old 03-03-2012, 02:12 PM   #2
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Amazon is not unstoppable. But they won't be stopped while their competition is playing catch-up, or while the competition is trying to just copy Amazon. They will be stopped when the competition comes up with a better plan and can execute it perfectly.

The execution is the hard part - anyone can come up with an idea, but actually putting it into practice is much much harder. See, e.g., Pottermore.
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Old 03-03-2012, 04:12 PM   #3
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I agree with Andrew H. Amazon isn't unstoppable. To stop them will require a lot of fresh thinking from both competition and publishers.
Dear Author had a longish post about what publishers should do recently ( They are down for maintance at the moment. I'll add the link when they are up again).
When it comes to competitors I wish that they took a look at what Dito and Sony did. As far as I know Dito's app comes pre-loaded onto the T1 in Sweden. Why don't BN ( or another brand) do that with Nook? Strike deals with german, French, Spanish bookstores etc? A win win situation. The manufacturer get to sell e-readers without investing in building up a store. The store sells more e-books.
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Old 03-03-2012, 05:36 PM   #4
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Quote:
Originally Posted by Andrew H. View Post
Amazon is not unstoppable. But they won't be stopped while their competition is playing catch-up, or while the competition is trying to just copy Amazon. They will be stopped when the competition comes up with a better plan and can execute it perfectly.

The execution is the hard part - anyone can come up with an idea, but actually putting it into practice is much much harder. See, e.g., Pottermore.
I agree that in principle, Amazon isn't unstoppable. One of the pillars of its strategy- the loss-leader pricing approach to eBooks- is under attack from publishers large and small, and from investors impatient with continual losses. I expect that the average price of Amazon books and hardware will drift up over time.
In terms of user experience, Amazon stands alone. From Shatzkin:

Quote:
Some of this is subjective, but it still looks to me like they offer a better print searching-and-buying experience than BN.com and a better overall ebook ecosystem than Nook or Kobo. I read on an iPhone and use all the ebook purchasing systems from time to time, but I use Kindle the most because it is the best. I am close to somebody who prefers to buy from BN.com because (she says; I don’t do this research…) they give money to Democrats and Amazon gives money to Republicans, but she still does her searching at Amazon because it works better before she hops over to BN.com to make her purchase.
I can testify that I also used to buy from BN but do my searching on Amazon. Frankly, I've stopped doing that and now just buy from Amazon.

It also maybe, btw, that there just may not BE any better business model. In that case, the only hope for BN and others will be just to out-execute Amazon. So far they haven't come close.
I think Apple's strategy is to focus on making technically superior ebooks and hoping that a general market develops for enhanced ebooks and eBook apps: but so far most people seem to want "straight narrative", text only ebooks at low prices: all of which plays to Amazon's strengths. Maybe things will be different next generation: but by the next generation, Amazon's competitors may be dead.
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Old 03-03-2012, 06:27 PM   #5
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Yes, the simple truth is that Amazon do it best. If someone else came along and did it better, they might be in with a shout, although Amazon have now claimed a lot of real estate and it could be too late.

I'm not that happy with the amount of control Amazon have over the market. I specifically bought a second ereader for epubs to make sure I had a horse in both races, but I still mainly get books through Amazon because it is so easy.
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Old 03-03-2012, 07:00 PM   #6
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Yup, in theory Amazon could be challenged, but in practice I fear it won't happen.
It would require a high degree of working for the common good by everyone else, and probably planning far more long-term than current market policies, or the short-term accounting practices, allow.

No, Amazon's ideal aim is a monopoly, and I'm sorry to say thy're in with a good shout to achieve very near that.
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Old 03-03-2012, 07:15 PM   #7
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Amazon can be beat but it is going to take time and a lot of work.
There are no magic bullets: price-fixing won't do it, trivial boycotts won't do it, superficially imitating their business model won't do it.
And most of all, whining won't do it.
To beat Amazon you'll have to be better than Amazon at meeting users' needs and earning their goodwill.
And, so far, none of the wannabes qualify.
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Old 03-03-2012, 08:47 PM   #8
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Someone will come along and challenge Amazon. When a company is large and successful there are always people who look at it and go "Are they unstoppable?" The answer is always yes.

I don't see who it is going to be in the e-book arena. The EPub readers are fractured and fighting among themselves as well as fighting Amazon. Amazon essentially has one front, EPub Readers. BN has Amazon, Sony, Kobo, and the niche market. Fighting on one front is doable, fighting on two fronts is a bit silly, fighting on three or more fronts is down right insanity.

The problem is, Sony and Kobo are not going to give up the fight and BN is not in a position to challenge them outside of the US. BN needs to get an international reader out fast so that they can develop that market. Then they will be in a better chance to deal with Amazon.

Even then, they are not in the best position because Amazon has its entire non book related market to bring in money and help the Kindle out. Amazon is probably not losing that much on e-books, thanks to Agency pricing. I doubt Amazon is losing that much on the devices.
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Old 03-03-2012, 09:14 PM   #9
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Quote:
Originally Posted by stonetools View Post

Quote:
Some of this is subjective, but it still looks to me like they offer a better print searching-and-buying experience than BN.com and a better overall ebook ecosystem than Nook or Kobo. I read on an iPhone and use all the ebook purchasing systems from time to time, but I use Kindle the most because it is the best. I am close to somebody who prefers to buy from BN.com because (she says; I don’t do this research…) they give money to Democrats and Amazon gives money to Republicans, but she still does her searching at Amazon because it works better before she hops over to BN.com to make her purchase.
I had a laugh over this and moved on, but then thought, maybe I can help out.

Tell your friend if she wants to give money to Democrats, then she should go ahead and do it directly. That will help them the most and they might even send her a button or a bumper sticker. (If they don't, she can get a good price on buttons and stickers at Amazon.)

But when it comes to commerce go with what works, not fuzzy feelings. There are too many fuzzy feelings in this world today. That is what is messing us up.

(And by the way, they have stopped production on the GM Volt for a while because the demand isn't there. The sell 60K/year model isn't working out. Fuzzy feelings gone haywire again!)
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Old 03-03-2012, 10:00 PM   #10
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Originally Posted by frahse View Post
Tell your friend if she wants to give money to Democrats, then she should go ahead and do it directly. That will help them the most and they might even send her a button or a bumper sticker. (If they don't, she can get a good price on buttons and stickers at Amazon.)
I would think the friend's point is that B&N gives MORE money to the Democrat party than she has available to give and she would like to encourage that.

I don't actually see what's wrong with that, particularly since the friend in question is female and (presumably) thinks that a life of being perpetually pregnant would cut into her reading time.
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Old 03-03-2012, 10:20 PM   #11
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I should have snipped out the part that referred to political contributions.

Let's keep it non-political .
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Old 03-03-2012, 11:00 PM   #12
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Quote:
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I would think the friend's point is that B&N gives MORE money to the Democrat party than she has available to give and she would like to encourage that.

I don't actually see what's wrong with that, particularly since the friend in question is female and (presumably) thinks that a life of being perpetually pregnant would cut into her reading time.
1. I don't think that B&N "grows" the "friends" money. It will just pass on a part of all the "friends'" money, so that logic is faulty.

2. As for as what the friend "thinks" that is already suspect and you have given it the coup de grace with that picture of her eternally in a birthing bed. On another side, taking it that far, all the resultant child support will help her buy many books to read while being permanently bedridden, and a nice house to store the books and children in.

3. I give credit in getting the best laugh of the week from this "friend's" thinking.

Quote:
Originally Posted by stonetools View Post
I should have snipped out the part that referred to political contributions.

Let's keep it non-political .
It wasn't really political. It was a smaller question of economics without any discussion of policies or practices, by you stonetools or myself.
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Old 03-03-2012, 11:29 PM   #13
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@frahse, er, you seem not to be aware of the Republican party's current radical stance against birth control, but we won't get into it here lest the thread be moved.

However, there is definitely merit in supporting a company who supports (financially) your goals over supporting one that doesn't. If one is going to buy X anyway, and has two stores to choose from, it makes perfect sense to buy X from the store who donates to charity over the store who donates to (picking something at random) Pollution R Us.

Saying that said person would be better off not getting X and donating money directly is seriously missing the point.
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Old 03-04-2012, 12:41 AM   #14
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no businesses give to my candidates/party . maybe i should just stop buying stuff


since i joined B&N's 'club' on a whim i've been buying my hardcopies from them lately. the no purchase minimum free express shipping is pretty handy. i still like amazon but i'll admit its a big + in B&N's favor. i just wish their site was faster and felt more like a community like amazon does.
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Old 03-04-2012, 01:16 AM   #15
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Why don't BN ( or another brand) do that with Nook? Strike deals with german, French, Spanish bookstores etc? A win win situation. The manufacturer get to sell e-readers without investing in building up a store. The store sells more e-books.
What you're suggesting is exactly what Kobo's been doing with their recent deals.

Kobo was created by, and still partnered with, the biggest bookstore chain in Canada (Chapters/Indigo/Coles). They've used that dominant retail footprint to raise Kobo from a new entrant to #1 in the Canadian market (yes, ahead of the Kindle) in e-reader ownership in Canada. I believe Canada is now the only market that Amazon's ever lost leadership in e-readers.

Kobo's reaching out to major retail players in other countries that have the reach to build the brand. In exchange for the retail shelf-space for these bricks-and-mortar stores, Kobo shares royalties on e-book sales in those countries.

So far, in addition to Chapters/Indigo in Canada, Kobo's signed up:

- WH Smith in the UK (the #1 book retailer in the UK based on number of locations),

- Swindon Book Co. in Hong Kong (I'm not sure how big they are),

- Libris Blz in the Netherlands (an alliance/buying group of independent bookstores, apparently the biggest player in book retail in that country).

They've also signed up:

- FNAC in France, a book/electronic store hybrid, and "the largest retailer of its kind in France",

- Redcoon.de (an apparently major online retailer based in Germany, but serving most of continental Europe).

There are rumours that the second-largest bookstore chain in the UK (Waterstones) might be working with B&N/Nook as well, but I haven't heard anything official yet.

It'll be interesting to see if Kobo can replicate the magic they performed in Canada. Market research firms show Kindle maintaining its cumulative marketshare (ie. growing with the market), while Kobo has rocketed up the charts at the expense of Sony and other players (whose cumulative marketshare is dropping). Canada is quickly becoming a two-horse race for e-reader sales.

But Canada has a singularly dominant bookstore player in Chapters/Indigo, not even B&N is as influential in the U.S. market as Chapters is in Canada. I think the partnerships with WHSmith and Libris Blz are very significant for Kobo, but I think these deals may provide Nook-style results (ie. strong second-place finishes) rather than Canadian results (a first place position ahead of Kindle).

One potential exception to all this: Japan. Obviously a strong market for Sony, but Rakuten (the so-called "eBay of Japan) is not to be dismissed there. The Japanese are apparently voracious readers (both books and manga). Rakuten will have to act as a disruptive force in the Japanese market as there's a bit of an oligarchy there (what the publishers/distributors are doing there makes our agency-model debate look like nothing), but there's huge potential for the Kobo brand there, and Amazon is not yet offering the Kindle there (despite attempts to do so). And whatever the book publishers do, manga will remain an opportunity there.
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