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fjtorres · 04-28-2017, 01:36 PM

The biggest difference between Blockbuster and B&N is that when Blockbuster screwed up, they only destroyed their own business. (Even today there are still companies making good money renting DVDs and games on physical media.)

When B&N screwed up in 2010, they screwed up the entire interactive epub ecosystem. Thry hurt everybody except Amazon. For absolutely zero gain: at the time of the four hour price war, Amazon was down to 54% market share. Its all-time low. Nook was at 26%. Its all-time high.

The damage, though, was substantial.
A few months earlier at CES 2010 a total of 42 ereaders were on display, targetting the US and world markets. All were interoperable epub. Now, typically, half to two thirds of all CES announcements amount to nothing. But a third of 42 is still a lot of competition and the list included multiple models from the likes of SONY, SAMSUNG, ACER, ASUS, iRiver, Pocketbook, etc. And those all did make it to market. But few made it to the US. Because they were designed to sell at $299 and higher. Even the cheaper, second tier generics were priced at $199 and up. In a market the B&N reset to $149-179 for wireless connected models there was little room for hardware-only vendors.

It became a walled garden world and ereaders became primarily storefronts with little room for differentiation or premium models.

There is a lot of handwringing today over lack of variation in the ereader mainstream but the fact is Amazon is nice and comfy with its position as the mainsteam benchmark and nobody else has the pockets or the tech to mount a credible challenge. Not at today's price points. Witness the squealing when Amazon dared introduce the Voyager and the Oasis at higher price points. Even Kobo got grumbles when their new models came in $10 higher.

When basic Kindles can be regularly had for $49 and Paperwhites for $99 there really isn't enough margin (or demand) for competitive products with innovative functions or form factors.

That's what happens when you cut margins from 30% to under 10%. If Amazon had done it first the antitrust guys would've been all over them before you could say "predatory pricing".
But since it was B&N that started it...

Amazon has a lot to be thankful to B&N for.

04-28-2017, 01:36 PM	#28
fjtorres Grand Sorcerer Posts: 11,732 Karma: 128354696 Join Date: May 2009 Location: 26 kly from Sgr A* Device: T100TA,PW2,PRS-T1,KT,FireHD 8.9,K2, PB360,BeBook One,Axim51v,TC1000	The biggest difference between Blockbuster and B&N is that when Blockbuster screwed up, they only destroyed their own business. (Even today there are still companies making good money renting DVDs and games on physical media.) When B&N screwed up in 2010, they screwed up the entire interactive epub ecosystem. Thry hurt everybody except Amazon. For absolutely zero gain: at the time of the four hour price war, Amazon was down to 54% market share. Its all-time low. Nook was at 26%. Its all-time high. The damage, though, was substantial. A few months earlier at CES 2010 a total of 42 ereaders were on display, targetting the US and world markets. All were interoperable epub. Now, typically, half to two thirds of all CES announcements amount to nothing. But a third of 42 is still a lot of competition and the list included multiple models from the likes of SONY, SAMSUNG, ACER, ASUS, iRiver, Pocketbook, etc. And those all did make it to market. But few made it to the US. Because they were designed to sell at $299 and higher. Even the cheaper, second tier generics were priced at $199 and up. In a market the B&N reset to $149-179 for wireless connected models there was little room for hardware-only vendors. It became a walled garden world and ereaders became primarily storefronts with little room for differentiation or premium models. There is a lot of handwringing today over lack of variation in the ereader mainstream but the fact is Amazon is nice and comfy with its position as the mainsteam benchmark and nobody else has the pockets or the tech to mount a credible challenge. Not at today's price points. Witness the squealing when Amazon dared introduce the Voyager and the Oasis at higher price points. Even Kobo got grumbles when their new models came in $10 higher. When basic Kindles can be regularly had for $49 and Paperwhites for $99 there really isn't enough margin (or demand) for competitive products with innovative functions or form factors. That's what happens when you cut margins from 30% to under 10%. If Amazon had done it first the antitrust guys would've been all over them before you could say "predatory pricing". But since it was B&N that started it... Amazon has a lot to be thankful to B&N for. Last edited by fjtorres; 04-28-2017 at 01:39 PM.