Quote:
Originally Posted by murraypaul
Market share matters. Setting up a brand new eBook business would be very costly, because you would need almost as much infrastructure for a small small market share as for Amazon's huge one. So your cost per book would be much higher. Again, it scales well.
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And...we're back where we started: OVERDRIVE has the digital infrastructure for both rentals and sales. They weren't maximizing the return on those capabilities so the investment guys figured they could buy it (at a premium to what Rakuten paid) and do better. They already put up the ante so what remains are the incrementals, which are minimal.
They have a higher ceiling than any startup because they are already a going concern making fifty to a hundred million a year net.
That is one very useful starting point.