Quote:
Originally Posted by Pajamaman
Sony got out of the e-reader market because they weren't selling e-books, and yet...
Sony continues to sell e-ink devices, but to a niche pdf-reading market. They continue to find value in producing e-readers. Why not B&N? I assume B&N sell a lot more e-readers than Sony.
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Sony makes more off one eink document viewer (strictly speaking they're not ebook readers if they don't supoort an ebook format) than B&N makes off a dozen readers alone. And that's after recent price drops ($699).
https://www.sony.com/electronics/dig...ads/dpt-series
Remember, the markup on ebooks is 30%...over and over...year after year.
Over the life of a reader (say 5 years) a person might spend $130 on the hardware and $1000 on books. So $300 profit vs $30?
Sony sells the readers for $700 and that's it. That's all they get. No recurring life cycle revenues. For Nook to match even a one year ebook revenue they'd have to sell the reader for around $200-300.
Of course, Nook *isn't* averaging even $30 a year from all their readers still in use and it's because a big portion, probably the majority of their customers can and do get their books elsewhere.
Selling hardware and living just off that margin is 20th century thinking.
The smarter companies are long past that. Recurring revenue is the modern way to get *big* rich.
Nook's problem is their garden is only walled one way and it has the wrong lock-in; the books are proprietary but the hardware is open. Good for customers but bad for Nook. Demonstrated by the stampede of Nook customers to generic Adept vendors. Nook has gone from 25% ebook market share to less than 4% in a *growing* market.
That's a big disfunction.