As Competition Wanes, Amazon Cuts Back Discounts (trims free lunch)

[FizzyWater]

Originally Posted by speakingtohe

The fact that Amazon doesn't sell epubs (yet) seems to indicate that Amazon is not trying to kill off the competition.

It seems to me that if Amazon did sell epubs that they would get quite a lot of business from the epub crowd and possibly hit the competition really hard. Sure they might have to pay 22 cents a copy to ADE, but I doubt that would hurt too much.

Well, I think Amazon still hopes to be the ultimate winner in a VHS vs. Betamax war...that eventually epub will be no more (like IMP, LIT, LRF/LRX, etc.)

[speakingtohe]

Originally Posted by FizzyWater

Well, I think Amazon still hopes to be the ultimate winner in a VHS vs. Betamax war...that eventually epub will be no more (like IMP, LIT, LRF/LRX, etc.)

Could be. I am inclined to think they would know that ship has sailed, but then they held on to the location numbers for quite a while

Helen

[fjtorres]

Originally Posted by speakingtohe

Could be. I am inclined to think they would know that ship has sailed, but then they held on to the location numbers for quite a while

Helen

epub won't vanish soon.
But the problem is there is no single commercial epub. And not all epubs admit to being epub. (Kf8, ibook...) Both Amazon and Apple are updating their proprietary formats and implementing select epub features *their* way for very good business reasons. Others will likely follow their example, even if they choose to call their product epub.

epub may end up like openebook, a backend format used as feedstock for the consumer formats but not something consumers see or care about. (Few really knew or cared that MS Lit files with basically tweaked oeb.)

[pidgeon92]

Originally Posted by speakingtohe

but then they held on to the location numbers for quite a while

They still have them, and I still prefer them.

[speakingtohe]

Originally Posted by fjtorres

epub won't vanish soon.
But the problem is there is no single commercial epub. And not all epubs admit to being epub. (Kf8, ibook...) Both Amazon and Apple are updating their proprietary formats and implementing select epub features *their* way for very good business reasons. Others will likely follow their example, even if they choose to call their product epub.

epub may end up like openebook, a backend format used as feedstock for the consumer formats but not something consumers see or care about. (Few really knew or cared that MS Lit files with basically tweaked oeb.)

And what are those sound business reasons and how sound are they?

The obvious one of making the kindle and iPod names synonymous with the product type (kindle is to ereaders what Kleenex is to tissues) has pretty well been accomplished.

I understand that locking in customers and building both loyalty and shopping habits is a sound business practice, but I wonder about the soundness of effectively locking out the epub users. Lots of us out there and a good portion would be happy to buy from Amazon.


And while epub may go down the tubes, so can mobi, azw, kepub etc. My feeling is that all of these formats, even mobi, are at an acceptable level for formatting and displaying books. Improvements can be made, but does the average person who just wants to read the book really interested in facebook connectivity or other features of that nature. And some can be annoying. I clicked on a link to a map once and got a 404 error, thinking my wireless was not working I clicked on the same link using my PC and got the same error. That was the first and last time I did that. I am sure most links work, but are they being rigidly maintained and guaranteed to last? I doubt it.

Sure bells and whistles are nice at times, although the novelty soon wears off for me. And if one format introduces a really great feature some of the others will soon follow. Selecting a format based on it’s superiority does not seem to be happening. If I say epub to a kindle user or mobi/azw to a Sony or Kobo user generally I get the same blank stare.

Seriously, what are the other sound business reasons, other than standing by the cannons till the ship goes down.

Helen

[speakingtohe]

Originally Posted by pidgeon92

They still have them, and I still prefer them.

Try explaining them to your 87 year old mother Mine was just so happy when page numbers came out.

I've always thought that the location numbers were used by the programmer for debugging purposes and they forgot to change them back when the kindle went to market. Then they were embarrassed to admit it.

Still you are not the only one who wants an exact count of letters and whitespaces, so all was not a total loss.

Helen

[speakingtohe]

Duplicate post

[JD Gumby]

Originally Posted by speakingtohe

And what are those sound business reasons and how sound are they?

The obvious one of making the kindle and iPod names synonymous with the product type (kindle is to ereaders what Kleenex is to tissues) has pretty well been accomplished.

As advantageous as that sounds, companies actually hate when their names or brands become generic, at least after the first few years. Xerox has been fighting to convince people not to use its name as a verb for at least 50 years now...

[fjtorres]

Originally Posted by speakingtohe

And what are those sound business reasons and how sound are they?

This has been extensively discussed in the epub3 threads here and elsewhere as well in the regullar "why won't Amazon sell epubs" threads but I'll summarize:

There are three main reasons why Apple and Amazon run proprietary ebook formats:

1- The control their own fate - by using proprietary formats they get to define what features they support, when to support them, and how to support them. They do not rely on outside sources or certification as to what constitutes a valid file. They can tailor their format's capabilities to what their products can properly support. (For example, KF8 supports a commercially-useful subset of epub3 in ways that even the millions of Kindle 3and Kindle 4 readers can support.) They are also solely responsible for what the user experiences; in case of consumer problems there is no ping-pong between customer service departments.

2- Time to market - since proprietary solutions do not depend on external committees to decide what the format looks like and how it behaves, the implementation process is a lot shorter. Case in point: epub3, which after nearly 3 years is still in gestation, as an interoperable consumer product, while iBook and KF8 quickly adopted the commercially useful features of epub3 and added them to their formats and are already selling product with those features. The interoperable "open" epub crowd are still waiting on the Readium reference implementation. It might be another year before epub3-capable readers reach the market, whereas every Kindle from the K3 on is already KF8-capable.

3- Money - supporting the "open" interoperable epub DRM costs money; a fixed per file fee that amounts to anywhere from 4% to 25% of the sale price. It also costs a per-device fee as well as back-end server fees. Those are all costs that Apple and Amazon avoid that their interoperable competitors have to pay. So neither is going to go out of their way to help their enemies and competitors; they would rather give up sales. So far, the results are proving them right.

There are other, lesser technical issues as well as strategic considerations, but in the end it comes down to the fact that in the world of technology products history tells us that proprietary products have always out-performed committee standard products. Proprietary solutions get to market faster, evolve faster, and blend the capabilities of software and hardware better. Further, historically, companies that start out proprietary and get "open" religion after the fact end up as roadkill. And fast.

Two notable examples of once-dominant companies that lost their grip on the market in a single year, waiting on committee standards, are Netscape and Sony.

Sony stated out doing everything that Amazon does--proprietary format, dedicated ebookstore, eink reader, etc. They had the first mover advantage, outselling the field before Kindle showed up, and gave it up to "run with the pack", letting others define what the key features of their product were. In one year they went from industry leader to also ran, in three to after-thought. Since then it has been a constant struggle to catch up with the new leader and close followers.

Right now, the publishers--for good and valid reasons--only want to support one *distribution* format for their product but since their specification does *not* define a consumer-grade product, the vendors are free to craft the retail product as best fits their needs. And in a world where mainstream consumers care about as much about format as they care about DRM (i.e., near zero) the sharper retailers have taken advantage of this freedom to add as much proprietary value and differentiate their offerings as technology and economics allow them. And consumers have responded.

People buy into the various walled garden ecosystems because they like what they see. And the internal plumbing of the ebooks is not something consumers see or care about; they care about what shows up on screen, not *how* it gets there.

There is nothing irrational about the proprietary walled garden business model, it is just hard-headed business sense at work. It has its pitfalls but it also has its rewards. And until publishers change the rules on *their* end, the odds of major changes anytime soon are very low.

[Crowl]

Originally Posted by crich70

I think you miss the point Graham. If Amazon raises the price of a book up fewer copies are sold of that book which means that the author gets less $$ back at the end of a given month. So if a book costs $5.00 and the author gets 30% of that then one copy brings him/her $1.50 when someone buys it. And if 10 people buy that book that means he/she gets $15.00 but if the price of the book goes up to $10.00 then 30% is $3.00 which would mean that if 10 people bought it he'd get $30.00 but if only 5 people buy that book (at the newer higher price) where before it would have been 10 who bought it then he/she gets $15.00 or the same amount that he got for selling 10 of the books at the $5.00 price. In short unless more and more people buy the book he doesn't really stand to earn more than he would if the price hadn't been raised. In fact he'd be lucky to break even and make the same amount back that he would have made if the price hadn't been raised.

The problem with your example is that it overlooks the point that there probably isn't going to be a distinct change in the amount of people who want to buy a non-new book unless the price was cut drastically.

If 5 people are going to buy that book regardless of the price and there is no evidence that a slight decrease will lead to any additional sales then it does actually make sense for them to increase the price to cash-in from what sales there are going to be.

[Crowl]

Originally Posted by SteveEisenberg

Mostly small ones with limited backlist selection. That's why Amazon reduced discounts the most for less popular books.

So you mean Amazon are providing a service by continuing to stock these low demand books and are expecting to make money from doing so unlike the alternatives who decided not to stock the low demand books at all?

[Crowl]

Originally Posted by HoraceWimp

As a book lover, I couldn’t agree more.

Depending on how you choose to define book lover, there are plenty who would say that any ebooks were a bad thing as well and they'd be just as wrong.

[Crowl]

Originally Posted by Rizla

But seriously. Why the heck does anybody waste the ink and breath to defend this beast? It should be shot. People are weird.

As somebody who speaks english as their first language while living in a country where that is not the case, I am more than happy to compliment amazon for the service they provide me with the kindle.

It is far more convenient with a much wider selection and cheaper than buying english paper books over here while also being a far better ebook service than I could get from anyone else when I bought my first kindle several years ago where it would have typically been quicker to just warez the ebooks.

[speakingtohe]

Originally Posted by fjtorres

This has been extensively discussed in the epub3 threads here and elsewhere as well in the regullar "why won't Amazon sell epubs" threads but I'll summarize:

There are three main reasons why Apple and Amazon run proprietary ebook formats:

1- The control their own fate - by using proprietary formats they get to define what features they support, when to support them, and how to support them. They do not rely on outside sources or certification as to what constitutes a valid file. They can tailor their format's capabilities to what their products can properly support. (For example, KF8 supports a commercially-useful subset of epub3 in ways that even the millions of Kindle 3and Kindle 4 readers can support.) They are also solely responsible for what the user experiences; in case of consumer problems there is no ping-pong between customer service departments.

2- Time to market - since proprietary solutions do not depend on external committees to decide what the format looks like and how it behaves, the implementation process is a lot shorter. Case in point: epub3, which after nearly 3 years is still in gestation, as an interoperable consumer product, while iBook and KF8 quickly adopted the commercially useful features of epub3 and added them to their formats and are already selling product with those features. The interoperable "open" epub crowd are still waiting on the Readium reference implementation. It might be another year before epub3-capable readers reach the market, whereas every Kindle from the K3 on is already KF8-capable.

3- Money - supporting the "open" interoperable epub DRM costs money; a fixed per file fee that amounts to anywhere from 4% to 25% of the sale price. It also costs a per-device fee as well as back-end server fees. Those are all costs that Apple and Amazon avoid that their interoperable competitors have to pay. So neither is going to go out of their way to help their enemies and competitors; they would rather give up sales. So far, the results are proving them right.

There are other, lesser technical issues as well as strategic considerations, but in the end it comes down to the fact that in the world of technology products history tells us that proprietary products have always out-performed committee standard products. Proprietary solutions get to market faster, evolve faster, and blend the capabilities of software and hardware better. Further, historically, companies that start out proprietary and get "open" religion after the fact end up as roadkill. And fast.

Two notable examples of once-dominant companies that lost their grip on the market in a single year, waiting on committee standards, are Netscape and Sony.

Sony stated out doing everything that Amazon does--proprietary format, dedicated ebookstore, eink reader, etc. They had the first mover advantage, outselling the field before Kindle showed up, and gave it up to "run with the pack", letting others define what the key features of their product were. In one year they went from industry leader to also ran, in three to after-thought. Since then it has been a constant struggle to catch up with the new leader and close followers.

Right now, the publishers--for good and valid reasons--only want to support one *distribution* format for their product but since their specification does *not* define a consumer-grade product, the vendors are free to craft the retail product as best fits their needs. And in a world where mainstream consumers care about as much about format as they care about DRM (i.e., near zero) the sharper retailers have taken advantage of this freedom to add as much proprietary value and differentiate their offerings as technology and economics allow them. And consumers have responded.

People buy into the various walled garden ecosystems because they like what they see. And the internal plumbing of the ebooks is not something consumers see or care about; they care about what shows up on screen, not *how* it gets there.

There is nothing irrational about the proprietary walled garden business model, it is just hard-headed business sense at work. It has its pitfalls but it also has its rewards. And until publishers change the rules on *their* end, the odds of major changes anytime soon are very low.

I do not think the walled garden approach is irrational, but it does not always lead to long term success. Another poster alluded to the Betamax/VHS wars and we all know how that went along with the viseodiscs that you could serve dinner on. Fast moving technology and cheap bandwidth have made physical formats somewhat irrelevant. We as consumers are incredibly spoiled these days. There are those among us who quail at the thought of spending $9.99 for a book, yet think nothing of spending several times that much daily on fast food and fancy coffee. And God forbid we should have to wait a few weeks to get the book free from the library.

Personally I try to stay away from proprietary things such as cameras with their special batteries, KF8s and kepubs etc. but I know that I will still buy some of these devices against my better judgement because they are just too nice in some way to resist. I don’t see how epub 3 or epub7 or KF99 will vastly improve my reading experience, but I am not saying it isn’t possible. I can see major hardware improvements making reading even more convenient. Perhaps a watch sized ereader that you wear on your wrist and it goes sproing right into your hands when you want it to

My original point and I still believe it rightly or wrongly, is that if Amazon started selling epubs at this point in time it would not detract substantially from their sales or take away from the popularity of the kindle readers. Nothing to do with the rightness or wrongness of the walled garden approach, past or present. It would probably substantially increase both sales and profit despite the 22 cents ADE fee.

Of course at this point in time it would be seen by many as a hostile move and some may even see it as displaying weakness or loss of faith in the kindle product. I am also fully aware that the Amazon people and probably yourself are far more knowledgeable about these things than I could ever hope to be and it is their business to do with as they see fit. If there is any irrationality going on, and I don’t see any signs of it, it hasn’t hurt them much.

Sorry for the long post and a few repetitious parts but your post was so well thought out I could not seem to stop typing.

Helen

[speakingtohe]

Originally Posted by JD Gumby

As advantageous as that sounds, companies actually hate when their names or brands become generic, at least after the first few years. Xerox has been fighting to convince people not to use its name as a verb for at least 50 years now...

I personally hate it when people refer to my Sony as a kindle or any other tablet as an iPad. But then I hate it when people say they are on the computer or on the internet when they are obviously on a chair using the computer or accessing the internet and I really hate it when people use the word gift as a verb.

Very curmudgeonly of me so I generally keep it to myself

Helen