Odds of Sony Staying in the Ebook Business?

[fjtorres]

Originally Posted by dsvick

I understand that Sony wants to sell more readers where as other B & N want you to keep using the nook so you keep buying their books, so it is not an apples to apples comparison,

That is the crux of it all.
Sony needs to sell hardware *and* make money off the *hardware*.
Nook and Kindle (now at $189) can sell at cost or even under cost because their reason for existing is to drive traffice to the ebookstores.

Sony can stay in this business (in North America, at least) only as long as the ebookstores don't drive retail prices below cost. And with the price war on, the odds of that look plenty slim right now. Given that Sony is *not* the volume leader, there is no way they can drive their costs (for equivalent hardware) as low as the store brands. Their choices are to go for rock-bottom price-leader prices and features (like the PRS-300) or try to value-add to sustain prices. The problem with the former is you need to go significantly lower than the competition to sell enough to justify the R&D costs alone. The problem with the latter: tablets.

It's the old rock/hard place situation.
Go low and bleed buying marketshare, go high and watch the share wither to nothing.

They need a rethink. Maybe moving to color LCD?

[dmaul1114]

Originally Posted by fjtorres

They need a rethink. Maybe moving to color LCD?

Which is where tablets come in. They can be priced higher than dedicated readers. Can sell to more people that the avid reader niche. And they can still put a Sony e-book app on it and make money in their e-book store.

[phenomshel]

Originally Posted by Kali Yuga

It all depends on something we don't know: How well the Sony readers are currently selling, and if the combined project (hardware + books) is turning an acceptable profit.

Sony may not be getting a lot of media attention right now, but that does not necessarily indicate anything about actual sales, revenues and profits.

Despite the absence of that info, I expect Sony will stay in the business in some form for awhile. As others mentioned, they'll likely put out some tablets, and can leverage their existing ebook store as an enticement.

Right now, Sony is the reader most carried in outside retail stores. That's got to count for something with consumers. Also, if anyone's paying attention in the Publishers vs. Retail ebook wars, Sony got those titles well before most anyone else, and while Amazon was still playing cat-and-mouse with Penguin. So I really do hope they stay around, they've become my go-to store for ebooks. Right now for me, it's Sony, if they don't have it, B&N. If B&N doesn't have it, I check the independents, and Amazon is an absolute LAST resort.

*Disclaimer: this post is US centric.

[Logseman]

If we, The People, keep "blade sellers" from tying our wallets to them (mainly by cracking their DRM's and distributing content), Sony and other hardware providers will have their space. The very Sony Playstation1 survived because it was easily pirateable (I read somewhere else that there were more sales of PSX devices than PSX games). All kinds of MP3 players are sold which reproduce DRM-less contents because there is profit in them, since people download MP3 files all the same. Why should there be no space for pure hardware providers?

[fjtorres]

Originally Posted by Logseman

If we, The People, keep "blade sellers" from tying our wallets to them (mainly by cracking their DRM's and distributing content), Sony and other hardware providers will have their space. The very Sony Playstation1 survived because it was easily pirateable (I read somewhere else that there were more sales of PSX devices than PSX games). All kinds of MP3 players are sold which reproduce DRM-less contents because there is profit in them, since people download MP3 files all the same. Why should there be no space for pure hardware providers?

Piracy as Sony's salvation? We *are* talking Sony, right?
Sorry, I'm not touching that one.

[Spiffy]

Originally Posted by Ervserver

Sony has been in business a long time.......my thought is they know something

Sony loses a fistfull of money regularly in a lot of markets they dabble in. It's a pattern. They keep afloat mainly because they are so big and have such a diverse business. Also, of course, because of the Playstation and their many media businesses.

With the notable exception of the Playstation, really, the last time they dominated the U.S market in anything (hardware based, I mean... their media businesses are something else entirely) was probably back with the original Walkman. Since then they've had some good but hardly dominant products (the CD versions of the Walkman, their line of PDAs during the CLie days, their Vaio computer line) but also a lot of total bombs.

I mean honestly... do many people use a Sony Memory Stick if they can help it? Or one of their proprietary music players? Or choose a Sony Ericcson phone if another brand is available for a similar pricepoint? And their cameras and videorecorder sales are pretty far down too. Even their TV sales are down somewhat.

They still make a lot of money in parts and components though. Winning the whole BlueRay/HD DVD thing probably was a nice leg up for them, so they're hardly in trouble.

They might stick with eReaders out of stubborness, or they might completely ditch it. Hard to say. But them "knowing something" because they've been in business a long time? Yeah... they know to diversify--that has little to do with their success in any one product line.

[nomesque]

I'd be a little sad to see them go under in the ebook reader market. I like their early reader implementations.

On a positive note, they're making changes to their ebookstore, and there's a small possibility that they'll do it right. I know they're taking up Smashwords retailing (although, isn't everyone?) and aren't they partnering with Kobo too? Or did I dream that one? If nothing else, that will give them an international market.

[dmaul1114]

Originally Posted by Spiffy

Winning the whole BlueRay/HD DVD thing probably was a nice leg up for them, so they're hardly in trouble.

Yep, that was a huge win for them. Though it did come at a high cost. They dominated the video game market for over 10 years with the PS1 and PS2.

But they forced Blu Ray into the PS3 to win the video format war, and that launched the console at $500-600 (mainly $600 as the $500 models sold out quickly and were very scarce the whole time they were available) which cost them that dominance and has left them stuck in third place in the video game market now.

Time will tell if winning the HD movie disc war was worth that trade off.

[murraypaul]

Originally Posted by Moejoe

I'm going to have to agree (unwillingly). Sony just don't care enough about their products and especially not the store and I believe they'll probably shift to a tablet computer sooner rather than later. Looks like it'll be a three horse race in the coming years (and after recent talks I've had, I'm even more convinced) between Amazon, Nook (rank outsider) and iBooks. The dream of one e-book standard across all devices is dead on its arse

While there is outright competition between Amazon and Apple hardware, that isn't the same as competition between the Amazon and Apple book stores. There is a Kindle app for the iPad, and Amazon are happy to sell books to iPad owners. Amazon as a content-provider wins either way, as long as they can maintain their lead as a book store. It is obviously less optimal to them than selling Kindle devices, where they then have a lock-in, rather than competing with multiple book stores on the iPad.

[luqmaninbmore]

Sony Ericsson phones are quite nice actually. I an typing this response on a W995 Walkman phone. They are possibly the best music phones available. The last several generations of Walkmen have been open excellent Mp3 players with top notch sound quality, battery life and features.

[DawnFalcon]

Originally Posted by Logseman

(I read somewhere else that there were more sales of PSX devices than PSX games)

Absolute nonsense, sorry. The PS1 (PSX) had an attach rate of 7 or so, and that includes it's end-life as a kids game console (although data from the very end is fuzzy). The PS2's attach ratio is over 10, which is phenomenal given how late in it's lifecycle it is.

(For reference, the same data source says 8 for the PS3, 9 for the Xbox 360, 7 for the Wii - although that's almost certainly high for a few reasons - 4 for the PSP and 5 for the NDS - which is almost certainly low for completely different reasons)


dmaul1114 - Yea, but. There are now 40 million Xbox 360's sold, and 35 million PS3's. Given the extremely high failure rate of the early 360's, there are probably more working PS3's in the market now.

Their gamble has amply, amply paid off. They don't own the US market, true, but in Japan and Europe they have a substantial edge.

[Crowl]

Originally Posted by DawnFalcon

dmaul1114 - Yea, but. There are now 40 million Xbox 360's sold, and 35 million PS3's. Given the extremely high failure rate of the early 360's, there are probably more working PS3's in the market now.

They aren't counting each replacement in that total so the number of working consoles is going to be fairly similar to the actual total.

Their gamble has amply, amply paid off. They don't own the US market, true, but in Japan and Europe they have a substantial edge.

Do you have any figures to back up the claim for europe, the last time I saw figures reported for there, the xbox 360 had a lead in the uk that offset the slight preference for the ps3 in mainland europe.

[iphitus]

Sony are looking to expand, they have stated that their eReaders (and presumably store) will be available here in Australia later this year.

I don't see book availability as an issue as it has a far greater range of stores to choose from. Borders.com.au, Kobo, the Sony Store and anywhere else that uses Adobe's Inept DRM.

Plus their hardware is slick. I know someone with a PRS600 and I'd swap my K2i for it any day. Those PDF & annotation abilities are awesome.

I don't think this will become a 2/3 horse race as suggested by some - rather the market appears to be growing. Already I can see multiple Hanlin clones now available here, an iRiver, plus some random ones I've never seen before. Asus and other companies have indicated they intend to release one too. I don't see why hardware companies such as Asus, iRiver & Sony can't compete and give Amazon/Nook/Kobo a good challenge.

[Crowl]

As far as ebook hardware, sony will continue to make it while it is making them money, what they are probably not seeing is the market expanding for them and that is why we aren't seeing new features getting added in updates, unlike the offerings from b&n and amazon that are in a more active competition with each other.

[Crowl]

Originally Posted by iphitus

Sony are looking to expand, they have stated that their eReaders (and presumably store) will be available here in Australia later this year.

I don't see book availability as an issue as it has a far greater range of stores to choose from. Borders.com.au, Kobo, the Sony Store and anywhere else that uses Adobe's Inept DRM.

I think a lot of people in the states do forget how long it took amazon to launch in other countries and in that time the market in those countries seem to settle on epub with adobe drm meaning that the sony reader is competing there with all the less well known brands rather than being in a direct fight with the kindle or nook.