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Tip for B&N: Don't just follow Amazon

Joseph Esposito on Amazon's dominant position and what B&N can do about it.

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I follow dozens of publishing blogs and tweet streams, but there’s one that always rises above the rest for me. Any time I see something from Joseph Esposito (@JosephJEsposito), president of Portable CEO consulting, I make sure I read it. He’s a frequent contributor to the Scholarly Kitchen blog, and one of his recent articles there got me thinking about the need for better competition in the publishing industry. I sat down with Joe to discuss Amazon’s dominance, what B&N should do to improve its position and much more.

Key points from the full video interview (below) include:

  • “B&N needs an ‘MCI solution’” — Amazon is the clear market leader and, as #2, B&N must avoid just following Amazon’s lead and come up with a completely new and different product and content model. What B&N is doing with in-store Nook merchandising is great, but they’ve got to go much further. [Discussed at the 1:00 mark.]
  • Can B&N do anything to disrupt Amazon Prime? — Amazon and anyone else creating a Prime-like service will start to run into the same challenges Netflix has encountered. [Discussed at 4:07.]
  • Broad content repositories vs. narrow, vertical ones — Specific genres lend themselves more to this sort of offering, and each one could have a different pricing model. Safari Books Online is a great example. [Discussed at 5:52.]
  • Pay-for-performance is the only option — Amazon has publicly stated that the Kindle Owner’s Lending Library program pays most publishers a flat fee. I strongly believe that’s the wrong model, and Joe talks about why the flat fee probably won’t be a viable long-term option. [Discussed at 6:45.]
  • Apps vs. HTML5/EPUB — Publishers are starting to figure out that platform-specific investments often aren’t wise. Development costs for a single platform, even if that’s iOS, are still high, so the future leads to more open, portable solutions. [Discussed at 8:26.]
  • DRM — Joe makes an excellent point when he notes that, “the pro-DRM stance that many publishers have is not really getting them anywhere.” [Discussed at 11:05.]
  • Discoverability & recommendations — Discoverability will continue to get worse before it improves, but better integration with the social graph can provide a way forward. [Discussed at 15:06.]

You can view the entire interview in the following video.

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  • Michaela

    As someone who worked at MCI back in the McGowen days, I smiled mightily on your first point. Yes!

  • Troy McConaghy

    I’d take issue with both your comments on discoverability, i.e. the ability to come across books you otherwise might not have seen otherwise.

    Most bookstores only have new-ish mass audience books, and maybe a few “local authors.” What about rare gems and niche delights? The bookstore probably doesn’t have them in stock. How are you supposed to discover a book that isn’t there?

    Amazon.com probably knows about that book, and has it for sale too (maybe used via an Amazon Seller). How do you discover it there? Maybe it comes up in a search (with the Amazon search engine), maybe it’s “frequently bought with” the book you’re currently investigating, maybe it’s in the list of books bought by customers who also viewed that book. Maybe you heard about it on the radio, it was referenced in another book, it was mentioned in Wikipedia, it was recommended by a friend, it was being read by a character in a movie… there are many ways that modern people discover new books besides bookstores.

    Even if I *do* discover a cool-looking book at a bookstore, what’s to stop me from noting the title on a piece of paper, then going home to buy it on Amazon.com, or searching for it on WorldCat.org (to get it from a library)?