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  • nemesis_editor_2007 nemesis_editor_2007 Feb 14, 2013 11:26 AM Flag

    Physical books vs. digital

    "The cannibalization of physical books is not good for Amazon long term... Amazon has virtually no structural cost advantage on digital books versus Google or Apple."

    Then why has Google books and iBooks failed so miserably? This ship has already sailed. Consumers simply view Amazon as the go to retailer for all their content needs. They do not view Google in this way. Google is a search engine to them no matter what Amazon shorts say Google "can" do (technically).

    iBooks failed because it was a closed system with overpriced books. Amazon stared Apple down and Apple blinked and lost. They went with the closed system because they needed it to sell their high margin hardware with. They had no other choice. Consumers did not want that, as Amazon had to have known. Having high margins is a kind of curse in this way. You become an easy target for Amazon to pressure your margins which is reflected in Apple's falling share price.

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    • Are you kidding me, Amzn sells EVERYTHING, and I mean EVERYTHING your problem is you still see Amzn as just a book seller, and Google books and Ibooks failed because of AMZN. I and everyone I know pretty much exclusivly buy E-books and buy them from from Amzn.

    • "Having high margins is a kind of curse in this way. "

      True, what is the point of making earnings for a business right nemesis.

    • Once upon a time everyone was saying that the ship had sailed... NFLX won the streaming content future... Then Amazon used its reach and deeper pockets to change that. Amazon's reach and resources are trivial compared to Google and Apple. No ship has sailed on digital content. In fact, the competitive pressures will build significantly over the next few years...

      • 1 Reply to techstrategy
      • "Amazon's reach and resources are trivial compared to Google and Apple. No ship has sailed on digital content."

        You display your ignorance again. Tens of millions of users have already committed to the Kindle platform. They have entire libraries and $1000s each of content locked into Amazon's ecosystem. The switching cost is going to be too high for them suddenly go over to some other platform. This is why you invest heavily or take heavy losses at a crucial stage of any new business in order to lock in customers and gain early share dominance.

        Amazon could see in advance how things would play out because they track consumer behavior and discussions 24/7 and mine that data very well, whereas Apple is simply a hardware maker and Google is just the owner of some fancy search algorithms. So they're simply operating in the dark, by comparison. This puts those two at a severe disadvantage against Amazon and all the cash in the world can not make up that deficit.

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