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Barnes and Noble’s Nook Sales Hurt by Amazon’s Lower E-Book Prices

Posted on January 10th, 2014 at 9:14 by John Sinteur in category: News -- Write a comment


So the result of a successful DOJ antitrust case is that the undisputed market leader, Amazon, is better able to destroy smaller competitors through predatory pricing. Got it.

  1. When you read the source article, you find this:

    “Sales in the NOOK segment declined year-over-year largely because during the previous holiday season the company introduced two new tablet products, while no new tablets were introduced this year,” said Michael Huseby, Barnes & Noble’s new chief executive, in a statement. “Instead, we executed our plan to sell through our existing high-quality devices.”

    That’s true. It’s also not a very robust defense. E-book prices are a big reason why Barnes & Noble is losing this battle. The lopsided pricing on The Goldfinch is one of many examples. Amazon often sells e-books at a loss, using low prices to lure customers into the Kindle ecosystem. It goes so far as to give many books away—the Kindle Owner’s Lending Library allows Kindle owners with Prime membership to “borrow” a free book each month. And a relatively new service called Kindle MatchBook prices digital copies of books at $2.99 or lower, when a customer has already bought the physical version of the book. Barnes & Noble doesn’t have the resources or the relationship with customers to match MatchBook and services like it.

    Some of the blame here lies with the U.S. Department of Justice. (…)

    So B&N says the problem is that they didn’t have fresh hardware. The BW article says that there’s also the pricing AND the fact that Nook’s software & services don’t match Amazon’s.

    Recap: They’re behind in hardware, and in services, and in pricing. But Gruber concludes it’s all due to predatory pricing. But the BW article continues:

    Not everyone shops for e-book readers based on the prices of digital books, of course. But Barnes & Noble hasn’t given customers many other reasons to opt for the Nook over rival devices. Amazon continues to roll out new publishing services that are exclusive to customers of Amazon. Day One, a smart new literary magazine, includes short stories and poems. Kindle Worlds is a program that opens up a catalog of legal fan-fiction based on well-known literary characters.

    Individually these are minor services. Taken together they are links in the chain that is strangling the Nook.

    They don’t even mention Kindle’s features that let parents control the amount of time kids can spend on their tablets, allowing separate time limits for educational content vs. time spent with games. I know a whole bunch of parents who love that and got their kids Kindles instead of iPads because of it.

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