Amazon Versus Publishing

The ongoing battle for dominance of the publishing industry saw Amazon emerge victorious from the ‘Ebook Wars’, its heavily armed Kindles decimating Barnes and Nobles’s woefully under-equipped Nooks.  The ‘Pricing Wars’, which included an ambitious offensive by vigilante book retailer Overstock, who implemented an aggressive bestselling titles discount campaign, is now little more than a skirmish after Overstock made a predictable tactical retreat thereby avoiding being annihilated by Amazon.

Amazon’s ambitious empire expansion plans have entailed a campaign to lure customers to switch allegiances to them.  The company’s strategy of rolling-out a series of new programs has had the dual purpose of distinguishing themselves from their competitors while crucially keeping Amazon in the media spotlight.  Recent innovations include – Kindle First, Kindle Matchbook, Amazon Smile, Day One, Kindle Countdown Deals and Free Kindle Freetime subscriptions.

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Kindle First and Kindle Countdown are arguably the two programs that offer the most benefit for readers, authors and publishers alike.  Kindle First allows Prime Members the opportunity to download one free ebook per month ahead of an official launch, whilst the Kindle Countdown, which is open to all customers, highlights discounted ebooks, at the same time putting pressure on customers to make quick purchases due to the timer which ticks down the days, hours and minutes until the deal expires.  As with Amazon’s Kindle Select offering, publishers are only eligible for inclusion on the condition that the given title is exclusive to the Kindle platform (i.e. the title has been removed from competitors platforms) and is discounted by at least a dollar (£0.62).

Amazon5 copyAmazon’s approach has no doubt been successful to date, the fact that they control about 75% of the ebook market in the US and Canada pays testimony to this.  Amazon is also striving to expand its empire into new markets, particularly Asia, as well as various other territories, including countries like Poland, where ebook sales are expected to increase more than ten times between 2011 and 2016.

However new threats to Amazon’s continuing dominance of the ebook market have emerged in the form of supermarkets.  In the UK, Sainsbury’s have declared a discount war against Amazon.  Last month Sainsbury’s offered ebook titles from bestselling authors at 99p for periods ranging from one day to an entire month.  These ebooks are accessible through Android, Adobe Readers, Kobo devices and Nooks, but crucially not via Amazon’s kindle offerings.  Sainsbury’s nemesis Tesco are also getting in on the action, having recently brought out their own-brand tablet, the Hudl (modestly priced at £119).  To date the Hudl has been well received by customers and analysts alike.

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Despite the fact that Amazon have established a position of dominance, the future remains uncertain.  It was not so many years ago that Microsoft were in complete ascendency of their market yet now that supremacy is being eroded.

Click here to read my post about Amazon’s Asian expansion.


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