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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