“Missed it by that much….” – Maxwell Smart (Agent 99)
When I saw the headline, “Barnes and Noble offers 30 free e-books to switch to Nook” I thought, oh yeah, now we’re talking. When you are competing with the industry leader who has a stronghold on the market, you need to do something pretty dramatic if you’re going to get a leg up. Giving 30 free e-books to switchers would have been just the kind of bold, ballsy move that could have changed the tide, at least a little. Alas, it turns out Barnes and Noble isn’t that gutsy after all and this promotion isn’t going to do a damn thing. The 30 free books, you see, are chosen by Barnes and Noble and span a wide variety of titles from cooking to history to fiction. Great, you gave me 30 books, of which if I am lucky I might be interested in one or two. They claim it’s a $300 value. Some value.
You see, the real problem is if I already have an Amazon Kindle, I have all my books already stored there. I don’t have access to them on the Nook and this creates a nice lock in for Amazon. Now if you allow me to take 30 of my favorite titles over, and make it even better, the rest of my titles for a nice discount price, you will be able to generate switchers. What would this cost Barnes and Noble? Plenty to be sure but what’s the value of a new lifelong customer? This game is hardball and either you step up and play or you’re going to be out of the game soon.
The same thing can be seen in the tablet wars. Apple is the dominant player with the iPad. Competition is coming now from various Android tablets and most recently HP. But the HP tablet starts at $500 and many of the Android tablets are close to the same price point. That’s the same price as the iPad and like it or not, those tablets are just not as good as the iPad yet. Price being equal, people are going to choose the iPad. If these alternative tablets are going to make any headway, someone is going to have to through down a price like $300. This is not about profit or loss at his point, when you are trailing a dominant player like Apple, you’ve got to grab market share anyway you can.
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