Amazon, Barnes & Noble, and the Battle for E-Books

There’s a battle emerging over the industry structure of e-books: Amazon has one approach, Barnes & Noble another. Will the clash play out like the computer wars of the late 80s, or the music wars of the late 90s? Let’s take a look.

Years of declining music sales reflect a grim story for the music business — the amount of music people are willing to pay for has dropped dramatically, the unit of business has shifted fundamentally to music by the song, and the preferred medium for acquiring music is now downloading individual songs, rather than purchasing a complete CD. Who is winning in the battle for the soul of the music business? The popular verdict at the moment would certainly be Apple, to the detriment of the traditional music producers and distributors, and with mixed effects for artists.

What are the implications for the current battle over e-books? Amazon.com is certainly gunning for the traditional book business with the advent of its Kindle reader. Note the characteristics of this business model — Amazon sells proprietary hardware, which is linked to a list of electronic books over which they have considerable control, and tied to their website which facilitates just about every aspect of a user’s experience, from the first moment you might become aware that you have a need to getting that need fulfilled, time and time again.

To read the rest of this Harvardbusiness.org blog post, click here.

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