More Thoughts About The Sony Reader

Joe Wikert’s post about Penn State’s Sony Reader experiment got me thinking about the Sony Reader again.

I’m a big fan of the Sony Reader, and I would love to see them succeed. But, I also feel that Sony has to gird for daily battle with Amazon. Jeff Bezos has proven over and over again that he’s willing to invest for the future regardless of Wall Street analysts trashing his decisions for long term success because of their impact on short term profit. (As an investor and someone passionately interested in business, that’s a Wall Street stance I’ve frankly never been able to understand. I guess I’m a value investor at heart. Give me long-term profit and invest for that profit any day over a short-term mindset – trash the company’s long term prospects to eek out good numbers for the quarter).

Back to the Sony Reader, I had an idea this morning about what could lead to a successful rival to Amazon’s Kindle. Drum roll please . . . Sony should seriously consider spinning off the Sony Reader (maintain the Sony brand and the Sony Reader’s stylish design) into a joint venture with Barnes & Noble.

Despite its many critics, I’ve often admired Barnes & Noble and the Riggios’ business acumen. Granted, as someone who loves bookstores of all kinds – locally owned independents, Barnes & Noble, Borders, the Strand, Powell’s, The Tattered Cover, etc. – it pains me to see any small independent bookstore go out of business. But, I also believe that Barnes and Noble has offered a wider selection of books ever available to many of the towns where they have stores. How can that be a bad thing for people passionate about books?

Again, back to the Sony-Barnes & Noble idea, I would guess that Len and Steve Riggio are watching the various Kindle sales estimates with heightened interest. Who knows? Maybe they’re writing off those Kindle owners as customers who would have purchased from Amazon anyway vs. buying a book at Barnes & Noble. So, they may reason that those Kindles really aren’t having much of an impact.

As a bibliophile, I would strongly disagree. I routinely buy buys via Amazon. But, I also love spending an hour or two browsing in Barnes & Noble at least once a week. If I don’t get my Barnes & Noble fix, my wife can tell. And, I routinely buy books at Barnes & Noble. Why? Because the physical bookstore browsing experience still hasn’t been replicated online, and I doubt it ever will.

Historically, Barnes & Noble has struggled with the rise of digital media and the online sales channel. Let’s be honest. If Amazon or any other sizable online bookstore didn’t exist, I’d wager many dollars that there would be no bn.com. Just look back at the launch of BN.com, the financial spin-off of the website, etc. It wasn’t pretty. And, every step of the way, the Riggios were dragged kicking and screaming.

But, at the end of the day, they’re business people who want to compete and succeed. Do they really want to wake up in 2015 and have herds of customers wondering around Barnes & Noble stores armed with their Kindles, discovering new physical books, then downloading them on the fly. I don’t think so!

So, why not take a very calculated risk, cut a deal with Sony now and hit the floor running. Does Sir Howard Stringer really want to be dabbling in the ebook business anyway?

Think about it. Barnes & Noble could create a unique sticker that they slap on every book when it comes out of the box? Buy this book today or download it to your Barnes & Noble-Sony Reader device right now. And, if you really want to think about the possibilities, that sticker could have a readable bar code – or a numerical code or something – that would allow a customer to access and start downloading the ebook with one shot.

And, if you think the barcode idea is farfetched? Seriously bar code technology is hugely popular in Japan and other countries. How hard would it be to release a next generation Sony Reader with a quick inclusion of a bar code reader.

Do you think this will happen? If not, what is Barnes & Noble’s planning to do to combat the rising sales of Amazon Kindles? I’d be interested to hear your thoughts.

  • Hi Jeff. I like your idea but it would seem Sony has already made their brick-and-mortar choice and it’s Borders. I’ve seen the Reader in several Borders stores around the country and it gets prominent placement in the new Borders concept store media section.

    Could Sony rethink things and go with B&N as well or instead? It all depends on the terms of their agreement with Borders. I do think having the device in more outlets would be good for Sony and perhaps B&N would come up with a new way of helping promote it.

    The fact that B&N, the country’s largest brick-and-mortar book retailer, doesn’t have a reader or alliance like this of their own is quite odd. Even if they can’t get the Sony-branded reader into their stores maybe it would make sense for B&N to work with Sony on a private label version of the device that’s prominently branded as a Barnes & Noble product. That’s something Borders hasn’t done and it would help provide differentiation, particularly if B&N could come up with some unique new features to add to the mix.

    The more I think about it, if I’m B&N I’m on the phone with Sony right now saying, “hey, go ahead and continue your relationship with Borders. But let’s work together on a next generation Reader with wireless capabilities to take on Amazon…” I’m not sure if that would be enough to avoid whatever non-compete language might exist in the current Borders/Sony agreement but it’s worth thinking about.

  • Hi Jeff. I like your idea but it would seem Sony has already made their brick-and-mortar choice and it’s Borders. I’ve seen the Reader in several Borders stores around the country and it gets prominent placement in the new Borders concept store media section.

    Could Sony rethink things and go with B&N as well or instead? It all depends on the terms of their agreement with Borders. I do think having the device in more outlets would be good for Sony and perhaps B&N would come up with a new way of helping promote it.

    The fact that B&N, the country’s largest brick-and-mortar book retailer, doesn’t have a reader or alliance like this of their own is quite odd. Even if they can’t get the Sony-branded reader into their stores maybe it would make sense for B&N to work with Sony on a private label version of the device that’s prominently branded as a Barnes & Noble product. That’s something Borders hasn’t done and it would help provide differentiation, particularly if B&N could come up with some unique new features to add to the mix.

    The more I think about it, if I’m B&N I’m on the phone with Sony right now saying, “hey, go ahead and continue your relationship with Borders. But let’s work together on a next generation Reader with wireless capabilities to take on Amazon…” I’m not sure if that would be enough to avoid whatever non-compete language might exist in the current Borders/Sony agreement but it’s worth thinking about.

  • jeff

    Joe,

    You’re absolutely right. I should have mentioned the Borders-Sony alliance which I do know about. I guess that’s what happens when I’m writing blog pasts at 5 a.m..

    I have a Borders 40 minutes away, but I’m much more of a Barnes & Noble customer. I really wonder how successful the Borders-Sony partnership is doing.

    I’m sure there’s probably some wiggle room in that partnership agreement if Barnes & Noble came calling to Sony.

    I really do wonder what Barnes & Noble is thinking and planning regarding the Kindle. As I mentioned in my original post, Barnes & Noble management are smart businesspeople. If Kindle sales continue to go up, they’ll have to figure out an answer.

    Maybe they’ll go out and make some acquisitions in the eBook industry – DailyLit, Fictionwise, etc.! Who knows? (Caveat, I worked on the PR for DailyLit’s launch).

    One final note, and I’ll need to blog about this in the future. Why am I a Barnes & Noble customer over Borders? The simple fact is that Borders’ loyalty program leaves a lot to be desired. It’s based on printing out coupons and keeping track of when those coupons expire. I’m far too busy to do that. I like knowing what my discount will be with my Barnes & Noble member card.

  • jeff

    Joe,

    You’re absolutely right. I should have mentioned the Borders-Sony alliance which I do know about. I guess that’s what happens when I’m writing blog pasts at 5 a.m..

    I have a Borders 40 minutes away, but I’m much more of a Barnes & Noble customer. I really wonder how successful the Borders-Sony partnership is doing.

    I’m sure there’s probably some wiggle room in that partnership agreement if Barnes & Noble came calling to Sony.

    I really do wonder what Barnes & Noble is thinking and planning regarding the Kindle. As I mentioned in my original post, Barnes & Noble management are smart businesspeople. If Kindle sales continue to go up, they’ll have to figure out an answer.

    Maybe they’ll go out and make some acquisitions in the eBook industry – DailyLit, Fictionwise, etc.! Who knows? (Caveat, I worked on the PR for DailyLit’s launch).

    One final note, and I’ll need to blog about this in the future. Why am I a Barnes & Noble customer over Borders? The simple fact is that Borders’ loyalty program leaves a lot to be desired. It’s based on printing out coupons and keeping track of when those coupons expire. I’m far too busy to do that. I like knowing what my discount will be with my Barnes & Noble member card.

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