Why we haven't heard about Sony's Portable Reader?
Why Amazon Kindle is a success while Sony failed even with the better product?
Sony launched it's Reader to strong reviews a year before Amazon brought out the Kindle.
However, it's the Kindle that stood out as the e-reader of choice. Nobody even knows about Sony's Reader, but Kindle is a household name with the Millenials.
So, what is it that didn't work for Sony ?
Though Sony spent more than twice what Amazon spent on measured media, it lost mind share by not sustaining its marketing and failing to highlight its product superiority. It also didn't cash-in on its first-mover advantage.
Launched in 2006, Sony's Reader was a Mercedes to the Maruti of earlier attempts at electronic book readers. Lightweight and slim, with a highly praised "electronic ink" technology that was as easy on the eyes, it was seen as the iPod of the book technology industry. It achieved what no other e-reader had managed: a reading experience that almost matched traditional print, with the advantages of storage, search, and portability inherently available in the digital media. The launch met with much fanfare and hoopla from the media, where the 'Reader' was hailed as "the electronic gadget that could change the way we read." The next big thing.
So why, after having delivered this exceptional device, did Sony fail to deliver on its promise?
Sony's Yoshitaka Ukita, full of optimism, said that "the freedom to access material at their convenience" would make consumers adopt the new technology. Unfortunately, that was precisely where Sony went wrong.
Once Amazon Kindle hit the markets with its enormous range of books, the limited Sony book store looked rather bland. Sales were less impressive than the quality the hardware deserved, as customers opted for lower quality and price, but a better range of titles they got with Amazon. Here again, convenience triumphed.
Though Sony brought massive technology resources to the Reader project, however, a great e-reader was not just enough to complete the value proposition for the customer. They also need something to read. And that reading material came from 'Sony's Complement.'
Sony's plan for getting the e-books to readers depended on bringing on board authors, publishers, and its e-book retailer, 'Connect.com.'
Even though some authors could have been convinced to issue e-books, it was the publisher who controlled the flow of content. As co-innovators, publishers looked like reasonable partners. They would need to innovate, modify their internal processes and systems to manage and package e-books. This was a technical glitch but a manageable one. This glitch turned out to be the deal-breaker.
Amazon played a masterstroke here. It created conditions that made this e-book revolution attractive to publishers.As adopters, however, publishers had their initial hiccups on how to approach e-books.
Firstly, the economic and legal aspects of this new offering had to be hashed out: What is an e-book worth? How much will the royalty payouts to authors be? How should the contractual language read? What would margins look like? The conservative publishing firms clinging to a traditional business model–would not commit to e-books until these concerns were settled. Also, Sony was in no position to resolve them. Publisher red light number one. Amazon rose to the occasion, Amazon-1, Sony-0.
The second came the question of digital standards and intellectual property rights(IPR). The idea of having their copyrighted content in the digital wilderness–a hacker's dream–sent shudders down the publishers' spines. Sony had proposed the digital rights management (DRM) solution, the BBeB format, and it was just one more unproven option in an already crowded field. This scared the publishers — publisher red light number two.
To turn this light green Sony would need a clear path and a plan before it could get publishers on board in a meaningful way. But again, it faltered.
In the excitement of launching the PRS-500, Sony's only focus was on delivering great hardware as the key to unlocking the potential of e-books. However, while the hardware was definitely a cornerstone, it was not the whole structure. Sony played down the publishers apprehensions. Plus having a limited collection of books on an e-book device.
As the publishing industry negotiated over how to make e-books a winning proposition, Amazon entered the fray in 2007. As described by one analyst as "downright industrially ugly," it was much bigger than the Reader, weighed more and had an inferior screen. Moreover, it was an on a closed platform whose content was made available only on Amazon, and which prevented the users from transferring books that they purchased to or from any other device, sharing them with friends, or even connecting to a printer.
Then how did an Amazon engineer triumph over with a weaker product? The company did it by engineering a superior and better solution.
Presenting the Kindle, CEO Jeff Bezos announced, "This isn't a device, it's a service." It played on the convenience card. Unlike Sony's Reader, the Kindle offered a holistic experience to the customer: a wide library of books and the ability to download the book instantly using Amazon's wireless network.
Often overlooked, but critical to its success is what Amazon changed on the back end to create its offer. To provide this seamless experience, Amazon changed the way critical elements of the ecosystem were configured by both extending its strong position in retailing and simplifying the value proposition for all the other parties involved.
Amazon's powerful retail platform gave enough leverage to the publishers that would encourage the creation of digital books for Kindle. However, Amazon did not bully publishers into supporting the Kindle. It created conditions in the ecosystem that made joining the long-awaited e-book revolution a more attractive proposition for publishers than any previous attempt.
First, Amazon tackled the DRM issue. The Kindle was both closed and proprietary, meaning that users could not print their e-books, read them on any other device, or share them with other people.
While this restriction was a turnoff for consumers, it was critical to reducing publishers' perceptions of risk and total cost in making their adoption decision. In looking at the entire ecosystem, Amazon made the wise choice to connect with the weakest link in the entire e-book revolution, that was, the publisher.
Amazon increased the relative benefit for publishers by effectively subsidizing their participation through a counterintuitive retail model in which Amazon paid the publisher 50 percent of the list price of the print version but then sold the e-book for $9.99. To jump-start the e-book ecosystem, Amazon sacrificed its e-book profits. Virtually Amazon made everybody a winner: the publisher received the same amount it would have earned from a print version; there was a boost in sales; the customers enjoyed cheaper, and a better reading experience; and Amazon emerged as the leader in the electronic book revolution. It was a position worth fighting for. Amazon-2. Sony-0.
Sony's and Amazon's efforts to conquer e-books were the exact opposite of each other: Sony enjoyed competence in its hardware but was almost wary to the ecosystem; Amazon though well positioned in the ecosystem but was less competent in the hardware department.
The e-book ecosystem–like so many of today's innovative efforts–is ultimately a system of interdependencies where all players are equally important and necessary.
As seen by experience, success is not determined based on one winning effort at a single point; it requires moving of the entire cohort of partners in the same direction.