I Find This Impossible to Understand

Most of you are familiar with the razor and blades strategy:  Give away or sell the razor below cost to ensure years of profitable razor blade sales.  We had a great example of this at AlliedSignal (later Honeywell) Aerospace where we pretty much gave Boeing the brake assemblies for the aircraft plus a free spare plus I think we put some cash in the box as well, all to get decades of guaranteed high price brake replacement business (courtesy in part to government regulation which made is extraordinarily difficult to the point of being impossible for anyone else to produce aftermarket parts).

So what I don't understand is, why is this company proposing to sell only the razors while inevitably leaving the blade sales to someone else:

The UK's biggest bookstore chain has announced that it will start selling Kindles alongside other digital services from Amazon. Waterstones stores will let Kindle owners digitally browse books in-store and link up with special offers, tying into the chain's plans for substantial renovations that would also include dedicated digital book areas and free WiFi.

One buys the books right from the Kindle interface.  I understand the issue that browsing books online is less satisfying than in a book store (but much more convenient), but I am not sure how they are going to make money.  Are Waterstone Kindle's coded to give Waterstones a share of each purchase?  I can't find anything like that in the media reports, but I would certainly demand that at Waterstones.  If not, this is like selling gift certificates for your competitor.

I will confess to being a book store free rider.  I shop airport book stores but if I see something I like, pull out my iPad at the gate and buy it.  Yes, I understand the appeal of physical books and it frankly pulled at me for years.  But having just gone on a trip with 100 pages to read in the third Game of Thrones book, the relief I felt in having both the third and fourth books on my iPad rather than carrying both physically  (think 800 pages or so each) was great.

  • morganovich

    this strikes me as having 2 possibilities:

    1. there is a rev share with amzn paying them on the back end as a marketer.

    2. they hope to sell you coffee and pastries, which seems like a really bad plan.

  • http://mjb.biglaughs.org m

    "Are Waterstone Kindle’s coded to give Waterstones a share of each purchase?"

    Short answer has to be yes. I'm sure they use Amazon referral links for the purchases.

    Great strategy!

  • Me Again

    Beware the G.O.T.... it is highly addictive and awesome :)

  • Sol

    There is another possibility. Anyone can make and sell e-books that work on the Kindle. For instance, most or all of Project Gutenberg's free books are available in Kindle format (.mobi). Perhaps they're intending to sell their own razorblades and gleefully let their competitor subsidize the price of the razors?

  • Agammamon

    I don't understand how the Kindle makes money. I bought one and as soon as I understood that damn near all the ebooks were the same cost as the dt ones I put back in box and in the closet it went. Not just that, but most new books that I want to read aren't available in that format anyway.

    Hell, they even try to sell acess to news and commentary sites that are free.

  • Mark of Distinction, 10th Dan Snark Master

    You're understating the size of those books -- the paperback page count for A Feast For Crows is 1104 pages, and A Dance With Dragons is 1040 pages in its hardcover edition.

    The biggest problem with the Game of Thrones books is the time between releases, which means you have to practically re-read the whole series when the next one comes out...

    (Trust me, those of you who have not read the books, the page count is misleading -- they are really dense even at those page counts -- they do not "skim" easily).

    And anyone who thinks that the experience of Ned Stark in the first book was a shock, well, Get Used To It. One of the book's strengths is that there really is nothing "off limits". Just when you think you can see where he might be taking it, someone central to that idea you had is no longer on the table. It does not follow any standard classic narrative. I'm not claiming it's absolutely original, but it's not very derivative, either.

    I've been reading them since they first came out, since I've been a fan of GRRM's stuff since the Wild Cards days...

    The principle behind Wild Cards is the notion of making "superheroes" and "supervillains" "real" (sort of like Watchmen, but less limited)

    It's still necessarily Fantasy, but, second only to Doctor Who since the 2005 reboot, it's probably the best example of Science Fantasy I know of -- less attention to the Science than SF has, but not a total abandonment of it, as one finds in Fantasy.

    It is notable as one of the first "shared universes" -- the editor (Martin) created a background, then let other authors propose story ideas and such set within that background, and selects/oversees the writings included as a part of the series, which mostly is a collection of short stories.

    The "Wild Card virus" is the macguffin that sets it in motion... created by an alien race then inflicted on humans, it flat out kills 90% of those who catch it. 9% of the rest are generally disfigured in some horrific way ("Snotman")... but the remaining one percent are gifted with powers along the lines of what one considers a "superhero": Flight, Telekinesis, "Super Strength" and so forth... the delineation between the 9% and the 1% is fuzzy, of course. Some people have significant power with significant disfigurement. And what one chooses to do with one's powers are anything but minor in the effect of what one becomes. And there is a suggestion that one's personality and natural disposition has some effect on what one "becomes", that it's activating a latent quality within us all for good or ill.

    It's a dark series, but then, so is GoT. With the success of GoT I'll be surprised if someone doesn't seriously look into turning it into a series, too. It would be a good TV series on something like HBO.

  • IGotBupkis, Legally Defined Cyberbully in All 57 States

    I bought one and as soon as I understood that damn near all the ebooks were the same cost as the dt ones I put back in box and in the closet it went.

    Agammamon, that's changed. There are a lot of self-published books now for like $3 and there are a lot of older books available for free in Kindle format.

    My own primary issue with the Kindle has to do with its rather Orwellian nature -- a couple years back, Amazon demonstrated that they had the power to not only remove books from the Kindle remotely -- even to directly alter their contents -- all without the permission, or even the knowledge of, the owners... with 1984 and Animal Farm, no less! :-D

    IIRC, what happened was that a publisher in Canada who had the right to sell the books in Canada put them up on the Canadian Amazon... and Americans bought them. The rightsholder complained, Amazon pulled the book from its store... and then removed the book from purchasers' Kindles (while refunding the purchase price), with no permission provided by the Kindle owner. During the ensuing flap, it was also revealed that they had the power to reach into your Kindle and alter its contents without the owner being aware of it happening, also. If that's not downright Orwellian, I don't know what is. They could change a passage from one thing to another and you'd be none the wiser. I don't trust that at all, and will NEVER trust Amazon as a result. I cannot imagine what kind of dunderheaded idiot could not see that as blatantly Capital-W Exclamation-Point Wrong right on the surface.

  • http://cardioblogy.blogspot.com/ Jens Fiederer

    Just remember to buy a magazine for those portions of your flight where the electronics have to be turned off.

  • DrTorch

    Well, there goes another one of my business ideas.

    While not on your level Coyote, I have come up w/ a few ideas for businesses. Mine looked like this:

    Bookstore w/ limited dead-tree inventory (plus the usual kitsch, like mugs and of course our board game)

    Browse books electronically, $.50-.99 each (depending on title and book price), which is discounted from the title if you buy.

    Coffee shop and lots of comfy easy chairs...sell the sizzle not the steak.