Yes, Virginia, the Barnes & Noble ebookstore is a Good Thing

Yesterday, I took a whack at explaining why Barnes & Nobles new online ebook store would turn up the competitive pressure on Amazon’s Kindle world and, more than likely, benefit consumers. But now at least two prominent ebook bloggers are disputing the notion that the new Barnes & Noble ebook store provides important competition for the Amazon Kindle store.

“Jane” at the DearAuthor blog complains that B&N’s effort lacks a dedicated hardware reader (at least until the Plastic Logic reader arrives next year), includes far fewer books people actually want to read and is using a proprietary format that excludes existing Kindle owners. Kassia Krozser, on her Booksquare blog, makes of some of the same points, concluding:

It’s great that Barnes & Noble is offering its customers an ebook option. But to pretend they’re creating serious competition to the Kindle ecosystem is madness. Let’s talk when they have a device and experience that makes the buying and reading of ebooks the best experience technologically possible.

While I certainly agree that B&N’s early ebook effort is somewhat half-baked and rather over-hyped, I find the conclusion that it won’t have any impact on the market puzzling, perhaps even madness. Like I said yesterday, this is a big deal for the ebook market and a net positive for people who buy and read ebooks.

It’s true that B&N does not offer an alternative to people who already own a Kindle (or a Sony eReader for that matter). But it does offer immediate competition for people who buy ebooks to read on mobile devices, like an iPhone — a significant and growing population. And, hopefully, B&N will provide competition in 2010 for people buying a dedicated ereader device for the first time — another significant segment of the market at this early stage. Remember, Kindle store ebook prices are the same for iPhone or Kindle device, so even the limited B&N effort now can have a positive impact on all Kindle users.

It’s also true that the B&N ebook store has far fewer of the most desired books and limits its discounting policy to far fewer titles than Amazon. But Amazon now has to factor in to its Kindle strategy and tactics the current and future existence of a well-heeled, highly-publicized competitor with a top brand name and web site among book-buying consumers. Say Amazon has an undisclosed plan to move typical ebook prices up from $9.99 to $12.50 over the next year (as a recent Wall Street report suggested). Now it has to rethink. Or say Amazon’s ereader app for Blackberry was a very low priority but now B&N is suddenly offering an ereader for that platform. Again, it should prompt some positive movement.

A competitive threat doesn’t have to be perfect or massive to have an impact on the market leader. Netscape was a blip in the market but caused Microsoft to do all sorts of things, good and bad. I would argue Apple, despite its small market share, also has a large impact on Microsoft. And Amazon’s MP3 store, small but fast-growing, put pressure on Apple to cave to the music labels’ demands on pricing.

Finally, there’s some confusion about the competitive landscape and the best strategy for book publishers. If they want to avoid getting pushed around by Amazon in the ebook market, they should do what music publishers did and abandon Digital Rights Management, or DRM, software. That would make their digital products far more valuable and break the proprietary stranglehold of a popular device maker like Apple (in the iPod case) or Amazon (with the Kindle).

[This post started out as comments I made on the two above-mentioned blogs. I thank the two ladies for their stimulating posts.]