Comments on: Why the iPad in not a Kindle killer http://blog.madrona.com/index.php/2010/01/why-the-ipad-in-not-a-kindle-killer/ Thoughts, news and events from the people at Madrona Venture Group Fri, 19 Mar 2010 19:01:31 -0700 http://wordpress.org/?v=2.8.4 hourly 1 By: Mukesh Agarwal http://blog.madrona.com/index.php/2010/01/why-the-ipad-in-not-a-kindle-killer/comment-page-1/#comment-8155 Mukesh Agarwal Fri, 19 Mar 2010 19:01:31 +0000 http://blog.madrona.com/?p=125#comment-8155 Good post Scott. I agree with most of the points from device perspective. However, it will be interesting how the relationship with content owners plays out. With the traditional paper book model, I think retailers exterted power on publishers on pricing because access to that channel was extermely critical and publishers couldn't afford to hold inventory. So they gave retailers flexibility in setting the prices. However, in the digital books, publishers don't have inventory holding or variable publishing costs. As the paper publishing business declines, publishers would attempt to retain more power in setting terms favorable to them. We can see that in other types of digitial contents like music and movies. Netflix agreed to delay rent new movies from Warners in order to get access to more streaming contents. In my opinion, the availability of content would be one of the key factors in which device win. The player which has moat in hardware and doesn't depend on marging from the content would be better positioned to win the market. I am not sure how much Amazon makes from the Kindle hardware, but I assume Apple would have significant margin on iPad. Good post Scott. I agree with most of the points from device perspective. However, it will be interesting how the relationship with content owners plays out. With the traditional paper book model, I think retailers exterted power on publishers on pricing because access to that channel was extermely critical and publishers couldn’t afford to hold inventory. So they gave retailers flexibility in setting the prices. However, in the digital books, publishers don’t have inventory holding or variable publishing costs. As the paper publishing business declines, publishers would attempt to retain more power in setting terms favorable to them. We can see that in other types of digitial contents like music and movies. Netflix agreed to delay rent new movies from Warners in order to get access to more streaming contents.
In my opinion, the availability of content would be one of the key factors in which device win. The player which has moat in hardware and doesn’t depend on marging from the content would be better positioned to win the market. I am not sure how much Amazon makes from the Kindle hardware, but I assume Apple would have significant margin on iPad.

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]]> By: Madrona Venture Group Blog Blog Archive Why the Ipad in Not a … http://blog.madrona.com/index.php/2010/01/why-the-ipad-in-not-a-kindle-killer/comment-page-1/#comment-6316 Madrona Venture Group Blog Blog Archive Why the Ipad in Not a … Sun, 31 Jan 2010 03:46:23 +0000 http://blog.madrona.com/?p=125#comment-6316 [...] A 3G iPad will run you $130 more than the $499 base price, and its data connection will cost you between $180 and $360 per year. To be fair, iPad’s data plan can and will be used for a lot more than downloading books. …This Blog [...] [...] A 3G iPad will run you $130 more than the $499 base price, and its data connection will cost you between $180 and $360 per year. To be fair, iPad’s data plan can and will be used for a lot more than downloading books. …This Blog [...]

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