Technology of the Week: team 39. Amazon Kindle vs. Blendle
Information goods can be described as products whose market value is derived from the information it contains. We will focus on pay-per-piece model, in particular Blendle and Amazon Kindle.
Blendle is called the iTunes for journalism. Readers are able to read articles from different authors instead of paying for multiple issues to reach those articles. The readers only pay for articles that he or she finds interesting. Blendle gives refunds on articles, if readers find that the article was not worth the money. Blendle offers not only the possibility to read articles of multiple authors, but also they have a wide range of categories. Blendle works together with traditional journalism instead of competing with them, but they are dependent on their articles. Investors are important, as Blendle needs the money to pay their employees, but also because big names come with great publicity, like The New York Times. A big threat for Blendle is the offering of online articles for free.
Amazon provides an online bookstore. Their strategy is built on overall cost leadership, and they aim to offer the lowest possible prices. Therefore they have very low margins. They realized the potential online market and developed Kindle. Kindle allows customers to download hundreds of books and bring those with them. Customers do not have to wait for their order or go to a store; they can have immediately access to an unlimited amount of literature on one device. It should be simple to find for a customer what he or she is looking for. Customization is very important for Amazon. They like a personalized approach to their customers, for example personal recommendations based on search history and purchases. Amazon also gives the customer freedom of choice. This concerns both the various selection of having the greatest set of titles available, but also tools provided the customer so that they can choose between titles based on reviews and free trials of literature.
A difference between Amazon Kindle and Blendle is the pay-per-piece or subscription. Blendle offers users to pay per article. Amazon Kindle uses this method as well, but they also offer subscription. Users of Amazon Kindle can take a monthly subscription or pay for each book separately. Amazon and Blendle also give suggestions to the readers, but both in different ways. Amazon uses observation. The reader gets suggestion after he already made a purchase. The next time he will open his account, he will see those suggestions. Blendle has this as well, but they also give suggestion based on the reader itself. This is similar to the concept of registration and billing. Another theoretical concept that can be linked to these case studies is the concept of intermediation and its adherents disintermediation and reintermediation. Both Amazon and Blende are disintermediating the book and article industry. They aim to replace bookstores and newspaper stands by going online. They both have network effects. Amazon lets readers interact through reviews and stars. Blendle has created a following-tool. Users can follow prominent users. These interaction points between users provide the readers with more information.
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- CNN.com, (2011). Amazon e-books now outselling print books. Available at: http://edition.cnn.com/2011/TECH/gaming.gadgets/05/19/kindle.outsells.books/ [Acc. 16 Sep. 2015].
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- Meulder, M. (2014). Blendle haalt 3 miljoen euro op bij New York Times en Axel Springer. Available at: http://www.quotenet.nl/Nieuws/Blendle-haalt-3-miljoen-euro-op-bij-New-York-Times-en-Axel-Springer-132886 [Acc. 19 Sep. 2015].
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N. C. Barendregt 371391
L. H. Møller 439323
N. S. van der Lee 375253
F. J. M. Bevelander 339384