Major companies in the e-reader sphere are jockeying for position in the cutthroat world of retail sales. It looks like Target has had enough of these companies lowering their prices and has slashed their entire inventory. This has resulted in many current generation e-readers to have their prices severely lowered as Target seeks to liquidate the existing stock. This creates a great avenue for the average customer to save some money and get a fairly modern device. The downside is that Target is seemingly getting out of the e-reader game altogether.
Target initially got behind e-readers in a big way. It carried Amazon, Barnes and Nobe, Kobo, Sony, and iRiver. The company has seemingly stopped carrying devices from all those companies due to its growing relationship with Apple and slim profit margins on hardware slashed to the bone.
The iRiver Story HD was released in 2011 and had an exclusive relationship with Target to be the sole distributor in the USA. It hit the shelves at a fairly competitive price of $129.99. Sales were lackluster to say the least and the company decided to slash the price down to $99.99. It was further reduced to $49.99 and was officially discontinued a short-time later.
The Amazon Kindle has been available at Target since May of 2010 and has enjoyed tremendous success at the retail chain. The company started way back with the second generation Kindle and has released all of their current models, including the Fire. In May of 2012 the company suspended its relationship with Amazon due to a myriad of reasons. The main reason includes Target’s growing relationship with Apple, culminating in Target signing an agreement to give them better rates on the products if they axed Amazon. The other major facet was that Target hasn’t been making any money on digital content and making only a pittance on the hardware sale.
In October of 2011, Target entered into a relationship with Barnes and Noble to distribute the Nook line of e-readers and tablets. This was a savvy move for B&N because it took the Nook line outside of B&N’s own stores, so more companies in the USA were pushing the product. Target continues to sell the Nook line of readers, despite the fact it doesn’t do business with Amazon, iRiver, and others.
Canadian based Kobo has had a tumultuous relationship with the USA putting its line of devices on store shelves. Initially they had an exclusive agreement with Borders to sell their e-readers and for a while, things were good. Borders went out of business and its assets were sold in a New York Bankruptcy Court. Part of the assets in question included Kobo’s exclusive agreement with Borders, which Kobo vigorously defended. This prevented the company from actively marketing its devices with any other retailer, until the courts made up their minds. In early 2012, the Vox and Kobo Touch were made available Target, but this only lasted a few months. It seems many Target locations have discontinued these devices. You can find them on clearance right now at various stores in the USA at $50 or less.
It really seems like Target has had enough of e-readers and their slim profit margins. In a retail setting, e-readers do not really make much money for Target. The real money is in digital content and the retailers are left in the cold. Amazon deliberately sells the hardware at rock bottom prices, because the company knows that digital content is where the real money is. Speaking of digital content, Target is seeking to circumvent the lost sales in selling e-readers and make some money from selling ebooks. This new partnership comes courtesy of Livrada, that intends on offering gift-cards in over 1,700 locations in the USA to sell single novels and bestsellers in digital form. These cards will allow customers to buy digital content in the store and then have their books synced automatically to the e-reader of their choice. Most retail and supermarket chains make a hefty profit margin on pre-paid cards and the revenue is fairly certain.
Kobo, Barnes and Noble, and Amazon continue to war with each other to offer the most affordable e-readers. It was only a few years ago that the Kindle cost $229 and now you can get one for $79.00. When one company reduces the price, in the next few weeks the others follow suit. This creates a competitive landscape for independent companies like Onyx Boox, Pocketbook, and Bookeen, making it difficult to gain any traction in North America. They simply cannot afford to offer their products at the same prices as the big sellers. It is chiefly due to the fact that none of them have well developed digital ecosystem. They don’t make any money in selling ebooks, newspapers, and magazines to earn residual long-term revenue and cannot subsidize their hardware.
This pricing war, in the short-term, benefits customers immensely. Unfortunately, things are not so rosy at Target. Over the course of the next year, e-reader visibility will be severely hampered. It will get increasingly harder to find nationwide new readers released in the next few months. Your alternative is to deal with Shop e-Readers, eBay, or an another retail chain that carries them. There might not be a Barnes and Noble or Sony Store in every town in America, but everyone lives close to a Target.
Michael Kozlowski is the Editor in Chief of Good e-Reader. He has been writing about audiobooks and e-readers for the past ten years. His articles have been picked up by major and local news sources and websites such as the CBC, CNET, Engadget, Huffington Post and the New York Times.