US booksellers Barnes and Noble has been struggling for years and things aren’t getting better reports the New York Times.
An important part of the New York Times story is the quote from a Forrester industry analyst,
“The problem is not whether or not the Nook is good,” said James L. McQuivey, a media analyst for Forrester Research. “What matters is whether you are locked into a Kindle library or an iTunes library or a Nook library. In the end, who holds the content that you value?”
Locking in customers lies at the heart of the Kindle and iTunes business model. Once users have a substantial investment in their book or music collections on one platform it’s unlikely they will go elsewhere as the costs, and risks, of moving are too great.
This doesn’t always end well for the customer and it gives online businesses great power which they often misuse.
Every online business tries to lock their customers into their ecosystem – Google, Amazon, Facebook and Apple are the most successful but every single social media and cloud service tries to make it hard for users take their business elsewhere.
In some respects this is no different to the phone company or bank which have historically tried to lock customers into their services, but the online social media, cloud computing and e-commerce platforms make a much more ambitious grab for their users’ data and assets like music and book collections.
The New York Times article illustrates just how critical that user lock in is to the success of online businesses. The question for us as consumers is how much we want to be locked inside the web’s walled gardens.