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Dedicated e-readers vs. omni-functional smart phones

February 25, 2010 Leave a comment

E-reader makers and publishers (with the exception of Apple) have focused primarily on larger, dedicated devices for displaying e-books. The result has created products like the Kindle, a larger, yet still portable device tailored specifically for the reading of e-books.However, in an age crammed full of mobile devices, can e-readers afford their myopic approach to functionality?

Last week, the Mobile World Congress conference in Barcelona sparked nervous chatter from in the publo-blogosphere about e-reader competition from mobile phones. Does the future distribution of e-books rest in smaller, more functional mobile phones? At least some people think so. Hannah Johnson of Publishing Perspectives says the infrastructure for a mobile reading market already exists, built on the back of 50 billion connected devices.

“In the last couple years, the growing infrastructure for delivering mobile content (app stores, secure financial services, and mobile Web sites) combined with better device technology (clear displays, touch screens, and Internet connectivity) has created a robust mobile marketplace where content creators have an ever-expanding platform for reaching consumers.”

If so many people already have access to a network capable of distributing content, publishers and application developers would be fools not to jump on board.

The mobile market also points to the importance of leveraging existing infrastructure as e-readers innovate. One of the largest hurdles e-reader viability faces is getting people to purchase a dedicated reading device — a tall order when so many people already carry around multiple electronic devices. If increasing use of smart phones can be seen as a trend — and I think few people would argue that it can’t — it makes much more sense for publishers and retailers to fold their services into those devices.

We all hate carrying multiple, bulky devices. The argument for the pocket-sized omni-tool requires little defense, except for current e-reader retailers, who seem to think consumers will prefer a dedicated device. They could still be right, but if they don’t move on the mobile market soon, someone else will (see: Apple).

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Macmillan's 'agency model' victory over Amazon = publisher pricing power?

February 21, 2010 1 comment

The past couple weeks have been ripe with speculation over the new pricing model for e-books originally proposed by Apple: the “agency model.” The model would essentially give publishers power over the pricing of e-books instead of retailers like Amazon — a dream for publishers.

Well, the agency model could be more than a dream soon. Last month, publisher Macmillan demanded power over pricing in their dealings with Amazon, leading the key-market retailer to pull nearly all Macmillan titles from their store. But a few days later, Amazon reneged on their position, announcing that they would yield pricing power to the publisher — setting a ground-breaking precedent in the e-book retailer-publisher relationship. A week later, Hachette USA followed suit.

Summed up by IdeaLogical’s  Mike Shatzkin, the agency model lets publishers sell directly to consumers with retailers acting as more of a cut-taking conduit.

“The ‘agency’ model is based on the idea that the publisher is selling to the consumer and, therefore, setting the price, and any ‘agent,’ which would usually be a retailer but wouldn’t have to be, that creates that sale would get a ‘commission’ from the publisher for doing so.”

This model would set a new standard for book pricing, giving more power to e-book publishers than in the current physical-book supply chain. Success would also provide a powerful incentive for publishers to promote the e-book market, particularly larger publishers that own the most titles (i.e. Random House, HarperCollins, Hachette Book Group, Simon & Schuster, Penguin, and Macmillan).

It remains unclear, however, how all this would work in reality. Would publishers keep and serve e-book files? What will the not-Amazon retailers do? How will smaller publishers with less leverage fit into the market? And most importantly for consumers, what will determine the price of an e-book?

For now, speculation reigns. Pricing power is a powerful weapon, but the model’s success ultimately rests with consumers, who must decide what an e-book is worth and whether publishers’ expectation of value matches it.

NYTimes: Who gets the iPad — print or web?

February 17, 2010 Leave a comment
New York Times on the iPad

Can NYTimes replicate iTunes?

There’s nothing media-rumor sites hate more than blatantly generalizing people who read the New York Times (read: sarcasm). But that said, it’s long been a foregone conclusion that NYTimes readers overlap considerably with the iPad market. Thus, the Times became a major proponent of the new platform — and the potential for new subscription revenue.

However, according to reports coming out of Gawker and various other Apple-rumor sites, the print and digital newsrooms over at the Times disagree over who gets to claim this new territory. The print division calls dibs on the ground that the iPad will do nothing more than distribute the same paper format offered through physical media. It argues subscriptions should cost $20 to $30 a month — presumably equal to a print subscription — to avoid a massive exodus from the paper to the pad. (I guess we’re just ignoring that the paper is available free online until 2011 and that the iPad eliminates all printing and distribution costs?)

The digital operation has proposed a more-reasonable $10-per month subscription, and is promising interactive post-paper features regardless of the final pricing outcome.

Obvious questions aside, what seems like a prima-facie “turf war” could actually be a deep philosophical question for the future of news media on e-readers. What is the product? Is it simply another way to distribute the paper, similar enough with traditional print to justify higher pricing? Or is it something new, requiring a new pricing model and marketing focus?

My inclination — and what I suspect will be others’ as well — is to view subscription apps as something new. Fancy new distribution models for the same product won’t justify use, in my opinion.

However, as is Apple’s legacy, premium distribution and software might make a difference, e.g. iTunes. The music industry was struggling to combat illegal downloads before Apple’s music infrastructure completely reversed the trends, proving that people will pay for music downloads if it is wisely priced and convenient. Could the New York Times pull off the same thing on Apple’s new platform? I think it’s possible, but it will take precision marketing, content design, and a leap of faith.

Amazon, Kindle textbooks sued on behalf of the visually impaired

February 10, 2010 1 comment
Kindle Textbooks

The perfect replacement for textbooks?

When I think of potential uses for e-readers, the first thing that comes to mind is a replacement for textbooks. Texts tend to be large, heavy, expensive and — most importantly for the skimmer in all of us — not keyword searchable.

Amazon’s Kindle would be the perfect device to change all that. College students could load all their textbooks for the semester onto the Kindle and carry it with them wherever they go. Any off-time riding the bus or between classes becomes potential study time. The added convenience lies in the fact that you have every textbook with you at once — no need to plan.

As a student who commutes to many of my classes, I know personally the challenges of deciding what book deserves to be hauled around all day for the unlikely scenario that I have some extra time. Many times, I’ll opt for a lighter book, even if I really need to study for a different class.

The other pop to convenience comes from searchability. E-readers like the Kindle bring CTRL-F to any textbook, making it easy for students to search for the passages they need based on keywords. To some extent, this feature is also available on Google Books, which offers a limited search for free.

With all these features, Kindle seems destined for the classroom, right?

Wrong — at least until all the legality gets settled. In response to a pilot program introducing Kindles to certain classrooms at Arizona State University last fall, The National Federation of the Blind and the American Council of the Blind filed a joint lawsuit against ASU and the Arizona Board of Regents. The organizations claimed using Kindle in the classroom violated the Americans with Disabilities Act and Rehabilitation Act because, while the Kindle does sport a text-to-speech program, the device’s menus are still inaccessible to the visually impaired. ASU settled with the two organizations last month and, as a result, halted the program until access could be improved.

This sounds like an easy fix: just add a text-to-speech navigation feature. However, this incident exemplifies a common problem with new technology as it enters the market. All innovation faces  troubles integrating into the existing infrastructure and law. The key challenge becomes adapting to and changing that infrastructure. These kinds of field tests provide companies like Amazon a clear goal for functionality that they obviously overlooked.

The suit caused Amazon to quickly promise audible menus. In fact, they announced that by summer 2010, the company would release the “Kindle Blind” for the visually impaired — a move that other companies, if they’re smart, won’t miss out on either.

The bottom line: getting people to switch over will be hard, which is why e-reader companies need to cram as many features into those little devices as possible.

And it makes good market sense too. After all, if you’re trying to revolutionize the publishing industry, why not revolutionize the Braille publishing industry too?

iPad an iReader?

February 2, 2010 Leave a comment

Apple released the long-anticipated iPad last week to tremendous hype. From Apple fanatics to juvenile humorists, we all held our breath as Steve Jobs revealed the device that months of rumors had promised would be the end-all device and the new hip tool to tote around.

But as the tweets and blog reviews came to a boil, the blogosphere seemed decidedly mixed. Publications like Wired released a lists of problems that come down to the realization that Apple left so many features out of the iPad — not to mention compatibility with all those adapters — that many people viewed the devise as a huge step backward.

However — and here I’m getting to the meat of the story — there is one feature debuting on the iPad that struck me off guard: iBooks. Apparently, Jobs means for the new iPad to become a prominent e-reader device. With its larger, glossy screen and the new iBooks store (an iTunes-esque download store), the iPad could be in a great position to bring convenient e-reading to consumers. Of course, Apple insists the iPad offers much more than e-reading, but this striking feature has many publishers and news organizations drooling over possibilities.

Will the iPad work as an e-reader? Price is certainly an obstacle. Even the cheaper, wifi-only version will run consumers a cool $499, the G3 model $829. The extra price may be justified by the fact that, after all, the iPad is more than an e-reader. However, because the device can only run one application at a time, it might as well be just another e-reader while running iBooks.

Compatibility is another potential problem. Apple has cultivated an infamous reputation for locking users into proprietary hardware and software. I can only imagine the frustration of trying to transfer my downloaded e-books to another platform.

One thing the iPad has that Amazon’s Kindle and other competitors never quite grasped is the all-important cool factor. Owning the latest Apple gadget will always be a priority for some, and that market impetus may be enough to grab dominance.

In addition, many publishers seem eager to have their content associated with the iPad. Print news media in particular will be looking for a way to monetize content on a platform of users they suspect will be willing to put up with the extra expense. Of course, answers will have to wait until the official release date, April 2010, but that won’t stop speculation.