Archive

Archive for the ‘e-readers’ Category

CEO's mussings hint at new business model: the e-book library

While trawling the blogosphere for e-book insights, I came across an interesting post by Eric Hellman questioning the future market for e-book rentals. I’ll admit it’s something I haven’t given much thought, and it could hold substantial implications for e-books.

According to Hellman, John Sargent, CEO of Macmillan publishing, spoke briefly at a Publishing Point meeting in New York City. During audience questions, Hellman asked Sargent about the future relationship between libraries and e-book distribution.  Sargent’s comments suggest he’s given some though to the publisher-library relationship in an e-book-dominated future. The following is Sargent’s response, excerpted from Hellman’s blog.

“In the past, getting a book from libraries has had a tremendous amount of friction. You have to go to the library, maybe the book has been checked out and you have to come back another time. If it’s a popular book, maybe it gets lent ten times, there’s a lot of wear and tear, and the library will then put in a reorder. With e-books, you sit on your couch in your living room and go to the library website, see if the library has it, maybe you check libraries in three other states. You get the book, read it, return it and get another, all without paying a thing. ‘It’s like Netflix, but you don’t pay for it. How is that a good model for us?’

‘If there’s a model where the publisher gets a piece of the action every time the book is borrowed, that’s an interesting model.'”

I agree.

These could simply be off-hand remarks from Sargent, but in light of Macmillan’s recent agency-model victory over Amazon, we can be sure the company isn’t afraid of trying new things.

Is a rental model possible for e-books? It seems likely. Apple has already had success with movie rentals via its iTunes store, not to mention the video-rental behemoth that is Netflix.

Could a rental market pay off for publishers? That’s harder to get a beat on. It seems unlikely that e-book publishers and distributors will allow free borrowing on the same level as contemporary libraries. After all, the physical restrictions and limitations mentioned above have always provided a significant incentive for consumers to buy their own copy of a book. However, none of these restrictions apply to an e-book, which can be copied and distributed almost effortlessly — at least in comparison to physical print. Thus, no inherent incentive exists to pay for a copy — ignoring the opportunity for added content, ease of access, etc.  It seems reasonable to assume publishers will at least try to get a commission on e-book rentals. I would not be surprised if the big publishers start making quick inroads with distributors like Amazon or Apple on a rental model.

Advertisements

Kindle on your iPad?

Last week, Amazon rolled out two more Kindle applications to bring their e-book distribution to more platforms — an app for MacOS and a plan to bring it to the iPad.

Kindle on the iPad

A Kindle application for the iPad.

At first glance, it seems counter intuitive for Apple to allow its biggest competitor in the e-reader market to develop distribution applications on its own platform. The company has been in negotiations with media conglomerates to supply content for the iPad, but Amazon’s application would steal users away from the company’s new iBooks store.  Apple’s locked-in philosophy has become infamous, best exemplified by its iTunes-iPod strategy. By controlling both the content distribution and platform, Apple dominated the competition. Why let Amazon break the chain?

It’s time for some speculation. Even though it goes against traditional Apple ethos, allowing Amazon’s app on the iPad could still hold benefits. For years, Apple users have railed against the company for locking them into proprietary platforms and services. Relaxing that legacy of control could hold more appeal in the e-reader market, where market segments are still developing.

The move may also appeal to users already using Kindle software. Amazon already has a substantial user base. Wired reported that Kindle books outsold real books on Amazon last Christmas. Offering the service on the iPad platform could give Apple an opportunity to reach users that have already bought into Kindle, enticing them back to the fold with glossy screens and color display — perhaps before ultimately cutting the umbilical.

Of course, all this is just speculation. Amazon’s new Apple applications remain a mystery. And the development could highlight a greater controversy in the making: Who distributes e-books and who makes e-readers? Currently, it looks like that battle will converge on the iPad, with retailers all fighting for the vaunted platform.

Amazon's new model: speak loudly and carry a big stick

In the past few years, Amazon has become one of, if not the, premier book retailer. Now, as the online retailer attempts to cultivate its e-book market, that strength is paying off.

One account, published in the publishing-industry news letter Publishers Lunch, says the retailer is pressuring all but the biggest publishers (i.e. Random House, HarperCollins, Hachette Book Group, Simon & Schuster, Penguin, and Macmillan) not to pursue the new agency model introduced by Apple earlier this year. Independent publishers looking into the agency model risk being dropped from Amazon all together. In the newsletter, Publishers Marketplace‘s Michael Cader says:

“At least one independent publisher of scale was told categorically by Amazon in a recent phone call initiated by the retailer that Amazon would not negotiate agency selling terms with any other publishers outside of the five initial Apple partners. This publisher was told that if they switched to an agency model for e-books, Amazon would stop selling their entire list, in print and digital form. In conversation, Amazon is said to have reiterated that as matter of policy they are declining to negotiate an agency model with any publisher outside of the five who have already announced agreements with Apple’s iBookstore. Another sizable independent publisher we spoke to has not discussed an agency model with Amazon yet, but is resolved to work with Apple regardless. ‘We’re committed to going forward with Apple,’ a senior executive told us, underscoring, ‘we don’t see how we could allow one retailer, no matter what threats they make, to block our authors’ works from being available at another retailer.'”

It’s hard to say what Amazon’s stance on the agency model will mean in the long run. The agency model appeals to publishers by giving them the power to price books. The retailer then receives a portion of that price. Apple revealed its plan to implement the agency model in conjunction with iPad content earlier this year.

This difference in the two companies approach could make all the difference. After all, what good is an e-reader without content? Some (see Mashable’s Chistina Warren) have even described the divide as an “e-book war.” And it probably is; to the victor go the market.

The crucial question becomes how Amazon will be affected. Will loosing (if they loose) indie titles make a difference? It’s just another dimension to the industry’s zeitgeist question: what will people pay for content?

Expanding e-books to mobile

Mobile devices come with us everywhere these days — all the more reason to load those things with e-books!

Convincing people to buy — or haul around — another electronic device these days proves a hard sell. Pocket space is limited, and no matter how big purses grow — their ballooning size probably isn’t a coincidence, in my opinion — having to keep an extra device with you is a hassle. So, it seems extremely intuitive to have e-books work on a platform people already carry.

Amazon’s Kindle seems to have caught on to this concept. The e-book retailer has already come out with applications for iPhone and iPod Touch, Windows PCs, and Blackberry. Now they’ve announced a content partnership with devices running the Android operating system, bringing e-books to many main-stream smart phones.

Expanding to mobile devices should have been an easy call. What remains to be seen is how dedicated e-reader devices will fare after the same functionality becomes widely available on devices users already have or offer multiple functions. Will people prefer a device that only displays e-books? That question probably depends on the quality of the device experience. History has shown that fanism sprouts around devices that offer something unique or extraordinary. All the pre-order iPad hype could indicate such potential. For now, however, on-the-market e-readers may not have the experience edge to make buying and carrying an extra device worth the trouble. If so, the Kindle brand could be on the verge of a much-needed transition to mobile.

Penguin's plan to 'reinvent' books on the iPad

During a presentation today in London, Penguin CEO John Makinson showed a video of how the publisher plans to utilize the iPad in the coming age of e-books. The presentation looks great, but it left many asking the same question: Can we even still call it a book?

Are the interactive reading experiences Penguin has in mind even books?  Makinson says the publisher will develop games, online communities, and multimedia content that corresponds to these new ebooks. According to The Huffington Post, Makinson said, “The definition of the book itself is up for grabs.” That’s a hard one to swallow, considering books have arguably been published for more than 600 years.

The shift in conceptualizing books — from text on paper to fully integrated applications — is a startling one.

Makison’s remarks made obvious his vision for increased e-book sales in the future. According to paidContent: UK (the origin of the videos as well), Makison said he expects e-book sales to hit 10 percent next year, rising from just four percent in the U.S. this year. He also hinted that his focus on the iPad could be just as much a function of Apple’s new “agency model” and the chance for a paid distribution model as the increased functionality of the device over other e-readers.

What does this mean for Penguin? The announcement has already received criticism from some (see: Slate’s Big Money) as a “we’re still relevant” cry from struggling publishers.

What does the mean for the future of books as we know them? That could much more complicated. Still, the move to revolutionize one of our oldest traditions — as old as the written word itself — will surely attract debate.

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).

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.