B&N’s double-duty e-reader

Gizmodo has photos of the new Barnes & Noble e-reader, which will be announced next week. Apparently after running a blurb on the B&N announcement, Gizmodo got the “scoop” direct from B&N PR, because they have a nice set of professional product shots to show you. The news is not news, but staged product release. Fast Company picked up the story and calls the unnamed gadget “more exciting” than most of the dedicated e-readers on the market, as it sports a touch LCD screen below the E-Ink display to facilitate greater interactivity, with color.

The B&N device is intriguing for several positives and an inadvertently negative reason. First, the positives:

The device will run Google’s Android OS, which implies it will have a variety of capabilities beyond simply displaying books. Fast Company suggests users will have “social chat” within books via the LCD screen. I think we like to concentrate when we read, so the kind of chat seen on Twitter or instant messaging would be interruptive. However, if the screen facilitates embedding of comments from friends, which could be entered on the LCD screen and conveyed to an insertion point in the text for later, non-interruptive access, that could be incredibly cool.

The LCD does offer a solution to the lack of interactivity in E-Ink-only devices, but it is much more likely to be useful for playing audio books, shopping for books (clearly a greatly enhanced experience with color and a refresh rate faster than ice melts), and non-book functionality. Here’s the negative side: It is just one of many solutions, though, and the dual-screen form factor seems to scream “this device isn’t big enough for our business model and your needs as a reader.”

The touch screen will make typing much easier than on a Kindle, but isn’t the stark similarity between the LCD portion of the B&N e-reader and an iPhone or iPod Touch underlining what an e-book reader doesn’t do? Should the device ship with Google’s Talk Voice over IP (VoIP) application and a combination of Wi-Fi and mobile data service, that would actually be revolutionary. But why, then, buy an e-reader and not a smartphone if the essential benefit of either is the LCD screen?

I’m actually eager to see this e-reader for myself. Until then, when we will know the price and its actual capabilities, we can only speculate about its ability to disrupt the market. Given the popular belief that e-readers must be cheaper than $100 to win a mass audience, it’s unlikely the B&N e-reader will do all the cool things it needs to to be really revolutionary.

Finally, let’s do remember that B&N is a retailer and discount publisher, not a hardware company. It’s entering a business it does not comprehend, because prevailing opinion says everyone needs to have their own e-reader hardware offering. Amazon’s Kindle, as I’ve written many times, is a temporary phenomenon tied to extending Amazon’s ability to retail books. Both the B&N and Amazon hardware businesses are kick-starting efforts designed to drive the providers’ e-book retailing business, and not likely to result in long-lived hardware products.

We don’t drive cars made by Chevron and Ford doesn’t build cars that burn only one brand of gas.

The Lost Symbol’s e-book sales to date: 100,000

Early evidence, in the form sales figures from The Lost Symbol publisher Doubleday, reported by Silicon Alley Insider, suggests that e-book sales, while explosive on the first day after the book was released, remain relatively small overall. Doubleday says that 100,000 of the two million copies sold so far are e-books. That’s five percent, which means people did not buy e-readers to buy the book, and that smartphone applications weren’t an extraordinary contributor to sales.

So, of the approximately 1.6 million dedicated e-book readers in the market, plus the approximately 3.1 million smartphones with e-reader applications, Dan Brown’s new book sold to two percent of the installed base. That may simply mean that the book isn’t the major hit that was expected. I still think that over time more e-copies will be sold than hardbacks, but paperbacks are the editions that will earn any profits Doubleday finally collects.

A bookstore with no books, but lots of coffee

Moriah Jovan has a nifty idea for a bookstore annex, of sorts, where people could order and pick-up print-on-demand books. Paul Biba at Teleread picked it up, and there are excellent comment threads on both postings. Check out it.

The design is reminiscent of the environment I discussed in this posting about the Espresso Book Machine. Here are my thoughts, which are also posted to the comment thread at TeleRead, so you can just go read them there….

I think this idea is viable, but only in the concierge/bookstall (like those that specialized in particular kinds of books in early printing) sense. It would make a great ground floor of a paper bookstore. The design makes sense as a place to WAIT, but not to browse. Bookstores are places to browse, cafes are places to wait — indeed, that’s all Starbucks and other coffee places think about in the design of their stores, in terms of making it pleasant to wait for a drink.

I don’t think on-demand bookstores are as practical as Moriah believes they will be. The estimates of wait times for a POD book always assume optimal performance and perfect demand (no more orders than the book machine can make in any given time), when retail is a highly inefficient setting characterized by long waits whenever business improves. See: http://booksahead.com/?p=329. It’s never “GOOD TO GO,” but usually “you’ll need to wait a bit longer.”

The question not addressed here is the cost of the space and technology for selecting the book one would like printed. If all the espresso seats have a screen, each sharing one-fourth of a workstation and there is a need for more than two POD machines, the upfront cost of the design would run somewhere north of $45,000, with ongoing costs for leasing the machines, point-of-sale systems and so forth. I’m not sure that is going to make sense to a retailer.

Nolan Bushnell gave a speech about the future of retailing at Digital World in 1994 that anticipated this scenario. It assumed people would go to places to browse, then order for home delivery. That model didn’t come to pass, because there was no link between browsing costs assumed locally and the potential revenue from actual sales (one could go online and order from someone else for a better price). The bookstore of screens ONLY doesn’t really enable browsing — which I think will take place from home.

Practicing what he preaches: Chris Anderson’s Free book

Chris Anderson’s new book, Free, is available on Scribd for free for a limited time. It is a great promotional strategy for the paper and e-book editions of the book, but it doesn’t answer the question about how to make “free” a sustainable price. The book ventures to answer the question, though I haven’t found substantive answers other than the idea that, once you have an audience, it can be milked.  The limited free access on Scribd may be enough to convert free readers to paying readers, so that they can actually put the text to use, but beyond the promotional value of the short-lived giveaway, it is hard to see what changed. That would make Free a temporary price, not the inevitable answer to building great businesses.

Meghan Keane reports that Anderson answers the tough question with: “Give away the book. And pray.”

Great, a faith-based solution for publishing is exactly what we need.

UPDATE: Publishers Weekly reports that Anderson doesn’t promise any answers for publishing.

Follett expands digital book distribution partnerships

Follett Digital Resources, book distributor and developer of a desktop e-reader application for the K-12 and library markets, announced the signing of 10 new publisher partners who will offer books through the company’s Titlewave and Titletales commerce sites. The deals bring the total number of e-book titles for K-12 and libraries available from Follett to more than 52,500. The Follett Digital Resources technology allows e-books to be checked out to individual readers, and is integrated with the company’s library management software.

The publishers joining the network, which include Macmillan US and Perseus, are: Continue reading

Don’t fear rising Kindle prices, don’t accept arbitrary pricing

Aaron Pressman blogs that “As feared, Kindle prices appear to be rising.” Kindle prices are certainly changing, but the increases don’t mean any of us have to buy the books being offered. It only means that diversity is inevitable in this marketplace, because the increasing number of higher-priced mainstream titles will be met by growing numbers of alternative offerings at other prices. Some folks want to boycott anything that costs more than $9.99 on Kindle. Let’s be clear, the format isn’t what determines pricing, it’s the cost of the research and writing that went into the book.

Indeed, the statistics Pressman points to indicate that while more books are being priced over $9.99, 69.5 percent of all the books on the Kindle store sell for $9.99 or less. Only 10 percent of those books are the sea of public domain books that are repeatedly copied and uploaded in poorly formatted version for $0.99 or less. In that margin between 99 cents and $9.99, a majority of books published for Kindle are delivering value to readers at a very low cost, because there is no longer the cost of production and inventory associated with paper books. The cost of the book’s production itself is actually a small share of the cost of a book at retail, it’s the massive return rates of books—typically over 50 percent—that keeps prices high.

Then, it is the discounting of books that cleaves most of the profit from even the biggest bestsellers. As Pressman notes in his posting, a copy of Big Russ and Me, by the late Tim Russert, is available in paperback for $5.58 in paperback, $9.18 in hardcover (originally $24.95) today, because they have been remaindered. In electronic publishing, where a copy of a book is never produced until it is sold, there is no remaindering. So, Russert’s book in the Kindle edition sells for $9.99 all the time.

Big Russ and Me Kindle edition is an "excluded product"

Big Russ and Me Kindle edition is an "excluded product"

What’s especially interesting to me, as someone interested in how books will be sold in more egalitarian ways, the Kindle edition of Big Russ and Me is an “excluded title” in the Amazon Associates program. A blogger who is an Amazon Associate cannot link to the Kindle version, but can link to the paper or hardcover editions. That’s a subtle but important level of control that skews the sales of books few people acknowledge.

Is $9.99 for the Kindle edition of Tim Russert’s book an arbitrary price? The reason the paper and hardcover editions of Big Russ and Me are available for less is that they cost money to keep on hand. They actually eat away at profits while sitting on the shelf of a warehouse somewhere or, at least, that is how publishers do bookkeeping. What would make more sense is a situation where the Kindle version, because it is not competitively priced with other editions of the book, were repriced to make it more attractive. That would require, though, that the publisher to have not created this big pile of remaindered paper copies it would rather sell. So, the pricing is arbitrary, but “justified” in the publisher’s business calculations. The reader gets stuck with the bill for the publisher’s inefficiency.

However, if another author had spent, say, ten years working on a comprehensive history of the Gulf War and had assembled an electronic book that included all the writing, photos and archival data she’d collected, why not price it higher than $9.99? The paper edition of such a book, which could be thousands of pages long and include high-resolution photos sell for much more, not because it was printed on paper, but because it was an artifact of great scholarship and beauty. The project may have cost her $60,000 in travel and research expenses, let alone what it cost in time to write the book. For argument’s sake, let’s say it cost $120,000 to produce this richly documented history. At $9.99 a copy, she would have to sell about 18,000 copies (given the 45 percent share of revenue paid to Amazon) just to break even. But at $24.95, break-even would come at approximately 9,000 copies—and all this assumes she self-publishes. A publisher would only add costs that increased the break-even point into the 30-, 40- or 100-thousands of copies.

Since we can assume that people do not publish to lose money, although they may freely write without compensation for love or dedication, it would be against the reader’s best interest to demand that any title they purchase be priced at $9.99. More than half the time, at current price distribution, they’d be paying more than the price the author sought and in cases where a book’s costs were high but the rewards for the reader comparably high, the reader would be underpaying for the book and likely preventing the author from working on her next title. Spending ten years paying back the cost of a book isn’t the way writers want to live; it’s like having to build a house from scratch on your own dime, then letting someone else live in it while you pay back the cost of the materials.

Pressman points at the “horrendous” price of ScrollMotion’s books for iPhone, but at least there are 100,000 new titles for the iPhone to choose from because of those prices. If you don’t want to pay those prices, find one of the obviously plentiful alternatives to the Scrollmotion version of those books. Don’t tell others that they can’t buy them. Call them foolish for paying those prices instead.

If we demand that anything formatted for an e-reader be no more expensive than $9.99, the real opportunity of the “long tail,” which describes a market where a small readership can sponsor highly focused writing that serves their interests or a hit can grow by word of mouth among grassroots readers, will be lost. A while back, I addressed how the real cost of journalism could be covered by readers dedicated to getting great reporting could be covered at a relatively low cost per reader. That means putting the premium on the ideas contained in a book.

Pressman says he wants the Kindle to succeed, which puts a premium on the device and format. I want to see publishing change and diversify, which means there will be many price points for myriad titles that were never before available to readers. A $9.99-only world would lead to less diversity of ideas, even as it looked like greater fairness to readers.

iPhone OS 3.0 out now, upgrade odd

title-20090608Apple has released the next generation of its iPhone operating system, OS 3.0. It adds a number of features, the most relevant to the e-book market is the addition to the iTunes Store of audiobook, movie, TV and music video downloads direct to the handset. The best feature, in my opinion, the long-awaited copy-and-paste capability. Here’s the upgrade page link.

Although iPhone 3.0 does offer tethering, the ability to share your phone’s broadband connection with a PC, it is not available in the United States, by AT&T’s, the carrier with exclusive rights to provide data and voice services to iPhones here, choice. The telco’s choice, not yours.

I am plugging my phone in now…. More soon on the upgrade process. Interesting first challenge: My phone is not being recognized by iTunes.

UPDATE: After downloading and installing OS 3.0, my phone cannot be activated. I have a brick and am advised to “try later.”

ONWARD: Okay, now the phone will start and can access the network. But most of my applications are gone. The only survivors, other than Apple’s apps: Kindle for iPhone; MLB AtBat 2009, ZumoDrive, QuadCamera (best hack of the old iPhone OSes); XpenseIt and; Twitterific. Oddly missing in action: iTunes and App Store.

AND FURTHER: After synching again, all apps are back, but now appear on new pages in the home view, with a blank page between the two groups. That’s weird. All apps seem to work, though adding a new email address didn’t work.

Overall grade after using it for a short time: I give it an “A.” Seems to perform a bit faster, the search feature, which appears when you sweep left (moving your thumb right across first home screen) is convenient because it finds everything with your search term, whether a contact, an email, calendar or document. Downside: The iTunes updater has repeatedly asked me to accept the same new terms of service.