Smashwords gets Kindle distribution deal

Smashwords, the e-book self-publisher services company, is for real. The company has won a series of distribution deals, including through Barnes & Noble, Sony and Shortcovers e-book stores. Today they added Kindle distribution, paying authors 42.5 percent of the sale list price of their Kindle books.

As an author services play, Smashwords has sped to the front of the pack for e-book authors. Congrats to Mark Coker and team.

Headline 2010: e-Reader device failure

The market knows best, right? Markets are bloody paths to progress. At this writing there are approximately 52 e-reader devices coming to market in the next 12 months. Fifty-two different devices coming to market (Here’s what I wrote about Steve Jobs’ approach to reader devices when there were just 45 e-readers on the horizon). Creative, the maker of MP3 players and computer audio cards, is the latest to announce their impending arrival, Zii MediaBook.

This is the definition of “glut” becoming reality. We can see a glut of e-readers coming and there’s no waving off the Kamikaze piloting most of those e-readers toward the deck. Will they blow up the fuel supply needed to get the next generation of e-reading off the ground? No, but the coverage will likely make it sound like e-reader failures mean e-book failure.

With excessive abundance comes failure, and that spectacular conflagration of hardware products, unfortunately, will dominate the headlines in this market next year as many, indeed most, of these devices are pulled due to lack of sales. They are ridiculously expensive for a market where the vast majority of customers buy one book or less a year—more than 180 million Americans don’t buy a single book in any year.

Many hardware makers will retreat and e-books, not the glut, will get the blame.

Today’s dedicated e-readers sell for roughly 10 times the price of a new hardback book. Most people don’t buy hardback books, so for argument’s sake, let’s say the average price paid for a book by the 120 million Americans who buy a book each year is $12. Amazon Kindle2 and Barnes & Noble’s Nook, both of which sell for $259, cost as much as 21.6 books, which suggests they break the book-buying budget for most people. I don’t want to suggest there is a magic price for reader hardware, because we’ll see some of the new e-readers announced this year selling for $59 next year, because retailers cannot get rid of them. That is a result of fierce competition, but leave it to the press and bloggers to turn the whole process into a mandate on e-books, not the expensive hardware.

This isn’t a horse race, but a complex evolutionary event, that cannot be reduced to headlines. Consider: “T. Rex extinct, world awaits silence of lifelessness” would have made the papers, if dinosaurs had had their Gutenberg.

Yet, it’s a short step from “people don’t want e-readers” to Continue reading

Nook clarified: Really solid progress for e-readers

Yesterday, I posted a long analysis of what I thought was right and strangely wrong about the Barnes & Noble Nook. Matt Miller today got a clarification about my main concern, which was that Barnes & Noble seemed to have said, according to several published reports, that Wi-Fi would work only in its stores at launch and be “opened up.” A PR representative for Barnes & Noble’s agency, Fleishman, attributed the Wi-Fi information to “an error, so we’re glad to clarify it today.”

Matt asked the question of William Lynch, president of Barnes & Noble on a press call this morning and got the clear answer: Nook Wi-Fi will work in stores and on Wi-Fi networks operated by third-parties and on home computer networks to allow shopping in the BN.com store. I’ve been able to get some additional details and, to some degree, my criticisms in yesterday’s article have been addressed. I’m going to leave that article up, with clarifications and corrections as part of the public record. I have confirmed it, as well, though only on background.

Nook Wi-Fi will work at launch anywhere you want to use it.

That said, I still think the Nook has some flaws, which are fewer and less bizarre than I thought.

I also received clarification of another important point I raised yesterday: Shopping in the Barnes & Noble e-books store is free via 3G, but it was not clear that Google Books titles would be accessible via free 3G service. That would have raised a lot of synching issue for customers who, frankly, don’t want to synch as much as early adopters are willing to do it.

Barnes & Noble, through its PR firm, said that Google Books will be downloadable from the BN.com eBookstore. So, B&N is subsidizing its customers wireless access to free out-of-print books offered by Google, which is a very good thing indeed.

If you are visiting BN.com, you will have access to more than one million e-books, more than twice the total available at Amazon.com. There are issues of quality in Google Books, but the solution is for either volunteer or for-profit editorial fixes of those books. That means a lot less synching than I thought.

Finally, one of my disappointments (based on the potential for an Android device described in this pre-launch posting) was that the Android OS was not accessible to programmers (never mind the potential for cracking it, I want to see programming supported by B&N). It struck me as odd that, for example, there was no Android B&N e-reader client for smartphones with which a Nook owner could share an e-book downloaded on the Android-based Nook.

B&N, again via Fleishman, said that an Android e-reader client will be introduced soon. No specific date was given.

Several readers excoriated me via email, and they are welcome to criticize but not to deploy abuse. The process of reporting a story, especially as an unpaid blogger, is somewhat different than having a budget to fly to New York to attend a press event. So, I must rely in doing analysis on breaking news on what is written by people who do attend. The New York Times, The Wall Street Journal and TeleRead all reported that Wi-Fi worked in the stores but not outside, based on comments made by B&N people at the event. You will have to forgive me if, in trying to find out the truth by treating FAQs with skepticism when they use very vague language that seem to create exception situations, I raise questions for which I do not currently have an answer. I tend to trust people who cover an event more than the company holding the event, because that is our job as customers, to question until the truth is perfectly clear. It wasn’t clear yesterday and it is more correct today.

Having gotten clarification, I believe what I wrote yesterday, that Nook enters the e-reader race in a dead heat with Kindle 2 for anyone not currently invested in a Kindle library. That’s pretty good for a first try, a triumph for Barnes & Noble. I don’t think it is a revolutionary device, particularly because an almost identical dual-screen Android-based device, from Spring Design, was announced the day before.

In addition to yesterday’s non-Wi-Fi related criticisms, I’ll add: Nook should allow books to be loaned more than once. It should be using the Web features of the Web-centric Android OS, it ought to open Nook to third-party development that could substantially enhance the reading experience. And, ultimately, all these hardware devices offered by booksellers are transient devices whose primary purpose is to get readers engaged with a bookseller’s library management services.

In the long run, this is not about selling hardware but all about selling books. The Nook and Kindle will not likely be what we use to read in five years. We will, though, still want and use access to the titles we buy on those devices today.

Cross-posted to my ZD Net blog, where a lot of discussion is going on.

B&N’s Nook: Weirdly unrevolutionary

In addition to this posting, please visit this clarifications posting to get the whole picture.

It would be nice to say, as Matt Miller has, that the e-book and e-reader market was revolutionized today. It simply got more interesting. A careful reading of the $259 Nook’s features, and the comparison offered by B&N to the $259 Amazon Kindle 2, reveals that, while it packs a lot of new ideas, Nook is a combination of innovation and the extraordinarily conventional.

Highlights:

  • Two screens, one 3.5-inch LCD for navigation and purchasing and a six-inch E-Ink display for reading;
  • Virtual keyboard via the LCD display
  • ePub and PDF formats supported;
  • Free 3G connectivity when shopping via BN.com;
  • Sharing of books, across Nook, smartphones and PCs;
  • Wi-Fi built in, but with strange limitations at launch(see below);
  • Synchronization of location, notes and annotation across multiple devices;
  • Audio is supported, though only MP3; Audible books not supported.

There is much I like about this device, but I am not at the announcement today, where I would be asking a lot of questions I have not seen answered in any coverage, so far. Here, with the apparent downsides first and foremost, is what is known to me at this moment.

An e-reader designed to get you into the physical Barnes & Noble store. This, and the question of how to get non-BN content onto the Nook, represent the most backward features of the Nook. When you visit a B&N retail store, you’ll receive offers and, soon, the ability to read some e-books in their entirety while in the store. Everything deleted below, while part of this critique has been clarified and extended in this posting.

There, however, is the rub.

I’d pointed out before that wireless services for browsing the 500,000+ titles available for free through Google Books, a notable feature of the Nook, probably wouldn’t be supported over the built-in 3G wireless service. It isn’t. You’ll need to download and synch the Nook with your PC, via a USB connection, to move any content not sold by BN.com onto the device. From there, it gets bizarre.

According to The New York Times’s Motoko Rich, the built-in Wi-Fi networking works only inside Barnes & Noble retail stores:

With the market for electronic readers and digital books heating up by the day, Barnes & Noble sought to differentiate itself with the wireless feature that consumers can access in any of the chain’s 1,300 stores. Outside of the stores, customers can download books on AT&T’s 3G cellular phone network. (emphasis added)

A review of the BN.com tech specs for Nook adds the caveat that free wireless service is available “from Barnes & Noble via AT&T.” Note that they are saying you get free wireless service when buying or browsing Barnes & Noble, not when accessing other sites or services. Put this and the quote from the Times together and you get: Free 3G service anywhere, when buying from BN.com. Free Wi-Fi in Barnes & Noble stores, but no Wi-Fi connectivity outside, where you can shop wirelessly on BN.com.

Comments from riffraffy in TalkBack point to this section of the Nook FAQ, which I read but still find very vague, since they refer only to travel and Wi-Fi:

Q. Can I use my nook while traveling abroad?

A.Yes, when you travel abroad, you can read any files that are already on your nook. You can connect to Wi-Fi hotspots that do not use proxy security settings, such those commonly used in hotels, and download eBooks and subscriptions already in your online digital library. You cannot, however, purchase additional eBooks and subscriptions.

Q. Will new issues of eNewspapers and eMagazines be downloaded to my nook while I’m traveling?

A. Yes, if you are traveling in the United States, or if you are abroad but connected to a supported Wi-Fi hotspot, new issues are delivered to your online digital library in both cases. When travelling abroad without Wi-Fi access, new issues are not downloaded to your nook (automatically or manually).

Two things:

In the first answer, they specifically say that you cannot purchase eBooks or subscriptions over an international Wi-Fi connection. That suggests it is not a fully functioning Wi-Fi connection. Maybe because you are connecting from overseas, maybe not. If you had full Wi-Fi access and a valid BN.com account, what should stop you?

What is a “supported hotspot” in the second answer? If they mean an AT&T hotspot, my concern remains.

I wrote that I hoped I was wrong. I think the language here and in the announcement is strangely vague (having seen a lot of strangely vague FAQs turn out to bear bad news) and would have liked to be present at the announcement to ask.

UPDATE: Paul Biba, who attended the event, added this to his report, which seems to answer clearly the question whether the Nook provides ad hoc Wi-Fi access:

Wifi can only be used in store for events and in store content. Plan to open up later on.

B&N should enable ad hoc Wi-Fi access at launch, or disclose more clearly that it will not be available in order to avoid disappointing all the people who are expecting to be able to use Wi-Fi at home or elsewhere not served by an AT&T Hotspot. To do otherwise would be doing damage to the credibility of a very impressive piece of engineering.

The rest of the content you want to put on the Nook will have to be downloaded via a PC and synched to the Nook. That’s a step back from what the promise of built-in Wi-Fi would lead a buyer to expect—particularly because Nook is advertised as providing access to 500,000 Google Books titles that, in fact, aren’t accessible through the device, but must be synched.

I hope I am reading this wrong or, that if this is correct, B&N changes the Nook to support ad hoc Wi-Fi access to Google Books. It would be a blunder, forcing readers into retail stores when we want to get away from them, into virtual stores with much broader inventories.

UPDATE: Google Books, per the updated posting here, can be downloaded free of charge over 3G and Wi-Fi connections.

Synching is cumbersome and, frankly, what keeps most people, the non-early adopting masses, from using dedicated e-readers. The popularity of smartphone e-reader Continue reading

BookServer: Internet Archive leaps into book indexing

Brewster Kahle, founder of the Internet Archive, announced the non-profit will launch a cataloging and book search system, called BookServer, that connects readers with copies of the books they want, whether in a library, online or at a bookseller. BookServer is an open alternative to the catalogues maintained by Amazon, Google and others that could connect authors offering e-books directly to readers.

The service is based on an open specification for digital book distribution co-developed by the Internet Archive, Threepress, Feedbooks, OLPC, Adobe, the Book Oven and other organizations, according to the announcement. The system is not designed solely to support distribution of free content, but also books and e-books for sale. It is also several years away from realization, CNET’s Daniel Terdiman reports.

The announcement goes on to say that everyone will benefit:

  • Authors find wider distribution for their work.
  • Publishers both big and small can distribute books directly to readers.
  • Book sellers find new and larger audiences for their products.
  • Device makers can offer access to millions of books instantly.
  • Libraries can continue to loan books in the way that patrons expect.
  • Readers get universal access to all knowledge.

The service was announced by the Internet Archive this evening in San Francisco. Kahle, who founded Alexa (which he sold to Amazon) and the Bookmobile POD service, along with the WayBack Machine service, doesn’t do small ideas. BookServer looks promising. I think it can be the foundation for a lot of interesting reading enhancements. We’ll discuss that later.

Google Editions defies digital economics

Google today announced it will enter the e-book distribution business with a service, Google Editions, which will sell electronic copies of as many as 500,000 books offered by traditional publishing houses. The service is amazing, because the company has found a way to increase the retail distribution cost of e-books relative to paper books. Think about this—the zero cost copy of an e-book will be the basis for Google keeping substantially more, as a share of list price, to deliver a Google Editions e-book through a third-party retailer than buying directly from Google.

It may seem attractive to retail partners, which will purportedly include Amazon, Sony and Barnes & Noble, but even they’ve got to be scratching their heads about the added overhead Google built into its pricing scheme. An e-book purchased from Google Editions will list for the same price as the same book offered by a publisher through Amazon or Sony, for example, and Google will pay the publisher 63 percent of the list price. But, if the book is purchased in Amazon Editions format through Amazon or Sony, publishers will only get 45 percent of the list price.

Google said it will share the additional 18 percent with the retailer, though “most” of that 55 percent reportedly will go to the retailer. My guess is that by “most,” Google means the retailer will get 25 percent and Amazon 20 percent, or some approximation of that split. This seems a concession to make sure the Google Editions format books are carried by retailers.

Let’s break that down. For a bestseller, which the market has decided should be priced at $9.99, the publisher will earn $6.29 when Google Editions sells a copy. When that same Google Editions e-book is sold through a third party, the publisher will earn only $4.49. Intermediaries increase their share of revenue, even though they’ve taken on no inventory risk.

Publishers get 63 percent for selling directly and 45 percent for a Google Edition book sold through a third-party retail site. It defies all the economic logic of digital distribution. The likelihood that Google will really get more e-books from publishers on those terms compared to those offered by Amazon, Sony or Barnes & Noble to the same population of publishers strains credibility. But, we shall see.

More bad news: DRM

While the Google Editions e-books will be readable in a browser, they will not be unencrypted. Google makes clear that books will come with DRM, because they have created a way to let readers access files when not connected to the Net but without the ability to share those books with others. Books will be tied to a Google account, just as GMail, Google Docs and other services.

The retailers, all of whom have introduced proprietary e-readers and, except for Sony, which offers ePub formatted e-books, should be Continue reading

Cheaper Kindles will seed more digital libraries

Amazon today lowered the price of its U.S. Kindle 2 to $259. It also announced an international version of the Kindle 2 for $279—globe-trotting customers are paying more for a more capable radio, but it’s still $20 less than Kindle 2 was yesterday. The price of e-reader hardware is definitely trending downward. If you imagine the profits from an ever-less expensive Kindle converging with the rising costs of selling Kindle bestsellers below cost, the model makes no sense, unless the purpose of the business is to create digital libraries.

With 45+ dedicated e-reader devices on the market, Amazon absolutely must lower its prices aggressively over the the next year to maintain its market share. But, here’s the question: To what end is Amazon driving e-reader pricing downward? Kindle still delivers a much better buying and reading experience than any of the currently shipping e-readers. Sony’s Daily Reader will be comparable, but it will not be out for another month or more. Next year, Plastic Logic, among others will have a Kindle challenger with built-in wireless purchasing features, too.

AmazonBestcostsRemember that Amazon is still losing money on every bestselling book sold through its store. The company pays publishers about $3.60 more than the list price for a bestseller when sales costs are factored into the expense. If each Kindle accounts for just two bestseller sales, the cost of supporting 3 million Kindles in the market rockets past $20 million (see chart, right, which looked better in Excel. The scale should be 50,000 to 3 million, though this logarithmic curve makes the point that every Kindle sold adds to Amazon’s bestseller costs at $3.60 per title sold).

The goal, at this point, is to get more people invested in a Kindle, or, more precisely, a digital library. It’s more than format lock-in, Continue reading

The Bookends, Pt. IV

….continued from previous entry

In this maddened and maddening stream of real-time communication, from which occasional works of startlingly genuine value do surface, are authors required to engage a community? Is this community-building a keystone service for publishers seeking to survive by adding real value for authors? Can publishers thrive by providing community-like engagement with the book, even if the author moves on to other works? The answer to all these questions is that there is no single approach to writing a book, marketing a book or building an enthusiastic word-of-mouth community. Many authors and publishers will find the investment in engagement pays dividends, perhaps with increasing returns for each title that builds on initial success. Publishers can offer to take up the technical and financial burden of these communities, which can be slight when aggregating dozens or hundreds of audiences, as part of the new service they provide authors, who naturally want to focus on the books they write (books, however, will not be just text, as we’ll see later).

To our peril, we live in the golden age Erasmus described as he joined Aldus’ Academie and reveled in the revival of culture and humanist debate of the early decades of the 16th century: He felt world peace and prosperity was at hand because of the energetic dialogue erupting all around him, very much like techno-utopians see the Internet-connected world in 10 to 20 years. As Erasmus found out by the 1520s, when the Reformation had wrenched his world apart, launching the schism that would kill millions during the 30 Years War, freedom was a messy and dangerous business. After learning that his friend Thomas More, the progenitor of the concept of “utopia” latter canonized a Catholic saint for his refusal to declare Henry VIII the head of the newly formed Church of England, had been beheaded, Erasmus lamented that his times had become “the very worst century” ever, a declaration that anticipated the ironic critique offered up for contemporary contestants for pop cultural supremacy by Matt Groening’s The Simpsons.

The Shack may be the last of a new incunabula, print books that succeed wildly based on online word-of-mouth without providing its own branded online experience. Publishers have discovered how to market with the Web, but not how to extend the experience of reading on the Web. This time around, because technology has distributed opportunities to innovate in authorship, publishing and marketing, there will not be one Aldus, there will be many Aldi.

Even though William P. Young had built many Web sites as a part-time developer, his personal engagement with community once the The Shack hit the best-seller lists has been cursory at best. Yes, his book rocketed up bestseller lists on the tidal wave of emails sent by readers, but the greatest contribution to the word-of-mouth phenomenon was the more than 3,200 customer reviews on Amazon.com, and comments posted on his blog and at the book’s Web site, which is primarily a place to order The Shack with a forum where approximately 9,000 readers have posted 135,000 times about more than 5,300 topics related to The Shack, individual chapters and personal testimonies. Even the 500+ bad reviews on Amazon seem to have helped propel the book forward, because they are cast as polarizing responses to the 2,500 or so positive reviews that a browser must test by reading The Shack themselves. And it doesn’t hurt that, as Motoko Rich of The New York Times put it, “Sales have been fueled by a whiff of controversy.”[i] Young is surprisingly quiet online, investing much more of his time Continue reading

The Bookends, Pt. III

….continued from previous entry

When William P. Young wrote The Shack in 2005, he intended it as a Christmas present to his friends and family. Unlike Fra Franceso Colonna, he didn’t have to consider the challenge of getting copies made, because he had Kinko’s to duplicate and spiral bind the book before his personal release deadline, December 25th. The publishing world at that late date, on the verge of a crisis, missed one of the biggest best sellers of the decade because the author no longer needs a printer or marketers to take the first steps to winning readers.

Young’s book, the story of a man who, after losing a daughter in a grisly murder, receives a note from God asking the grieving father to join the Holy Trinity for a weekend in the shack where the little girl was killed, has struck a chord with a wide range of people, capitalizing—albeit unintentionally—on the increasing dissatisfaction some Christians feel toward even Protestant church hierarchies and a general sense of victimization in American society. But as Young has said in interviews, it is a work of fiction, not theology, and the attacks on the book as “heresy,” which have come from some quarters of the evangelical community, because The Shack challenges fundamentalist assumptions about Judgment Day and the value of acts of faith based on Biblical rules, such as the Ten Commandments, only helped sell the entertainment as a theologically challenging read.

Young makes up his theological universe with the same creative license Colonna did his portmanteau Italian. God is portrayed as a stout black woman named “Papa,” with Christ turned into a wood-shaving covered Semitic carpenter with a big nose, and presenting the Holy Ghost as an Asian woman, Sarayu, who glows and levitates when speaking. He told The New York Times that he recast the Trinity in order to shake readers’ preconceptions about God: “I don’t believe that God is Gandalf with an attitude or Zeus who wants to blast you with any imperfection that you exhibit.” Young is no theologian, nor a great writer. His reasoning, in the mouth of the Holy Ghost, runs along the lines of Sophistic and Stoical cliché: “Mack, if anything matters then everything matters. Because you are important, everything you do is important. Every time you forgive, the universe changes; every time you reach out and touch a heart or a life, the world changes; with every kindness and service, seen or unseen, my purposes are accomplished and nothing will ever be the same again.” However, the questioning of church hierarchy and recasting of dogmatic rules, laying heavy emphasis on the suffering and faith of the individual, make The Shack feel like a mainline injection of Martin Luther’s preaching, if Luther had had a sense of humor and the worldview of a 21st century Oregonian grief counseling program facilitator.

Like Colonna’s Hypnerotomachia, The Shack mines deeply a shaft of a Continue reading