COOL-ER hypes its progress

I am sure this story will be picked up around the e-book-o-sphere as revelatory, proof the e-reader’s time has come: British ebook Reader Becomes Bestseller. It’s a remarkably unchallenged PR effort. Neil Jones, CEO of Interead tells Sky News his e-reader has sold “tens of thousands…in only three months” and that “we are already in profit.” Jones previously described the launch of the COOL-ER as the “iPod moment for ereaders.

How many tens of thousands? Sky’s Jeff Randall let that slide. What is a “profit” on a device that sells for £189 ($311 U.S) in “every country on the planet“? That’s an expensive launch. If Interead has sold 20,000 devices, for instance, it has $6.2 million in top-line revenue. It’s doubtful that the fully loaded cost of getting those devices designed, manufactured and marketed was less than $6 million. Who knows, maybe they’ve sold 30,000, which would put the device somewhere in the low- to moderately well performing e-readers by sales in its first three months—Kindle sold about 370,000 units in its first year by my estimates.

But an iPod moment? iPod sold 378,000 units in its first year (2001-2002). With Kindle and Plastic Logic coming to market in Britain and worldwide, respectively, in 2010, it’s hard to see COOL-ER sustaining its sales momentum without substantial additional investment in marketing and upgraded designs in the face of both dedicated e-readers and smartphone/PC competition, which will increase dramatically next year.

Scrutiny of these kinds of claims is needed. It has been delivered forthwith.

There is also no clear definition of what constitutes a “bestseller.” Marketers make up lots of this as they go along to regale the press and stupefy customers.

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 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 book evolution, not revolution

We often hear arguments that the age of the book has passed or that, with the advent of e-books, the book is doomed. It makes good copy, just as populist-sounding charges that publishing is “corrupt” does, but none of these arguments recognizes the human cultural tradition that we build on rather than destroy. Is it true that no one listens to radio now that television has reached 50+ years of use? No, we remix our attention and what is valued. Books, both paper and digital, will live side by side.

I write this because of two Fast Company pieces of the last 24 hours, one of which I helped edit for my good friend, Marcia Conner, the other reporting on the possibility that Dan Brown’s The Lost Symbol could sell more copies in digital form than hardcover. I am sure The Lost Symbol will sell more e-copies than hardcovers over time, if readers don’t find they are disappointed by the book—it’s virtually assured, just as cheaper paperbacks outsell hardbacks. The important question is whether e-book versions of The Lost Symbol will cannibalize hardback sales or be additive. Only a few weeks time will answer this question, as the initial hype wears off and sales become more “normal.” Based on pre-orders, the book has been in Amazon’s best sellers list for 150 days; all those copies were delivered in the last 24 hours. Currently, The Lost Symbol is #1 in both Amazon’s book and Kindle stores. Shortcovers is reporting its biggest sales day in its short history, exceeding its previous one-day sales by 100 percent.

Fast Company‘s Kit Eaton dissects Stephen Windwalker’s claim that e-books will outsell hardbacks, based on day-one figures that are largely guesswork. Eaton suggests that while Kindle sales may be strong, it doesn’t mean that e-book versions of The Lost Symbol will outpace hardcovers. With one million copies sold after such an intense marketing Continue reading

Reading Steve Jobs: Why 45 e-reader devices don’t make a market

Thomas Jefferson hacked bookstands for partial continuous attention

Thomas Jefferson hacked bookstands for partial continuous attention

As I develop the coverage here at BooksAhead, I have decided that trying to break news stories about e-reader devices doesn’t add a lot of value for the reader, especially when there are few differentiating features or functionality. Way back in the early 90s, when a new Ethernet interface card for the Mac—I was networking editor at MacWEEK—it became clear that an occasional summary article covering all the recent releases would be more useful than many individual articles announcing yet another Ethernet card.

However, sometimes a real breakthrough would come along, and that would get an individual article. The most important change in the early networking card market was something subtle and largely unheralded: The addition to writable ROM chips to cards eliminated the need to return a card when its software was defective. Yet, for several years, Ethernet card developers hesitated to include EPROMs in their products. Once they did, new features proliferated, such as Simple Network Management Protocol (SNMP), because cards could be updated in response to changing technology rather than having to be replaced. It sounds trivial, yet it made a huge difference.

The e-reader device market is looking a lot like the Ethernet card business back then: It’s a developing commodity market. Price is becoming the only differentiator, but the functionality is still very limited compared both to books and what e-books could be. The action will soon turn squarely on format and networking of documents, just as the Web became relevant when the browser changed hyperlinks from navigating between documents to navigating within parts of many documents.  Two hundred years ago, Thomas Jefferson designed a bookstand for reading several titles to accommodate the limitations of books (the idea is older, but Jefferson’s is one of the most elegant solutions to the problem). Readers want to use books and the knowledge and enjoyment they contain, not just consume them.

I’ve been doing a lot of thinking about this issue since I wrote about the ePub standards maintenance process beginning a couple weeks back. There are huge business opportunities in the Continue reading

Open letter to Hachette CEO Arnaud Nourry: Kill your hardback business

Sir:

I read with interest your comments in the Financial Times of August 31, 2009, regarding the fact that “unilateral pricing by Google, Amazon and other e-book retailers such as Barnes & Noble could destroy publishers’ profits and kill the lucrative trade in hardbacks.” I write to warn you that, if your primary concern is retaining the profit in hardbacks, you will repeat the errors of numerous of C-level peers in media companies, from newspapers and magazines to the music and television industries. Instead, you should be prepared to wipe out your hardcover profits over the next five years to retain your relationship with readers. The real reason Amazon is selling e-books at a loss today is to take the demand-creation relationship away from you.

The hardcover is a package for printed content. Despite it’s wonderful history, the codex form factor in its various sizes of hardbound pages, is just a package, albeit one tightly bound up in the distribution processes traditional to publishing. The hardback book has led the publishing parade for centuries, but has given way in the era of industrial publishing to paperbacks, so that now far more than half the books published are never released in hardback. Hardbacks are seldom profitable, despite what the FT article says, relying on unexpected hits to produce the lion’s share of profit at a publishing house. Predictably successful hardback first editions, such as the upcoming Dan Brown novel, The Lost Symbol, are less profitable than the surprise hit because of the deep discounts demanded by retailers online and off.

Hardbacks are the best way to test the market for viable trade paper titles that will thrive in your midlist, because they are more likely to end up in discount bins than as returns. Rather, I should write “Hardbacks were the best way…” as the e-book is poised to take the place of hardbacks as first-edition-to-market because they can be sampled by chapter and, even, given away to spark readership wildfires. Newspaper companies failed to see that preserving the newspaper killed the news that made the daily edition valuable. The form factor in newspapers and books are deeply integrated into the distribution systems on which these industries rely. Moving books or morning editions from place to place has been the key to profitability for publishing since before any of us were born. It’s over, as newspaper companies prove daily.

Distribution is no longer the hard problem in publishing or any form of information delivery. It’s a competence that Hachette should shed in favor of outsourced relationships with, among others, Amazon and Google. Amazon can move books much more cheaply than any publisher. They could probably print them more cheaply, too. Both Amazon and Google can move virtually unlimited volumes of bits anywhere on the planet at a fraction of the price Hachette can deliver books to retail.

Amazon is not poised to tell Hachette and other publishers that it will pay a smaller share of $9.99, they are thinking about whether Continue reading

The Lost Symbol will be a dollar sign

The Da Vinci Code sold more than 81 million copies worldwide. Dan Brown’s new book, The Lost Symbol, will be released simultaneously in hardcover ($16.17 at Amazon, a 46 percent discount) and for Kindle ($9.99) on September 15th. Five million paper copies of the book will be printed, one digital copy will be encrypted several million times. Likewise, Sony is certain to offer the book at the same price or lower in its e-book store, taking its losses on The Lost Symbol to drive sales of its Reader devices.

What we will witness is a test of how far hardware vendors will go to increase unit sales of their respective devices. Since Random House will collect between $12 and $13 per copy from digital channels, the hit to Sony and Amazon’s top-lines will be substantial. Each will pay millions to keep The Lost Symbol at the top of their device’s bestseller list. The symbol lost in all this hoopla will certainly be a dollar sign, but it may result in greater uptake in e-book formats generally and, perhaps, a “winner” among the current dedicated e-book readers.

The Lost Symbol is the title that could make or break the current generation of e-reader devices, firming up reader’s investment in the platform and format in which they read digital books. I don’t think that Dan Brown’s latest will sell millions of Kindles on its own, but it will be the title that converts some readers to Kindle or Sony Reader. Both Sony and Amazon see royalties paid on this book as a sunk cost they expect to recoup from hardware sold. If the hardware revenues don’t follow, this book may convince one or both of them that dedicated e-readers aren’t the best business.

If there are approximately 3 million Kindle-compatible devices (Kindle hardware and iPhones running Kindle for iPhone) and some 500,000 other dedicated e-reader devices, as well as perhaps six million other software-only readers installed, electronic sales of The Lost Symbol could account for up to five million copies, matching the first print run. That will be a huge accomplishment.

However, because e-reader hardware is still too expensive for most consumers, e-book sales will likely be slower than print sales after the initial release, especially when paperback editions appear. The key market to watch then will be e-reader application installs on smartphones and computers. Since e-book applications that run on phones and PCs carry little migration cost, we can expect to see an explosion in sampling of reader apps if digital copies of The Lost Symbol are going to pace paperback sales. The only possible channel through which The Lost Symbol could continue to sell 50 percent of total copies sold in digital format is e-readers on phones and PCs.

In the long run, the economics of reading will drive adoption of common formats not incompatible e-reader hardware. I’d be very surprised if Dan Brown’s next book isn’t offered in a single digital format—most likely ePub—that can be read on any device or in any e-reader application. By then, Kindle will be compatible with ePub, because Amazon’s goal is to grow share of books sold, not just to be a e-reader hardware vendor.

Smartphones could be e-readers of choice

Flurry_JulyPulse_eBookActiveUsers-resized-600Flurry, a San Francisco-based mobile applications market research firm, reports a break-out increase in e-book application use on smartphones, particularly Apple’s iPhone. According to this blog posting, Flurry is tracking user sessions (privacy questions about in that statement) and found a 300 percent increase in e-book application use between April and July. The company suggests that translates into 3 million active e-book readers during July.

The methodology isn’t explained, but the firm points to another research group, Apptism, to back up its claim, albeit tangentially, saying that e-book application sales had a 14 percent share of sales in Apple’s AppStore, second only to Games sales, which were 19 percent. There is, however, no explanation about how sales are tracked and reported, something Apple has been disinclined to do in detail.

A little context, if these numbers are valid, which I think remains unproven. They suggest that smartphones are convergence devices that will contest with specialized e-readers, such as the Amazon Kindle and others. If so, the real question to look into is sales per instance of application installed. Here, I think, Kindle would wipe the floor with iPhone e-reader applications. Why? Well, sampling of applications is a typical feature of iPhone and smartphone usage. People buy phones and install lots of apps, but seldom stick with them, either uninstalling them (which is not tracked by anyone) or simply ignoring them. Also, because book titles are usually embedded in an application on smartphone platforms, at least until recently, each book purchased may be counted as an application installation, which skews the real number of installed applications.

I don’t doubt that devices that include e-reader features could easily outsell dedicated e-readers. These numbers don’t support the argument that smartphones will overwhelm e-reader devices, yet. We need per-device or per-application counts of titles sold to determine what’s really going on.

Via GalleyCat

Samsung also leaping into the Kindle cage fight

From The Korea Herald: Samsung takes on giant Amazon in e-books. And, no, we’re not talking about a battle of GIANT WOMEN. “We seek to become a bigger player than Amazon or Sony in the e-book market,” Lew Jae-young, vice president of Samsung Electronics, is quoted saying at a press conference.

The Samsung device, the SNE-50K, which launches later this month in Korea, has an E-Ink display the same size as Kindle 2, no wireless connectivity and touts the first handwriting recognition technology in e-books, which is not true.

The $270.00 (339,000 Korean Won) device will be available through a Korean bookstore chain, Kyobo, and features only 2,500 titles in its current catalog, with a thousand more expected to be added each month. Interestingly, the article states flatly that e-books will sell for 40 percent less than their paper counterparts, so there is no assumption that an e-book must be priced at a specific amount, such as $9.99, to be attractive to the Korean market.

Local language focus may be a boon for Samsung in Korea, where providing double-byte character support and domestic bestsellers can help establish a beachhead for the device.

iRiver’s got another Kindle competitor

iRiver, which dominated the market for “personal music players” or “MP3 Players” back in the days when we referred to portable music by technology acronyms and iPod was just a sparkle in the eyes of a few Apple folks, is reported to building a Google Android-based media player and an e-book reader. But, wait, the devices are “not yet 100 per cent signed off” yet, said iRiver product manager Danny Bejanoff in the article. The company is also developing a Web tablet and e-book reader that will be available in Australia “for testing” soon, according to Bejanoff.

Sounds like a trial balloon.

I believe the device referred to as a Web tablet is, or is related to, the P7, a $209.00 tablet-like device with 16GB of memory already offered by iRiver in the U.S. A $179.00 8GB version is also available.

Fun fact to know and tell question of the day: What company preceded iRiver with the first portable downloadable audio player? It’s not this, which was the first device designed for music playback. Enter your answers in Comments!