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.

David Faber of the real work in journalism

GalleyCat has a short interview with CNBC’s David Faber, one of the handful of television reporters who did a good job on the financial meltdown. He has a new book out, “And Then The Roof Caved In” (Kindle edition), about the financial crisis. He talks about starting out doing journalism on a typewriter, which I appreciate, and has this to say about doing the footwork before reporting: “I think there is a tremendous pressure to be fast. Better to not be first and be right, than to be first and wrong.”

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.

Businessweek’s More-for-your-money strategy

Businessweek is experimenting, trying  to make itself of more use to readers. Businessweek is trying a variation on something new, the idea of giving subscribers more for their money while continuing to provide content for free online. It’s a variation on an idea that Josh Young and I have been talking about for a while.

You have to feel for magazine publishers these days. With few exceptions, like The Economist and specialty interest publications, they are seeing declining subscriber numbers along with the decrease in ad revenue due to the recession.

Businessweek made a good start, offering subscribers earlier access to print articles online and some “user-generated” news and social features. This will tax the staff very little, unless they choose to dive into the Businessweek community site and really talk to readers about the news. The degree of investment in relationships with readers remains to be seen. But there are a couple simple things they could do right now that would be relatively easy and cheap, involving e-book technology:

  • Provide print subscribers a free PDF, Kindle or ePub version of the magazine when it goes to the printer, typically two days before the issue is released.
  • Build tracking into its site and collect readers’ discussions, bundling them up into quarterly e-books (in the reader’s preferred format) delivered by email to subscribers, so they get a memorialized record of their participation in the community. The really active users will love this—generate a fake Businessweek cover with their avatar’s picture to make a personal package of the e-book.
  • Finally, take at least one full page, if not more, and turn it over to the community. Make them the authors of opinions and articles that reach print—then there is a reason to pick up the print copy.

Media transformation is inevitable—just maybe

<p>
<a href=”http://journalism.nyu.edu/pubzone/weblogs/pressthink/2004/12/02/rect_glsr.html” target = “new”>Jay Rosen notes a growing willingness</a> to join a new journalism movement. <a href=”http://susanmernit.blogspot.com/2004/12/mark-glaser-media-company-i-want-to.html”>Susan Mernit points</a> to the way the industrial journalism industry has created the conditions for its own destruction: “Like dragons sitting on piles of treasure, publishers have built up client relationships and sub lists that fuel their businesses and keep margins high. Like the polar ice floes, that all seems to be melting away, and at a similarly alarming rate.” Oh, and <a href = “http://www.businessweek.com/magazine/content/04_50/b3912115_mz016.htm” target = “new”>BusinessWeek misspelled my name</a>.
</p>
<p>
<a href=”http://www.nickdenton.org/002078.html” target = “new”>Nick Denton says it’s time for a committee</a> to enforce ethics. <a href=”http://calacanis.weblogsinc.com/entry/8816914257178893/” target = “new”>Jason Calacanis is leading the charge</a> to launch a blog ethics watchdog. This smacks of the preliminary professionalization of the medium by those in the position to claim they have the capital necessary to enforce ethical standards, a sure sign that the well-funded see things about to take off. That doesn’t make Nick and Jason bad guys, just shrewd businessmen who see a growing challenge to their business model, which is centralized (around an ad sales infrastructure) and cost-intensive.
</p>
<p>
<img src = “http://www.ratcliffeblog.com/speer-honor.jpg” width=”300″ height=”218″ border=”1″ align=”right”>Yet what we know about blogging is that it is highly decentralized and while parts of the network will certainly be organized by Nick and Jason’s companies many projects have to take root for a richly varied media to thrive. Their ethics are important examples, but they must not be the rule.
</p>
<p>
The economics of a blog-based media—though I don’t advocate a blogs-only approach at all, but for sake of the argument will use the phrase here—are susceptible to lightweight infrastructures, as well. For example, <a href=”http://www.siliconbeat.com/entries/2004/11/29/snap_the_future_of_transparency.html” target = “new”>Bill Gross has introduced</a> what, to today’s media giants, is surely a frightening level of transparency in his startup search engine company. He shows how much revenue is collected daily. A collective effort to produce <a href=”http://www.correspondences.org/” target = “new”>civic</a> <a href=”http://demo.wikinews.org/wiki/Main_Page” target = “new”>journalism</a> can operate in the open and everyone involved can see the economic progress they are making. If you can show individual contributors, such as editors, writers, photographers and videographers that they are helping to create something big, they will work for very little in exchange for a small share of ownership—Wired proved this, without providing any accountability whatsoever, in the mid-90s—and a significantly increased level of editorial control.
</p>
<p>
<img src = “http://www.greatbuildings.com/gbc/images/cid_2343022.150.jpg” width=”150″ height=”150″ border=”1″ align=”left”>I’ve been reading Christopher Alexander’s four-volume <a href=”http://www.amazon.com/exec/obidos/ASIN/0972652914/ratcliffecom-20/102-4701855-9772918?creative=327641&camp=14573&link_code=as1″ target = “new”>The Nature of Order</a>, which is about creating a living architecture (buildings, not information technology). There’s so much to his work that it would be impossible to summarize (though it is <a href=”http://www.natureoforder.com/overview.htm”>by his publisher here</a>), but the richness of the living designs he uses as examples throughout the book are the result of real craftspeople working over long periods of time to produce structures that engage people, enhance their lives and enable their work, spirituality and pleasure through its interaction with them. As I think about the journalistic structure awaiting catalysis, it seems that the thing will begin simply and become incredibly deep or complex, even when they are simple, because they are full of life. Fractal would be the pop cultural way of describing it, but that discounts the importance of managing—architecting—what will be built.
</p>
<p>
<img src = “http://www.ratcliffeblog.com/roof.jpg” width=”300″ height=”226″ border=”1″ align=”left”>As Jay Rosen has written, <a href=”http://journalism.nyu.edu/pubzone/weblogs/pressthink/2004/01/07/press_religion.html#morel”>journalism is a kind of religion staffed by believers</a>. What is wrong with a committee to oversee the entire range of blog ethics is that it immediately becomes a rigid infrastructure, a kind of theology instead of the living spiritual process that Alexander describes in living architecture. The current diverse and contentious debate is a source of liveliness that can prevent a new journalism from taking on the stultifying sameness of the mass media. Layers of journalistic experience, ethical decisions and business experiments can add up to something greater, something alive. We ought to accept that mistakes will be made and learn to live with a process that is ever-improve through debate. So, no committee, but a metalogue should be organized and we should begin to record the lessons learned, the ethical lapses and successes. If we can embrace some uncertainty, we might just pull off something extraordinary.</p>
Here’s a December 2, 2004 post about the reinvention of journalism, a discussion with a long history and not a whole lot of success to date.
Jay Rosen notes a growing willingness to join a new journalism movement. Susan Mernit points to the way the industrial journalism industry has created the conditions for its own destruction: “Like dragons sitting on piles of treasure, publishers have built up client relationships and sub lists that fuel their businesses and keep margins high. Like the polar ice floes, that all seems to be melting away, and at a similarly alarming rate.” Oh, and BusinessWeek misspelled my name.
Nick Denton says it’s time for a committee to enforce ethics. Jason Calacanis is leading the charge to launch a blog ethics watchdog. This smacks of the preliminary professionalization of the medium by those in the position to claim they have the capital necessary to enforce ethical standards, a sure sign that the well-funded see things about to take off. That doesn’t make Nick and Jason bad guys, just shrewd businessmen who see a growing challenge to their business model, which is centralized (around an ad sales infrastructure) and cost-intensive.
Yet what we know about blogging is that it is highly decentralized and while parts of the network will certainly be organized by Nick and Jason’s companies many projects have to take root for a richly varied media to thrive. Their ethics are important examples, but they must not be the rule.
The economics of a blog-based media—though I don’t advocate a blogs-only approach at all, but for sake of the argument will use the phrase here—are susceptible to lightweight infrastructures, as well. For example, Bill Gross has introduced what, to today’s media giants, is surely a frightening level of transparency in his startup search engine company. He shows how much revenue is collected daily. A collective effort to produce civic journalism can operate in the open and everyone involved can see the economic progress they are making. If you can show individual contributors, such as editors, writers, photographers and videographers that they are helping to create something big, they will work for very little in exchange for a small share of ownership—Wired proved this, without providing any accountability whatsoever, in the mid-90s—and a significantly increased level of editorial control.
I’ve been reading Christopher Alexander’s four-volume The Nature of Order, which is about creating a living architecture (buildings, not information technology). There’s so much to his work that it would be impossible to summarize (though it is by his publisher here), but the richness of the living designs he uses as examples throughout the book are the result of real craftspeople working over long periods of time to produce structures that engage people, enhance their lives and enable their work, spirituality and pleasure through its interaction with them. As I think about the journalistic structure awaiting catalysis, it seems that the thing will begin simply and become incredibly deep or complex, even when they are simple, because they are full of life. Fractal would be the pop cultural way of describing it, but that discounts the importance of managing—architecting—what will be built.
As Jay Rosen has written, journalism is a kind of religion staffed by believers. What is wrong with a committee to oversee the entire range of blog ethics is that it immediately becomes a rigid infrastructure, a kind of theology instead of the living spiritual process that Alexander describes in living architecture. The current diverse and contentious debate is a source of liveliness that can prevent a new journalism from taking on the stultifying sameness of the mass media. Layers of journalistic experience, ethical decisions and business experiments can add up to something greater, something alive. We ought to accept that mistakes will be made and learn to live with a process that is ever-improve through debate. So, no committee, but a metalogue should be organized and we should begin to record the lessons learned, the ethical lapses and successes. If we can embrace some uncertainty, we might just pull off something extraordinary.