Borders UK introduces a £189 e-reader

Borders UK today introduced a lower-priced e-book reader, the Elonex, which it will offer alongside the £400 ($665) iRex Iliad e-book reader. The £189 ($314) Elonex, manufactured by the British PC maker of the same name for Borders UK, is a basic e-Ink screen e-reader with no wireless or other network connectivity. It supports the ePub and Adobe PDF formats and comes pre-loaded with 100 books (presumably out of copyright classics) and an SD memory slot. (A brief, not very informative review is here.)

Borders offers a catalog of 45,000 e-books, which can be displayed on the Elonex or iRex Iliad. Borders executives had previously told the Bookseller they did not consider the iRex, which includes annotation and handwriting recognition technology, “sustainable” at £400.

The dichotomy between the basic e-reader, which does little more than display pages, and a multi-purpose e-reader, like the iRex, is evolving to be the simple distinction made in this market. Amazon’s Kindle 2, however, splits the difference, doing more than a basic reader (notably with the WhisperNet delivery service, but also an increasing range of applications), at a price that, at this point, is so close to the “basic” models, it is poised to crush competitors that try to compete from the low-end. Now, if only Kindle supported ePub documents.

Asking the wrong question about Kindle

The Salt Lake Tribune, with a Denver Post article by John Wenzel, asks the wrong question about Amazon’s Kindle (or any e-book reader device, including software readers): “Is Kindle the right device to put books behind us?” It’s the kind of provocative headline that gets readers, but it gets readers thinking the wrong way about the subject, which is a deeper problem than the question of replacing books with e-books. Steve Ballmer, CEO of Microsoft, relies on this kind of bellicose statement to make headlines, too, but I expect better of newspaper editors.

Media succeed one another in importance, but a new medium does not wipe out previous generations of media in a zero-sum game. New media and old find roles that redefine the media environment. Books are so pervasive and serve a unique role with regard to authority in our society that e-books will never replace them entirely. Humans will always memorialize some things in books, just as we still occasionally produce scrolls, calligraphic invitations and diplomas on vellum, or produce music on vinyl records.

List your book on Mobipocket, Amazon or both?

Steve Weber has a good primer on why it is advisable to publish an ebook to both Mobipocket (owned by Amazon) and through Amazon’s DTP service. The Amazon registration will get your book on Amazon’s site faster than Mobipocket does. You’ll also get enhanced reporting and U.S. royalty payments from Amazon that aren’t available through Mobipocket.

Kindle’s “unitasking” and the task of book publishers

Thomas E. Weber, editor of SmartMoney.com, has an excellent essay at paidContent.org today about his experience of reading on an Amazon Kindle. His key argument, one that publishers need to take heed of, is that the ability to focus on a book when reading on the Kindle is the device’s greatest strength. He calls it “unitasking,” which is a consequence of the multi-tasking we are told is essential in the information age. I’d just say that with a book, concentration is rewarding. It gives wings to ideas, lets your mind escape your world into the minds of others.

As publishers seek to capitalize on these devices and the devices evolve to provide color and video features, though, Weber cautions that books could be over-designed to their detriment. Simple, straightforward presentation of text (even when it is enhanced with social features, video or graphics, and interactive annotation) is the hallmark of good book design, even with e-books.

Amazon on the record: Device limits set by publishers

I queried Russ Grandinetti, vice president, Books, at Amazon about the lack of clarity about how many devices can access a Kindle book or how many times a buyer can expect to download a title from the Kindle Store. He referred me to Drew Herdener, director of communication at Amazon, who replied with the following:

Russ forwarded me your note.  Thanks for your interest.  To answer your question, there is no limit on the number of times a book can be downloaded to a registered device (i.e. Kindle, Kindle DX, iPhone).  In the case where the publisher has chosen to apply DRM, there may be limits on the number of devices that can simultaneously use a single book.  If a customer has upgraded or replaced their device(s), they can delete the content and deregister any device(s) no longer in use, which enables the customer to download to new registered devices.

So, to reduce the answer to its component parts:

  • Buyers may download an unlimited number of copies of a Kindle book title they have purchased to a registered Kindle device or iPhone (and, future supported devices) that are associated with the buyer’s Amazon account,
  • unless a publisher has decided to impose a limit on the number of devices that may simultaneously have access to the title,
  • in which case, the user may go to their Manage My Kindle page and “deregister” a device to allow for downloading to a device that does not currently have an access to the book.

Publishers, not Amazon, make these decisions. Customers need information about device limits when buying, it should be displayed on the product page as a courtesy to customers. I still believe setting a higher limit than six is essential to making a book useful to a family.

I have asked Drew several follow-up questions and hope to have a bit more soon on how customers can identify books with limits and whether there is a system-wide default limit on number of devices.

A usability note based on this information: The Manage My Kindle page does not list either the number of devices on which a title  may be accessed, nor the devices on which the title is currently is readable. Both would be helpful information, the latter because it should be possible to deactivate a device’s access to a single title without wiping out the device’s library—this is doubly important because only some of the titles in the Kindle Store come with simultaneous device limits.

I may want to make a book accessible to my son’s iPhone, for example, which would be the seventh registered Kindle device in our household, by taking it off my daughter’s Kindle. If I disable all the titles on my daughter’s Kindle by deregistering it, she’d be pretty disappointed, when all she wanted to do was share a book with her brother (not that she’d be in the mood to do that very often).ManageKindleitem

My roughly hewn mock-up of what this should look like in the Manage My Kindle library is displayed to the right. There is ample room in the Your Orders listings for a book to include a device listing that allowed per-device  registration of the title. By checking the red box, one could deactivate the title on just one device, in this case “Dad’s Kindle.”

Without per-device control of titles, the system effectively limits the number of devices a customer can use conveniently to the lowest number of devices on which they may want to read a DRM-limited title. That needs to change. And it is good that Amazon is listening.

Noted News and Opinion, June 23, 2009

A few of the postings and articles that crossed the wires worth reading today:

Kindle Myths, Misinformation responds to yesterday’s GearDiary posting about Amazon download limits. Frankly, defending Amazon could become a full time job for a large team of people, and it appears to be iReaderReview’s gig. More power to them. However, when I sent a query to Amazon PR about the download limit story, I got no response, and “no comment” isn’t a barrier to reporting claims by a customer who has spoken to customer service and documented his inability to download Kindle titles. iReaderReview claims the accusation has been retracted (“Number of downloads is not restricted. Even the person who started this rumor is admitting as much now.”), but provides no pointer to the retraction. In fact, as explained in my previous posting, Dan Cohen published a clarification that makes clear limits do exist—he has been told by Amazon employees that a title may not be downloaded to an undisclosed number of devices. This, apparently, after several ass-covering fibs, like “the server failed.”

If you are going to make a statement, such as “the person who started this rumor is admitting as much now,” you should back it up with a link. If you exaggerate, you should rethink why you write, because it’s not helpful to spread disinformation. The article goes on with some valid points and a lot of keyboard diarrhea about claims, many fabricated from the writer’s agenda, against Amazon. Let Amazon defend itself, report the truth to the best of your ability, Switch11 (the writer at iReaderReview). Moreover, drop the questions of Amazon’s being “evil,” because no one can make a factual statement about a company’s moral and ethical condition—it will always be a matter of opinion until people die because of willful indifference. Not going to happen with Kindle issues. TeleRead, summarizing several of the things about which Amazon should be criticized, agrees that the iReaderReview article is a misplaced screed.

If Switch11 is an Amazon employee writing, and we can’t know because we don’t have a name to check (“Hello, Amazon, does ‘Switch11’ work there?”), the company should put a muzzle on them until they learn to stick to the factual truth and leave customers to discuss their experiences freely.

Rob Pegoraro of The Washington Post reviewed the Kindle DX this past Sunday. He finds it wanting, despite its strengths, because of price and some of the restrictions it introduces because of limited support for non-Amazon formats and DRM. His observation about the amount of storage in the DX, “how many books do most people need to carry at once,” is shortsighted. If we’d said that a PC would one day ship with a Terabyte of storage in 1990, it would have sounded crazy, but we find ways to fill all the memory we can get.

Teleread finds a Sony Reader app that lets users customize the device. Paul Biba points to a cool tool, PRSCustomizer.

There is a ton of e-book information and plentiful links to related reading at The Know Something Project.

GalleyCat points to NPR’s call for best beach books of all time, which will be featured online and on-air on July 30.

ReadWriteWeb writes about its discussion with iRex CEO Hans Bron, who is talking about the company’s focus on the business-to-business and professional markets. They talk about the DR 1000‘s note-taking capabilities, iRex’s announcement it is working on color readers, and the missed opportunities by iRex because it does not have an e-book store.

I think the challenges iRex face include: Lowering the price of its devices, especially the Wacom-enabled products; Providing better note organization (I don’t agree that handwritten notes are “easier” than typing on a Kindle, as ReadWriteWeb argues—both are hard to use; Keeping its customers focused on current product, rather than trying to compete on future versions, such as a color e-reader, because it freezes buyers considering what they offer today.

The Mirror has video of the Cool-er eBook device. No review, just a walkthrough of the device features to music. Gizmodo had a review of the $250 Cool-er in May.

Kindle limits: The reality and solution

Dan Cohen of GearDiary published a clarification to his claim that Kindle titles downloads are limited in the form of An Open Letter To Amazon’s Jeff Bezos. He explains that he was told by an Amazon employee there is not a limit on the number of downloads of a title, the limit is on the number of devices to which any title can be downloaded.

Given that Amazon will only sell a two-year service agreement on Kindle, we can assume that they expect the device to have two years of useful life. You’d use five different Kindle devices over the course of a decade, which means you may find you can’t download an e-book from your library in the foreseeable future. Or if you expect to buy more than one Kindle per household and share books, it’s also likely that you’ll exceed the number of devices allowed per title sometime.

Amazon simply needs to do one of two things to make this right, probably both:

  • Follow Apple’s lead with iTunes activations and allow the customer to reset the number of active Kindles on an account to zero devices up to once a year.
  • Raise the number of Kindles allowed per title to a large enough number to avoid having a user ever reach the limit.

Raising the device limit will not encourage piracy, because account management is sufficiently complex that one user could never efficiently share titles with large numbers of people.

One family, including multiple generations, should be able to share a library. A devoted reader who happens to have a Kindle 1, Kindle for iPhone and multiple family members sharing a Kindle library should never run into a “limit exceeded” message. If families can’t share books, e-books are doomed to obscurity, as the libraries in many homes are full of titles passed along from generation to generation.

UPDATE: Let’s be sure we all understand the issue. The question is whether there are any limits on downloads of a book purchased from the Kindle store. The Amazon terms of service for Kindle do not mention “simultaneous device” limits. It does say:

Use of Digital Content. Upon your payment of the applicable fees set by Amazon, Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times, solely on the Device or as authorized by Amazon as part of the Service and solely for your personal, non-commercial use. Digital Content will be deemed licensed to you by Amazon under this Agreement unless otherwise expressly provided by Amazon.

There’s no mention of limits and, if read literally, could be interpreted as limiting the use to one device, which is clearly not the policy. According to Amazon’s Kindle DX FAQ page, which does not qualify the number in any way, in terms of total downloads or number of simultaneous devices:

Can I read content on multiple Kindle devices? What about my iPhone?

Our Whispersync technology allows you to seamlessly switch back and forth between your Kindle devices and iPhone while keeping your reading location synchronized–now you can read a few pages on your iPhone or Kindle and pick right up where you left off on your Kindle DX.

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.

Kindle download limits are the publisher’s prerogative?

Dan Cohen posts a well-documented proof that Amazon limits the number of downloads of Kindle titles on some, but not all, books in the Kindle store. He found this after attempting to load a reference book on several devices before the weekend, at which time he was told that the publisher, not Amazon, had set a limit on the number of downloads.

This sounds plausible, because Amazon is particularly sensitive about its relationships with publishers. Yet it is a grave mistake by Amazon, because the one feature of the e-book buying experience they should be enforcing is ongoing availability. Once purchased, a book should be accessible to the buyer for download forever, which is the advertised offer (“Automatic Library Backup: Download Your Books Anytime for Free”), otherwise the e-book becomes less reliable than a paper book and its primary value, its re-usability, is defeated. For example, my family has three Kindles, and if I wanted to share a book with all those Kindles, a book I’ve paid for, but the publisher thinks I should only be able to download the book twice, that’s an inconvenience I would not have with one of the thousands of paper books around the house. Hence, paper becomes the more attractive and flexible option and Amazon has shot itself in the foot by catering to the publisher’s wims on copy limits.

Because Amazon factors in the cost of delivery via its Whispernet service, there should be no limit on downloading imposed by publishers, since those fees are not passed along to them. Amazon, as the distributor and the seller of the Kindle reader, is taking on the cost of providing ongoing access. This form of curation, as I wrote at ZD Net a couple months back, is essential to growth of e-book adoption. Customers do not want to have to repurchase books for different devices, nor to keep up with changes in e-book formats.

A bookseller needs to provide ongoing access to the book, including upgrades to formats needed to support new devices, just as the music industry has had to do when offering downloadable music—it is common for a music rights holder to pay $1 million or more to convert a library into a new format it wants to sell. Only Apple has managed to get away with fees for upgrading music to its DRM-free iTunes-Plus format, but those fees are the least popular decision Apple has made in recent memory, one it ultimately had to change from a bulk upgrade-only model to one that allows customers to choose individual tracks and albums to upgrade.

As Dan Cohen writes, the problem becomes one of a seller obviously misleading the buyer if the terms, including the number of downloads one is purchasing, is not explicitly described with the pricing. It cannot be buried in fine print, because it makes every purchase potentially unreliable, eroding customers’ confidence in the books and the company from which they are buying.

I’ve queried Amazon PR about this but received no response. Will post an update when I hear from them or one of my Amazon contacts.

Noted Opinion, June 21, 2009

A couple of articles crossed my radar today. Some thoughts….

Zombie Publishers, a nice philippic by Morris Rosenthal with a video interview with Harlan Ellison that’s worth the link alone. I’ve been approached about writing the kind of slap-dash book by “contributors” that he describes by a surprisingly wide range of well-known publishers, it’s not a feature of “bad” publishers, it’s becoming the norm. Like Rosenthal, I don’t like the trend. Ultimately, he’s making the argument that paying a writer to write well is a worthwhile investment or, if you are contemplating self-publishing, writing well is worth the effort. Yes!

Democracy’s tough, but Amazon’s role isn’t pure as switch11 argues over at iReader Review. First off, I agree with the initial points made in the article, that Google v. Amazon, Kindle v. Sony Reader, Plastic Logic v. Kindle DX are all distractions from the real transformation of the publishing market. They are sideshows, as I wrote yesterday. However, the article then veers into the ideologically charged topic of “democratizing publishing” an identifies enemies of progress. The author throws unfocused charges about misinformation from publishers and “other sites, and bizarrely characterizes Scribd as an enemy of democratization, apparently because it will “let Publishers determine pricing.” “People who are stuck in the past” are also enemies of progress; I’d argue they are barriers to, but more likely poised to become victims of, progress. There is also discussion about misinformation, which is rampant in this market, though it seems to me to be coming from many different sources, not just the enemies identified in the posting.

Stay grounded during an industrys evolution

Stay grounded during an industry's evolution

Switch11 goes on to say that Amazon’s position in the market is essentially “democratic,” even though it acts as a pricing arbitrator. Governments that set pricing ruin economies. Amazon is making useful early suggestions about pricing but is smart enough to know it must let prices find their own level. Building on the Amazon qua democratizing hero, Switch11’s argument goes: “Publishers are used to the status quo i.e. they control what gets published, they make the lion’s share of the profits, we read what they decide we should read, and so forth.” There is also the standard “we are at the beginning of a revolution” rhetoric, but really, it’s an evolution. Revolution is what is happening in Iran. In publishing the krill shrimp that were authors and small publishers suddenly are equals in the food chain with industrial publishing whales. The big question now is what to do with all the blubber in the old system, and that’s Switch11’s point, though it is buried in a lot of finger-pointing.

Kindle didn’t start this change, desktop publishing and cheap printing exploded the economics of the publishing industry in the 80s, as did the Web in the 90s. Self-publishing innovation has dramatically expanded the number of titles published in paper each year, with more than 10 times as many titles published in 2008 than in 1990 (a link to this coming, in the growing BooksAhead statistics pages). That’s an order-of-magnitude change in paper titles published. You won’t see one often. We’re early in a long change, but not a competition between aristocratic publishers and the reading public, rather it’s a rising tide of competition within publishing, from all corners of the map, that cannot be accommodated by existing distribution and marketing infrastructures.

Putatively, anyone can reach an audience with a book, in either paper or electronic form. The reality is that it is hard to reach a large market, but the economics continue to change. For this market to develop most efficiently, a distributor like Amazon cannot be setting prices. Instead, all publishers should be free to set prices and let the market work out what the right price is for each intellectual product out there. My guess is that Simon and Schuster’s price experimentation with Scribd will be useful as an exercise in facing reality, as Amazon has set the market’s expectations at $9.99 for a recent bestseller. But even Amazon doesn’t enforce a single price point. One price doesn’t fit all, and it’s good that we’re seeing price-based competition in the market. What we really need, in addition to that, is more innovation in the idea of what a book is. We haven’t even scratched the surface of how texts and culture will change as a result of innovation.

Switch11 writes that “by 2012 we’ll be living in a world where the majority of the power and benefits lie with readers and authors.” With publishing margins in low single digits, it’s clear we live in that world now. What will continue to change is the number of people and companies that will be publishing for a profit, as well we’ll see a flood of quality free publishing efforts that seek other compensation, such as social influence, political power and commercial relationships with an audience. If we’re going to measure the success of this “revolution” by the shuttering of publishing house offices, that is the mistake.

There is no enemy, and no need for enemies, just for more participation.