An old Shaman Friend from Canada, Duke Redbird, once wanted to test new ecommerce ideas in a real time online environment and called it ‘Is It Wise Dot Com’. A sort of online ‘Dragons Den.’ Today we came across a new venture which tested our commercial and business thinking and also posed many questions we thought would be good to share and ask ‘is it wise dot com?’
eBook Exchange aims to punch a hole in the ebook lending and potentially explore the used ebook market.
In principle it is setting itself up to be a social clearing house, linking ebook owners with ebook borrowers and promoting lending, reading, sharing and ultimately a second hand market in ebooks. Today it aims to accumulate borrowing request against a title until someone submits a contribution of $2 or more. A paid contribution secures a loan if the title is available. However the contribution is not mandatory and if no contributions are forthcoming, then eBook Exchange chooses who gets to borrow the book based on several factors, which all geared to a user’s history activity. Only one book at a time may be borrowed. However if you are contributing to eBook Exchange, you can borrow up to three books simultaneously.
Lenders will effectively be restricted to use the services created by Barnes & Noble and Amazon and use their accounts to achieve the process. They are interestingly encouraged to ‘suggest a price you think someone should be willing to contribute, based on what you think the author deserves and/or how strongly you're encouraging a borrower to contribute to the eBook Exchange cause of improving your ebook licensing rights and contributing to children's literacy.’ They clearly intend to push for used ebooks sales and rentals and are today limited to the speed at which players such as B&N, Kobo, Amazon, Apple, Google etc move in this direction
Ebook exchange have elected not to be a non-profit entity and state that all ‘profits’ during 2011 will go to charities supporting childhood literacy and fostering a love of reading.
We see a market demand for sharing and rental, we understand the current licensing restrictions and dilemma the industry has with public libraries versus resell, and we also see the clearing centre approach as novel. However, there was something that kept niggling us, ‘where’s the money?’ Despite all the nice words we felt a bit apprehensive about something that aims to make money out of something that although limited is free today. Building a service that is reliant on others to permit transactions and its growth, is an interesting concept, but we believe is also a dangerous one, as all the third party facilitators could change their own rules or set up their own service tomorrow and leave the exchange effectively dead in the water.
We could go on but leave it to you to judge for yourselves whether the venture is ‘wise dot com.’
2 comments:
Hi, Martin:
We're interested too and are certain in only a couple things: We're happy to operate this without charging a fee to help borrowers find lenders, and view contributions primarily as a chance to do some social good.
The key was to manage the tension between (1) an environment where (due to publisher restrictions) demand will likely always considerably exceed supply and (2) compellling the target consumer, whom we judge is motivated most by the unique value opportunity of borrowing an ebook, possibly for free. That latter's presence and activity on our site is something we want to preserve (and build).
We contemplated a more conventional auction model, but were concerned it risked alienating traffic we might otherwise aggregate. We did not want to trade that for short-term, early revenues.
From where we sit, the most likely evolution is to drop the "immediate win if you contribute," and simply roll the fact that someone will contribute into other considerations when adjudicating who gets to borrow the book, while preserving the "everyone has a chance" premise we think is important.
Kevin
I like the concept and believe it has legs but only if you can secure that middle ground and become the neutral player. Rental, used, loans all have to happen but i am not sure about the economics and whether there is a viable business and whether the treat is from existing players who can just offer it themselves.
It is certainly very interesting and something many have avoided addressing. Like music many felt that they could close down the secondary market by DRM but because DRM had to enable libraries the door has been left ajar
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