Tablet, Phablet or Smartphone?

So how much would you pay for a tablet, or would you rather have a Phablet, or just a good smartphone? Does size matter? Do you have to be been seen with a 10”, 8”, 7” or a 5.5” device?

We find ourselves constantly asking what we want and what is the best fit for us? What is clear is that the only word that matters is ‘convergence’ and tablets may be just a stepping stone and far from the answer.

We have seen the emergence of eink readers and also their decline. Yes they may still sell and yes they may be good reading devices, but you don’t find many calculators around today as the functionality is absorbed into other more functional devices. The eInk readers are long past their sell by date and although the technogy still has legs the ereaders don’t.

We have seen many try to establish a tablet position on the back of the iPad. The reality is that many have failed and for a host of reasons. What is interesting is that the likes of the Kindle Fire and Nook which were aligned to retail brands and services have fared relatively well and driven down the price for many. Samsung and the Google offers have put in a respectable delivery but many more technology driven companies have failed.

Microsoft were determined to recapture the market with the Surface but it so far has lacked that something that it should have clearly had – the same OS and functionality as the laptop. The company is now writing off $1bn after missing sales targets, but isn't giving up and is unveiling two new Surface tablets.

Enter that supermarket Tesco with its Hudl tablet. Will it like the Amazon Fire appeal to Tesco’s customer base and offer a cheap but high quality alternative, or will it die a thousand cuts and have little style or designer appeal in a designer label world? It not just about delivering the cheapest, it’s also about creating something to be seen with. You don’t go to a black tie event clutching an Aldi bag. You may not want to be seen huddling up with a Hudl in public.

Having just upgraded to a Samsung Phablet, the Note 2, we don’t want to be carrying a luggable tablet around that has the same functionality, but is merely bigger. We don’t want to trying to manipulate spreadsheets and word documents on a smartphone that demands thin and nimble fingers and thumbs. The Samsung pen is a clear bonus and is truly amazing, but it’s the fact that Microsoft have given us a free Office app with our Office 365 licence so making all documents truly accessible and editable on the move. All our contacts, social networks, outlook email, gmail accounts, Skype and many more applications are now with us at all times. We can even watch our home security CCTV cameras and be alerted to disturbance and much more.

So it’s not just about, price, size, functionality and design but about lifestyle and that’s what make it easy to see today’s winners and hard to guess tommorrw’s.

So Who Will Pay The eBook VAT on 1st January 2015?

We are all aware that the EU VAT rules will change at the beginning of 2015 and that this will effectively end the offshore tax loophole operations of the ebook operators. This EU rule change will not impact the corporation tax loophole and so we will not see a mass migration from those countries who offer low corporation tax today, but it demonstrates that the EU as a block has the ability when pushed to change the rules.

The EU official statement is available on their taxation and customs site. http://ec.europa.eu/taxation_customs/taxation/vat/traders/e-commerce/

What it mean is that EU operators have to pay VAT at the point of consumption not at the point of dispatch and operations. They also no longer have to any VAT on consumption outside the EU which may be advantageous, but doesn’t not mean that the non EU country will not charge their own tax on digital services. Those supplying from outside the EU will be charged at point of consumption. A long overdue level playing field even though it is some 15 months away.

All operators will now have to amend their systems to operate and levy tax accordingly, which is not in itself a simple task.

This is going to be an interesting change to watch as those with a large customer base in a high VAT country will have to either pass on the hike in tax, absorb it or negotiate tighter supplier costs. We often automatically expect the cost increase to be passed onto the consumer but with digital ebooks this may not be as simple as that. As prices of ebooks continue to fall, we are clearly seeing the emergence of price points and once these start to be accepted by consumers, merely adding say 20% may not be palatable and it could trigger of a further hike in the price wars. Those with deeper pockets may elect to start to force a visible price difference and hurt the margins of others who don’t have the flexibility to part absorb this drop in profit, or the clout to get tighter cost prices.

Far from damaging Amazon this could damage others and in fact strengthen Amazon’s grip on suppliers and appeal to consumers. 

Books Without Price Points

Most retail products have price points. These are either know price points which the consumers expects; can of beans, pint of milk, loaf of bread, or are more industry accepted price points which the consumer doesn’t always know. When at B&Q we had some 50,000 plus SKUs (stocked units), we discovered only a couple of hundred had consumer know price points and it was only these you often had to focus on in a price war.

Book publishing has always enjoyed price point freedom, where the RRP (Recommended Retail Price) is often anybody’s guess and some would suggest as fictitious as some of the content. It is also one of the few consumer products to still carry the RRP on the product itself. When being discounted this is a great indicator of value to the consumer. Although it has often been a bone of contention to retailers who feel it can limit their options.

Buying a physical book is often a process of selecting a title and then flipping it over to discover the price expected. Many titles sit spine out and negate the use of POS shelf stickers so demanding that each individual title is either stickered or pre-printed and discounted. It can often be like a lottery with prices often all over the place and all sitting alongside each other. The obvious exceptions are when the book is in a discounted section, dump bin, end of gondola, or is discount stickered. Although some publishers and formats did come close to establishing price points, they often find themselves sitting next to others that undermined the action.

Remember when music had little price points and the impact that iTunes and others had and now we find pricing is being established by market forces and discounting and also is very low compared to only a few years ago.

Today we live in the price comparison world where anyone can find the cheapest offer at a click of a button and even via their smartphone. This has had a significant impact on many sectors where pricing was a challenge. Insurance, big ticket items, travel and many other sectors are now down to a beauty contest where the winner is often the cheapest, or the cheapest known source.

So how much would you pay for an A, or B format paperback, hardback biography, softback reference work, academic monograph, etc? Does the RRP price reflect the cost of production plus margin, what the publisher thinks people will pay or some vague recognition of a market price and price sensitivity?

As discount wars exploded, some would suggest that many publishers merely raised their RRP to compensate for the heavy discounts given and those with a price point policy often found their hands tied by a policy that the consumer didn’t recognise. We had rendition format pricing with those big paperbacks at airports aimed at adding an extra return for larger paper. We have the hardback versus paperback price which is now confused further by the digital edition. All contain the same content merely held within a different container, or container priced.

Can effective RRP price points be established , or is it now one way discount traffic and down to the retailers to establish their own price points? Remember when Amazon introduced the $9.99 ebook concept and the ensuing responses and agency debacle?

Amazon’s latest Matchbox offer may be a success, or it may fail, but the one thing it will do is drive down the price of ebooks even further and faster. The bundling concept doesn’t drive up the price of the physical merely devalues the secondary sale and although some will state this is good and new revenues, there is a cautionary saying – beware of what you wish for.

Amazon’s marketplace is the new book price comparison destination for many and their mix of physical and digital offer is one few can even start to compete with. They may not be the discovery channel but they will be the price comparison one.

The other interesting aspect of the price pointing of books is how publishers will position themselves against their channels as they explore direct to consumer sales.

Finally, the digital ebook market has already thrown up some interesting insights on price points. Which of the following price points will attract the most activity, the next highest activity, next highest level from; free, 0.99, 1.99, 2.99, 2.99 plus? The challenge is to then understand the logic behind the attractiveness of the offers and their potential logic.

The industry has taken too long to establish and work with price points and it’s the market that will start to establish them and maybe not just for digital product.      

Beating the Tin Drum

As far as the consumer is concerned is it the device, or the functionality it enables, or is it the content it can render that is ultimately the decider? Is it in fact cyclical and does the technology always come first, closely followed by the features and functions and the actual content come last, or are we now at a point of change?

Who today would buy, or even want the pre iPhone mobile? Was it purely down to the iconic design and presentation of the iPhone, or the apps it unleashed and app store? Would the device have been enough without the digital content?

We then have the drivers behind the major offers.

Apple’s iPod enabled iTunes to go mobile and was a phenomenal success like the Sony Walkman before it. But the iPod was nothing more than a mobile jukebox and when smartphones started to compete they needed to do more and the iconic iPhone was introduced. This masterpiece of design was king and spawned the lucrative world of apps and multimedia mobile. But again as Android replicated Apple’s offer they had to once again find something different - enter the iPad. The iPad was another winner and the true multi media player of choice but it wasn’t a phone and it wasn’t small enough to put in your pocket. Apart from the telephony the only real difference between the iPhone and iPad was size and in a mobile world the smaller size does matter too many. So when others started to introduce smaller tablets and larger smartphones the world started to change again.

Interestingly, the only real difference between many of today’s offers is the content and how well it renders of the device.

Some suggest that books are different and needed eInk dedicated readers. The reality is there are not and don’t. Amazon, Nook, Kobo have all adopted an increasingly agnostic device and operating system approach. This ‘platform’ approach is not dissimilar to all the major content services across all digital media. Today you can now play music, watch films and TV, play games, deal with emails, perform full office functions, access all media, community services and the internet on a device agnostic basis.

So devices are basically today’s fashion and quickly becoming tomorrow’s scrap. The apps are being developed for all operating platforms of significance, browsers are fully agnostic and content is available from all with everyone trying to mirror each other’s offer across all platforms. We now have the emergence of the super toys in the form of mobile watches, external snap on lenses and glasses, but is there no reason to believe that these will decide who wins and who losses? Some would suggest that they are a mere distraction and that, like so many before them, they do not offer sustainable advantage.

Maybe we are now entering the world where even the availability of media is not enough and it is the commercial package that will decide the winners. Perhaps the winners will not be the tin manufacturers, who as we have seen, now play on an increasingly level playing field, but the content packagers and community hubs who are becoming the ‘must haves’. Perhaps it’s those who have multi-faceted information on their community. This is where Amazon is scoring day in day out and where those who can design a place in their side lines can also survive. Amazon announced when it launched Amazon Matchbox that it had data on every book purchased since 1995 and I bet every search, basket and much more.

The latest rumour is that Amazon is about to launch a smartphone and give it away free within their service community. It isn’t such a farfetched idea and would certainly fire a shot across of the bows of the mobile technology companies who rely on selling units, be it to network providers, or direct. The shift would be from a device centric world where people watch the sales of smartphones to a service centric world where the consumer is attracted to who offers them the most convenience at the best price on whatever device.

As John Lennon once said, ‘ I may be a dreamer but iam not the only one.’

What's That In Your Pocket Sir?

So we have the introduction of wearable mobile devices; watches from Samsung and also Google Glass. Both providing ‘accessories to be seen wearing’, but which will probably date and be superseded very quickly. The Samsung watch is far from sleek and has as much design cache as those first ‘brick’ mobile phones. To make matters worse it doesn’t replace the mobile but ‘compliments it’.

It’s as if the manufactures can’t decide how big our physical pockets are, or just how many gadgets we actually want to carry around with us. Will tomorrow’s commuter really be wearing Google’s Glass, have a Samsung watch on their wrist, carry a smartphone and have a tablet tucked away in their bag? They could be soon joined by other devices to track our health and dismisses the eink readers as an evolutionary step we have already taken..

The challenge is that they all have to have significant feature and functionality overlap and the common denominator is actually very high which make accessories either very specialist or prone to be pure fashion statements and subject to the swings and moods of the market.

However, just when we thought we had seen it all up steps Sony with its supersized lenses which connect to smartphones by wi-fi, allowing them to take higher-quality photos. They are compatible with Android and iOS handsets and were announced alongside a new Sony smartphone which features a 20.7 megapixel camera and a larger-than-normal image sensor. The QX10 lens offers a 10x optical zoom and 18.2MP resolution which Sony says makes it ideal for taking shots of distant landmarks or close-ups of people. It will cost about £170.

There would appear to be two flaws in Sony’s strategy. You either want to give more megapixels to the camera within the phone and compete head to head with the pack, or you step to the side and develop the accessory lens. To do both effectively creates two competing products, adds costs and confuses the consumer. We are living in a YouTube age where convenience out strips quality and ask how many video cameras you see today. For those wanting top-quality photographs, the experience of having a DSLR [digital single lens reflex] offers a better experience than a Sony add-on camera. Sony itself has even acknowledged that it did not know how strong demand would be.

So what does this tell us about the developing market. It is clear that peripheral devices will evolve and that leads one to ask whether they will then shrink the smartphone to a network hub or compete with it as a standalone. It is like the laptop, tablet smartphone battles, we have to establish the optimum form factor and what differentiates one from another.

This is very important for all content, media producers and services who want to be device agnostic.  

Have a Break, Have a KitKat

Google is known for calling its release of its Android software after sweet treats and also naming them alphabetically. We have Cupcake, Donut, Eclair, Froyo (frozen yoghurt), Gingerbread, Honeycomb, Ice Cream Sandwich, Jelly Bean and the next was expected to be Key Lime Pie.

Today the news is that they have doubled up with the chocolate giant, Nestle to name version 4.4 KitKat.

It is hoped that the global recognition of the KitKat brand will give Android a positive association and Nestle now plans to deliver over 50 million chocolate bars featuring the Android mascot to shops in 19 markets, including the UK, US, Brazil, India, Japan and Russia.

So we hope the slogan, ‘have a break have a KitKat’ doesn’t relate to the new Android version and expect that Mars bars and Penguins are on the horizon.

Amazon Matchbox: Wet Matches or Real Fire?

If you buy a print book and get an ebook thrown in you would call it a bundle. It’s like the old ‘buy 1 get 1 free’ offer. You may pay a little extra at the time you buy it, but you may want to read the hardcopy at home and the digital in the version on the train. You may just be a hoarder and intent on owning everything, in every media.

But is physical and digital book bundling mere hype dreamt up by the digital advisors, or a new marketing ‘must have’ and is there a real consumer demand that needs to be fulfilled, or are we merely striking matches in the dark?

Well Amazon have once again gone where others often teeter and have announced Amazon Matchbox. Perhaps it will set the market on fire, or perhaps it will just be another potential attractive offer that keeps the others playing catch-up.

Matchbox offers to let you have a digital copy of those books you bought from Amazon since it started in 1995. Some will cost up to 2.99 others may be free. Once the publisher enrolls and the title is in the programme consumers can complete the bundle. HarperCollins are reported to be the first in Matchbox and Amazon claim some 10,000 titles are already eligible.

If we forget all the big names and titles that litter the press release, we have to ask ourselves whether this is feeding a latent consumer demand, creating a ‘must have’ bundled environment, or just a Matchbox with wet matches?

It is relatively easy to understand those that would subscribe to a MP3 and vinyl bundle, but has this been such a huge success that we all have to have a musical bundle? Books don’t get reread like music can be replayed, or suffer the reduced quality issues of MP3, so why would you buy a book bundle?

Perhaps the answer is in the second hand market of used books, which Amazon just happens to also sell. Perhaps it is to further differentiate Amazon from the pack who don’t sell physical books and probably ever will? Perhaps Amazon know something we don’t?

So you can now sell your old copy if it was bought from Amazon and buy a new digital one which takes up no space, but is yours barring any DRM issues. You can even replace those books you threw out, or previously gave away, or sold. But the point is you could do these things anyway and didn’t need matchbox to achieve it. Matchbox today is retrospective bundling and involves effectively two separate transactions and it will be interesting to see how HRMC in the UK and other tax authorities judge the ‘bundle’ when a tax variation exists between the physical and digital formats.

We presume the offer is purely for the Amazon fulfilled product and doesn’t extend to their other booksellers, ABE and The Book Depository.

Retrospective bundling also introduces issues if the rights have reverted, changed hands or are not world-wide. The question of how these ‘net receipts’ will be accounted and itemised to authors is yet another potential digital ‘honesty box.’

So we are no better off understanding this new ‘bundle’ than we were when we started and Amazon’s intentions may appear to offer even more perceived added value to keep the distance between them and the pretenders.

To visitthe Amazon Matchbox pages

To readAmazon’s press release

Microsoft Capture Nokia On Transfer Deadline Day

Yesterday was the day of the big spenders. Gareth Bale became the world’s most expensive footballer and joined Real Madrid for £85 million,  Vodaphone announced the selling off of its huge stake in Verizon for a mere £84bn and Microsoft has agreed a deal to buy Nokia's mobile-phone business for 5.4bn euro ($7.2bn; £4.6bn).

Tottenham have already spent the cash and replaced Bale with half a team of international talent. Vodaphone are planning on giving their shareholders a huge dividend of some £54bn to sweeten the windfall and true to their nature will avoid paying any tax on the deal. But what of Microsoft and is the deal going to reverse their fortunes under its new leadership?

Only some ten years ago Nokia ruled the mobile world and was the device of choice for the majority. However, Nokia made some fatal errors of judgement around its operating system and also failed miserably to compete with its new competitors from the Far East and Apple. Today it finds itself with saes falling at the rate of 24% in the last year. Microsoft, like a giant tanker spent 10 years trying to change course in changing seas and took too long in doing so.

So will a marriage of two of yesterday’s men make any difference to their fortune moving forward?

Microsoft will now license Nokia’s patents and mapping services and take on some 32,000 Nokia employees but will it win the consumers over? Microsoft will also licence the Nokia brand for the next ten years which may sound a good move but may also not appeal to the consumer.

Mobile is the area of tremendous potential but it has been one of weakness for Microsoft. There attempts to fix their OS offer have had the hype but delivered little. Microsoft’s Surface tablet should have been a winner but turned out a loser and its weakness was down once again to the OS and its offer.

Nokia greatest weakness has been their inability to adapt and sort out its OS. So will Windows OS mobile be the new must have or will it merely burn a deeper hole in Microsoft’s purse?

The new Lumia phones, which run a Microsoft operating system, may offer a small rest bite and the potential for greater integration, but will the marriage also drive other mobile manufacturers away from Windows offers and yet closer to Android?

Real Madrid have already covered their expenditure with the sales of Kaka and Ozil and in shirt sales. Vodaphone believe they can survive as a smaller global player and have a wedge of cash to soften the move and we now have three clear mobile offers; Apple, Android and Windows/Lumia/Nokia/whatever brand they finally choose? 

The Polarisation of the Civic Library?

In stark contrast to the new £188 million Library of Birmingham, we read of yet more cuts of some 20% to library service budgets in Anglesey, of potential closures to local libraries in Southend and across Lincolnshire and many other areas. Over 200 libraries have closed over the last year and Library campaigners are predicting some 400 closures in the next three years. Southend however are not just closing libraries but are spending 27 million on The Forum, a state-of-the-art library being delivered by the Council, the University of Essex and South Essex College.

So are we seeing a shift towards a centralised civic library and away from the local community one? Is this a wise move and are there other potential options?

If we forget the emotional rhetoric of the need to save our heritage, versus the cold blooded reality of having to cuts costs, do we have a potential to redeploy spending and potential meet the needs of all?

Many councils are looking to somewhat blatantly to breathe life into their library services and these ideas include library relocations, using volunteers, and increasing income. But is this merely sticking a plaster over a heavily bleeding patient? Some may suggest that it is a pity it took many until public spending cuts had to be made, to galvanise their thinking and responses. This sudden reaction has itself created opposition and polarisation of positions, which may have been avoided if the authorities had acted progressively and proactively over the years.

But we are where we are today.

Birmingham’s new library covers some 31,000 square metres over 10 levels and houses over 400,000 works which all be readily available to the public. This is twice the number of works which were available in the previous central library. It is also seen as an iconic landmark building and Birmingham’s answer to the many new landmarks such as London’s Shard. Some would suggest that this prestigious civic statement is reminiscent of the Victorian era when buildings like libraries were seen a civic statement of wealth and prosperity.

In contrast, the Lincolnshire authority is looking to reduce the number of libraries under its control from 47 to 15, in a bid to save £2 million and is hoping that many local communities will step in to take over the running of some libraries in rural locations. In an interesting twist the Lincolnshire Co-operative has offered to join forces with the council to keep six of the libraries open and also some 21 communities have expressed an interested in becoming involved in running local library services.

We have written about this subject and we often forget the relative short history of the public library in the UK.

With more public private partnerships such as the Lincolnshire Co-operative, we may now also be seeing a return to the subscription and circulating libraries?

We have to recognise that change is happening all around us. As a result of; technology, networks and mobile connectivity, we are changing how we communicate, discover, research, consume media and the media itself is changing. We are not advocating a ‘digital only’, monolithic database that is only accessible over the net. Far from it. Southend however are spending 27 million on The Forum, state-of-the-art library being delivered by the Council, the University of Essex and South Essex College. But neither are we advocating the status quo, where in many cases books lie dormant on shelves in local buildings, because they have done so for the last hundred years.

The publishing industry is often the first to jump on the barricades to defend the libraries, but its track record to date in enabling digital lending has been somewhat questionable and some would suggest self-centred. In a world, where for many the community is both local and virtual, maybe it’s the redefinition of the community library hub we are trying to grapple with. Libraries are often seen as book depositories and although many have tried to change this image, to many it sticks. But today we have libraries such as Amazon with every book available in both print and digitally, Google with its search engine and the online encyclopaedia that is Wikipedia. Merely replicating these is not what a civic library is best equipped or resourced to do. As the book evolves and media extends some past the spine, we have to also ask how we incorporate the book into a widening remit, whilst protecting the library as a centre of knowledge and expression.

Some other past Brave New World articles on the subject:

Public Libraries: Back to the Future

Can You Define Tomorrow's Digital Library?

Digital Libraryworld Part 1: Defining the Public Library

Digital Libraryworld Part 2: The Public Library Landscape

Digital Libraryworld Part 4: The Hodge Potch

Digital Library Fallout Continues
Digitally Wallpapering Library Shelves
Public Libraries: PA's Plan Fails to Join Dots
Can the Public Library Deliver That Golden Egg?
Freeing eLibraries to Compete?
Can eBooks Meet Changing Social Demand?

Spacey Questions 'Yeterday's' Media Practices

When someone of the status of Kevin Spacey does a keynote speak at the Edinburgh International Television Festival about media and content we have to listen. The speech centred on the lessons he had learned from his successful remake of the ‘House of Cards’ series.

His first point was that in making the series they refused to be drawn into the US TV pilot route forced on the market by the networks. He cites that some 113 pilots were made last year of which only 35 made it to full adoption and that of these only 13 were renewed. This year there are some 146 pilots and 35 take ups. The process is costing the industry some $300 to $400 million a year.

Spacey, who was also executive producer on the show which was nominated for no less than nine Emmy Award, said that "labels" were becoming meaningless and they risked being "left behind". Netflix bought into their production, believed their figures and backed it without a pilot and success followed.

The second point was on the film industry’s continued obsession with the staggered release. They continue to refuse to release via multiple channels simultaneously because cinema companies have insisted on exclusivity periods. There have been incidents where cinema companies have threatened dropping films if they were given simultaneous DVD or online releases.

Spacey claims that in releasing ‘House of Cards’ into multiple channels they dispelled the argument that multiple channel release would not work and that in providing the customer with choice they in fact bucked the lure of the pirate copy and gave the customer what they wanted – choice. He says that film companies should now follow the example and not cower to the cinema company’s pressure.

‘Give people what they want, when they want it, in the form they want it in, at a reasonable price and they’ll more likely pay for it rather than steal it.’ Spacey also says about why the ‘Game of Thrones’ is the most pirated show in the history of TV, is, ‘because people can’t get it fast enough.’

He said: 'If you watch a TV show on your iPad is it no longer a TV show? The device and length are irrelevant ... For kids growing up now there's no difference watching ‘Avatar’ on an iPad or watching YouTube on a TV and watching ‘Game of Thrones’ on their computer. It's all content. It's all story."

If we look at the book trade we hear many calling for staggered releases to be extended to cover digital, whilst others want digital first and some just want simultaneous multi form release. What Spacey argues is both logical and in giving customers choice and also lowers the attraction to share or buy pirate copies. Those who would cite the hardback to paperback, or the international staggered release as best practice, should note that we are now in the 21^st century and that 20^th century and that old models don’t always work in our global and networked world.

To see an abridged video of Spacey’s speech click here

To read the Telegraph article on the speech click here

The Mysterious Bookshop Finds A Survival Answer?

Sometimes we miss news, or items, which at the time didn't make our radar.

Today we come across one such story, which at a time when many bookshops are struggling to see the way ahead, may well offer some food for thought.

Driven by the realism of the book market for independent bookshops, Otto Penzler woke in the middle of the night and had an idea. Otto thought that if he asked some of his author friends to write a profile of their series characters, he could then print them and give them away with a book purchase as a special souvenir.

Otto is the owner of the Mysterious Bookshop in New York, which specialises in crime, mysteries and thrillers. This idea wasn’t his first and he had previously commissioned an original story from one of his author friends each Christmas. The story had to be set during Christmas, have an element of mystery and be part set at the Mysterious  Bookshop. He would then print the story and give it as thanks to his customers at Christmas.

He produced the new profiles in collector sets of 100, all signed by the author and as they say, the rest is history.

The initiative helped sustain the business and years after its initiation it still worked. He went on to publish the profiles as a collection, with Little Brown in US and Quercus in the UK.  ‘The Lineup’, featured character profiles from authors such as; Lee Child, Michael Connelly, Colin Dexter, Ian Rankin, Alexander McCall Smith.

Even if this is old news, it is still relevant news and gives us all food for thought.

Spotify For Trade eBooks?

Many talk about creating a ‘Spotify for eBooks’, but all too often they fail to grasp the differences between the media, marketplace and cultures and once again see all as the same. There is no reason to doubt that a subscription service will work for some book sectors, but there is plenty to question whether it could prevail across all sectors.

Academic, professional and educational sectors have a captive audience and market and often also have ‘must have’ content. This makes subscription services potentially viable in these sectors. There are questions about who can aggregate the offer and whether the subscriber is the user or a secondary intermediary service, but the content is often mandatory either way. The challenge is establishing that one stop shop and recognising that multiple ‘must have’ offers don’t always work in the eyes of the buyer.

Music, newsprint, magazines, film, TV along with services such as broadband and mobile service provision are ideal for subscription. The nature of these services also can lead to collaborative offers which can exploit additional memberships and add additional value. Importantly with regards to the content it is less about individual files and more about access to databases and collections.

Trade ebooks however have several challenges. The market and consumer reading is still very mixed between ebooks and pbooks, The readers are likely to only read a mere handful of books a year and often in an inconsistent and unpredictable time manner. Heavy readers tend to be eclectic in their habit and therefore do not want to be restricted to one genre and whereas ‘Twigging’ works best in a ‘must have’ market it is often far less important in a trade market where depth and range can be easily provided and search and discovery become more important.

The emergence of MOOCs such as edX and Coursera have started to radically change the content and business model in academic and education sectors. Jimmy Wales, founder of Wikipedia reflects on his own experience, ‘I was taking an advanced calculus class and my instructor was reputed to be a fabulous researcher, but he barely spoke English. He was a very boring and bad teacher and I was absolutely lost and in despair.’

‘So I went to the campus tutoring centre and they had Betamax tapes of a professor who had won teaching awards. Basically I sat with those tapes and took classes there. But I still had to go to the other one and sat there and wanted to kill myself.’

We now have TED Ed, MOOCs, Khan etc all built around offering the best teachers, content to all irrespective of location. The emergence of the virtual and universal course is forcing institutions to rethink their models and here access to quality can be best achieved by a subscription model.

Even the software industry is ditching its perpetual licence model and starting to move to a subscription based one. This drive is being led by the likes of Microsoft with their Office 365 which is now offering subscribers full office mobile on the smartphone.

Streaming services and faster mobile bandwidth are changing media markets such as music, film, TV sports. We are now seeing a clear shift from download and buy, to own to subscribe to access on demand as much as you want. Large subscription based services such as Sky, Vodaphone, EE, BT are all now also having to offer complimentary and added value services to maintain their member bases and avoid churn. Vodaphone are offering new 4G contracts with either Sky mobile sports or Spotify bundled in the UK. In other words you can now subscribe to one umbrella service and get the others at discount or even free. It’s about community and lock-in based on a single subscription.  

So what about books?

Today we have a number of attempted subscription based services; Nuvem de Livros in Brazil and Argentina, 24Symbols in Spain, Oyster in US. We have the potential return of the subscribing library and offers such as Amazon’s lending library. However these have to compete with a market which is still in a heavy discount war and undergoing fundamental relationship and value chain changes. The subscription offers that have emerged are not doing anything new and it could be argued are appealing to students and so tapping into the ‘must have’ segment not the trade.

We also have the potential of our Read Petite venture and subscription model and we would argue that this is different content to trade ebooks and a different new marketplace.

Subscription models are appropriate where there is a high reliance on the access and ’must have’ content, the captive audience and the alignment with mobile and online streamed services. We would suggest trade ebooks are not there today and are unlikely to make that transition anytime soon. 

More Ketchup With Books On The Side

Earlier this year we wrote an article, ‘Does Publishing Have Ketchup On Its Hands?’, which was about the promotion of free books with fast food from McDonalds. Some said ‘so what?’, one commented that ‘McDonalds are engaging in a wholly legal promotion, one which also encourages literacy among children and supports the waning fortunes of a primarily bricks-and-mortar bookseller'. Some of the personal emails we received also suppored of a position of, ‘books at any cost’.  

Today we read in eBookPortugal that a promotion is being launched in Portugal that is offering digital books for free with a Happy Meal from McDonalds. The programme from Happy Studio has some 12 titles including "The Major Cities of the World" and "The Wonders of Nature." So parents can bring in their kids knowing that they can get fat and learn at the same time!

Last night we watched another episode of 'Family Guy', where the evil tobacco company took over the Toy factory where Peter worked and promoted the least competent, (Peter) to President. Their motive was to introduce kids to smoking through toys and have someone who knew no better at the top. Thanks to Stewie the plan unraveled and even Peter saw the light.

Some 20 years ago the board of B&Q employed an Environment Controller. A move unheard of at the time and one aimed at ensuring we had an ethical approach to sustainable resources, supplies and also that our suppliers in the Far East and elsewhere adhered to acceptable standards of safety and employment. Today such policies are standard across the majority of business.

So the question we once again ask is, why are we allowing books to be used to promote fast food and to children? We recognise that diet is only one part of the children obesity problem, but it is a major contributor. It is claimed that some 25% of boys and 33% of girls in the UK that are aged between two and 19 years are overweight or obese. 

Not convinced then here are some sobering reads:

http://www.weightlossresources.co.uk/children/childhood_obesity.htm

http://www.dailymail.co.uk/health/article-2340641/Childhood-obesity-cases-fold-decade-Nearly-21-000-aged-19-treated-hospital-weight-related-conditions.html

http://www.bbc.co.uk/science/0/21702372

http://www.bbc.co.uk/news/magazine-19661085
http://www.cdc.gov/healthyyouth/obesity/facts.htm
http://www.cdc.gov/healthyyouth/yrbs/pdf/us_obesity_combo.pdf 

The world has always been full of double standards and hypocrisy, but do we honestly support that reading a book is worth the health of a child?

Amazon.com And You're Done

I remember in the late 90s siting in a strategy board meeting, where one director predicted that Bertlesmann would ‘crush ‘ Amazon and that the company would not last at the level of losses is was making. I tried to explain global branding, customer service, and how retail operations can work on positive cash flow, but I only got a glazed look in return. The outcome is now history.

It is hardly surprising to find that the media that Amazon started with, books, is one that they cover so well. It is the width and depth of Amazon’s book vision and commitment that makes it different. They proved themselves adept in understanding the market’s weaknesses and seizing on opportunities. As a result Amazon is truly vertical.

Who else has a significant if not major share of:

Physical books - Sales over the internet now includes The Book Depository and ABE acquisitions. Amazon remain one of a few who openly sell new books alongside, bargain, second hand and rare. They understand that to a consumer, a book is a book and that bookselling is about selling all books, not just front list.

Ebooks - Amazon not only rekick started the ebook market, but drove the consumer adoption of eink readers and later platforms. Although they still own Mobi, it is somewhat languishing in the background and we are not sure what happened to that other acquisition, Lexcycle’s Stanza reader. They have however created a market leading and global Kindle brand, which now transcends the device itself.

POD – Amazon acquired Booksurge. Although POD never fulfilled its potential to change the model from print and distribute, to distribute and print, Amazon still acquire content through this channel and it has also established their appeal to many authors.

Audiobooks – Amazon has this base covered with market leading and aptly named Audible.

Marketplace – Amazon’s service pulls in retailers, wholesalers and publishers and creates a place where Amazon may not be the cheapest but they still gets a healthy slice of the takings from each sale. A very clever move to create a service which everyone has to be in.

Singles - Amazon Singles may still be a bit lost but could easily find a home in their new Washington Post offer.

Digital Library – The Amazon owner lending library creates a new lending model which offers the consumer a new service and the author additional new income.

This is all without KDP and its successful self-publishing arm and also Amazon’s now serious and potentially disruptive moves into being a publisher. Did we forget that Kindle brand? Did we forget that umbrella subscription service, Prime?

To achieve the above in less than 20 years and do so across the globe is significant. Together it shows a clinical understanding of the value chain, book sectors and its supply chain that has to be admired. Amazon is truly a category killer.

Now add LoveFilm video streaming and DVD rentals, a very healthy CD Rom music retail offer and music downloads, the Washington Post, Amazon’s new Art offer and we see a media conglomerate that has subtly moved in and picked the industry’s ‘low hanging fruit’.

We must not forget all the other Amazon businesses. The range of goods it now sells is diverse and generates significant revenues. Here it services the same consumers through a single marketplace portal, offering a true one stop shop, or ‘Walmart on the internet’.

Then we have the technology that underpins all their services and like their cloud and web services are now being retailed in its own right. 

Amazon is here and is here to stay.

As long as they continue to provide that comprehensive cover, service and one stop shop, they will not be dislodged. Some may want to be number two or three, but it’s like chasing rabbits and their future will be determined more by Amazon’s actions and their ability to merely track them. We now need to learn to survive in an Amazon world. To do so we must innovate and do things differently and smarter and in doing so recognise that only the agile survive a category killer.  

Watermarking DRM Could Offer New Opportunities

Many see DRM as a glass half empty and also a barrier to interoperability, others see it as a means of restricting abuse, copyright infringement and piracy. The solution may not be as black and white as many believe.

Only a few years ago we would have advocated the wholesale dropping of DRM and a position similar to that adopted by MP3 music. Today however, there is potential for a softer approach to DRM to offer great opportunities for the marketplace. 

First we must accept that the current prevailing ‘unsocial’ or encrypted DRM serves few and in fact in many cases can be broken fairly easily. The major retail channels have walked away from a common standard and have created their own DRM ‘walled gardens’. There is little point in pointing a finger at Amazon, as Apple, Kobo, Nook all have their own DRM flavours and Adobe’s ACS4 is still locked into 2006 and apparently going nowhere fast. There are even some who are now actively pursuing the establishment of DRM on HTML5.

There is watermarking, which through the provision of a sort of an ‘ex libris’ stamp, offers a softer and more social form of DRM. Some would argue that watermarking can be removed, or abused, as easily as it can be applied. However, watermarking offers visible authentication and ownership. If it were coupled to a virtual registration database then removal, or alteration, would quickly identify the file as a rogue. So in principle we have the opportunity to establish an ownership model, but what is in it for the consumer and the author and how does such a stamp offer a market opportunity?

Today it is not possible to resell a used ebook. This applies loosely to all digital files and although this is being tested by the likes of ReDigi in both the music and book markets, we remain tethered to the first sale doctrine. However, why would we not want to resell ebooks? Some would suggest a used ebook market could kill off the front list market, others that the author would see no revenues for the supplemental sales.

However, others would suggest that a vibrant used ebook market could actually stimulate the market and that offer revenues against not just the second but third, forth, fifth, etc sale of the ebook. If coupled with an authentication and audit trail, watermarking could create additional revenue for all, social information and marketing opportunities and mirror the rights on physical books. Importantly it could act as a significant barrier to pirates who would have to establish a different value proposition.

Today’s DRM is restrictive, segmented and frankly a mess but that doesn’t mean that we need to flip and go DRM free which equally may be counterproductive as it would be difficult to put the horse back in the stable once it has bolted. Alternately, we lack any watermarking standards today and this itself could inhibit the adoption of the technology.

The question is, who is seriously looking and discussing this issue today? Stumbling blindly forward with unsocial DRM is not the answer, nether is a mass exodus to no DRM.

On-demand Media and Sensory Devices will Change Culture

Our dependency on electronic devices has grown over the last decade. We now appear to be entering yet another cycle of the technology escalation and it resulting cultural change. It will like those before it change how we consume media and how we communicate with others.

The ‘I’ era was one of the Pod, Phone and Pad. It enabled mobility and communication but also created the ‘I’ society who often resembled zombies, switch on, tuned out and transfixed through those white earpieces. What it finally gave us was the platform environment which enabled media to be enjoyed across multiple devices. This platform broke the single device was previously tied to single media. No more Walkmen, MP3 only, eink readers, the smartphone and tablet became the do it all devices for all.

Having created the platform we now appear primed to create sensory devices that themselves will enable a more intuitive interface and also delegate the platform to the cloud. Everything will be available online on-demand and will negate the need to have a local copy or download. This change will be significant as it truly starts to change culture from one of ownership to one of rental and subscription.

So we will have the likes of Google’s Glasses, Apple’s watch and many more sensory aligned devices. Speech recognition will become the norm and retina tracking will negate the need to pitch and squeeze and scroll. Mass robotics are still to fully happen and a device is whatever you wish it to be.

What will come first the sensory device, or the cloud on demand media? Some will suggest the technology is here today and they would be right, but they have yet to be mass adopted and in doing so change the culture.

The media industries now need to gear up for a significant change in business models which itself will create new opportunities for new and well as old media. It’s hard to find a music store on the high street today but when you do look at what they are now selling and recognise their business in now online. Add to that the new services that took up the mantle of Spiral Frog and are delivering on-demand media by subscription and we have a culture change that isn’t going back in the box.

In ten years sensory devices may have gone even further than we think possible today and the speed of bandwidth and universal connectivity will make the cloud reality. 

Retaining Author Relationships In A Transparent World

Technology and communications are changing not only our culture but also our relationships with others. It is not just about how and what we communicate but also about the transparency and openness of the communication. Where once we could not see, we now can and this can start to question and even undermine the trust and inter-dependency in relationships we once took for granted.  

We can all now see our financial transactions and business is now viewable in real time 24x7. Even our location, what we are doing, what we like and dislike can be tracked and visible to many. There is often no hiding place unless you are switched off. As recently witnesses in the news, even governments are exposed and they need to maintain their trusted relationships within an increasingly hostile environment.

When we look at the book business and it value and supply chains, this increased openness and transparency is opening up both new opportunities and also starting to question relationships and process we once took as given.  Increasingly, we are all questioning the value that others add and are now looking to technology and information to support these. These changes are changing relationships and what we expect from them and potentially exposing that thorny issue of trust.

We can no longer deny the rise in self-publishing. What was once seen as the slush pie and vanity publishing is fast becoming respectable and a vibrant publishing market in its own right. As this door widens it could impact on the traditional publishing chain and question what rights are traded, the terms and even the commercial relationships themselves. The process between rights and royalties may have been to many authors something that just happened, but as the likes of Amazon’s KDP and Kobo’s publishing and other services start to show live sales being accrued along with earnings, what once was a mystery to many authors is starting to become transparent. This shift is significant as it starts to force new rules on all and merely sticking to the old ways may in fact end up driving more to the new ones.

We have long argued that physical and digital rights should be separated. We accept that the two go hand in hand and that they are different to other rights such as Film and subsidiary rights. However, the terms under which they are licenced should be separated. Right reversals have a defined physical trigger in most contracts and this works today. However in a digital content world this can easily become perpetual licence as the inventory never goes out of print. If the two are joined under the same revert clause then the physical work can be locked in perpetuity irrespective of its performance. Term time licencing of digital would make sense, but these leads us to consider the information needed by the author on which to base their relationship and trust. We now have to accept a greater transparency, openness, availability of detailed information and timeliness of payments.

Of course some may say the wheel isn’t broken so it doesn’t need fixing, others may say they have a contract and that is that, but it is not about today but tomorrow and maybe it’s time for a change and one that reinforces the relationships and trust and negates the need to go for a more transparent and open deal.

What we can’t deny is that the world around us is changing and with it our approach to what we expect out of those we do business with and there is no reason to believe that should be any different for authors. 

Books on Film

When my wife’s Bibliophile book business started its YouTube video reviews some two years ago, we all questioned whether the effort would be worth the reward. Some 500 videos later, we know the answer and like its library of over 100K unique and individual book reviews, the effort was worth the reward.

Imagine being show an expensive art book by the person who bought the stock, not on ‘sale or return’, but firm and hearing them enthuse about what turned their head. The bonus is that you don’t get a head shot of a person, but get to see inside the book at the pages and the look and feel of the book itself. The real bonus comes with the price!

Many of the 3,500 books Bibliophile stocks are out of print, remaindered, or are on offer at a great price, but the information about them elsewhere is often poor, hard to find and that is probably why Bibliophile can offer them. Bibliophile unlock these gems and ensure their customers can see both inside the covers and understands their value.

So why do we still have the dry jacket and blurb from publishers? Why is the poor source of information, duly copied and offered on to consumers by many online retailers today? In some genres it may work but in many it’s just not good enough today and we have to find new ways to show off the book, describe it and sell it. It is about engagement with customers not throwing scraps over the wall and crossing one’s fingers.

Today music is being increasingly discovered, sampled and enjoyed via YouTube and in due course is becoming two dimensional. So why do we still have the same dour book promotion?

Some publishers are spending more to create promotional videos and glossy advertising of their ‘best sellers’, but surely in the age of the YouTube and the DIY video, it makes more sense to do it for all titles and create ‘more for less’ than merely pamper and spend on the few that would be hits anyway.