Choksi Leaves Amazon/Lexcycle

We were impressed when we heard Neelan Choksi, one of the founders of Lexcycle, speak at ‘The Tools of Change’ conference last Frankfurt. He displayed enthusiasm, genuine interest in publishing and a clear understanding of what drives users, commerce and how to apply technology. He has now decided to quit the company he helped establish just one year after it was swallowed up by Amazon. There is no clear statement as to why Choksi has gone and the Stanza ereader remains one of the most respected in the market.

Some would suggest that Amazon’s track record on acquisitions has been more about taking out players than integrating them. Mobibook was seen by many as a reputable and safe reader and DRM service which Amazon bought and which effectively has been hung out to dry. Others would point to Audible who were clearly owning and tearing up the audiobook market, but now appear to have stalled along with their sector. Then there was that great clearing house of rare and used books ABE and its merchant programme …

Can Amazon absorb acquisitions? The record appears to say not as there is always start with much talk about backing the entity to move forward as before but within a larger family and then some would say that there is often little substance to support that.

As for Stanza the star still shines, but it’s dimmer and lives somewhat outside of the Bezos Kindle world. Before Amazon bought them Stanza had declared their intent that they would embrace Adobe’s ACS4 DRM. This would have been a significant move which would have opened up DRM ebooks on mobiles, but one year later that obviously got dropped. Logic would say it would be good to have Stanza and Kindle both reading the Amazon files. Logic would say that Stanza offers Amazon some extra protection against the new threats of Apple and Google, but little can be seen that thinking prevails in Seattle.

So where Do Read An eBook?

So we think we have to compete with the usual suspects for leisure and entertainment time? However it is clear that people’s habits young and old are changing. When there was nothing on TV they may have picked up a book but now not only is there an explosion of channels, music and radio on demand but tv is no longer restricted to a schedule.

The UK’s media regulator Ofcom claim some 29% of UK adults on the internet now watch or download TV programmes or films on demand and the majority of the usage is via the highly successful catch-up services of traditional broadcasters such as BBC iPlayer.
They also claim digital TV takeup among UK adults now stands at 89%, 73% have access to the internet and 91% own a mobile phone.

It was interesting to compare these significant numbers with those disclosed at TOC Frankfurt by Lexcycle COO and founder Neelan Choksi who claimed that 32% of ebooks where read in bed and a further 27% whilst commuting. This clearly shows that reading could be being squeezed hard by our apparent continued love of the TV and growing connection to the internet.

Amazon Swoop Strategically

A potentially very strategic acquisition was made yesterday by Amazon when they bought the e-reader application start-up Lexcycle. Lexcycle’s iPhone application Stanza is probably the most popular mobile ebook application platform and has been a huge success on the iPhone, claiming half a million hits in the first months after it app launch and 1.5 million users. Stanza is a ereader and book store application that is also available on Mac and PCs and was working closely with Adobe to make its ACS4 DRM service available to mobile platforms.

Repeating the message that B&N gave when it bought Fictionwise less than a month ago, it is reported that Lexcyxle will continue to operate at arms length from Amazon. Lexcycle’s company statement said, 'Customers will still be able to browse, buy, and read ebooks from our many content partners. We look forward to offering future products and services that we hope will resonate with our passionate readers.’

So on one hand Amazon is gathering up the digital options and placing them quietly in ‘fortress Amazon’; Booksurge (POD), Audible (audio), ABE (long tail and rare books), Mobi (DRM) and now Stanza (ebook platform). In all cases their moves have taken out either a rising star or narrowed the options within the market. They have built a very impressive family that covers all the bases between author/ publisher and readers. The acquisitions have not been expensive but are clearly strategic in their nature. Sometimes, like with Audible, they have been in conflict with Amazon’s position and this latest one certain could be seen at odds with their Kindle application.

Its also interesting that the dust has hardly settled on the Fictionwise acquisition by B&N that this move has been swiftly executed. It also comes as many waited for Adobe’s ACS4 DRM to be ported via Stanza to the iPhone effectively opening up secure epub and AeB formats to the mobile.

We have to wait and see how Amazon move forward but what is certain by this acquisition is that the ebook agenda is clearly moving onto the mobile platform and maybe despite the sales of K1 and K2 Amazon has seen the competitive threat that Adobe/ Stanza / epub / AeB poses if left unchecked.

A Random iPhone Giveaway

Random House Publishing Group is the latest to catch the iPhone fever and have teamed up with Lexcycle, to make full-length books available for free on iPhone through Lexcycle’s popular Stanza reader. Works by authors such as Alan Furst, Julie Garwood, Charlie Huston, David Liss, Laurie Notaro, Arthur Phillips and Simon Rich will be available via the platform . Initially the service will feature titles from each author's backlist and will include excerpts for any new 2009 titles. Random House is also providing links to Amazon, Barnes and Noble.com, Borders.com, Powells.com and IndieBound.org to encourage readers to purchase more books by these authors.

We should be careful for what we wish for. We are starting to offer backlists as a free incentive for front list, but what if the front list doesn’t sell and people are happy with the backlist they get for free on a relatively unsecure platform? Do the authors earn on the titles that are given away?

We ask whether this is Wise.com?

So we have a free reader, free backlist and we expect readers to pay to by new titles at what price? This free offer is the ultimate discount and could create a mindset value proposition in the market of free ebooks. This is likely to be compounded by others such as Google Book Search.

Have the children finally taken over the choclate factory?