A 100,000 Picture Kiosks Don't Make a Digital Summer

The recent news that Espresso Book Machine suppliers, On Demand Books, were to partner with Eastman Kodak and ReaderLink Distribution Services to distribute book production to potentially 105,000 locations was greeted by many smaller presses and self publishing houses with great enthusiasm.  Kodak is reportedly working with On Demand to integrate the Espresso Book Machine with the widely available KODAK Picture Kiosk and potentially provide 7 million titles on the long awaited ‘distribute and print’. ReaderLink open this opportunity further to include some 24,000 retail outlets (drugstores, groceries, etc).

However, since it conception the On Demand model has failed to take off at the direct to consumer end. POD (Print on Demand) has made it mark on the traditional production cycle, helping some to reduce risk with smaller and more frequent print runs and to keep titles effectively in print and negate rights being reverted.  Smaller presses and self publishing ventures have clearly benefited but at has been at a higher unit cost, environmental impact and mainly restricted to monochrome. In essence the market remains one of 'print and distribute' and not 'distribute and print.' The POD market is now dominated by the likes of Ingram and not On Demand who have failed to sell but a small number of machines and make any real market penetration.

Since the Espresso first appeared the digital market has exploded and the impact of this must reduce the opportunity both in terms of genre and consumer appeal. It also assumes consumers will want to go to Kodak locations and not bookstores, which may be achievable but at what cost to the already ailing bookstore.

We don’t know the economic model, pricing and what the turnaround and service offer will be today. but these will greatly determine its appeal and success. The trick will still be to get the machines into bookstores, libraries, schools etc and apart from content what do On Demand offer that others could not do more effectively?

We can’t help thinking this is somewhat of a marriage of convenience between two potential digital 'losers' and just having Picture kiosks in many locations is nothing if it’s the wrong location, wrong price, wrong service offer and its an inferior offer. 

Is The Online, OnDemand, Subscription Model The Way Forward For All?

Netflix launch in the UK at the beginning of 2012 and we thought that they would have a tough time establishing themselves, their brand and competing head to head with Amazon’s Love Film rival. We were wrong! Netflix in its first seven months has acquired 1 million subscribers in the UK. They have created a new business territory that is now worth £72 million and growing in just 7 months! Netflix took 10 months to achieve 1 million subscribers in Latin America and the Caribbean, and 10 months again in Canada. The catchment and infrastructure is different in the UK and Ireland with some 67 million consumers with good access to high-speed Internet services, whereas Canada is smaller population 34 million and Latin America and the Caribbean have 98 million but inferior infrastructure.

Some may say so what and point to LoveFilm’s 2 million customer base is wider and is across not just the UK, but also Germany, Sweden, Denmark and Norway and Sky. However, Netflix plan to launch in Norway, Denmark, Sweden and Finland by the end of the year. But the fact is that Netflix can to the UK and gave a simple message video on demand and as much as you can view for one price. The recent Harris Interactive ‘Screenlife’ report (July 2012) asked smartphone and tablet users to rate the appeal of an online music service on any connected device, with access to  practically any track available today even if you don’t own them, where you pay a monthly subscription of around £5 – 10? They also asked the same about watching as many films or TV programmes from a large library using any connected device, where you pay a monthly subscription of around £5 – 10? The response was significant

Appeal	Extremely	Very	Somewhat	Not Very	Not at all	Not sure
Smartphone
Music	14%	11%	24%	24%	25%	2%
Video	17%	16%	25%	17%	21%	2%
Tablet
Music	28%	17%	18%	16%	21%	1%
Video	32%	19%	19%	12%	17%	1%

Netflix claim that the top UK and Ireland genres are comedy and drama and users’ favourite time to stream is on a Sunday night, according to the service.

So will the same shift to an on demand subscription based service model impact other media markets? It is clear that the the  way we all consume and pay for media is changing radically and moving from, pay to own, to subscribe for on demand. This is no longer about music, film, games, TV,information and books , but about all digital media and how we find it, access it and pay for it.

Today’s book market is tearing itself apart with discounting, ebook pricing tactical games and a lowering of consumer price perception. Will now lead to a Spotify or Netflix for books or a continuation of the devaluation of the content? 

Related articles:

http://bookseller-association.blogspot.co.uk/2012/01/media-on-demand-takes-another-step.html

http://bookseller-association.blogspot.co.uk/2011/01/amazon-take-all-of-lovefilm.html

Apple on Demand?

Apple the pioneer of the digital music download is reported by Bloomberg to be in talks to acquire online music-streaming service Lala. Why would someone so dominant with their iTunes offer want Lala and does it indicate a potential shift in how music is consumed?

The Lala service has over 8 million tracks and enables you to listen to any track or album for free but only once. After that you can buy the track for a 10 cents and can access it at any time at your convenience. So instead of buying it and owning it you effectively rent it perpetuity. Obviously the 10 cents add up and its easy to see the business model being successful if consumers accept the change of ownership to rental subscription. The model differs to that of others such as Spotify who charge by the month for their premium service and enable you to access any track at any time and build your own playlists.

Both Lala and Spotify also allow you to buy a download.

So is the ‘world’s most popular online media store’ broadening its range of offer and realising that the online streaming on demand model has a broad appeal? Are they merely saving some money by buying the technology and its members and folding them into a broader and deeper iTunes one?

What is clear to us is that the world of the cloud computing and online media on demand service is becoming real. This changes how we store, service and consume media and importantly changes the economic models that the consumer has long been educated to live with. Gone is the physical ownership and my library is on my shelf model and in comes the ‘click and get it’ on demand at anytime in any place one. There are potential pitfalls to ownership – ask anyone with betamax, VHS, 8 track, audio cassettes etc. There are pitfalls to the on demand world which is totally reliant on the economic sustainability of the service. Therefore the hybrid mixed model would appear to offer the best of both worlds today and a platform for radical change tomorrow.

The obvious question is that of books and whether the same changes will appear. The answer is a simple yes and that they are already happening. The impact is both significant and as yet little thought through but the opportunity is clear and players such as Google are clearly seeing it today. The one saviour is that any streaming service could offer up any media. This means that there will be some battles ahead but that there is no reason why the likes of iTunes or Spotify or Google Editions can’t be one stop media on demand services.