Nook , Nook, Please Let Me In

We have already asked the question about Barnes and Noble’s international grand venture and whether it will even hit the consciousness of the UK consumer, let alone pass the ‘so what’ test?

As Frankfurt and the Christmas season nears we seen some more of their approach top the UK which is as far as we know still the limit of their ‘international’ programme today. They have announced two further stores Dixons, which is the High Street little brother of yes, PC World, which is out of town shed outlet of the same group Dixons Retail. So some would suggest they have not two but one additional retailer. The deal will not be exclusive so as with their other deals they will find themselves in a beauty contest with all the other wannabees but today with as much consumer awareness of their brand as the best Korean model.

Barnes and Noble have also announced their video offer of blockbuster movies, classic films and original TV shows from major studios including HBO, Sony Pictures Home Entertainment, STARZ, Viacom and Warner Bros. Entertainment, plus favourite movies from The Walt Disney Studios.  They also will integrate a customers physical DVD and Blu-ray Disc content and digital video collection through UltraViolet™. This will enable customers to link their UltraViolet accounts to the NOOK Cloud allowing them to view their content  across NOOK devices and platform. This again in true Barnes and Noble fashion is behind their competitors integration and although competes well with the likes of Kobo does little against Amazon. Would you put your video library in the hands of someone who is not really in that business, is not the market driver or leader in any digital media sector? This may carry more clout if they were still going to launch NEWCO with Microsoft, but this appears to be very quiet today and it is somewhat illogical to launch Barnes and Noble Nook ventures without a big partner at your side.

On a positive note Barnes and Noble did name Patrick Rouvillois vice president and managing director of its international business. Rouvillois was previously chief marketing officer and head of e-commerce for Carrefour , the No. 2 global retailer with 15,000 stores in 30 countries. Prior to that , he was Executive Vice President of Consumer Marketing for Orange Group, one of the world’s leading telecommunications operators, responsible for consumer propositions, product marketing, pricing and commercial investment optimization. Before joining Orange, Mr. Rouvillois has held positions at Vivendi Universal Net, where he managed a content aggregation portal for Vodafone and SFR and also spent six years at The Boston Consulting Group in Europe and Oceania. He will report to Jamie Iannone, President of Barnes and Noble digital products.

Rouvillois certainly has the background to make a difference but some would suggest on paper he may be a bigger hitter than the person he reports to and if Barnes and Noble are serious about international he should be standing in his own right.

The big question today is, how Barnes and Noble will define international success and the timelines they have identified to achieve this? It is often easy to get others to carry your devices, even relatively easy to sell them at a low price point, but it is far more difficult to break into an established market where you offer nothing different other than US reputation as number two.

Related articles:

Aug 12: Nook Nook Who's There?

Aug 12: Barnes and Noble, Nook and NEWCO Come to UK

July 12: Living In A US Centric World?

April 12: Microsoft return to eBooks via Nook

Jan 12: Do Barnes and Noble Have a Digital Strategy?

Apr 11: Nook Stops Short

Open Access Gets A 'Big Bang'

The STM Market has always been a rich seam for publishing, but it is very different from other sectors in many aspects. The old joke was that publishers got the material for free, got it peer reviewed for free and then sold it back to the University for significant amounts of money. Obliviously, there is always a slither of truth in all such stories, but the reality is that publishers have greatly assisted the spread of knowledge and ensured the quality, accuracy and currency of material. However, digital and communications is forcing everyone to rethink the value chain and the STM sector is not immune.

In July, UK government announced that it would require the country’s taxpayer-funded research to be open-access from April 2013. In Europe, the European Commission also adopted a similar approach aimed at opening up all the work funded under its Horizon 2020 research programme, which is set to run from 2014 to 2020. The aim is to making all EU-funded research open to all and deliver some 60% of all European publicly funded research articles to be open access by 2016.

Now it appears that the particle physics world has created its own ‘Big Bang’  and is about to make its research papers freely available through open access. This is unique, in that the initiative is across the specialist field and is helped by the relative smaller number of journals involved (12 journals cover 90% of high-energy-physics papers published). Particle physics already posts most papers on the preprint server arXiv but peer-reviewed versions are still published in subscription journals.

The Sponsoring Consortium for Open Access Publishing in Particle Physics (SCOAP) aims to ensure that all particle-physics articles (some 7,000 last year) are free on journal websites with payments from libraries funding the access. Under the deal, the journals will receive agreed payments per paper. The transition to open access is hoped to be transparent with researchers not noticing any effect on their grant funding or on the way they publish papers. The consortium will pay the contracts from an annual budget of €10 million, which is funded not by authors or research grants, but by ledged from over a thousand libraries, funding agencies and research consortia.

The question is as to whether this model can be replicated by others or remains unique due to the small number of journals and publishers involved?

Open Access and Open Research are happening and the transition for many will not be as smooth or painless as the Big Bang of high-energy-physics.

Fred Newman 1960

We were reviewing a book and found this interesting picture from 1960 of a 27 year old Fred Newman, then gossip editor of the Daily Sketch. He is with Rosemary McLellan their Scottish 'stunt-girl'.

The picture was part of a book ' Scandal: a scurrilous history of gossip' by Roger Wilkes. It appears that Fred's early editor days stood him in good stead for his later life running Publishing News. He is quoted 'Our policy is to entertain.' No change there then!

Still miss the man and his wit.

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. 

Sumo Wrestling: WalMart Vs Amazon

This week, Reuters broke the news that the world’s largest store, Walmart, had taken the decision to no longer carry the world’s largest etailor’s Kindle tablets and eReaders once the existing inventory and purchase commitments had been honoured. It was reported as being a merchandising strategy and a recognition that Amazon is a real competitor across all media content. Is more about who owns the customer, who is providing the service and whose brand is actually being built than dropping some devices?

In the physical world it was all about filling the shelf and if you didn’t have the product on the shelf everything else could simply fail. The likes of Amazon then created the virtual shelf with vitual inventory and online service and many failed to match the offer. Some even effectively gave their digital business, be it for physical or digital product, to these new virtual traders. Amazon built a significant marketplace which few have been able to emulate, where even when they didn’t get the sale themselves, it was done effectively in their name and they earned a commission on it. Amazon is no longer about books, or digital media, it is a retail virtual market. The Apple store then took this commission approach to a new level and established that doing business through their appstore , on their iPads, be it for purchases or subscriptions, warranted a hefty 30% commission payment. They even tried to force the whole digital market back into fixed pricing with them being the ‘most favoured nation.’

We have gone from digital device and format/DRM lock-ins and transaction charges to platform commission and portal charges and now have to ask what next and how many slices can the pie take?

It is somewhat pleasing to see the emergence of HTML5 as the potential great leveller, but equally interesting to see the browser positions adopted by Amazon Kindle with their Silk browser  and Apple with own browser.  Are these to become the new toll booths and open market restrictions?

If we were to  ask the consumer who is their first choice gateway for music, film, games, TV, radio, news, books, will they select one umbrella service or many separate ones? Are they now looking for a simplified access and a one stop shop and is this driven by a marketplace or merely a platform. We don’t know the answer but unless we ask we will merely assume we know the answer.  The important thing is that what once was the brand everyone thought they bought from may now be changing and the power shifting through technology to others who simple attract consumers and facilitate access.

Walmart may so no to selling Kindles but if all they devices they sell still access Amazon and they don’t have the comparable offer are they exposed to the same risk? By not stocking Kindles are they also just driving their consumers who want one to another store full stop? 

Are Consumers Now in the Digital Driving Seat?

Yesterday’s Apple announcements on the iPhone 5 were greeted with the usually hoops and wows but also with a few more yawns and so what’s. Its not so much that Steve Jobs is missing as much as the marketplace is shifting and moving on and more of the same isn’t that stimulating. Wired described it as being ‘mostly it is the Toyota Prius of phone updates’.

Sometime you just sense a change in the air. It’s like when winter changes to spring, the days start to lengthen, blossom and colour burst forth, and the sun’s rays become warmer and we start to think about summer. Business and technology is not different, just less marked and has many individual but intertwined seasons. The cycle can be seen as moving from innovation, to adaption to the market, to wide adoption within the market, to commodity and commodity upgrades and then, back to innovation. Because technology alone is not enough the subsequent innovation may be more commercially and market driven.

We are clearly seeing the emergence of the market demand for the technology to be device agnostic. This is because the technology itself is now becoming commoditised. Consumers are looking beyond the ‘wow’ factors and more at their own needs. Android has been the driver of much change and has clipped the wings of Apple. It may ‘borrowed’ some things on its journey and Samsung may have lost one battle on Apple’s home soil, but the change has happened and Apple now has to respond, is no longer in a market of one and that is good for everyone, including Apple. The Nexus 7 and Samsung Note are becoming serious tablet contenders and who would have thought the Kindle Fire, a basic tablet with a lower cut of Android, no camera and few Apps would secure a reported 22% of the US tablet market?

However, we are now also seeing some real convergence between mobile devices as smartphones get smarter, faster and with bigger screens, whilst tablets shrink to meet them. Just as eInk was always going to be and was clearly a significant catalyst of change, it now looks a casualty of the process it succeeded in kick starting. Amazon retain their loyalty with it some may say more as an insurance policy than a strategic bet. It is easy to see the same fate for the early smartphones and tablets. As many early ereader producers will testify, technology without the platform is now a waste of time.

It’s no longer about formats, DRM, standards and more about online, anytime, anywhere, any device. This itself changes both the package and its delivery in ways we are only just starting to see today.

The market is now focused on ‘platforms’ and less on devices, on online on-demand services and less on offline, accepting the consumer merely licences and doesn’t own files, and changing business models that continually engage with the consumer. These changes are fundamental and start to open up new business models which in turn fuel new technology. Remember Blockbuster and how we used to rent videos from the store, then came Netflix and Lovefilm with their postal offers and now everything is going on-demand and streamed importantly to aany device anywhere, anytime. Remember record stores and megastores, then came iTunes with DRM, then came MP3 now we have Spotify. The basic content didn’t change radically, what changed was how we found it, acquired it and consumed it.  

So where does this leave book publishing and its alliances to the new technology and the changing consumer market? Unlike music and video, books have to compete head to head with the physical product and existing model. Merely driving down the digital price to a silly point like 20p will itself force change but are we ready or even thought through the implications or are we like many today spreading our bets and hoping one will come in?

Somewhat related:

A funny cartoon that brought a smile to our faces over upgrade announcements.

French and German News Publishers Want More

Sometimes it’s as if someone has only seen one side of the argument and proceeds to go half cock into resolving only what they see withoutout stepping back and taking in the wider picture and implications. How many times have we witnessed knee jerk reactions and in-trenched positions that have unravelled once people have taken a more measured viewpoint?

The French publishers originally launched their hostility at Google claiming that they and other search engines were republishing headlines and the first paragraph of articles without compensating them - the provider of the content. It is easy to see the delima as one service wants to be seen as the source and to get the hits that they can potentially monetarise, whilst the other wishes to index a broad range on content in order to provide a single portal and get the hits, that they can monotorise.  

Then in steps a government, who probably has been heavily lobbied by one side and we start to slide into a 'hotch potch' of unworkable or counter productive legislation. Last week the German cabinet gave its support to a draft law aimed to extend copyright protection to snippets of news articles republished by search engines. It would allow publishers charge search engines such as Google for the republishing of headlines and first paragraphs of articles. In essence the French and German publishers want to share in the revenue that Google earns from advertising displayed alongside their news snippets. They also believe that a headline and summary of an article that is published on Google News is often sufficient to satisfy the reader. The result they claim, is that the reader then doesn't click through to the publishers website, who then loses potential advertising revenue.

So one could first question why the publishers haven’t created their own collective news service? Is the Google service sufficient, or do people actually click through? What would be the equitable revenue share the publishers seek? Do the publishers want the share revenue or be paid per article hit? The questions go on and soon become as irrelevant as asking any TV news or radio channel for a share of news related revenues that they earn alongside the news. Google aren’t pretending the news is theirs, nor are they divulging the whole story. They are merely serving up a snippet. If that snippet didn’t exist how much traffic would even find its way to half the publishers who are demanding payment for being 'ignored' and bypassed today?

What would be the implications of extending this Franco German logic past news and magazines to other media such as books. If Amazon hadn’t pulled the industry through the metadata hedge, we still would have limited jackets on display and ‘search inside’ would be a bridge too far for many. Would book publishers now demand a fee from Amazon for creating a jacket, or search inside library that sells their content? The question of book reviews and fair use of what is basically marketing material by third parties is a very interesting point.

Sometimes we all have to recognise that the Internet is about connectivity and linking information to add value. It is about creating a ‘quid pro quo’ environment where different parties, that may have different business models and drivers, help each other for mutual benefit. Google makes money from advertising, publishers make money from publishing. Google merely uses snippets and gives full linkage and accreditation to them. They do not plagiarise the work, pass it off as theirs, or publish the full work, and they provide the publisher in effect with ' a free advert' and the more the publisher is indexed and seen, the more their brand and reputation is enhanced.

It would be perfectly responsible for publishers who don’t want to be indexed to opt out, but how many really would?  

It was a Good Week For Amazon and a Bad Week For The Rest

Well it was a good week for Amazon and a disappointing one for the rest. That may sound a bit harsh but what is becoming clear is that even the strong players and pretenders often lack Amazon’s vision, customer focus, market understanding and delivery and in some cases many of these.

So what was so good for Amazon?

First they raised the device bar and ‘Fired’ everyone up for Christmas. New fire tablets, better Kindle ereader and Fire devices coming to UK. The announcements weren’t earth shattering, but well communicated and sufficient to nullify the opposition. It was if they were being innovative, as the reality was that they were just doing the same as their main competitors in the ereader device market and raising their tablet bar in order to compete better with their real competitors in the tablet arena; Apple, Samsung and Google. They also claimed that the original fire had captured 22% of the US tablet market which should be a significant wake up call for all given its basic features.  

The interesting twist was their media focus. They own: Audible, the leading audiobook player, Lovefilm, a leading European on demand film service, ABE the largest rare and second hand book marketplace, Book Depository a significant global book retailer, are a growing publishing force both for established and new authors and of course are the largest global ebook and physical bookseller buy any measure. They now are clearly starting to intertwine these offers, using ‘Prime’ to generate loyalty and with yesterday’s announcements starting to build a differentiator that will be hard for others to follow let alone compete with. Their new announcements on X Ray and their new serial programme are clear indicators of them pushing the boundaries.

Then we have Judge Cote approving the DOJ settlement with three publishers which some would suggest leaves Apple, who can afford to play hardball and the other two publishers who perhaps can’t afford too, looking exposed.

They also announce that they will be taking on 600 more staff in a new depot at Hemel Hempstead, 3,000 temporary staff over Christmas and creating 2,000 new jobs in the UK. All of which was not lost on David Cameron who welcomed the announcement. How to influence people in high places!

To top it all the share rose 2%.

Nokia never seem to learn. Just when some said that their new Lumia 920 smartphone running the new Windows platform may be one to watch they scored a stupid own goal. It appears that the video which was claimed to have been shot using the new phone was fake and created using a higher quality camera. The result, their share dropped a further 6%.

Having announced three new devices you would think Kobo would have had a good week. However, when you step back, the week will belong to Amazon who clearly upstaged the a poorly timed announcement from Kobo. The one thing you don’t do is beat your chest and declare you are a winner when the opposition is about to wipe the smile off your face. Kobo’s offer is now an also ran and like their service they are seen as having a poor competitive offer. Rakuten need to step up their investment and focus on building a real differentiator if they have any hope of competing in the major markets. It is clear that Kobo now have a narrow media offer and devices are not going to make any difference whatever they price them at. They are competing on the wrong thing, but perhaps like other forgotten pretenders such as Sony, that’s all they have got.

Barnes and Noble now know that they left it too late to venture outside of their comfort blanket – the US. They now have got strong established and committed opposition in the UK and that’s before they even spend a dollar trying to build their profile.

Apple are oblivious to bad weeks but even they must be wondering if agency was wise and why they continue to fight the inevitable. They have their own announcements coming up and the iPad nano (remember they said they would never shrink the screen) and a new iPhone are bound to play to the fans delight, but unless they start to get real on pricing there will soon be a serious price gap with the rest. This was easy to defend when they stood out but as the others improve, like with smartphones, people will start to look seriously at others.

However Apple appears to have bitten the hand that feeds it in their zealous patent actions against Samsung. It is claimed that Samsung is withholding memory chips for the initial shipments of the new iPhone because of a disagreement about pricing. Apple obviously doesn’t like to be dependent on Samsung , but there is only so much volume Apple can get from elsewhere. The Korea Economic Daily reported Apple’s exclusion of some Samsung components earlier today.

It’s a sign that we only have 19 weeks to Christmas. The cards are starting to appear in the shops and despite the potential Indian summer we are starting to think about presents.

'False Sale' without 'First Sale'?

Some ask why ebooks are so cheap to buy today. Some will point to the fact you don’t actually buy them and therefore you are just paying a perpetual rental charge for something you can’t give away, sell and don’t actually own.

What started and looked a serious report on Bruce Willis, in the Daily Mail. The report claimed Willis was taking on Apple over ownership of his vast iTunes library of music may have exposed a few facts to a very wide audience. The story was based on the fact that digital music files can’t be passed on to others and that they in fact die with their owner, or should that be guardian. Irrespective of how much was paid and the value of the library, it all turns to dust on death.  The story was denied in the Guardian and supposedly went away, but like any plausible story, people then asked, forget Bruce what about me and is it true?

We have those who say that passing on one’s media to their relations is akin to leaving them the food in the fridge – a waste of time and they don’t want it. Leaving someone your favourite Beatles music assumes that they want it and like it. They point to passed on 78s and old vinyl that can’t be played. They suggest that it rare to find that the next generation will appreciate and value the same music as the last.

Then there are those who believe that collections of media, be they music, books, pictures, videos can help define who we are and that this alone is a reason to preserve their library and their identity.

In the physical world there is no problem – goods can be handed down, retained and even sold or given away. However, in the digital world things are not so clear cut. We stumbled into the digital age without addressing the ‘first sale doctrine’, which enabled the buyer own the physical file. Today there is no second-hand market for music files, ebooks, games, videos and software. There are a few exceptions and challenges, but in the main you buy a licence not the file. So when Jeff Bezos talks about holding thousands of files on your Kindle he forgets to clarify what the word ‘hold ‘actually means. He is not alone and the whole question of ownership is avoided today.

We have written about challenges to this ‘false sale’ without ‘first sale.’

We have argued for the sale of licences to be made clearer and the need for media markets to move to a more logical on demand rental offer, which would at least remove the current ambiguity. However, the easiest solution is to allow digital goods the same rights of resale as physical ones. There may need to be a registry, but anyone who has read this blog knows we are strong advocates of a rights registry for what is a rights business.

So what about Bruce Willis and his vast iTunes music collection? Well those without DRM should be easy to pass on, albeit against the terms of purchase. Those with DRM remain locked until the service dies, the format dies , the device dies, or the person who bought them dies. It doesn’t take a genius to work out that ebooks are in a worse shape due to our continued support of DRM and the DRM constructs that are in play today and the fact that unlike music, videos and games most of us only read a book once.

Related articles:

http://bookseller-association.blogspot.co.uk/2012/01/first-sale-doctrine-digital-threat-or.html

http://www.dailymail.co.uk/news/article-2197248/Bruce-Willis-fights-leave-iPod-tunes-family-Actor-considering-legal-action-Apple-battle-owns-songs-downloaded-iTunes.html?ito=feeds-newsxml

http://www.guardian.co.uk/technology/blog/2012/sep/03/no-apple-bruce-willis

http://techcrunch.com/2012/09/03/bruce-willis-itunes-music-library/

Nook, Nook Who's There?

Both the Harris Interactive report on ‘Screenlife’ (July 2012) and OFCOM ‘Communications Report’ (July 2012) noted that the 35 to 55 group has already become switched on to mobile technology and the rise of digital ebook readers, smartphones and tablets. Smartphone penetration is now up to 39% with 80% of all UK households having internet access and tablet ownership increasing over the last twelve months from 2% to 11%, with 17% expressing the intent to purchase in next twelve months. Some 16% of the tablet ownership is within the 45 – 54 year old market and some 19% are A and B social grouping.

Interestingly,  10% of the UK population now owns an ereader device and this increases to 15% within the 35 to 44 age group. There is a clear indication that both tablet and ereader usage is home and family based with 67% of ereader usage being at home and 66% of tablet usage being shared with the family. This group have also been heavy adopters of digital ebooks (see OFCOM report)  with genre  such as romance, historic romance, and erotic fantasy, crime and thriller being in high demand.

Today Barnes and Noble announced their initial retail partners in the UK and the question is whether this will make any difference.

John Lewis is their ‘premier retail’ partner but they already sell Kobo, Kindle and were one of the first to sell Sony readers. The question is why they are seen as the premier retailer? They literally will sell the tin and the Nook will line up in a ‘beauty contest’ with the rest. Unless hard money is spent on brand building, one fears they may not even pass the ‘so what?’ test and the winner here maybe not down to who has the best bikini but who is known and is a trusted investment.

Argos is pitched at being well placed with 700 store to ‘touch the UK population’, but again is already selling Kindles and Sony readers and a host of other devices. It is questionable whether their demographic matches John Lewis and ebook reading and therefore Barnes and Noble may have challenges in building the brand awareness they clearly don’t have today in the UK.

Blackwell’s also sell Sony readers so have the same ACS4 DRM allowing the ebooks should play also on the Nook . However, Blackwell’s 18 months ago gave poor customer service and offered no in store experience, so it will be interesting how staff are to be trained and rise to the challenge. The other question is why they couldn’t do it for Sony who had a stronger brand awareness in the UK than Barnes and Noble have today.

Foyles already have a relationship with TXTR, so are they to ditch that to sell the Nook and Barnes and Noble inventory?

By entering the UK market when the device battles have been largely fought and the competition is installed, are Barnes and Noble going to make a difference? At best they may equal their US second place, but unless serious money is put on the table to promote their brand, build a credible in store experience and convince the public they are a real player in the UK, it is questionable whether they will achieve that.

It isn’t about devices any more, its about platforms. Its about branding and experience and with Amazon its about loyalty, price and service. Amazon has a UK base understands the UK market and can position its offer and content accordingly. This is the first time Barnes and Noble have attempted to come past the Eastern seaboard. Will they tailor their offer to the UK or merely rebadged it with a UK sticker? 

Related previous articles:

http://bookseller-association.blogspot.co.uk/2011/01/would-you-buy-ebook-reader-off-this-man.html

http://bookseller-association.blogspot.co.uk/2011/02/would-you-buy-ebook-reader-from-this.html

http://bookseller-association.blogspot.co.uk/2012/08/barnes-and-noble-nook-and-newco-come-to.html

http://bookseller-association.blogspot.co.uk/2012/05/waterstones-let-fox-into-chicken-hut.html

Are ABA's Members Ready For Another eRelationship?

The American Booksellers Association (ABA), has already walked away from one ebook marriage it said would solve all its members wishes and no sooner has the divorce papers been filed , it now appears to be teaming up for a new marriage based on Kobo. Is it a shotgun wedding , a marriage of convenience, or simply a marriage on the rebound?

The last relationship engaged with close to 400 stores but failed to work out. Now the same stores have another ‘arranged marriage’ with yet another suitor, but will this fair any better?. Maybe the Google relationship was destined to fail once the honeymoon was over and the reality sunk in. Just as the BA may have discovered in the UK, Google may have had different ideas about what they wanted, or expected from their partnership.

So stores are expected to simply flip from Google to Kobo , start to sell not just ebooks but Kobo devices and become overnight Kobo disciples. The ABA may be excited, Kobo may be excited , but are the stores really geared up to support it? 

In early 2011 we wrote two articles on the UK’s bookshops approach to selling ereaders and ebooks, we have since seen WHS dump Kobo POS displays and await the Waterstones  Amazon in store experience. We accept that Barnes and Noble offered a good in store experience but they were committed and it was their own show.

We must remember that the ABA stores will be basically selling other’s devices and the files will be sold by the service provider. They will not control prices, nor the overall experience and they will receive a commission for what some suggest is potentially handing over their customers to others to exploit. Some would say that it’s like inviting the fox into the chicken hut.

We would ask many questions, some obvious others not so and presume everyone signing up will have the answers:

·         Tax who owns the problem/issue and are equipment sales separated from file sales?

·         Are equipment sales based on sale or return or firm?

·         Who trains the in store staff?

·         Who provides the customer service first and second lines and is it online, offline or by retailer

·         Do stores train all staff or selectively will there by an expert on stand at all times?

·         Will stores sell proactively or passively?

·         If pricing is set by provider how do stores handle competitive questions?

·         DRM is a challenge, but can the customer play a kobo file on kindle, Nook, Sony or must they have a Kobo device?

·         How will staff handle questions about Google?

·         Must customers buy all their files for same store and if not, where else can I buy them and will they then appear as disparate accounts within the Kobo platform?

·         Who owns the customer data?

The important question is, how do stores handle questions about Kindle, Nook, Apple, Sony etc?

These and other questions can be thought through and can be negated, but we must remember this is not within one organisation, but across many different ones and the consumer is likely to be exposed to multiple experiences.

However, the experience maybe tested further with another ebookstore , Zola, setting its eyes on the same market opportunity and claims to be already in discussion with the ABA and have 50 stores signed up. Others such as Copia also can’t afford to be left outside. 

So is the KOBO agreement exclusive, or open to all? If it is open to others and how do the ABA plan to level the experience?

We wrote the Brave new World report some 6 years ago and at the time we strongly believed that there was an opportunity for book retailers to join the ebook marketplace. However, apart from exceptions such as Barnes and Noble, few rose to the challenge and those that did often stumbled and instead of collaborating to jointly develop and hone the opportunity, they choose to compete. Some would suggest that its somewhat ironic that they now find themselves at the same place, but without the same control. Instead of rising to develop their own offer, under their associations, they chose to ‘white label’ others with all the implications that strategy delivers. 

The Power Of The Amazon Prime 'Club'

In 2002 Amazon launched its Free Super Saver Shipping program Amazon offering free shipping on orders over $25. In 2005 Amazon launched Amazon Prime, which for an annual fee of $79 gave its’members’ free two day shipping on all you can eat. Initially, many may have questioned the value of the service but Amazon has continued to add value its its club and now has built a very substantial membership which obviously keeps coming back to Amazon for more.

Amazon Prime now offers over 15 million items that are eligible for the service, Prime Instant Video, which is free to members offering over 22,000 films and tv programmes on demand and adding the Kindle Owners’ Lending Library, which has now grown from some 5,000 books to over 180,000 that can be borrowed for free with no due dates. Prime remains just $79.

Amazon now has announce that it ships more items with Prime Free Two-Day Shipping than with Free Super Saver Shipping and they have built a club and member loyalty which will become increasingly self fuelling. Amazon Prime is a marketing work of genius that its competitors will struggle to compete with. They may offer free shipping but in doing so stand to the total cost, they may offer free on demand film downloads but only have a film service and not a media service. They may only offer digital and have a limited range compared to Amazon’s.  more and – the program Amazon launched in 2002 that offers free shipping on orders over $25.

Amazon is building a significant ‘club’ and differentiator which not only is hard for others to follow but potentially protects Amazon from sudden attack by building a ‘first choice’ or preferred port for its customers. Importantly they can now build new services which can be offered to Prime members and the Kindle lending is a clear example of this. Effectively what started out as a postal offer has morphed into a subscription club, on line library for film and ebooks and could be easily plugged into other services.

As others improve their offer Amazon may well loose some share in individual markets but they are growing a bigger market share across several markets. This in turn will become more appealing to many and offer value and a one stop shop.  

Amazon has displayed and continues to deliver first class value and customer service and it is these qualities that others such as Barnes and Noble, Kobo and Apple must grapple with

Apple 1 Samsung 0

Trademarks are trademarks, patents are patents and copyright is copyright and all should and need to be protected but one has to question the findings of a US jury in San Jose. They have delivered a massive blow to Samsung and awarded Apple $1.05bn (£665m) in damages in an intellectual property lawsuit.

The ironic thing is that Samsung are one of Apple’s largest suppliers of chips and other technology which underpin its own iOS technology. It also begs the question as to whether the result would have been the same if Samsung was US and Apple from South Korea?

Now follows lengthy and costly appeals and Apple pressing for import bans against Samsung’s devices and probably others.

Is this a good result for consumers? In the short run probably not as it will certainly slow down the Android market and restrict some devices. Apple will continue to dominate the tablet market and prices will remain at a premium. The one party that may be rubbing their hands today are also American and being late to the party now have a chance to shine through being different – Microsoft.

Digitise Your Books For Chump Change

Sometimes we all miss the launch of something and its only when someone discovers it do some of the ramifications come home and the service become ‘news’. We were alerted to a piece in Publishers Weekly ‘1DollarScan Takes Service to Cloud, Authors Guild Worried’

So who and what is 1DollarScan?

The company is based in San Jose and operates under a Japanese company Bookscan. The object of its service is to offer consumers the ability to digitise their books for a 'cent a page' making a 200 page book digital for just 2 dollars, or less than the cost of the postage to 1DollarScan. The book is destroyed in the process, which first cuts the spine, then using high-speed Canon scanners, with optical-character recognition, scans and OCRs the content turning it into a PDF file, which can be read on literally a host of devices.

So what’s the difference with scanning your own books using standard off the shelf equipment and software and creating digital copies using1DollarScan? What’s the difference between copying a CD to create a MP3 file or taping a TV programme to create a digital copy? The reality is that the day is fast approaching when everyone will be able to do it themselves effectively at home and this service is just offering the economies of scale and scope. If the consumer only uses the files for their own use it is ‘fair use.’

The service may be taken up by many people wanting to clear their shelves, or it may fail just as other smart ideas, which no one really wanted. However, the challenge is how we would regulate such a service? 1DollarScan claim that they will ensure consumer self validate their usage and that they will also provide an opt in/out service for the owner of the copyright. From the outside and without the detail it is hard to say how this will work, but given that they will know nothing about the copyright against the titles they are scanning, it would appear half baked and some would suggest 'aiding and abetting' potential infringement.

Do 1DollarScan retain an archive of the files and if so, are these fair use or an infringement?

If 100 requests for the same title are scanned, they will distributed the 100 PDF files to 100 people with little or no control over their future use. They will be effectively 'open files' which would be relatively easy to covert to other formats and trade. The files will once again fall under DMCA Safe habour protection for any trading services that  unwittingly got involved and the owner of the copyright will have to search, and issue take down notices.

When Google scanned books the process was restricted to one body. With this service there could be literally hundreds of the same files in circulation and onus is on the owner to ensure that they are not being traded and infringing copyright.

The challenge is that 1DollarScan will not be the first nor will they be the last service offer and the digitisation cost is going only one way. Without a rights registry we remain a rights industry that some would say is walking backwards into a digital world.

Related :

Publishers Weekly ‘1DollarScan Takes Service to Cloud, Authors Guild Worried’

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