Reactions to the DX have been varied and interesting - every kindle dx review bemoaning the high price and lack of ePub is matched by one hoping Kindle DX will save newspapers, textbooks, students’ backs.
However, look beyond the Kindle DX reviews and a fascinating picture emerges -
Amazon is in the midst of a war for the future of publishing.
Book publishers are finally waking up to this war and the threat to their very existence.
Let’s look at the 7 main entities fighting to own the future of publishing -
Amazon with its Kindles
Disclaimer: Running a Kindle Review site makes it impossible for me to be unbiased.
Amazon’s Play: Own a direct channel to customers. Sell content on every other channel. Cut out all middlemen.
Amazon’s Extended Play: Cut out paper as a medium for transmitting information. Replace Paper with Kindles.
Amazon’s Strengths: Customer’s Trust. Brand Name. Position as Book and General Retailer. Infrastructure. Kindle already #1 US eReader. Kindle DX textbook reader released before competitors. Customers equate Amazon with ‘buying’. Kindles and Kindle for iPhone (courtesy the Safari based book store) cut out all middlemen.
Amazon’s Weaknesses: Dependency on wireless providers (as the 12 cents per MB of data transferred charge shows). Lack of own search engine. Lots of enemies, some of which are now banding together.
Outlook: Good. Amazon have done a stellar job. However, they’ve left the door open for another company to steal the market they’ve helped create.
Apple, iPhone, iTouch, iBook
If Steve Jobs were around Apple would be well poised to win the war for publishing – the success of iTunes, iPod, iTouch, and the iPhone gives Apple such a huge customer base and such a powerful direct channel that no one except Google and Microsoft can compete.
Without Steve Jobs there might not be enough vision and drive left.
Apple’s Play: Publicly, to not focus on books. Actually – either address books via iTunes and their magical 10″ MediaPad (almost certainly) or create a dedicated ebook reader (unlikely).
Apple’s Strengths: Fanatical followers. Sex Appeal. Really well designed products. Huge installed customer base. Tens of thousands of iPhone applications. Asking for only 30% cut.
Apple’s Weaknesses: Steve Jobs’ health. Lack of willingness to compete on price. Hubris.
Outlook: If Steve Jobs doesn’t come back, Apple will have little impact on Publishing. Publishers might back Apple – However, they haven’t yet shown any desire to create a viable future for publishing.
Google, Google Books, the Grand Agreement
Newspapers are of little interest to Google. Books are a different matter altogether -
Google’s Play: Own orphan works. Own the channels of Google Books and Google Search. Offer free public domain books. Sell Orphan works. Expand into current books.
Google’s Strengths: Two big traffic channels. Their infrastructure. Their ‘Do No Evil’ branding. The Grand Agreement (which would give Google virtual monopoly powers).
Google’s Weaknesses: None. If the Agreement gets signed, they’ll be unstoppable.
Partners: Sony (Google is offering 500,000 free Epub books for Sony Readers). Greedy book publishers who want to get 67% of profits from selling orphan works.
Outlook: If the Agreement gets approved, Google will finally have a non-search source of revenue. Plus a monopoly as no other company will be able to get the needed agreements and sell Orphan works.
My Thoughts: Google already owns the Internet. If the Google Books Agreement gets signed they get a shot at owning book distribution and sales.
Major Book Publishing Conglomerates
The 6 major US Book Publishing Conglomerates wield a lot of power because they own rights to most bestsellers and are basically the key content providers for Publishing.
Their Play: Advocate the theory that most of a book’s cost should go to Publishers and Authors and try to get a 70% or higher cut of a book’s price. They basically see that the publisher-distributor+warehouser-retailer trifecta is crumbling and want to grab the lion’s share of profits by claiming that everything except publishing is now low cost and doesn’t add much value.
Publishers’ Strengths: They create the content. They, for the moment, own the content and the selection of content to publish. Its their core competence and they understand the business better than anyone.
Publishers’ Weaknesses: Inefficiency of a titanic scale. Hubris. An inability to connect directly to their customers.
Partners: Everyone, and noone.
Outlook: Unless Publishers develop a coalition and create their own site like Hulu.com, they are going to get massacred. They are under the illusion that Apple, Google, etc. will happily give them 70% of the revenue and let them keep control. If an entity gains control of the distribution channels and the retail points for books, publishers will see their share cut to 30% or to a performance based cut.
My thoughts: The extreme view would be that anyone connecting creators to consumers qualifies as a middleman and the ultimate efficiency is to remove all middlemen. Publishers might not get this – However, Amazon, Google and Apple do.
Barnes & Noble and FictionWise
B&N have been fighting Amazon for a long, long time. B&N tried to buy Ingram Books (biggest book wholesaler in the US) in the late 1990s. The Federal Trade Commission shot down the deal on anti-trust concerns.
Seeing Amazon try a completely different strategy to cut out middlemen, and beginning to succeed, must be particularly irksome. Barnes and Noble also runs hundreds of college bookstores and seeing the Kindle DX reviewed as the future of Textbooks only adds to their worries.
B&N’s Play: Unclear to me. They have stepped tentatively into the ebook waters by acquiring Fictionwise (and their eReader for iPhone application).
B&N’s Strengths: Tens of millions of customers walking into their stores every month. A double digit percentage of book sales in the US. Strong Brand.
B&N’s Weaknesses: Wedded to physical retailing. No device of their own. Reactionary Approach and (as far as I can see) a lack of long term strategy.
Partners: Publishers. Note: B&N specifically refused to carry Sony Readers.
B&N’s Outlook: Mixed. They might have a good future as part of an Anti-Amazon alliance. However, they would be hard pressed to survive themselves.
Sony and Sony Reader
Sony announced just today that Sony Readers are now available at Best Buy Canada. Sony Readers are also available at Waterstones in UK and Borders in the US. Sony is building up a strong international and retail presence.
Sony’s Play: Create an eBook Reader and fit it into the existing publishing eco-system.
Sony’s Strengths: Sony brings more experience with consumer electronics, more wins, and more hard learnt lessons than any other company. International Availability. Availability at Physical Retail Locations. Openness thanks to ePub support.
Sony’s Weaknesses: They aren’t thinking big enough. Partnering with Google for content. ePub support will likely reduce them to device manufacturers.
Partners: Google for content. Borders, Waterstones, BestBuy for Retail Locations in US, UK, and Canada.
Sony’s Outlook: Good. They are unlikely to win – However, the mutual fear of Amazon will lead to a steady stream of partnerships and alliances. #2 spot in a huge market.
Plastic Logic
Disclaimer: At this point, there is limited information to review regarding PlasticLogic’s product and strategy. Hence, this section is mostly conjecture.
The company has a lot of ambition and some good technology – its unfortunate that they are so late to the party.
Plastic Logic’s Play: Target Business Customers. Very advanced technology. Replace Paper, and also look at products beyond ePaper. Plastic Logic is mostly a plastic electronics company that happens to have chosen ePaper as their first product.
Plastic Logic’s Strengths: Good funding. Good Technology. International. Products other than ePaper potentially down the line.
Plastic Logic’s Weaknesses: Very late to market. Not sure how well they understand the US market. Releasing only in the US when they obviously have more Europe expertise is questionable strategy. Dependent on partners much more than Amazon or Apple. No Brand Name.
Partners: Publishers.
Plastic Logic’s Outlook: I’d bet money that Apple or Google buy Plastic Logic for their technology. Else, a #3 spot in the market for eReaders. Their other products could have more of an impact.
The Bit Players
There are some other companies/coalitions in the running. However, at the moment these have little chance of beating the above 7. These companies include -
- Newspaper Corporations. They’ve trained their customers to expect free content.
- Small Publishers of all types.
- Hearst and its partnership with FirstPaper LLC.
- Indigo with its Shortcovers Apps.
- The Little Guys.
- The Open Initiative Non Profits.
- Companies trying to profit from Openness (FeedBooks, etc.).
As far as Borders and WaldenBooks -
- Borders.com used to be run by Amazon.com until early 2008.
- In 2007 Borders teamed up with Sony to sell Sony readers at their store and run an ebooks store online that is co-branded with Sony.
- Borders’ financial situation is particularly grim and they’se spent the better part of the last few years fighting for survivial.
I feel that Borders’ financial troubles and their general lack of vision (letting Amazon run their online store highlights this) means they’re going to focus on surviving rather than helping mold the future of publishing.
Closing Thoughts on the Future of Publishing.
The crucial point that every Kindle DX review misses is that upending publishing as it exists also means gaining all the power and profits that publishers, distributors, warehousers, and retailers currently have.
The Kindle has awakened companies to the possibilities -
- Kindles have changed how people read and how much they read. Very few people believed in the Kindle. Yet signs point to indisputable success -
For example: Mr. Bezos admitted that, for books available in both paper and Kindle editions, Kindle edition sales account for 35% of sales.
- Amazon’s DTP has made it possible for anyone to publish a book and anyone to get shelf space.
- The Kindle DX threatens to do the same for textbooks and newspapers.
A lot of these companies have jumped into the fight to own publishing.
This war for publishing’s future might very well result in one entity controlling most of publishing, distribution and sales of textbooks, books, newspapers, and magazines. That sort of power and revenue would be unprecedented in the field of publishing and would put the company at the same level of monopoly power as Microsoft, Apple, and Google.
We are in the midst of one of the most interesting and exciting periods in the history of publishing. Our choices – who we support, what devices we buy, where we buy our books - will shape its future.
Filed under: apple ibook reader, publishing | Tagged: future of publishing, kindle future
