If we envision an ideal future for Publishing it might look something like this -
- Authors.
- Publishers (when Authors choose to engage them).
- A Platform that facilitates creation, editing, buying, and distribution of books.
- Readers.
We would want an equitable distribution of profits -
The Platform gets 10-30%, the Publishers get what Authors deem proper, and authors get the rest.
There’s one huge problem here -
As opposed to most middle-men who are just hoodwinking authors and readers into believing they provide value, we have cellular networks which do provide a lot of value.
The only way to eliminate cellular networks and the share they get is to build out your own network.
How could eReader companies build out their own network?
There are no easy solutions.
You either create your own network –
- Consider a WiMax network like the one Sprint and WalMart are building. It’s potentially workable.
- You could attempt to get devices to talk to each other and interconnect to form a mesh network.
- You try to buy out a wireless network – not an easy task.
- You buy up infrastructure from a lot of the fiber optic infrastructure companies that are struggling or bankrupt.
- You develop or promote new wireless technologies to the point that they can form viable networks.
OR
You carve out a piece of an existing network –
- You could use a ‘Net Neutrality’ strategy and claim that wireless networks are supposed to allow some free traffic or some ridiculous argument.
- You could lobby to carve out a portion of the networks as ‘open’ for the greater good.
- Strike a deal to get a set amount of bandwidth per year.
- You tie up with WiFi networks.
- Strike a deal with the cable networks and mesh that with WiFi.
Platform companies usually go for the former set of options and create their own network. They should – sometimes they don’t.
The constant war between content creators and networks
We have an interesting conflict going on -
Every element of the eco-system is trying to maximize the value it can get.
In terms of the cellular networks and content creators -
- Cellular networks want to make content cheap or free. They want to get all the money for delivering content while portraying content as not very valuable.
- Content creators want to turn the cellular networks into dumb pipes. They want the infrastructure to be cheap or very free.
The Platform aims to provide and own most of the pipeline. Thus, the natural evolution of the platform will be to supplant the networks or merge with them.
The most powerful Platform is one that has its own Network
We’re talking -
- Apple with its own 3G network.
- Amazon with a WhisperNet built on its own servers and towers.
The opposite direction is possible too i.e. the networks evolving to become the platform -
- Vodafone opening its own ebook store is a first, big step.
- AT&T and Sprint will begin to do this too.
At that point there is NO ONE else between authors and readers.
A joint Platform-Network becomes the sole channel between authors and readers and gets the type of power even monopolies marvel at.
Will any company be able to pull it off?
At the moment it doesn’t seem likely.
There are a few reasons why it’s extremely hard to create a platform-network hybrid -
- It’s very expensive to build up the infrastructure.
- Wireless Networks have a lot of money to fight off challengers.
- You need some amount of domain expertise in each area.
- The Platform companies are very powerful and can fight off encroachments on their domain.
- The margins aren’t high enough.
- It’s hard to imagine tech companies getting into running mobile kiosks and repairing wireless towers.
The easy option is to play the openness and net neutrality game and that’s why you have a lot of tech companies doing that.
- It’s amazing to see some of the most profitable companies in the world plead in favor of turning wireless companies into dumb pipes.
- Internet users are keen to sympathize as it benefits them.
- There’s a lot of lobbying going on so there might still be some hope for the Net Neutrality circus.
It’s quite remarkable what you can get people to believe by including an element of self-interest.
Who would have thought the biggest threat to wireless networks would be a completely made-up story.
Filed under: extensions Tagged: | ereader network, ereader platform
The wireless networks are incredibly expensive to build and maintain. We are talking in the hundreds of millions in start up costs. The cost of using the wireless is measured in the cents per book. This is not one of the large costs in providing ebooks. It is not something any ebook manufacturer or seller wants anything to do with. The cellular industry dwarfs the ebook industry by huge multiples.
And there is also the cost of obtaining the frequencies to utilize on the wireless network. This is in the hundreds of millions of dollars as well.
Good point. The auctions.
Why do eBook Readers need a cellular data network?
Of course it’s convenient in a lot of ways, but for my case I’m not willing to pay the price to have a feature that fells like a luxury: Having a device Internet-enabled everywhere, 24 hrs.
That’s reasonable for my smartphone, but an ebook reader I can sync it via wifi where available or via USB with my PC.
I’m not saying that the cellular wireless data isn’t a needed feature for most people, I’d just like to have the option of buying a Kindle, just sync/download via wifi and not pay the cost of cellular wireless data (the simcard, the activation, the bandwidth).
That’s a good question.
I LOVE being able to download books wirelessly at any time I want, but it is NOT a necessary feature.
Think about music. People have to download iTunes onto their computers and then transfer them to their iPods with a USB cable. You can’t download songs over the air directly to your iPod (though you can with iPhones). No one seems to think this is a problem I’ve never heard someone say, “My iPod sucks because I need to connect it to my computer to get books.”
Well, perhaps it’s a workable solution.
People are used to wireless book downloads.