Kindle Review – Kindle Fire Review, Kindle 4 Review

This is a particularly complicated area to tackle as eReaders and eBooks mean a lot of different things to different companies.

Let’s start by looking at what each of these mean.

What eReaders mean to eReader companies

Let’s start with the obvious things eReaders represent -  

1. A big source of income including repeat customers for eReaders.
2. A direct channel to customers. Unpolluted by other companies or by governments (at least for now).
3. A means to expand into selling more than books. Something that surprisingly few people talk about.
4. Customer purchase behavior. To get an edge over every other publishing related company.
5. Customer information for advertisers. So far no company has been doing this which is a relief. At some point iBooks and iAds will intersect.
6. An easy target – especially if they have to do just a few hardware tweaks to an existing product.
7. A means to save their business.
8. A means to keep their monopoly.

Then there are the implications and possibilities if we look 10 to 50 years down the line -

1. A means to take over all of publishing.
2. The replacement for paper and an unlimited stream of revenue.
3. A chance to bring people back to books, democratize publishing, and change the course of literature and books.
4. The opportunity to propagate a certain world view.
5. Connecting people to each other and making reading truly social.
6. A direct, ever-strengthening relationship with the customer.
7. The opportunity to sell customers more and more of the devices they use. A foothold into their lives and wallets and homes.

eReaders are a lot more than a simple device.

What eBooks mean to eBook companies

eBook companies and Publishers see a lot in books –  

1. Potentially $23.8 billion a year from the US alone.
2. Control over books and their impact. Control over authors. 
3. Influence and the power of being gatekeepers.
4. A means to find out more about readers.
5. Customer information to sell to advertisers.
6. Lower costs and higher profits.
7. An opportunity to take over a market.
8. Lots of high quality content that is relatively cheap.

Note that while there is some overlap eReaders offer much richer user data. A Publisher or a bookstore could never figure out the most highlighted passages or which books were read and which were finished.

Things get more interesting when we look 10 to 50 years down the line -

1. The future of literature and books. 
2. Unbelievable profitability.
3. A gold mine that if controlled would pay huge consistent dividends.
4. Control over a huge part of the world’s source of knowledge.
5. The chance to completely take over Book sales. To become untouchable.
6. Lots of good publicity.
7. A direct link to the bank account of every single library and every single educational institution.
8. The opportunity to commoditize eReaders.
9. The opportunity to control the flow of books. Expand that to control the creation of books. Expand it more to control the consumption of books.

eBooks are far more important than other types of content – they still hold value, they can be made very profitable, book readers are devoted enough to bear with Publishers, and books are the keys to a lot of other things (knowledge, libraries, education, public service, brownie points).  

That explains why Amazon, Apple, Google are jumping in

When you consider all the different possibilities and the ridiculous amount of profits that could be generated it makes sense that all these tech giants are jumping in.

Publishers and authors who complain about not being able to make money need to take a hard look at themselves. 

PC makers, Search companies, tire manufacturers, TV makers – everyone is flocking to eBooks and eReaders. Yet you continue to do nothing with all that you have.

We have companies leaving some of the most lucrative opportunities to focus on books. They must see something HUGE for them to turn away from all the exciting new technologies and instead focus on books.

Apple and Google both must see a multi-billion dollar industry – It wouldn’t really be worth their time otherwise. 

Naive and Cynical takes on companies’ eReader and eBook Strategies

For each of the big eReader companies let’s start with the party line, then look at things from a naive perspective, and end with the cynic’s view.

Note that this is just eReaders and eBooks and it doesn’t discuss everything else the company does unless it’s relevant to reading.

Apple

The Party Line – It’s an iWhatever you want it to be. It’s a better eReader than dedicated eReaders.

The Naive View – Apple are interested in books. Apple have built the iPad as an ebook reader.

The Cynic’s View – Apple want to put in the least effort and instead use marketing and apps to pretend the iPad is an eReader. Money for nothing and the 30% cut for free.

Quite frankly, it doesn’t really seem like Apple have a strategy beyond talking people into believing that whatever Apple produces is magical. It’s excellent in some ways because they are training Apple users to buy Apple and trust in Apple and love Big Brother killing Big Brother Apple.

In effect Apple see ebooks and ereaders purely as an opportunity to sell iPads and get more people into the Apple way of life. Plus it’s nice to get 30% for ebook sales.

Google

The Party Line – Organize the world’s information. Offer up books for knowledge. Save the world’s libraries.

The Naive View – Google will make all books free. Google will not get into hardware.

The Cynic’s View – Google will sell people ebooks and then also collect their information and sell them other things.

Google are an infinitely dangerous company and eReader and eBook companies have got to be worried about its entry into ebooks.

Google looks at the exploding ebooks market and sees easy pickings. They can get lots of things for free or cheap and sell them for good prices. The ‘open’ strategy Google loves to use also fits in well because we have books and libraries and things like sharing.

Sony

The Party Line – We make great eReaders. Think they are supposed to be used to read books.

The Naive View – Sony have a strategy.

The Cynic’s View – Sony is in over its head. The Sony Reader is a very good reader. Perhaps the best. However, Sony as a service is painfully bad and they aren’t building out an ecosystem and will not have much of a role to play in the future of books.

It’s almost a waste of time writing about Sony. Just want to note this down as Sony’s complete and utter lack of intelligent strategy is also a sort of strategy.

Basically, Sony see eReaders as lifeless devices they can sell and then users can figure out the rest.

Amazon

The Party Line – Every book ever written in any language – in your hands in 60 seconds.

The Naive View – Amazon is transitioning from selling physical books to paper books.

The Cynical View – Amazon are taking over Publishing. They are building a direct channel to customers. They are pretty much taking over control of books.

Amazon think 50 to 100 years down the line. Lots of items that even our lists above don’t capture - Amazon are working for. Basically, Amazon are going to surprise a lot of people with where they take the Kindle and by then those people/companies won’t have a chance.

Barnes & Noble

The Party Line – B&N are books. B&N have big partners (HP, Google) and bright prospects. B&N knows books.

The Naive View – Barnes & Noble have a chance.

The Cynic’s Take – We promise more than any other eReader company. Eventually we deliver. A week later our competitors are ahead again.

B&N is just doing Nook to survive. There isn’t really a long-term vision here. At least not one that’s clear. B&N are in over their heads and in a ton of trouble. Basically, the Nook is a good move made by a company without the resources or the strengths to make it work.

Kobo Books

The Party Line – We’re taking this global.

The Naive View – Kobo doesn’t have a chance.

The Cynic’s Take – Round up a superstar alliance with a few goats (Borders) – that doesn’t mean it’s a win. The Kobo Reader is terrible and there’s no way it can be the foundation for a great win by Kobo.

Kobo are very, very dangerous. They are also very, very late to the contest. See little hope for them unless they do something drastic.

First Mover Advantage and Unexplored Areas

 Instead of wondering which company is going to win or analyzing each company’s chances let’s answer two questions -

1. What companies have first mover advantage in ebooks and ereaders and reading devices?
2. What are the unexplored areas?

The first answer is easy - Kindle leads the eReader market, Kindle Store leads ebooks, Apple leads in mobile devices people might read on, Windows leads in devices that can be used for reading, Google leads where people start off looking for books, and Amazon and B&N lead in where people buy books. 

It’s going to be very, very hard to replace one or more of these.

Different areas important to the future of ebooks and eReaders are dominated by different companies. Even Amazon only dominates in a few areas. Any company’s eReader+eBook strategy should factor this in – lots of Giants controlling the different areas and often with insurmountable leads.

To win companies will have to leverage new and unexplored angles and areas.

Changing the eReader and eBook Wars

Here are a few ways to skirt around the incumbents -

1. Bring in the FTC. Notice how various companies are already doing this to each other. 
2. Get the Big 6 Publishers that account for 60% of books on your side. 
3. Get readers on your side. Amazon actually dominates this too.  
4. Use the illusion of open or embrace actual openness.
5. Monopolize some amazing new ePaper technology.
6. Find a way other than ePaper technology to make a much better eReader. Again we see Amazon trying this out with the promise of Kindle Apps. B&N has a shot too if it uses Android well. Apple are using it in the opposite way – taking a non-eReader and turning it into an eReader using apps.
7. Beat everyone on price. Apple and Publishers destroyed this option for Amazon - the Agency Model is the exact opposite of what would be best for Apple’s prospects.
8. Turn the indie authors into a major force – although Amazon and Smashwords have an early start on that.
9. Create a subscription model. Publishers might not buy it as there’s potential for disaster.

There are definitely ways an entirely new player or one of the dangerous 3 (Amazon, Apple, Google) could win both the eReader and eBook wars.

 Each of them have their own unique strengths -

1. Google have search and open.  
2. Apple have an early lead in Mobile and their Apple hordes.  
3. Amazon have a focus on reading and publishing and early leads in a lot of book and publishing related areas.

Notice how they each have a reason customers love them.

Amazon have the early lead and are doing a lot of things right. In many ways the eBook and eReader Wars have turned into attempts to slow Amazon down and figure out a way to beat them.

Apple and Amazon both have very strong strategies and are the likeliest to win it all. It’ll be interesting to see exactly what Google brings to the table.

Filed under: evolution Tagged: | ereader strategy, google's strategy, kindle strategy