Kindle Review – Kindle Fire Review, Kindle 4 Review

Let’s say you buy the Kindle 3 and then you’re trying to decide where to get books.

There are two competing theories -

1. The theory that the teams behind Google Editions and most eBook stores would like to believe i.e. users will buy an eReader and then make a separate decision on where to buy ebooks.
2. The theory that convenience and loyalty will make eReader owners buy most books from the in-built store.

These are worth digging into because there is a lot that isn’t spelled out.

‘Kindle 3, Nook owners will buy books from another Store’ theory

eWeek has a good article about how the war between Kindle, Nook, iPad could kill Google Editions and it has this gem -

“I don’t think anyone who has bought an e-reader in the last several years has really intended to only buy their digital books from one provider for life,” Tom Turvey, Google Editions’ director for strategic partnerships

That’s exactly what you want to believe and need to believe if you have just a store and don’t have any device to lock users in with.

Here’s how the theory goes -

1. A user buys a Kindle 3.  
2. She sits down and makes a list of all possible ebook stores. Then she figures out that another store (as opposed to the in-built Kindle Store) meets her needs.
3. She sets aside her Kindle and searches for books on her PC or she uses the basic browser on the Kindle to search for books on another store.
4. She puts in all the effort required to buy books from another store, break the DRM, convert to Kindle format, and then read them on the Kindle 3.
5. She does this every single time or a significant portion of the time.  

With Google Editions it gets even better – She reads the books through her Kindle 3′s browser. She forsakes the dedicated reading functionality to go into the non-optimized browser and read through it instead.

The outside store theory needs openness and loopholes

For readers to start buying books from other stores we need some loopholes -

1. Kindle 3 should support DRMed books that are not from Amazon. 
2. It should support ePub format since other store books are in that format.  
3. Kindle 3 should make the process to buy ebooks from other stores just as easy as buying books from the Kindle Store.

That’s basically what openness is – a way to create loopholes in established leaders’ defences. A way to wiggle into ecosystems and steal the value.

The theory that a reader will buy ebooks from a source other than his/her eReader’s in-built store relies on three assumptions -

1. The outside store will have better range and/or better prices than the default store. 
2. The Reader will be willing to put in the extra effort to go to another store and buy books from there. 
3. eReader makers will be stupid enough to let other stores in OR the reader will put in the extraordinary effort to read ebooks in the browser OR the reader will break DRM and convert books to Kindle format.

The first might be possible since Google Editions might indeed come in with 2 million published ebooks and 1 or 2 million orphan works. It’ll probably also undercut Amazon on price – though it won’t be able to do that for Agency Model books.  

The latter two are, however, extremely unlikely.

‘Kindle 3, Nook owners will buy books from the in-built Stores’ theory

Here’s a laundry list of reasons the default store is likely to win out -

1. It’s the path of least resistance. It’s the default. Companies believe in this so much they are willing to pay wireless providers and PC makers money to be the default software or search engine on devices. With Kindle 3 the Kindle Store is the default store and with Nook the B&N eBook store is the default store.
2. Every other store is hard to use. The browsers aren’t ideal. Downloads could be blocked over 3G if Amazon or B&N choose to – after all bandwidth costs money.
3. Most users don’t even think of trying another store unless they’re dissatisfied. If users see lots of Kindle books below $9.99 and lots of free offers and lots of books at $1 and $2.99 then they have little reason to venture outside.
4. Agency Model, strangely enough, gives the default stores a big advantage since all those books have to be priced the same everywhere.
5. Loyalty – Amazon and B&N customers feel a lot of loyalty. Enough to invest a lot of money and time into their Kindles and Nooks. Contrary to most Internet users they aren’t likely to jump just for a few cents.
6. Customer Service – Amazon and B&N both are considered by their customers to have good customer service. Do we really think ebook stores will match that?
7. There are various types of lock-in - B&N ebooks can’t be read outside the B&N ecosystem. Amazon doesn’t allow DRMed books into their ecosystem. Both have apps for various platforms so readers can stay within the ecosystem.  

Fundamentally, rivals to Kindle Store and B&N eBook store don’t just have to be as good or better – They have to be considerably better. They have to make up for the loss of convenience and the lower quality of reading (if it’s through the browser) and the time wasted by the user. They have to fight off loyalty and the customer service and the attachment to the device itself.   

Specifically for the Nook, Nook 2

If you’re a B&N customer (perhaps with a long history, perhaps with a B&N Rewards membership) and you own a Nook, and your ebook library is in B&N format, you’re going to look at rival ebook stores very warily -

1. Firstly, you have no reason to look at them because B&N ebook prices are pretty decent for the most part.  
2. If you do look, there are things to consider. Nook has cover flow only for books bought from B&N. A few other small features are also missing for personal documents.  
3. Nook does read ePub books. That’s a huge weakness since it lets Nook owners buy ePub titles from any bookstore.
4. However, the Nook Store is easier than going to any other store. 60 second downloads Vs fiddling with the mobile version of a competitor’s website Vs going to your PC and then downloading to the Nook.
5. Features like LendMe probably aren’t going to work.
6. You have the option of free Library books to supplement what’s in the Nook Store.
7. Buying and owning the Nook makes you committed to it. Read the Nook forum and it’s clear that they aren’t going to jump ship from the Nook to save 50 cents per book.

Readers have a fundamental understanding that their ebook purchases are keeping the ecosystem of their eReader going and paying for R&D and improvements.

We tend to get swayed by the perception created by the very vocal minority that wants no DRM and the even more vocal and far tinier minority that thinks books should be free. However, most readers are happy to pay a fair price. As long as the Nook Store is providing them that they have no desire to jump ship.

Specifically for the Kindle 3, Kindle

The best thing the Kindle has done, and Kindle 3 continues this, is keep out all the people of bad intent. It weeds out the no-DRM people, the openness people, the ‘things should be free’ people, and it makes the Kindle particularly resistant to hostile attacks -

1. The only DRMed books you can read on Kindle 3 are from the Kindle Store. That means unless you get Publishers to sell without DRM you can’t penetrate the Kindle ecosystem. 
2. The ‘users can read books through their browser’ idea is nonsense. People don’t play web apps on their iPhone (or any phone) and they aren’t going to read through their browser. People want a customized experience – optimized for their device.
3. In the rare case you convince readers to read books through their browser Amazon can cut off your site since the free 3G is based on people buying books. It’s a bonus – not something users pay for.
4. Will readers read only when they have WiFi? That would be wishful thinking of the highest level - to imagine people would buy books that they could read only when they have WiFi. 
5. Amazon has amazing customer service and amazingly loyal customers.
6. Most Kindle readers, just like Nook readers above, understand that their ebook purchases are fuelling all the Kindle improvements and WhisperNet bonuses.
7. Kindle Apps are available across most major platforms reducing users’ incentive to try out other options.
8. It’s very easy to buy books from the Kindle Store and get them in 60 seconds. The alternative is the messy browser for browser-based books that only work via WiFi or to buy books from other stores and break the DRM.

While B&N locks users to the Nook by not letting them leave with their ebooks the Kindle has lock-in to both device and store. You can’t really compete against that. Most Kindle 3, Kindle owners are lost to other stores.

Highlighting the amount of resistance

It’s easy to think that users will choose a non-default store to save 30 cents per book and a small minority might. It’s also easy to think you can fool everyone with the ‘openness’ rhetoric and again a small minority is susceptible. However, for the vast majority of people you have a huge mountain to scale.

Loyalty, Path of Least Resistance, Committment, Superior Customer Service, Attachment to the Kindle 3 and Nook, Power of the Default, 60 second downloads, Existing Library.

There are just a lot of defences. Companies that own the eReader control the ebook revenue. Yes, they are occasionally brain-dead and give that up – However, most aren’t stupid and won’t just let other companies waltz in and steal their customers.

The eWeek article has a point – Every eReader owner and every iPad owner is a lost customer to Google Editions and other ebook only offerings. There will be 5% to 10% of device owners that sample other stores – However, 90% or more will stick with the default in-built store provided it’s not much worse than other offerings.

If you own the device the customer is reading on you have a direct channel to customers and the default store – it’s your battle to lose. Amazon isn’t selling the Kindle WiFi for $139 because it wants to help Google make money from ebooks. B&N isn’t investing into the Nook 2 so that Google can finally find a non-search revenue stream. Whenever Google Editions debuts we will see both Amazon and B&N make this painfully apparent.

Filed under: Reality Tagged: | path of least resistance, power of the default