On Discoverability

Posted on May 11, 2013 by switch11

Discoverability of Books is one of the last great remaining problems in Books and Publishing.

  1. We had the problem of book production speeds and costs. Which Gutenberg solved, perhaps too well.
  2. We have the problem of Gatekeepers not letting authors publish and keeping them separated from readers. Which eReaders and eBooks are in the process of solving.
  3. We have the problem of book replication costs and storage and shipping and handling costs. Which, again, eReaders and eBooks and the Internet are in the process of solving. Perhaps this problem, too, is being solved too well.

What does that leave?

  1. Monetization. To be precise – How do we prevent the current monetization model from falling apart, as we shift more and more to ebooks and reading devices?
  2. Discoverability. To be precise – How do readers find ‘the best next book for them to read’? How do authors get discovered?
  3. Platform. Who’s going to provide a platform/ecosystem for everything to happen on/in? There are contenders and Amazon is obviously the strongest one. However, Amazon is pushing for an Ecosystem and not a Platform. An Ecosystem might not be the best solution for authors. It might not be the best solution for readers either.
  4. Quality. First Aspect: Ensuring Quality Books are available. Second Aspect: Discovering Quality Books out of All Books. The Second Aspect is actually Discoverability. However, these two are intertwined. Publishers are the natural candidate to solve the problem of Discoverability. However, because they also ‘publish/sell’ books, they have a conflict of interest.
  5. Sustainability. How do we create a model that’s sustainable? Will a closed ecosystem controlled by one entity actually sustain books? Will a totally open ecosystem sustain authors and readers and quality?

There are a lot of aspects to consider. Today, let’s focus on Discoverability.

Why Discoverability is Important

  1. Discoverability has always been crucially important. Authors who got promoted by Publishers, got more visibility. This, in turn, meant they sold more and factors like sales rankings and word of mouth kicked in. It’s why Publishers controlled Books for so long and why they still do (though their grip is slipping). Readers can’t buy your books if readers don’t know they exist.
  2. We’re moving towards a world where people are, unfortunately, more and more conditioned to ‘Press the Easy Button’ and go with what’s offered. In the past, readers might have browsed the shelves of the nearest bookstores or browsed through a website for hours. These days, more and more frequently, a large percentage of readers won’t go beyond the Top 100 and ‘Recommendations’.
  3. The New Gatekeepers are making it tougher, perhaps on purpose, to ‘discover’ new books. Ever wonder why all these large companies can’t devote a few hundred thousand dollars out of their billion-dollar R&D budgets to Discoverability? Why they can make Cloud Computing and Smartphones but can’t make finding books and apps and movies easier? The only company that seems to be making a genuine effort is Netflix. Interestingly enough, Netflix doesn’t have a conflict of interest. No matter what movie you watch it’s the same to Netflix.
  4. If you have a Great Book, you need Discoverability for people to find out it’s a great book and spread the word.
  5. If you have a Terrible Book, you need Discoverability so that readers (the ones who pay for your books) can tell you it’s terrible and can give you feedback. You can’t even fail without Discoverability – you’re just stuck in a void of ‘not knowing if your book is great or terrible’.

It’s a dangerous combination. Readers only choose from amongst the books they are exposed to. Readers are getting more and more used to ‘Easy’ options. The New Gatekeepers are breaking Discoverability and replacing it with ‘Buy What We Tell You to Buy’.

For Authors, and even for Publishers, solving Discoverability becomes the #1 Problem to Solve.

  1. Authors – If you leave yourselves at the mercy of a store, then the store will marginalize you. They’ll cut you down until you’re happy to give out free copies and hope to get 100-200 ‘borrows’ and ‘sales’ a month on the side. That strategy just sets you up for permanent obscurity. Remember – Free is a good marketing strategy until there are 100,000 other Authors exploiting it.
  2. Forget the days when Publishers controlled Discoverability. Now, if Publishers don’t solve the Discoverability problem, they’ll go extinct. The Stores and Platforms will make Publishers’ books invisible.

We have all these readers who are looking to find a good book to read. The missing part is the ‘Discovery Engine’ that gets them a book that’s worth their time and money.

Unfortunately, it suits neither Publishers nor Stores nor Platforms to make an Excellent Discovery Engine. If they do, they weaken themselves as Gatekeepers. What they are making are Pretend-Discovery Engines that route users to the books that create the most profit and control for Publishers/Stores/Platforms.

Why Discoverability is Solvable

We still have a lot of the older methods of discoverability – bookstores, book critics, word of mouth, online reviews.

We have added brand new methods of discoverability – blogs, forums, platforms, social networks, crowdsourcing, book networks.

What’s missing is something that unifies everything. Something that shifts from ‘What to Buy’ and ‘What We Think You Should Buy’ to

  • ‘What to Read’ and ‘What’s Best for YOU as a READER’ and ‘What’s Worth YOUR Time & Money’.

A truly efficient Discovery Engine would treat each available discovery source as a data stream. It would combine these data streams to create a composite. Then it would use a neural network (or an evolutionary algorithm) to process your past purchases and the past purchases of customers like you.

The end result would be a very efficient list – Books that you will love to read, and will finish. Books that are guaranteed to be a good use of your time and money.

The Stores don’t want this. They actually want – Books you will buy and not necessarily read. Books that will get you to move on to buying other books.

Seriously – What percentage of books bought in the Daily Deals do you think are actually read? Why aren’t the Daily Deals personalized?

The Publishers and New Gatekeepers don’t want optimization and efficiency in readers’ reading and spending. They actually want to sell users books out of the books they control and/or make a lot of money from. They want to keep selling users books, whether or not the readers actually read them.

It’s all about conflicts of interest. The Store and the Gatekeeper can’t run an efficient Discovery Engine – because then they’d have to be anti-profit companies. An efficient Discovery Engine would reduce profits.

Who can Solve Discoverability?

Anyone who actually tries hard and then sticks with it until it’s solved.

The problem is that people who set out to solve Discoverability get distracted along the way -

  1. Discoverability is a really tough problem to solve. Much easier to point readers to ‘Deal of the Day’ and to ’New Free Books’.
  2. Discoverability means discovering and collating all the books yourself. This is a tougher problem than you might imagine. There’s no easy way to get a list of every book available. If you start considering that there are multiple stores to explore and build from, then it becomes downright horrifying.
  3. Lots of other problems. If you set off to solve Discoverability, you find a lot of side streets that are far more welcoming. Some of them also happen to be very lucrative in the short term. The net result is that the tougher problem of Discoverability gets forgotten and/or ignored.

Perhaps the real reason Discoverability isn’t being solved is that no one realizes just how powerful solving Discoverability will be.

Part 1: If you solve Discoverability, then ALL readers will come to you. It’ll be like Google with Search.

People might point to the ‘ease of use’ of the stores. However, the stores are ‘easy to use’ to ‘not solve the problem’. They aren’t solving the problem, so you can’t compare them to an Actual Discoverability Engine. If a site comes along and says -

Instead of spending $100 and 20 hours to find 2-4 great books, we’ll ensure you spend just $25 and 5 hours.

Please Note: If you only read $1 to $3 books, just replace ‘$100 and $25′ with ‘$20 and $5′.

Then a LOT of Readers will go to that site first. Again, it’s just like Google with Search. You help people find what they are searching for and you are set.

Part 2: Once all the readers start coming to you, you control EVERYTHING.

Keep in mind that ebooks don’t need middlemen. You can send readers straight to Authors’ websites, or straight to Publishers, or you can sell books to them yourself. If you get control of the Starting Point then it’s game over.

Do Publishers have the wrong incentives when it comes to Discoverability?

Totally.

Publishers push for Discoverability for their own books. Among their own books they push for Discoverability for books that are already doing well and books that they think should do well.

This is the single biggest problem with depending on Publishers. Publishers, by their very nature, discriminate against books not published by them. Add to that a second type of discrimination – against books that aren’t ‘commercial successes’ and against books that aren’t ‘what Publishers think readers should read’.

Let’s assume that the ideal reading list for Reader A is -

  1. Book A from Publisher 1, Book B from Indie Author, Book C from Small Publisher, Book D from Publisher 1, Book E from Publisher 2.
  2. What will Publisher 1 show Reader A? Book A, Book D, Some Books that are wrong for the reader. Just 40% of the best choices.
  3. What will a Store show Reader A? Book A & D from Publisher 1 and Book E from Publisher 2. Because these generate the most profit. Perhaps, eventually, after showing 50 more profit-generating books from Publishers, the Store will show readers Book B from the Indie Author and Book C from the Small Publisher.

This example illustrates the fundamental problem with Platforms and Gatekeepers controlling Discoverability. Platforms optimize for their own profits. Gatekeepers optimize to sell their own books. They show users a mix of ‘What’s Best for Users’ and ‘What’s Best for Platforms & Gatekeepers’. This is completely OK. It’s capitalism.

However, it means that we haven’t solved the Discoverability Problem via Gatekeepers and Platforms, and we won’t. Not as long as Platforms and Gatekeepers are the ones assigned the responsibility.

Do Amazon & B&N have the wrong incentives when it comes to Discoverability?

Yes, even more so than Publishers.

Amazon and B&N in the eBook World handle -

  1. Services to Indie Authors and Publishers, including selling marketing spots. Note: This is the long-term end goal. Understand this and it will explain a lot of their moves.
  2. Store Aspect.
  3. Platform/Ecosystem Aspect.
  4. Social Network Aspect. Amazon has taken this to an extreme by buying Shelfari and GoodReads, and by owning a share of LibraryThing via its purchase of AbeBooks.
  5. Publishing. Again, Amazon is a lot more aggressive here.
  6. Selling eReaders.
  7. Selling Reading Tablets.

There are so many Conflicts of Interest, the Conflicts of Interest are conflicting with each other.

Q1 Does anyone really believe that an AmazonCrossing title, or a Montlake Romance title, won’t be given ‘Special’ Discoverability?

If you do, you should keep an eye out for the sort of promotions that were done for The Hangman’s Daughter. Amazon does a lot for its published titles (always including them in Deal Lists and such).

Q2 Does anyone really believe that if a reader’s best fit is - $1 indie book, $5 small publisher, $10 Publisher, $2 indie book. That Amazon or B&N will show the reader those exact books first?

If you do, then you’ve missed the whole ‘secret handicapping’ of $1 and lower priced books.

There’s a ridiculous amount of power in the Platforms. By combining the functions of Store, Distributor, Curator, Publisher, and Service Provider we get two monsters that can pick and choose which books they turn into successes.

There are three critical conflicts of interest (these aren’t the only ones), that pretty much guarantee Pure Discoverability will be sacrificed -

  1. Amazon can’t let its own published titles suffer. That would destroy its delusional goal of replacing Publishers completely by 2057. Note: Along with Hollywood and the TV Networks and Federal Reserve (Of course, no one can lose money as fast as the Fed, so Amazon has zero chance there).
  2. Amazon and B&N can’t let $1 and $3 titles take over. That would destroy the profits and make a mockery of the billions of dollars of investments each has made in ebooks.
  3. Amazon and B&N can’t allow indie authors to take over. That would highlight what the long-term future for both companies is, if they don’t control Discoverability – Dumb Devices selling cheap zero-profit ebooks to readers.

The long-term goal is to build up a gold mine that’s one of only 2 or 3 gold mines in the entire world. Then, to slowly sell gold to readers. Look – Shiny! Shiny! Hand over Island of Manhattan.

Indie Authors are standing with their pans with tiny gold nuggets shouting. Hey! Hey! It’s cheaper here. What can Amazon & B&N do? Make it seem that their mines are the ONLY source for real gold. Make the other sources of gold ‘disappear’ by hiding them OR make them seem low quality.

Who does that Leave? Is anyone going to solve the Book Discoverability problem?

Well, we’re in a bit of a bind.

  1. The reward for solving Discoverability in Books is a long-term reward. It’s so far in the future that only large players might be able to go for it.
  2. The Large Players are better off if they don’t solve Discoverability. By solving Discoverability they turn the tin, which is what Indie Authors’ collective work seems like, into gold. Thereby devaluing the gold they control and sell.
  3. There are Large Players that aren’t already invested in the system, and thus become good candidates to innovate and disrupt. Well, they either think people don’t read any more (Apple, Google), or they think Books isn’t a big enough market (Microsoft, though that might be changing).

We have a massive, massive reward – To become the ‘Search Engine for Books’ and effectively control all of books.

Yet we have huge risks – the incumbents, the value of the market might get destroyed by a truly effective ‘Discovery Engine’, large time and money costs, long wait for the payoff, the possibility that the Platforms match/undercut you.

We have a dearth of companies that are trying to solve the REAL problem. Yes, there are lots of people offering Authors and Publishers marketing services and other band-aids. However, the real problem isn’t 1-day boosts and temporary jumps.

We need someone to solve the real, underlying issue – connecting readers with authors efficiently.

Discoverability in Books is one of the biggest problems holding back a Golden Age for Readers and Authors. Solving it would also mean gaining control over the Future of Books and Publishing. The only thing missing is someone willing to focus on Book Discoverability and solve it.

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Nook HD Review

Posted on May 9, 2013 by switch11

Nook HD is a natural competitor to the Kindle Fire HD. Reviewing the Nook HD will set things up nicely for a future Kindle Fire HD review.

Context for this Nook HD Review:

  1. Ownership since Day 5 after launch. So, approximately 7 months of ownership and regular use.
  2. Other Devices (to ensure a reasonable comparison basis): Kindle Fire HD, Kindle Fire 1, Kindle Fire 2, Nook Color, Nook Tablet, Google Nexus 7, Surface RT Tablet from Microsoft, Kindle Fire HD 8.9″, Nook HD+. And, in the past, iPad 2.
  3. Lots and lots of usage. Some book reading. Regular Apps and Games. Occasional web browsing. Lots of Netflix. Some general stuff like arranging things and setting things up.

Let’s start this Nook HD Review by understanding what the Nook HD is.

Nook HD Review – Nook HD is a Reading Tablet evolving into a Fuller Tablet

Nook HD represents a morphing from the Nook Color (a Reading Tablet that took off accidentally as a ‘cheap, all purpose Tablet’) to the Nook Tablet (a Reading Tablet inching towards being a full tablet) to the latest generation Nook Tablets (Nook HD, Nook HD+) that go ever closer to being ‘Full’ Tablets.

Last week B&N added Google Play Store to Nook HD. That brings it very close to being a Full Tablet. However, it is still 25% Reading Tablet and 75% Tablet.

This first part is absolutely critical. Nook HD is NOT an iPad or a Full Tablet. At its current sale price of $149 it’s less than half the price of an iPad Mini ($329). It’s 30% of the price of iPad ($499). So, please adjust your expectations accordingly. You’ll get an insane value for your $149. However, you will NOT get an iPad and you will NOT get an iPad Mini.

Nook HD Review – What the Nook HD is, What it’s Good for

What the Nook HD is -

  1. A Tablet that is built on a Reading Tablet base, with the addition of Google Play Store and Nook Video Store and B&N App Store. This turns it into a fuller Tablet. Important: It is NOT yet a full tablet.
  2. A Tablet that is built on top of Android and has Google Play Store and Google Apps. Important: It’s not ‘pure’ Android. Google Play is just an app within the Device. You don’t get a fully open Tablet and you don’t get the latest Android versions the minute they are released (perhaps never).
  3. A very well made hardware Tablet with buggy software. The hardware is the best out of the 7″ Tablets (though not as good as iPad Mini). The software has been improved since launch and yet it’s still buggy.
  4. A $149 Tablet that is worth more. A lot more if you consider the hardware quality and the addition of the Google Play Store.
  5. A Tablet that is family oriented. In particular, it’s aimed at mothers with young kids. The rest of this Nook HD Review will give you a good idea of whether it meets your needs or not. However, please keep in mind that any future software improvements (if they happen) will be tailored to this target demographic. The B&N App Store focuses on family friendly apps and kids apps. You will have to rely on Google Play for everything else.

Here are the Things Nook HD is Particularly Good for

An Important Caveat: If you have weak eyesight then you really should consider Nook HD+. It’s on sale for just $179 (a mere $30 more than Nook HD) and offers a 9″ screen.

  1. Reading Books. Nook HD is great for reading books.
  2. Watching Movies. Nook HD supports 720p videos and is great for movies and TV shows. It’s also great for Netflix although there are a few cases of Netflix not working. Now that there’s Google Play Store this issue should be fixed. However, check your device in the store you buy it from before leaving.
  3. Games & Apps. There’s a fast processor, enough RAM, a brilliant screen, and a light, easy to hold device. Games and Apps work well. You get Google Play and you get B&N’s smaller but well-curated store. Please Note: You will not get Apple iPad Apps and the Apps will not be as good as Apple iPad Apps. Amazon’s App Store and its Free App of the Day are also not available.
  4. Comics. Nook HD is great for comics. The high screen resolution and wide range of apps (thanks to Google Play) allows for a good comic reading experience. Nook Store has lots of comics and graphic novels and manga. Please Note: The 7″ screen means you can’t fit comics in page by page. You’ll have to read panel by panel.
  5. Google Apps. Now all the Google Apps like Gmail and Google Maps and YouTube are included.
  6. EMail – I’m not sure since Google Play is still new. The Nook HD EMail program was decent but not super. Now it’ll have Google Mail so if you’re on Google Mail then it should be very good. For other providers it works fine. However, there are sometimes problems with Yahoo Mail and with some of the smaller regional providers. On the whole, the in-built EMail works well, but not super well.
  7. Facebook – Not sure. Users seem to run into lots of problems when using Facebook via the browser. Now with Google Play there will be, I’m assuming, the Android Facebook App.
  8. Web Surfing. Nook HD is very good for web surfing. A large range of browsers. Higher screen resolution means you can see more of the webpage. Please Note: As stated earlier, if you have weak vision, the 7″ screen won’t work well. Get the Nook HD+ for $179 instead.
  9. What Else? Let me know what other use cases you’re considering and I can add details.

Nook HD is not a full-fledged ‘can be used for anything’ Tablet. However, it does do quite a few things very well.

Nook HD Review – What the Nook HD isn’t, what it’s not good for

What the Nook HD isn’t -

  1. It’s not an iPad. You can’t access iPad Apps. You can’t access Apple Store content.
  2. It’s not a ‘pure’ Google Device. What does that mean? It means you won’t get new versions of Android the minute they are launched. In fact, the OS might never be updated beyond the current Android 4.0.
  3. It’s not an ‘Amazon device’. Yes, you can get Kindle for Android (via the Google Play Store) and read Kindle Books. However, to support Amazon Instant Videos you’ll have to buy a $3 Browser (Puffin) and that support might end if Puffin stops supporting Amazon Instant Videos. You won’t get the same benefits as you would from buying a Kindle Fire.
  4. It’s not a large screen reading Tablet. This might come as a surprise to you – 10″ screens are MUCH better for reading PDFs, Magazines, Newspapers, and Web Surfing. Doubly true if you have weak eyesight.
  5. It’s not super smooth and free of errors. The software is a weakness, perhaps the only major one. The software is a real weakness.

What the Nook HD isn’t Particularly Suited for

Translation: Don’t buy it for any of these purposes. It won’t work and you’ll just be frustrated. Plus there will not be a Magical Fix in the future that’ll solve these issues.

  1. Consuming things you bought from Apple. Just won’t work.
  2. Consuming things you bought from Amazon. Won’t work well. Lots of hoops to jump through to get things to work.
  3. ‘Open Everything’ and ‘Load Anything’. This isn’t open Android. It’s a closed ecosystem that allows Google Play Store and Google Apps.
  4. Free Books. Kindle is best for that. Amazon gets exclusive contracts with authors in return for letting them give away books for free. B&N gets perhaps 20-50 free books a week from Publishers and Indie Authors and Smaller Publishers. Amazon gets hundreds a day.
  5. PDFs. Just don’t work well.

I’ll have to think more about this. There are quite a few other things Nook HD isn’t suited for. The biggest mistake prospective Nook HD owners make is assuming Nook HD is ‘iPad for $149′ or a Windows PC in Tablet Size. It’s neither of those things.

Nook HD Review – Top 10 Pros for Nook HD

Here are the Top 10 Strengths of the Nook HD -

  1. Very well made Hardware. Solid. Beautiful. Light. Compact. Highest resolution screen of any 7″ Tablet. I’ve had a Nook Color for 2+ years and it’s almost as good as new. Nook HD has a similar ‘well made hardware that will last’ feel to it.
  2. Google Play + B&N Ecosystem. Want lots of free apps? You have Google Play. Want a curated app store with safe apps? You have Nook App Store. Want books from Kindle, Kobo, Google? You have Google Play Store. Want books from Nook? You have B&N Store. You get both the ’Free and Open and Advertising Focused’ Google Play Store and the ’Paid and Curation Focused’ B&N Store.
  3. Incredible Price. Incredible Value for Money. Nook HD at $149 is a must-buy if A) You’re in the market for a Tablet, and B) Your needs are met by what Nook HD provides, and C) You don’t have a strong connection to another ecosystem like Amazon or Apple. Nook HD is not only the best 7″ Android Tablet, it’s also one of the cheapest. You get a lot for your money.
  4. Brilliant Screen. Nook HD’s screen has 1440 by 900 screen resolution and can handle 720p Video. It has 243 pixels per inch pixel density - that’s almost iPad Retina Screen level quality. It’s the best 7″ Tablet for watching movies, displaying photos and reading magazines.
  5. B&N Stores & Store Staff. Nook Store Support is great with great Staff. If you have a B&N store nearby you’re in luck. Great Support. Special BOGO offers on ebooks if you go into store (started 2 weeks ago). The ability to browse any ebook for 1 hour (1 hour maximum in a 24 hour period) if you go into a B&N Store.
  6. Light, Compact, Portable, Pretty. Nook HD is more compact (7.65″ by 5″ by 0.43″), lighter (11.1 ounces), and better looking than most other 7″ Tablets (including Kindle Fire HD). It’s easy to fit into a purse or bag and easy to carry around.
  7. Profiles Feature in Nook HD. You can set user profiles and set an age for each profile – only content rated for that age will be shown. You can enable/disable different features and apps and content for each profile. Profiles are a very useful feature, especially if you have kids or family you want to share your Nook HD with. Please Note: It’s not fully baked. However, it should cover 90% of your use cases.
  8. Google Apps are included. If you’re invested in the Google ecosystem (Gmail, Google Maps, YouTube), then Nook HD becomes a great choice.
  9. SD Card. This is a big advantage over most other 7″ Tablets like Kindle Fire. With the SD Card you can greatly expand storage capacity.
  10. Lots of great features for Kids. If you’re a parent then Nook HD (especially at the current $149 sale price) is a great choice. You can set up Child Profiles, there are ‘Read to Me’ books, there are lots of Apps for Kids in the Nook Store.
  11. Bonus: No Annoying Ads. Also, the Recommended Books feature is less intrusive than on Kindle Fire HD.

A few more strengths -

  1. Scrapbooking Feature & Catalogs. Scrapbooking doesn’t work on all magazines. However, for the magazines it works with, it’s a very fun feature to have. Catalogs are nice to have too.
  2. HDMI out (cable sold separately) lets you watch movies bought from Nook Videos Store or from Google Play on your HDTV.
  3. Power Adapter is included. B&N won’t Nickel & Dime you.
  4. Very comfortable in your hand. Nook Tablets are all very comfortable to hold. Nook HD, due to its compactness and lightness, is perhaps the most comfortable Tablet to hold. Also, no large, ugly bezel around the device like Kindle Fire HD has.
  5. Lots of options for browsers. There’s Chrome by default but you can switch to any browser available in Google Play Store or Nook App Store.
  6. Two Stores. Want Ad-supported Apps? Use Google Play. Want Ad-free Apps? Get the App from Nook App Store.
  7. Two color choices for Nook HD hardware – Snow (White) or Smoke (Charcoal Grey/Black).

From these lists it should be clear that Nook HD is a very strong, very capable little Tablet. If you ensure Nook HD covers your main 3 to 5 Tablet use cases (what you need and/or want to use a Tablet for), you’ll be happy with it.

Nook HD Review – Top 10 Cons for Nook HD

Here are the Top 10 Weaknesses of the Nook HD -

  1. Software Issues Part 1. The Android Skin B&N has added on top of Android 4.0 is buggy. While it adds some good features like User Profiles, it also has lots of bugs.
  2. Software Issues Part 2. The combination of Google Play Store and Google Apps running alongside Nook Apps doesn’t work perfectly all the time. There are lots of small niggling things.
  3. Software Issues Part 3. You might be stuck on Android 4.0. B&N is rumored to leave the Tablet Space around April 2014. Its move of dropping prices massively and adding Google Play supports this rumor. The problem is that you will not get software updates beyond that point. Perhaps they’ll stop earlier. So, to be on the safe side, assume that Android 4.0 is the Android version you’ll be on forever. Forever = for the life of your Nook HD. Might not be an issue now. What about in 1 year? Furthermore, B&N tends to break things when it does updates.
  4. If B&N sells Nook Media to Microsoft or someone else, you might be lost in terms of finding support. The whole ‘great B&N Store support’ might be gone. Support in general might be reduced greatly.
  5. Phone Support and Live Chat Support are bad. Nook Store support is amazing. However, by all accounts, the phone support is terrible. If you don’t have a B&N store within driving distance, you might have a hard time solving issues you have with your Nook.
  6. Nook HD Speakers are not as good as Kindle Fire HD speakers. Kindle Fire HD has the best speakers of ANY Tablet. Nook HD speakers aren’t as good and are not very loud.
  7. Nook HD is built on Android but it’s not Android. What that means is – If you love Android Openness you’ll go nuts on the Nook HD. Just trust me on this. If you are an ‘Android’ person, don’t get it. It’s B&N’s Closed Nook ecosystem + Google Play Store. That’s it. It’s not an ‘open Android Tablet’ you can tinker with.

Truthfully, there aren’t really 10 big cons against the Nook HD. You could even take the first 3 Cons and distill them into 2 Cons (buggy software, might be stuck on Android 4.0). Nook HD is a very good device. Software is its only real Achilles heel.

Additional concerns -

  1. WiFi support is spotty. WiFi doesn’t work well with 802.11 n. WiFi doesn’t work well with dual bands.
  2. Speakers are good but not best in class (Kindle Fire HD has better speakers). If you’re an audiophile then get a Kindle Fire HD – the difference is clear. If you don’t need audio to be super great, then Nook HD is great.
  3. Proprietary Charging Cable.
  4. No easy way to get Amazon’s Kindle Fire App Store on Nook HD.
  5. Sideloading is disabled. You can sideload via ADB or you can root. However, you can’t just simply sideload an App.

While there are not that many cons, the ones that do exist are very definite problems. If you can’t handle software that is buggy and sometimes sluggish, or if you are wedded to one of the other ecosystems (Amazon, Apple), or if you are in love with openness and tinkering and software freedoms, then Nook HD is most definitely not the right choice for you.

Nook HD Review – How does it stack up against Kindle Fire HD?

I’ll do a separate detailed Kindle Fire HD vs Nook HD post. The short version is that you should NOT get Nook HD (instead get Kindle Fire HD) if one or more of the following are true -

  1. You’re wedded to the Amazon ecosystem.
  2. You’re an Amazon customer and trust them a lot.
  3. You aren’t willing to go into a store for support. Remember, phone support for Nook is spotty.
  4. You need to have the best speakers.
  5. You want a company that is going to stick around in Tablets for longer than the next one year.
  6. You don’t care about Google Play Store and lots of apps and just want an easy to use Tablet. Note: If you don’t need Google Play Store, then having it just introduces complications such as all the Google Apps running all the time and eating up battery life.

Nook HD was the better Tablet. With the addition of Google Play it’s no longer a close contest. However, your best option might be Kindle Fire HD. Just go over the cons of the Nook HD and consider the above list.

To beat Nook HD, Kindle Fire HD’s price would have to drop to $139 to $149.

Nook HD Review – How does it stack up against iPad Mini?

I don’t own an iPad Mini, so this section isn’t worth much. The following thoughts are based on iPad Mini articles and specifications.

The short version of Nook HD vs iPad Mini is -

  1. If you can afford the iPad Mini, get it.
  2. If you can’t afford the iPad Mini, then stop expecting that Nook HD or Kindle Fire HD will give you the same experience. They won’t. Better to be realistic now than to be disappointed after you’ve already invested money in an Android Tablet.

Just to be precise – iPad Mini beats the other Tablets in nearly every criteria that matters. iPad Mini is far superior on hardware quality, software quality, quality of apps, ease of use, range of tablet optimized apps, and smoothness. The few areas Nook HD and Kindle Fire HD beat iPad Mini include – price, better screen, better audio (Kindle Fire HD), more compact (Nook HD), user profiles.

If you care about hard to measure things like ‘openness’ and ‘saving baby pandas’, then you could come up with a lot of reasons to claim some other tablet is better. However, the truth is that iPad and iPad Mini are the best tablets. If you can’t afford them then you can’t get that same high quality experience.

The one exception: If you’re looking for a Tablet for Creators (and not Consumers). Then a keyboard equipped tablet like Surface Pro is better than iPad.

Nook HD Review – How does it stack up against Google Nexus 7?

Nook HD vs Nexus 7 will also be a separate post. The short version is -

  1. Nexus 7 was the weakest out of Kindle Fire HD, Nook HD, and Nexus 7.
  2. If you’re a ‘Google’ person then, for some strange reason, you can’t see this. Then Nexus 7 is best for you.
  3. If you’re not a ‘Google’ person, then it’s a no-brainer. Get Kindle Fire HD if you don’t care about Google Play Store. Get Nook HD if you care about Google Play Store.

Google’s Nexus 7 is just a tablet made by Asus and branded ‘Google’. So it doesn’t even make sense to assume it’s some special Google Tablet. It’s also pretty old. Far older than Kindle Fire HD and Nook HD. Makes no sense to buy a Tablet that is 6-7 months older than the competition. That’s half a generation.

Nook HD Review – How does it stack up against eInk Readers like Kindle Paperwhite and Nook GlowLight?

Firstly, if you’re comparing Nook HD against Kindle and Nook, you’re making a mistake. These are VERY different devices. The former is a Tablet that happens to be optimized somewhat for reading. It’s like a truck you drive to work because your car is in the garage. The latter are dedicated reading devices.

The short version of Nook HD vs Kindle Paperwhite vs Nook Glowlight -

  1. If you read a lot of books, just get a dedicated reading device. It’s not close when it comes to reading. eInk Readers are the best devices for reading. Strange as it might sound, a device optimized in every way for reading does happen to be better for reading than one that isn’t.
  2. If you are going to read 80% of the time on your Tablet, then get an eReader instead (or in addition to) of a Tablet.
  3. If you are not going to read much, or if you want a device that ‘also lets you read’ (versus a device that ‘focuses on reading’), then a Tablet is the better choice.

Prices of dedicated eReaders are really low now. If you love to read, you owe it to yourself to get a dedicated reading device like the Kindle Paperwhite and actually read.

Nook HD Review – What about the new Tablets? What about iPad Mini Retina Display?

Expected Release Dates are -

  1. June or July – cheaper Nexus 7. May or may not be a newer model.
  2. July to September – New iPad Mini. May or may not be Retina iPad Mini.
  3. October to November – Kindle Fire HD 2.
  4. Nook HD 2? Perhaps Not.
  5. 7″ Windows 8 Tablets – July to September time range.
  6. B&N Windows 8 Tablet – Perhaps. Perhaps in September or October.

I’m really not sure if and when these tablets will arrive. Quite frankly, it might make sense to wait and see what the Windows 8 Tablets are like. For the rest – No. Because then you will just end up waiting another 3 months and another 6 months. Before you know it you’ll be 121 years old and wondering whether the Microsoft Teleporter Tablet 2.0 is better than the Amazon Gratification Delaying Tablet 3.1.

Nook HD Review – The Conclusion

Nook HD is, without a doubt, the absolute best value for money in the 7″ Tablet market. At $199 it was a steal. At $149 Nook HD is a no-brainer PROVIDED it is what you’re looking for in a Tablet.

In my opinion, Nook HD is better than – Kindle Fire HD, Surface RT (yes), and Nexus 7 PROVIDED you are looking for a Tablet that does well what the Nook HD does well (reading books, watching movies, displaying photos, web surfing, email, Netflix, comics, apps, games).

  1. Nook HD is a very good Tablet for reading books and surfing the Internet and for mobility and portability.
  2. Nook HD is not a good Tablet for PDFs and Magazines (screen size is too small).
  3. Nook HD is not a good Tablet if you want the Apple experience or the Kindle/Amazon experience. This is important. You can get the Kindle Reading App on it and you can use Puffin Browser to watch Amazon Instant Videos. However, large parts of the Amazon experience will be missing.
  4. With the addition of Google Play Store, Nook HD is excellent for games and apps. Nook App Store also has some good games.

Quite simply, Nook HD is the Best 7″ Tablet around. It also happens to be one of the cheapest 7″ Tablets around. So, if you’re thinking about it, the Nook HD Mother’s Day sale price of $149 is well worth considering.

Filed under: Barnes Noble Nook | Tagged: , , | 4 Comments »

Kindle Phone 3D? Kindle Phone with Eye Tracking & Gesture Recognition?

Posted on May 9, 2013 by switch11

A new Kindle Phone from Amazon rumor from The Wall Street Journal today.

  1. Key: A high-end Kindle Phone 3D that allows for 3D images without glasses.
  2. Key: A total of two smartphones and an audio-only streaming device.
  3. Interesting: Retina-tracking technology would be used to make images float above the screen like a hologram. That’s some very science fiction type stuff. Amazon? Really? Have the WSJ guys seen what the Kindle Fire 1 looked like? The company that made that boxy thing is going to make a Kindle Phone 3D that projects hologram and makes you feel like Tom Cruise in Minority Report?
  4. Navigation via your eyes. Another hard to believe feature. Please Note: Amazon does have a patent for Gesture Recognition and visual input. This was approved around June 6th, 2010. So, hard to believe as it might be, Amazon might really have a Kindle Phone 3D with retina-tracking technology and gesture recognition.
  5. Overall Strategy: WSJ says that Amazon will release a set-top box (Kindle TV), a smartphone (Kindle Phone), a Kindle Phone 3D, an audio-streaming device (Kindle Audio? Kindle Stream? Air Kindle?). These are known as the Alphabet Projects – Project A, B, C, and D.
  6. WSJ says some or all of the devices could be shelved because of performance, financial or other concerns. Way to give yourself an out WSJ.
  7. WSJ also thinks the overall aim is to expand Amazon’s reach into content distribution.

That’s a lot to digest.

Will Amazon release a Kindle Phone?

We’ve discussed Kindle Phone and Kindle Phone Release Date before. This seems quite likely.

Will Amazon release a Kindle TV?

Again, we’ve covered Kindle TV and Kindle TV Release Date and chances of it arriving before. This seems possible. It might not arrive until 2014.

Will Amazon release a Kindle Phone 3D? With Retina-Tracking and Holographic 3D images and Gesture Recognition?

I find this really, really hard to believe. Amazon has the patent for Gesture Recognition and Eye Tracking. It’s had it since June, 2010. However, does Amazon have the ability to introduce game-changing hardware? Kindle Fire and eInk Kindle have both been follow-ups to existing products from competitors. All the components and the screen technology were well established (it wasn’t brand new). I don’t see any 3D holographic screen devices Amazon can iterate on. Same for gesture tracking. Kinect exists. However, I doubt Amazon has access to Microsoft’s Kinect technology.

How on Earth is Amazon going to introduce a market-changing (perhaps even market-transforming) Kindle Phone 3D with not just one but 3 almost completely new technologies?

Retina-Tracking. Almost completely new. Since Kinect technology isn’t licensable.

Holographic 3D images. Completely new.

Gesture Tracking. Completely new.

If Amazon ships a Kindle Phone 3D then it deserves a ton of credit. Much as it pains me to say this, this seems like something Apple would do, not Amazon. Wouldn’t that be funny – if Apple introduces a boring iWatch while Amazon launches a genre-transforming Kindle Phone 3D.

Filed under: Kindle Phone | Tagged: , , , | 5 Comments »

Microsoft to buy Nook for $1 Billion? Microsoft vs Amazon in eBooks?

Posted on May 8, 2013 by switch11

We get the rather interesting news from TechCrunch that Microsoft might buy Nook for $1 billion from Barnes & Noble. What is very refreshing is that TechCrunch seems to have gotten its hands on some internal documents. It includes a lot of reasonable sounding figures including Nook device sales figures.

If this ‘Microsoft buys Nook, takes on Amazon’ thing ends up being a rumor, it’s at least an intelligently conceived one.

  1. Key: Microsoft is offering $1 Billion for Nook Media LLC. Nook Media LLC is the B&N spin-off that encompasses Nook Tablets, Nook eReaders, and Nook eBook Sales.
  2. Key: Nook Media plans to discontinue its Nook Android Tablets at the end of its 2014 Fiscal year. That would be April 30th, 2014 – just 1 year away.
  3. Nook Media will focus on selling Nook content through apps on ’3rd party devices’. What these ’3rd party devices’ are, isn’t specified. However, these 3rd party tablets are due to get introduced in 2014. My Guess: Either Nook will sell through Windows 8 Tablets and iPads OR Nook is handing off device manufacture to someone else (like Google has handed off Nexus 7 tablet manufacture to Asus).
  4. Nook eInk Readers will continue. Supposedly until every person in the world has left eInk for LCD.
  5. For Context: Microsoft already owns 17% or 18% of Nook Media. It had invested $300 million and had promised $300 million more in return for this 18%. Pearson has also invested in Nook Media.
  6. TechCrunch claims Microsoft promised an additional $180 million to B&N in return for B&N developing content for its Windows 8 devices. This seems rather strange given that B&N would perhaps want to make Nook Apps for Windows 8 for free. Unless they are crazy and don’t want to sell ebooks to Windows 8 owners. Why promise $180 million?

All of this seems in-line with the recent behavior of B&N i.e. opening up Nook HD and HD+ to Google Play; offering $50 off Nook HD and $90 off Nook HD+.

B&N seems set to put the Nook HD and HD+ and the entire Nook Tablet line to death.

Is Nook really 10 million devices sold and $1.215 billion in revenue?

There are some very interesting claims about the Nook business itself -

  1. 10 million Nook Tablets and eReaders sold. That’s what TechCrunch claims.
  2. 10 million seems a bit low. That suggests perhaps 5.5 million Tablets and 4.5 million eReaders. Which might mean B&N has a smaller share of the eReader market than is generally assumed (people assume 20% to 25%). OR It might mean that Amazon’s Kindle sales aren’t as high as everyone thinks (15 million to 20 million or more).
  3. TechCrunch says it has an internal document which shows B&N’s Nook unit brought in $1.215 billion in revenue in fiscal year 2012 (B&N’s fiscal year ends April 30th).
  4. The internal document says B&N expects $1.091 billion in fiscal year 2013 and expects Tablets to be phased out.
  5. B&N’s future projections are interesting. It thinks Nook will earn $1.976 billion in revenue in fiscal year 2017. This is despite ending Tablet sales and having only Reading Apps. Talk about being optimistic.

Basically, B&N has a billion dollar a year business and, within that business, the Hardware Tablets are failing in a big way. The rumor/data from TechCrunch certainly matches my read of B&N’s behavior over the last year and a half. B&N has a good ebook business but is floundering with the Nook HD and HD+.

Why Microsoft wants to buy Nook. Should B&N sell Nook?

For Microsoft this makes a ton of sense -

  1. It gets to add another $1 billion dollar a year business to its lineup. It can leverage Windows and Outlook and Skype and Bing Search and Office. It can strengthen Nook ebook sales considerably. It can add sales of business books and textbooks. It can really do some damage.
  2. It’s buying low. It is, in effect, buying 15% to 20% of the US eBook market. $1 billion for what might turn into a $1 to $2 billion revenue a year business for decades. That’s a really good deal.
  3. eBooks are a very high margin business. The costs to host and send out ebooks are really low. People are paying $5 to $10 for ebooks and much more for business books and textbooks.

Should B&N sell?

Reasons not to sell -

  1. They have all these customers who’re buying ebooks from them for pretty high prices. If you’re selling a $5 to $10 ebook there are very high margins. No stores to run. No shipping. No returns.
  2. They are expanding to selling movies. Another high margin business.
  3. They can focus on making really, really good Reading Apps and expand market share via that.
  4. They can buy up some well done Reading Apps and Reading related Apps like Pocket and Read It Later and Instapaper and get more customers.
  5. They haven’t really given ‘making the absolute best reading app on every platform’ a shot. Can you imagine the quality of software if they focused all their Nook Tablet efforts on software (albeit with developers who are really really good).

This isn’t a good strategy in the long term. Because the ecosystem owners will tax their profits. However, it’s good for the mid-term and will help them increase their valuation from $1 billion to the $3 to $5 billion range.

Reasons B&N should sell -

  1. $1 billion is $1 billion. Think of it this way – B&N losses last year were $69 million. A $1 billion cash infusion and the cutting away of a business that lost $200 million+ last year means B&N would get another 10-15 years to sort out its bookstore and college bookstore businesses. 10 to 15 years might be enough for B&N to strength and reinvent itself.
  2. Nook division might do worse. Windows 8 Tablets and Android Tablets and the newer iPad Mini might greatly reduce sales of Kindle Fires and Nook Tablets. There might be some amazing new reading app that steals away users. Amazon could kill Nook on ebook prices.
  3. Microsoft would be a strong, strong competitor for Amazon. That would mean Amazon has less time to focus on B&N. B&N can focus on its stores in relative peace. Let’s be honest – A Business with no real competitor (physical book stores) is better than one where you have Amazon, Google, Apple fighting you.

Overall, I think B&N should either sell Nook and cut itself away totally from Nook hardware and apps. Or it should hold on for 1 year and see if it can get to 30% to 35% market share in eBooks in the US.

The more I think about it the more the option of selling seems like a splendid idea. $1 billion would give B&N 10 years (perhaps even 15) to sort out its stores.

If Microsoft buys Nook, Microsoft vs Amazon will be Fun to watch

Microsoft and Amazon are already competing in the Cloud Space. Amazon’s AWS is the runaway leader with a rumored $2.4 billion a year in revenues. Microsoft’s Azure is rumored to be a $1 billion a year business already and there doesn’t seem to be any other Cloud based company that’s close (perhaps VMWare and RackSpace). That might mean Amazon is #1 and Microsoft is #2 in Cloud Computing.

Microsoft buys Nook and suddenly we get Amazon #1 and Microsoft #2 in eBooks.

The big difference between ‘Microsoft at #2′ and ‘B&N at #2′ is that Microsoft has $2 billion a month in profits (mostly from Office, Windows, Server Tools divisions) which it can use to really compete. It also has an incredible amount of money ($121.2 billion in net assets).

eBooks are a very malleable and flexible business. It’s even more in the ether than Cloud Computing. Cloud Computing there are actual servers being sold (as a service). eBooks are just words - bits floating around in the clouds. Microsoft might be one of the best companies in the world in terms of making money from software and digital products. It can bring international into play. It can bring a lot of weapons into play if it enters the eBook Wars.

Microsoft also benefits in that it will enrich its ecosystem by adding Nook eBooks. Microsoft’s ecosystem, in turn, can really enhance Nook ebook sales.

If B&N doesn’t sell. If B&N switches to eBooks and Apps only – What then?

This is a little hard to conceive.

B&N wants out. It wants to stop selling hardware.

Does it really want to just be an eReading App maker? That’s so far away from its roots of having stores and selling books. At least with devices it was making something physical and the devices were like little B&N Stores.

Becoming an eReader App maker would be like B&N renting a stall within WalMart and selling ebooks. No control. No glory. No long-term future.

B&N might stick to selling Nook eBooks. It might ship out Nook Reading Apps and try and grab and keep a decent share of the ebook market. If it does, then my guess would be that it fails quite quickly.

Without devices you don’t have any captive audience. Furthermore, B&N can’t really compete on software. B&N has shown it can make beautiful hardware. However, its software has always been poor and rushed to market. Dropping what it can do well (hardware), and focusing on what has been its main weakness (software) and perhaps the reason Nook hardware failed, would be a strange and suicidal move.

B&N is perhaps good at – Selling Books and Things in Stores. Making Beautiful Hardware. Selling in the US. Selling to its existing customers.

It seems to be miserable at – Making Software. International Expansion. eReader Apps.

If it’s going to end Nook devices, then perhaps it should shift back to its core competencies – Stores, Existing Customers, the US.

In that case, it can hand off the parts that it does not do well (software, international) to Microsoft. Rather conveniently, those happen to be part of Microsoft’s core competency. Software, Software Distribution, International, Marketing are all Microsoft strengths.

If ‘Amazon vs B&N for the future of books’ morphs into ‘Amazon vs Microsoft for the future of books’, we might see some really incredible and exciting eBook Wars. Strategies and Scale that recapture the spirit of the Robber Barons from the Gilded Age. Amazon, a company always dying to lose money from its future profits, taking on Microsoft, a company always dying to lose money out of its ongoing profits. The prize would be a rich profit stream from ebook and etextbook sales. A profit stream that might end up being $5 billion to $20 billion a year worldwide. How many companies really have the resources to even fight for such a huge profit stream? Just Apple, Microsoft, Amazon, and Google.

Amazon vs Microsoft in the eBook Wars – Things are about to get very exciting.

Filed under: Barnes Noble Nook | Tagged: , , | 5 Comments »

Amazon is usurping Publishers, and setting itself up to be Played

Posted on May 6, 2013 by switch11

Thanks to Roger Knights for these two interesting links -

  1. Seeking Alpha discussion about a startup combination trying to compete with Amazon.
  2. Article at Paid Content that covers this same Startup Partnership.

To fully understand what is going on here, we need to step back and look at (really look at) what it is that Amazon is trying to do with the Kindle.

What the Kindle seemed to be

When the Kindle first came out, it seemed to be a Gutenberg level transformation in Books and Publishing -

  1. Anyone could publish.
  2. Readers could get any book in the world, instantly.
  3. All your books on one device.
  4. A direct connection between authors and readers.
  5. Costs of printing and storage and shipping and stores gone.
  6. Instant and Quick Editing and Updating of Books.
  7. No more problems with supply and demand – As many ebooks can be made as needed.
  8. The chance for a more open market. More independent authors. More Publishers. More bookstores.

Of course, that’s not really how things are turning out. It’s becoming clearer that this was an illusion that readers and authors envisioned and dreamt up. Perhaps it’s time for reality.

What Amazon’s moves seemed to suggest

Amazon said all the right things -

  1. A device made for reading, with no compromises.
  2. The Fight against the Agency Model.
  3. Allowing Indie Authors to publish.
  4. Not getting in the way.
  5. Any book within 60 seconds.
  6. Convenience.
  7. Wireless Delivery.
  8. Readers want a device made for reading books.

Amazon, quite smartly, never really said much about how AMAZON would benefit from the shift in Books and Publishing. It suggested, implicitly, that becoming the de-facto bookstore was the goal. It just talked about how things would be better for readers.

That should have been a clue. As should have been Amazon’s attempts to give authors just 35% of book sales (changed to 70% once Apple entered the market).

What the Kindle really is

This is really hard to say. However, here are a few things the Kindle really is.

  1. The gateway device to Amazon.
  2. A device made for readers, and then ignored as Amazon shifted its focus to Tablets and Phones. A device for readers, with no compromises – Oh, wait a minute, we see a bigger market.
  3. The practice device and the device manufacturing and selling ‘experience’ which helps Lab 126 build Kindle Tablets and Kindle Phones.
  4. A lock-in device to keep readers in the Kindle ecosystem.
  5. A mini-Amazon store.
  6. The beginning of the attempt to take over for Publishers.
  7. Control for Amazon.

It’s becoming very clear that Amazon doesn’t see the Kindle as a great liberator, but as a usurper. It’s a coup, not a revolution.

What Amazon’s real intent seems to be

While everyone assumed Amazon wanted to usher in a revolution in books and a transformation in publishing, it merely wants to redirect the profits and control to itself. Instead of a system controlled by ‘The Big 6 Publishers, The Big Distributors, The Big Bookstores’, Amazon wants to create a system controlled by Amazon.

Amazon sees things very clearly -

  1. Authors pay Amazon for services like CreateSpace.
  2. Authors sell via Amazon.
  3. Amazon has its own Publishing imprints. It picks the best indie authors and the best backlist titles.
  4. Eventually Amazon starts signing up the best authors.
  5. Amazon gets lots of exclusives. It drives more people to the Kindle ecosystem.
  6. Amazon creates more and more lock-in.
  7. Amazon owns and controls the store and the listings and the reviews and the review sites and the social networks (witness the acquisition of both Shelfari and GoodReads).
  8. Amazon controls everything.
  9. Someone really has control issues.

Amazon wants to REPLACE the Gatekeepers (Publishers, Distributors, Retailers) and not Destroy Them. It wants to replace the Gates and Barriers with its own Gates and Barriers.

Amazon wants to create a system where it gets 10 to 50 cents out of every dollar made from book sales. 10 to 50 cents out of every dollar made by selling services to authors. 10 to 50 cents out of every dollar made from device sales.

It wants to be the Government of Books and Publishing and tax every little step.

Amazon is Usurping Publishers (and Bookstores and Distributors)

The aim was never a revolution. It was just REPLACEMENT.

Amazon actually likes the way things are set up in Publishing. It just wants to replace all the Gatekeepers.

The most important part is to destroy Publishers and replace them. Amazon is doing this in a very smart way -

  1. Firstly, it’s trying to create more and more power in the Bestseller lists and the Recommendations from the Kindle Store. So people get trained to trust Amazon completely when deciding what to buy next.
  2. Secondly, it’s building up an exclusive library of indie authors. So that the next generation of Good Authors are locked-in to Amazon’s Kindle Store.
  3. Thirdly, it’s signing up the best of the indie authors. The Amazon imprints aren’t experiments – they are the beginning of the replacement of Publishers. Publishers perhaps don’t fully see this yet. If Amazon starts getting the 10-100 best indie authors each year, then there’ll be NOTHING left for Publishers.
  4. Fourthly, it’s signing up back list books of famous authors and acquiring rights for international authors with potential in the US market. These are exclusives.
  5. Fifthly, it’s expanding the number of Kindles and Kindle Fires and thus increasing the percentage of ebook sales it gets. This part will become less important once it’s gained control of the authors (the content supply).

The aim is simple – Make more and more of the books sold in the Kindle Store, books that are controlled by Amazon. Make the transition smooth so Publishers don’t realize what’s happening (No, Dear Frog, the water isn’t hot). Keep the prices of books sold high, so the end reward will be worth it for Amazon.

Publishers don’t really get this. They’re playing checkers while Amazon is playing chess.

Amazon is setting itself up to be Played

The most delicious part of all of this is that Amazon, in the process of making Publishers replaceable, is weakening its own time at the top.

What’s the fundamental pipeline? It’s a pipeline connecting Readers with Authors.

Earlier we had a whole army of intermediaries – Publishers, Distributors, Book Retailers. They had HUGE, unavoidable Gates and Barriers. Printing physical books, financial investments, shipping, storage, renting stores, hiring people to man the stores.

As Amazon breaks down the various intermediaries, and places itself as the Sole Intermediary, it’s creating a system where we have:

Readers -> AMAZON -> Publishers -> Authors

Which Amazon will eventually modify to be:

Readers -> AMAZON -> Authors

However, there’s one big problem here.

Where are the Gates? Are there ANY real Barriers?

What Gates does Amazon have?

None. No real gates.

DRM is a very strong virtual gate. However, Tor is already showing that DRM can be forsaken. Sooner or later Publishers will realize that it’s better to drop DRM than to let Amazon whittle away their control and ownership of the most desired books and the most read authors.

All the other Gates are virtual.

Furthermore, by destroying the old model of physical books, Amazon has opened itself up to Battles on four fronts -

  1. Hardware. Amazon isn’t best in hardware. Apple and Microsoft and even Samsung and B&N are ahead. Lots of companies can beat Amazon in hardware.
  2. Software. Amazon is far from the best in software. There is an almost infinite army of developers willing to innovate and refine and polish and create something very beautiful. Amazon simply can’t compete. The one mitigating factor might be that the intersection of people who love books and those who love coding is relatively small. Furthermore, books are hardly a ‘glamorous’ business like music or movies.
  3. Infrastructure. Amazon is very strong here. Perhaps unbeatable by anyone other than Microsoft (and even that isn’t a given).
  4. The Default (Path of Least Resistance). Amazon is very strong here. However, there are a lot of iPads and iPhones and Samsung Galaxy Phones out in the wild. Windows is another monster. So, while Amazon has gathered up a very significant number of hard-core readers with eInk Kindles and Kindle Tablets, it is still very vulnerable.

Notice how these are all areas that Amazon doesn’t really control. They aren’t defensible. That’s the whole problem with going digital – There’s hardly anything left that’s defensible.

Amazon doesn’t have a Defensible Position

Contrast Amazon’s defence (default website, DRM, Kindles) with what Publishers have – Contracts with Authors, Agreements and Business Relationships with Book Retailers and Distributors, Book Publishing Expertise, Infrastructure.

Publishers control the ACTUAL product. Amazon just controls parts of the pipeline.

Publishers control ACTUAL PHYSICAL Barriers and Gates. All of Amazon’s Gates are imaginary.

Amazon is building up all the ‘content ownership’ advantages Publishers have. Its long-term aim is to control the actual books that people buy. However, the Kindle and Nook and Kobo and ebooks have destroyed the actual physical Barriers and Gates.

So we have three very interesting things -

  1. Amazon is in pole position to usurp Publishers. It is building up as much defensibility as it can.
  2. Without the real Gates and Barriers, Amazon’s position isn’t very defensible. It can be taken down. There are also lots of vectors of attack – Hardware, Software, and Path of Least Resistance are three particularly dangerous ones.
  3. Books have moved to a place where anyone can compete. As there is more competition the margins go down. This is true on both fronts – Anyone can publish and sell books. Anyone can set up a store and retail books. So not only will we have infinite authors, we’ll have hundreds of ebook retailers.

Infinite Competition almost always kills profits.

If there is no actual scarcity of product, how do you make a profit? How do you even sell the product?

Amazon is really, really setting itself up to be Played

There’s a 75% chance we’ll look back and laugh at all these companies that are investing heavily in devices to read books. Companies that are setting up magnificent forts and castles and trying to become the Titans of the eBook World.

If what you’re selling isn’t defensible, then all your investment is for nothing.

This isn’t oil or gold or diamonds. There are no oil wells or pipelines. There are no mines or armored carriers. It is digital content. It’s in the ether.

You aren’t the creators, the authors are.

You aren’t the buyers, the readers are.

These elaborate castles with their alligator infested moats – these aren’t deterrents at all. These, in reality, are sand castles on the beach. Sooner or later the tide is going to wash them away. Then the architects will realize it was just fantasy.

The 25% chance. Well, perhaps people will forever remain stuck in the old mindsets. In that case Amazon and B&N will be laughing all the way to the bank.

Their position will still remain very tenuous. How do you defend digital books? How do you defend them in a world where the Internet connects everyone to anyone and everyone? How do you get readers to pay $10 for books when authors’ desire to be read (supply of books) is greater than readers’ desire to read books (demand)?

Things change so fast. 10 years ago we didn’t have Smartphones or iPhone or Facebook or Twitter or Instagram or iPad or Tablets. In 10 years who knows what new devices and technologies are going to arrive. What do Amazon and B&N have to defend themselves?

We have a completely made-up situation. Everyone’s trying to pretend there’s some great scarcity in books. It was easy to pull it off when there were REAL limitations on who could get published and who could get visibility. When it cost money to print books and ship them and stock them in shelves. Now, there are no restrictions.

Yes, there are lots of ARTIFICIAL barriers and lots of IMAGINARY roadblocks. However, those are for the weak of spirit and for the naïve. If you see things as they really are, then as an author you can see that all your readers are freely available. The Internet, Google Search, Facebook, Twitter, Blogs, Review Sites, Email Lists, Pinterest, Instagram, Message Boards. The number of channels is ever increasing.

Authors willing to strike out and reach readers will prosper and gain independence (both financial and creative). More and more authors will realize this over time. That they don’t need the blessings of a Publisher for their book to get bought and read. That they certainly don’t need Amazon’s blessings.

This is why indie authors who find success almost always share their secrets and their figures. It’s not in their best interests. They get ridiculed by the unbelievers. Yet they still share. Why? Because this is bigger than any author or any reader. This is a bigger revolution than Gutenberg’s. Not only are we getting cheaper books and more people being able to read them, we are also getting anyone in the world being able to publish. This revolution in books is at least TWICE as impactful as Gutenberg’s revolution.

PROVIDED readers and authors snap out of their collective misconception that we’re still stuck in the Old World of Physical Books and Old World Publishing.

It’s going to be just authors and readers now. There’s room for enablers and platforms, but none for dictators and gatekeepers.

Where will that leave Amazon? With a very fancy infrastructure and a very controlled pipeline which, oddly enough, will be just one out of millions of pipelines that connect readers with authors. Even convenience or largest selection won’t save Amazon, unless it’s willing to cut margins to 5% or less. Perhaps not even then. You can’t compete against the Internet.

Amazon has served its purpose. Now the question is – Who is going to carry forward the Biggest Revolution in Books the world has ever seen?

Filed under: publishing | Tagged: , | 16 Comments »

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