So Barnes and Noble is joining Amazon in offering an ebook reader and downloadable ebooks.
This article from NZHerald has several indicators that they will fail if they keep on their same path.
The e-books sold at BN.com will not be compatible with the Kindle or the Sony Reader….
….the market is developing in such a way that customers with different devices will be limited to purchasing books from specific, associated retailers.
Amazon deleted Orwell’s finest from their Kindles the other day, and Barnes and Noble are falling onto the same DRM trap:
Publishers are viewing the developments in the US with a mixture of excitement and trepidation, in the expectation that e-books could become a profitable new business, if digital piracy does not take hold.
It’s in a way amusing, but so sad that the book publishing industry cannot learn from the debacles that the newspaper, music and movie industries have gone and are still going through.
So let’s recount the lessons learned from the digitization of Newspaper, Music and Movies:
- Piracy sounds scary, and you can spend $ millions fighting it
- Those $ millions spent on piracy will be essentially wasted (unless you are a lawyer)
- Fighting piracy will make your customers dislike you, even hate you
- In reality consumer to consumer piracy is great marketing, and increases sales
- People will still buy your offline content, even if it is free or cheap digitally.
- People actually prefer to pay for legal digital content – if you make it easy and cheap
- However customers want to own content, not lease it from you
- To make sure of ownership and transferability sell unencrypted unprotected content. DRM sucks.
- Maximise sales through end to end simplicity – from buying to consuming
- Apple gets all of this stuff and they will win if you let them.
Amazon, Sony and Barnes and Noble are Diamond with their Rio, Sony with their Minidisc and the mryiad of players using leased DRMed WMA files.
None have all of the pieces of the puzzle and all are doomed to fail until they get them.
Once again it is the publishers that are standing in the way of progress – just as the RIAA and the MPAA did for music and movies.
So – for you book publishers – please listen and watch the lessons of the other publishing industries, and let us buy your digital books for a few dollars, own then, copy them and read them on any platform.
The alternative will be pirated books, freely available from hosts of sites that are downloadable to any device. None of us really want that future.
Lance Wiggs 
In the newspaper scenario, it is Amazon that sets the subscription rate for access on Kindle, not the newspapers.
There has also been recent testimony by US newspaper publishers to Congress that for a Kindle deal, Amazon’s share would be 70% of subscription revenue + rights to republish content in other devices. Realistically, that’s not a decent deal for newspapers at all. They have no pricing power over their content, they have no control over their content and they get the poor end of the revenue deal.
Furthermore, device owners/distributors can only have that kind of commercial bargaining power when their device or distribution model reaches a scale whereby they are essentially the content carrier of choice (re Ipod). I don’t think any e-book device can claim to have reached this status yet so the fact that Amazon is trying to push through deals like these with newspapers specifically is probably them getting ahead of themselves.
You can see why publishers in different content streams alike are frantically trying to search for different models. No one wants to get cornered into a bad deal with no way out. I’m not saying that B&N have it right, but I’d give them credit for trying something new rather than bunkering down.
Also, I don’t think it’s fair to simply focus on the publishers as being the authors of their own demise/success with regards to the digital distribution of content. The Amazon example shows that it’s not simply just a case of publishers withholding content or being greedy.
As you may well know Lance, most newspaper publishers are very open to getting their content out there and as widely distributed as possible. Look at all the free news websites.
What has happened, or rather what’s essentially led to the talk of charging for news, is that the all this content that’s been released on the internet is not generating the kind of revenue that publishers expected, not even when comparing only to the digital infrastructure required to maintain a site with sufficient storage and bandwith to serve a small population.
There are many reasons for this. One of them is that the content created by these publishers are being monetized by other distributors without any returns to the host publisher at all, a consequence of giving things out for free. The second, are market price distortions by the likes of Google (no publisher can compete with Google’s rates, and Google makes money at the point of search and on the host publisher’s own page as well).
The third, is that in broadcasting and print media, the advertising revenue pipe was easily controlled and funnelled to the main media organisations. There was only really 1 form of advertising for each, TV commercials or printed ads on newspapers/magazines, leading to the ‘content supported by advertising’ model – which we all have come to know as ‘free’.
On the internet, advertising is not limited to display banners on news websites. In fact, most users hate advertising on news site (hence limiting what news publishers can do). Add to that social networks, search marketing, online brand marketing etc – news publishers simply are not competing with other news publishers anymore… they’re competing with everyone.
Chris Anderson was right. On the internet, ‘everyone can play’, and certainly ‘everyone’s eating the pie’. Yet, when you look at actual content production, it is still coming out from the same old ‘traditional media’ producers as it did 10 years ago. It’s just like YouTube – lots of UGC, but the most viewed are always going to be music videos produced and paid for by music studios.
Everyone is certainly earning money on the internet and I’d argue that content creators are still trying to rationalise this new economic model. They’re going to fumble around for a while. But at the same time, the internet is a game of distribution. And in this game, it’s the distributors like search engines and content aggregators that have all the power. What I find, is that more often than not, these distributors are painted as the ‘good guys’ (for spreading free/cheap content), while the content creators are the ‘bad guys’ (for wanting to charge anything).
It’s just simply not as simple as that.
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That ended up being longer than I thought it would be. Apologies.
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