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LisaGModerator
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Is the eBook Business Model Already Broken?
      #34930 - 10/20/09 11:03 PM

Or more aptly, has the eBook industry outgrown itself? No, I'm not talking about DRM (digital rights management), that's an ugly topic unto itself. Instead, I'm talking about two things: standarizing formats and sticking to what you're good at. Amazon is incredibly good at selling books-- that's their claim to fame and a lot of your and my cash as well. They are not a hardware manufacturer. Sony, the division that makes computers, eBook readers and other tech gadgets and not the film or music divisions, is good at making hardware. Likewise, Barnes and Noble, who today announced their own eBook reader device, is good at selling books, not making stuff. Astak is good at making stuff, so is Plastic Logic who will make yet another Barnes and Noble eBook reader device. Why are all these companies whose competancies are in one field, trying to start a business in another?

The answer is that the eBook industry is very young: Sony started the game in 2006 with their first eReader, the PRS-500. There were non-dedicated eBook readers for several years before in the form of Palm OS and Windows Mobile PDAs, but those markets were very small. Likewise there were and are some PC-based services, but they were also small. As a separate commercial enterprise of scale, the Sony Reader was it. But why would folks buy a dedicated eBook reader if there were no books for the thing? And I don't mean 20,000 current, popular books-- but a LOT of books, so the machine could decently compete with printed book selections at the corner bookstore. So Sony had to make a seriously big eBookstore, so you could buy the latest Robert Ludlum or Dan Brown book and download it to your reader. Sony did a decent job and their selection has grown over the years, though Amazon (remember, the guys who are good at selling books) offers many more titles and often sells them cheaper. Sony made a bookstore because they had to in order to sell the reader. And who knows, it might mean continuing revenue for Sony too.



The Sony Reader Touch Edition PRS-600


Then along came Kindle. Given Amazon's popularity and Oprah's testament, it gained great currency (most folks have heard of it). And while the first generation Kindle was too big and an eyesore since Amazon's not a hardware company, it did have something compelling: a huge assortment of books you could buy for the thing. Folks in eBook forum-land dreamed of the ideal: the Kindle's Amazon bookstore wed to the Sony Reader hardware. Hmmm... get the idea?

Now Amazon wants you to buy a Kindle so they can sell you lots of books, made even easier with direct download to the device over wireless-- impulse shoppers beware. Book selling is Amazon's goal, not selling digital devices like the Kindle. But Amazon knew the eBook market was still young when they entered, and the world needed more eBook reader devices on the market so they could sell a bizillion books. Hence they made the Kindle, Kindle 2 and the Kindle DX. They're a big company with lots of marketing clout, so they knew they could pull it off. And so they did.



The Amazon Kindle 2


The 2009 hit: the year of the eBook. Suddenly lots of folks are interested in eBook readers and digital book downloads. Public libraries have gotten on board in a bigger way, largely with Adobe Digital Editions ePub format. And so we have a big, ugly mess. Amazon's primary format is Kindle AWZ format-- want an eBook from Amazon, that's the only form you'll get it in. Nope, you can't read it on a Sony or an Astak or anything but a Kindle. Sony started with their BBeB LRF format, but clever folks that they are, always specializing in hardware, they added PDF and ePUB support so you could use their reader not just with their eBookstore but with the public library and Google Books (500,000 public domain eBooks, mostly comprised of the literary classics). They know how to make a living selling hardware and seem happy to sell Sony Readers as a hardware product.

And now we have eBook readers from Astak, iRex, Barnes and Noble, Sony, Amazon and soon Plastic Logic. That's a lot of devices, each with their compelling features. EBook readers will become commoditized like PCs, MP3 players and DVD players: a means to an end, which is consuming content (books and periodicals). Folks will buy them based on looks, screen size, color, price and extra features. They will not buy them based on the associated eBookstore in the end. For the short term that worked, but as the industry matures, consumers aren't going to want to be locked into Sony brand Readers, or Kindles or the Barnes and Noble family of eReaders.



The Barnes and Noble Nook

And so the industry is already outgrowing itself. With the introduction of the B&N Nook eReader today, consumers have yet another format, yet another cry for loyality to deal with. The B&N Reader works with that old standby eReader format (which goes back to the Palm days and Peanut Press) and a modified new version of that format that works only on their Nook reader, iPhone, BlackBerry and PC. At least the B&N system allows for 14 day eBook loans to friends and family, but it still requires that once you buy into their eBook system, you stick with it or lose access to your books on brand x eBook reader.



The Astak EZ Reader


What's the short term solution (2 years from now)? Go back to what you're good at. Imagine if Amazon offered eBooks in a variety of popular eBook formats instead of just Kindle AWZ? How many eBooks would they sell? A huge number-- and that would fit right into their core business model: sell as many books as possible. Imagine if Sony and Plastic Logic, Astak and others focused just on the hardware-- innovating and tweaking and making for these best possible reading experience? Likewise, if Barnes and Noble offers several formats compatible with most popular readers, they would likely sell many more books that if limiting themselves to only to their hardware platform.

What's the long term solution (5 years from now)? In addition to companies sticking to their core competancies, we need a format standard, which may likely be Adobe ePub. The eBook reading revolution can't fully take off until we have a standard. History tells us that consumers don't like fragmented platforms: BetaMax vs. VHS, HD DVD vs. Blu-ray and so on. Nobody wants to pick a CD player that can play only 1/4 of the CDs on the market? Why should they pick an eBook Reader that's limited?


eBook Reader reviews:

Sony Reader Touch Edition PRS-600

Sony Reader Pocket Edition PRS-300

Astak EZ Reader

Amazon Kindle 2

Amazon Kindle DX


Barnes and Noble Nook info


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Jacob_SpindelModerator
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Re: Is the eBook Business Model Already Broken? [Re: LisaG]
      #34935 - 10/21/09 01:28 AM

Quote:

Amazon's primary format is Kindle AWZ format-- want an eBook from Amazon, that's the only form you'll get it in. Nope, you can't read it on a Sony or an Astak or anything but a Kindle.




Well, don't forget the iPhone app.

But yeah, this is a very good point about eBook formats and the associated frustrations. My primary work involves making books more accessible to people with disabilities, and eBooks have the potential to be much more accessible than traditional books (not too many regular books have a "Braille Button" or "Speech" option, but computing devices can do things like that). However, eBooks often end up being much harder to deal with in terms of accessibility because we keep getting hit with new formats that people haven't been trained in using or making accessible, and in some cases the tools for making the formats accessible don't even exist (yet).

I don't think Microsoft eBooks or Microsoft CHM eBooks work with any eBook devices yet, but knowing Microsoft, they may still try to force these formats to become a monopoly at some point...

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LisaGModerator
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Re: Is the eBook Business Model Already Broken? [Re: Jacob_Spindel]
      #34936 - 10/21/09 01:59 AM

Microsoft seems to be letting their .lit format die a slow death of neglect. But to answer your question, the Astak readers can read both .lit and .chm files (without DRM). Astak is the champion of supported file formats (around 20 formats!).

Speaking of Kindle, or B&N format or eReader format, I meant you can't read them on any other brand of dedicated eBook reader. They all support the iPhone/iPod Touch as an alternative platform. Which is nice if you happen to own one of those and don't mind giving up the eInk experience to keep access to that book if you ditch the reader.

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Jacob_SpindelModerator
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Re: Is the eBook Business Model Already Broken? [Re: LisaG]
      #34937 - 10/21/09 02:36 AM

I see, I was mistaken about the M$ formats. But accessibility is definitely a real concern.

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