As any regular reader of this blog knows, I am a big fan of eBooks. I am currently using Sony’s PRS-500, and have been both a user and advocate of eBooks since back in the days of the now defunct Rocket eBook Reader by NuvoMedia. Technology has really come a long way since then. Compared to previous eBook devces I have owned, the Sony has a great screen, is small and light, and has excellent battery life.
I really do like my Sony reader, and have heard good things about their most recent model, the PRS-700. However, I think I may be ready to make a switch. Why?
Because the platform and technology are only a part of the story…
EBooks are an investment. You need to lay out at least $300 to buy an eBook reader before you even get to buy and read your first eBook. You then continue this investment by building up a library of eBooks over time that are effectively locked to whichever vendor you have chosen to go with. You need to count on this vendor to aggressively negotiate rights to sell a broader selection of books in electronic format, to seek out alternative forms of electronic content you can have access to, and to continue innovating their hardware and software to maximize the value you can get from your eBook investment.
So where does Sony fall short?
Sony has a track record of introducing products with proprietary formats and then abandoning them if they fail to dominate a market segment or add significant value to their bottom line. Over the past few years, they have walked away from the MiniDisc format and shuttered their ATrak based Music Connect store. I also expect their moribund UMD movie format to be sunset soon as well. Given where Sony is as a company right now, the eBook space can only be a distraction for them. Their recent dismal financial performance will no doubt force them to tighten their focus to just those areas that are critical to their immediate business objectives. I have no confidence that eBooks will make that cut, or that Sony will invest sufficiently in expanding the content they depend on. The bottom line is that Sony isn’t in the book business – they are in the ‘gadget’ business. I just don’t see them having a real commitment to this market, and I am concerned that any new eBooks I buy will end up being an investment in another orphaned Sony format .
So what will I probably be jumping to?
Amazon’s new version of the Kindle…
I was no big fan of Amazon’s first generation Kindle. It was too thick and angular for my taste, and had a generally unergonomic layout. However, it’s built in “Whispernet” (that lets you wirelessly browse, buy, and download books) is a great feature, and support from Amazon’s bookstore is a major draw. They also let you download free samples of books before buying them – a brilliant “Try before you buy” model that lets people sample a broader selection of content risk free. Now that Amazon is launching the next generation of their Kindle eBook reader, it looks like it might be the right time to make the switch.
That said, Amazon still has a lot more to do if they really want to make eBooks a viable and ultimately successful component of their overall business mix.
Here are some of the recommendations I’d like to make to Amazon:
- Remember to focus on being a book seller – View the Kindle as a platform that lets you sell content. Think less about making a profit on the devices themselves, and more about making them a ubiquitous platform you can sell content into. Do what you can to get the prices low, and look at creating a software version of the device that can work on other mobile platforms like iPhones, Blackberrys, and netbooks. In fact, make a deal with Apple and sell ebooks through iTunes. It’s not the number of devices you sell but the overall footprint that really matters.
- Explore new business models – There are three business models that you should latch on to. First is the Nexflix model. Make all books over a certain age “rent-able” for a monthly fee. This would create a guaranteed revenue stream for you while opening up a extremely broad selection of books to Kindle buyers. The second one is based on the business model of your recently acquired Audible audiobook division. They charge a monthly fee that lets people download (to own) a fixed number of audiobooks per month. Expand the concept to bundle both the audio and eBook versions of a book as standard, and make it available to everyone. You can even track where people are up to in either format and let them switch between them to the spot they left off in the other. This could open up the sale of Kindle devices to the entire Audible community, and broaden the appeal of eBooks even further. The third model integrates what the mobile carrier market does – handset subsidies. If people are willing to sign up to specific higher end subscription plans, subsidize the cost of the physical Kindle device. Don’t let up-front cost become the obstacle to someone having a Kindle. And building up recurring revenue streams is smart business.
- Get more free content online – Make deals with organizations like Project Gutenberg to produce Kindle compatible versions of works in the public domain. Do what you can to become the defacto repository for all creative commons work, making them available in an Amazon friendly digital format. Work with universities to make various academic research and journals broadly available. All of these sources should be available to everyone free of charge, or with very nominal fees to cover the cost of downloading via ‘Whispernet’. Why do this if your goal is to SELL eBooks? Because you need to attract a broad base of readers to adopt digital as their preferred method of consuming content – and that won’t happen at $10-$12 a book. This is a lesson you should take directly from Apple. Free (largely illegal) P2P music downloads fueled the growth of iPods, but the growth of iPods ended up making iTunes the largest distributor of legally acquired music in the world. Priming the eBook pump is essential.
- Let applications extend the capabilities of Kindle – Make it easy for people to do more using their Kindle enabled devices. Make services like Twitter available on Kindle so people can message around content – especially subscriptions to newspapers, journals, or web based sources. Provide hooks for integrating applications like Evernote to allow people to take and share notes across all of their digital footprints. Allow people to post from Kindle into popular blogging platforms. There is huge potential locked in the small, connected Kindle footprint. In short, open parts of Kindle up to the development community and let the platform become more than you would ever be able to make it on your own.
Based on the images I’ve seen and whispers I’ve heard about this new version of the Kindle, I believe that Amazon will have a hot product on their hands. But to make their investment pay off long term, they need to do everything they can to break this market open and really push eBooks into the mainstream.
Amazon has never been short on creative thinking, nor shy about taking chances to open up new markets. eBooks have been on the cusp of a “breakout” for over a decade, but no company has yet been able to find the magic combination of business models, content, and technologies to move them beyond their current niche audience.
Amazon – you won’t have any better luck if you just play it safe this time around.
So please – don’t…






