Thursday, December 16, 2010

E-book adoption barrier

E-Book readers (and to some degree tablets) are locked in a chicken & egg standoff with e-book content when it comes to user adoption: no one wants to buy books in a format that doesn’t work on the reader or a reader that can’t read the content they want.

Amazon’s solution is that you can read their proprietary format on Kindle, computers, some smartphones but not their competitors’ e-readers. Apple and B&N have the same approach, except they also support ePub.

A worker asked me last night (at a bar) what book format he can buy that will be readable 20 years from now. I told him ePub, which might actually be true. Certainly ePub is like the MP3 format of digital books — when it’s DRM-free everyone can read it and thus the least common denominator of e-books. (Amazon doesn’t read it but obviously could if they weren’t concerned about undercutting their proprietary format.)

However, the iPod/iPad MP3/ePub analogy breaks down pretty quickly, as Forbes blogger Chunka Mai points out:

I’d like to have an e-reader that would let me read the paper books on my bookshelves, plus the ones that have been consigned to assorted stacks and (gulp) boxes as my kids’ books crowd mine out. …

This is important because much of my reading is spent on books I already own, not just new purchases. Have you, for example, ever stumbled across an old favorite and found yourself immediately consumed? Or rediscovered a book that you bought and never got around to reading? Have you gone searching through the stacks for that reference that suddenly became timely? Those are the kinds of experiences that I want my e-reader to support.

In concept, I want to make the same transition as I did from CDs to digital music. Once I ripped the CDs that I owned into iTunes (thank you, gracenote, for filling in the track names), I packed away the CDs and the CD player and never looked back.
This is a flaw in the adoption model that (AFAIK) no one is pointing out. The MP3 caught on explosively because it provider a graceful path from the CD installed base.

In my case, about 10 songs are DRM-infested AAC from iTunes, and perhaps 100 DRM-free from Amazon. The rest are DRM-free version of CDs, including CDs I bought in 2008, 2009 and 2010.

So MP3 players were useful immediately, long before consumers made a large financial investment in electronic-only content. It’s not like the record companies wanted to make this easy: I’m sure they were hoping that I’d repurchase all my music again, just as I repurchased about 20% of my cassettes as CDs (and then abandoned the rest).

Mai also wants an open transfer of annotations and other content around the content:
These are, of course, not original cravings. They fit the vision famously laid out by Vannevar Bush in a 1945 Atlantic Monthly article describing his Memex system. They are fed by the aspirations that underlie much of the development of the World Wide Web.
Billion Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last 25 YearsAgain, this is an angle not covered by others. I looked up this bio, noted that it included yet another book about dot-com success and also that truly inspirational book, Billion-Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last 25 Years.

Mai offers an entertaining (if somewhat preposterous) way out of his dilemma:
Amazon is perhaps best-positioned to pull off what I want. I’ve been buying books there since 1997 and, as is the case for all their customers, Amazon has a detailed history of every book I’ve bought. This solves the question of whether I already own a book. If Jeff Bezos offered me the chance to upgrade to digital library with even just those books, he’d have me locked up in the Kindle’s proprietary format for life.
This assumes that publishers will let Amazon re-license the book on reasonable terms; Apple charged 30% to upgrade to DRM-free songs, presumably with most of that going to the record companies.

This also assumes that the publishers are stupid enough to slit their own throats. (Who knows, it could happen). If Amazon upgrades its print customers to its proprietary format, Mai and millions of other customers will be irrevocably locked into the company and its format. Pretty soon, the publishers will have only one distribution channel and a monopsony buyer who dictates the margin split with the authors and editors.

Absent such a clever solution, e-book adoption is going to be slow and gradual. And all the cute TV ads in the world won’t be enough to convince buyers that they should cast their lot perpetually with Amazon and its locked format. (If/when Amazon gets out of readers and allows others to read the format, it could be a completely different story.)

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