A recent survey put out by Gartner looked at portable device usage among five hundred or so participants to see how things like tablet computing were changing the way we live. One of the more notable results that they came up with was an indication that over 50% of those involved said that they prefer reading on a screen to reading on paper. This includes newspapers, magazines, and books.
They didn’t specify whether or not the participants logged any of this data based on using a Kindle or other dedicated eReading device, but that matters surprisingly little in this case. The reading experience on portable devices is becoming comparable to, and sometimes superior to, that of reading on paper. Who would have thought?
It would be somewhat foolish to claim that this was the result of the Kindle’s impact of consumer impressions. We’ve been heading toward digital text distribution since the first computers were capable of storing enough text to be useful. It was only a matter of time for it to reach the reading public. It was what the Kindle signaled that accelerated the transition.
Sony already had a better eReader on the market when Amazon released the first Kindle. What they didn’t have was the Kindle Store. Amazon made it easy for their customers to buy popular books. They even went the extra mile and made sure that purchasing could be accomplished right from the device itself. With no more need to find USB cables or memory cards, eReading was finally more convenient than picking up a book from the store. It was sometimes even easier that picking up a book off the shelf.
Over time, adding devices as they went, Amazon brought their selection to practically any device with a screen. The Kindle itself was and is still important for many people, but just about anybody who is interested will always have a device within arm’s reach that can load a book for them now. Convenience has reached an extreme.
Convenience is what the Gartner survey attributes the move away from paper to. Their participants indicated that they were willing to pick up whichever device lay closest to hand for practically any reading situation, even to the point of excluding print at times. Since all participants were required to have a media tablet and at least two other similar devices, being out of touch would have been a stretch.
None of this says that the printed book is really going to disappear. We know that won’t happen any time soon, despite the fact that the death of print has been declared regularly since at least 1984 (extra points for catching the obvious movie reference). What this means is that print is likely to lose its primary position in the reading world, even for magazine and newspaper readers, before too much time is up. Tablets used to be toys, now they are becoming household tools. Prices are dropping, exposure to options like the $79 Kindle is up, and it seems like every day readers get more to choose from. Publishers can’t even entertain the notion of maintaining their old model unaffected at this point.
There is no avoiding the fact that the Big 6 publishers created their own problem in the Kindle. Amazon provided them with an easy way to start making a move into digital publishing when it was just getting off the ground and they jumped at it. That alone wasn’t the problem, though. The issue was that they were so paranoid about the medium that they managed to lock people into the first platform they purchased any significant number of books through. Let’s face it, nobody is better at successfully selling, suggesting, and just generally getting people interested in books than Amazon.
I’ve talked here before about how the Kindle deserves its place as the top selling eReader primarily because nobody else has come close to designing a store that gives customers so much of what they want. The suggestions are often eerily accurate, the categories make sense, and the search options are almost always up to a given task. Even Barnes & Noble can’t come close because of how used to the store-based practice of sponsored marketing they are. Given a choice between accurate recommendations based on personal purchase history balanced against similar customer profiles and recommendations based on what publishers decided to pour an advertising budget into, the choice is fairly simple.
We know that Apple’s price fixing scheme was not the answer in the long run. Not only did it not work particularly well to decrease Amazon’s influence, now the publishers are enjoying legal troubles for their efforts. They do have plenty of reason to want more diversified distribution, though. Looking at Amazon’s treatment of the IPG is enough to highlight some of what it means to be completely at the mercy of a single distributor.
The problem these publishers really need to address is that of their DRM. Amazon has not required publishers to participate in their DRM scheme, to the best of my knowledge. That was forced by publisher paranoia over piracy. If done away with, they are afraid that eBook profits will plummet.
Here, it seems like publisher interests are actually well served by the design of the Kindle. Without losing existing Kindle owners as customers, publishers could easily begin selling their titles without DRM and encourage wider competition. Best case scenario, this would allow publishers to open their own cooperatively stocked eBook store. It would also make possible the creation of smaller stores taking advantage of the same opportunity.
If somebody got truly ambitious, it wouldn’t even be hard to create a Kindle alternative that allowed for essentially the same experience. There are any number of Kindle clones on the market already that do the job fairly well and could probably do it better if the provider felt it was worth the investment in development. There’s no incentive if they can’t attract customers because Kindle Store purchases are locked down to Kindles.
All of this hinges on publishers looking past the possibility of piracy. How is that really so difficult, though? The DRM on eBooks is already laughably easy to get around, judging by how common stories of switching platforms through format conversion have become. If somebody really wants to pirate content, it is going to happen anyway. If these companies genuinely believe that the only thing keeping most Kindle owners from helping themselves to hundreds of free books is the DRM scheme, they’re fooling themselves and working against their own best interests.
It has been an interesting few months of discussion, debate, argument, and drama, but The Independent Publishers Group has finally arrived at terms with Amazon that will allow their titles to return to the Kindle Store. This comes as welcome news to the many authors and publishers who rely on the IPG and is likely even more welcome to the many readers who have been unable to enjoy this content thanks to the ongoing conflict.
The terms that have been reached are as yet undisclosed. The only way we know anything of this is thanks to a mass email informing IPG publishers that as of May 25th their titles are back on the digital shelves. Anything that isn’t made it back into circulation should be restored “in the next day or two”. It will be interesting to see what exactly comes out about this new agreement since IPG CEO Curt Matthews has been blogging at length throughout this about the many evils of editor/publisher disintermediation.
I don’t agree with many of Matthews’s arguments. I think he is very persuasively trying to hold onto the past by ignoring a lot of important aspects of the eBook transition we have going on right now. Whether or not you buy into his points, though, clearly he has no interest in giving up any ground to Amazon. To hear him talk, Amazon is deliberately trying to destroy all publishing and the independent authors their self-publishing program enables are universally talentless amateurs. Taken not terribly out of context, his opinion is pretty well conveyed by this passage from the IPG Blog:
“One of the most important functions of publishers, distributors, and booksellers (book agents and reviewers too) has always been to assure a certain level of quality, not necessarily as high a level as we might want, but at least a baseline far higher than the abysmal standard—in fact the non-existent standard—set by the new electronic vanity presses.”
Details are mostly unimportant to both customers and publishers at this point, however. What matters is the fact that the books are available for the Kindle again. In order to take some of the edge off of the months that publishers have had to endure with no Amazon sales, IPG has chosen to forgo their fee on everything sold from June 1st through August 31st of this year. 100% of all revenue will go directly to the publishers.
The best that can be said about this whole situation is that it draws attention to the problems that exist in the power balance between distributers and publishers, as well in the mechanisms of the publishing industry. Publishers have a purpose and provide a great deal of value. Perhaps not as much as they want people to believe, but it is obviously going to be in their best interest to make that case.
Amazon is doing an amazing job of maintaining their place as the primary distributer of digital reading material and, despite the fact that they are doing most of that by simply creating in the Kindle the best platform there is right now, they are using that position in ways that don’t necessarily serve customers. It needed to come out, and hopefully things will be better as a result.
I am not a bestselling author, nor do I play one on television. I do, however, take a great deal of interest in how those who have managed to make it big with their self-published Kindle books have managed to pull it off. It’s a tough environment and authors don’t have the soft of support system that traditional publishing offers, so there is often a great deal of creativity that needs to come into play. If you are looking to follow in the footsteps of the KDP success stories that we have seen so far, however, there are a few things that are best kept in mind.
Treat Your Audience Well
You already know that social networking is considered the key to self-publishing success at the moment. What a surprisingly large number of authors seem to think this means is that you need to send out scores of random connection requests on Facebook and Twitter, then repeatedly advertise your book over and over again. This is the wrong way to do things.
Anybody who has access to a Kindle will already know that there are more eBooks out there than they can ever hope to read. Make yourself stand out by doing something besides badgering. Answer questions, share anecdotes, build up a conversation about your writing process, or just offer the occasional preview of your newest work. If you treat your readers like people, they will be more interested in what you have to say than any 140-character ad could accomplish.
Unlike with traditional publishing, you will not accomplish much on a book tour. Instead, harness the power of the internet to make your connections as virtual as your Kindle publication. Set up online gatherings, have a community forum on your personal site, make a Facebook fan page, and generally just keep your options open. Under no circumstances should you decide to buy into one social network at the expense of all the others. It doesn’t take much extra effort to at least cross-post news or check comments in a variety of places and you cast a wider net that way.
Build A Network
It is important to go beyond direct advertising as well. One of the best ways to accomplish this is by developing connections with other authors. Readers tend to take their favorite authors’ recommendations seriously, so it is definitely possible to form a circle of reliably interconnected readership with your peers. This is mainly just a way of directing the force that is the customer recommendation, but that can be tricky to get a hold on.
This should go without saying, but often needs to be said. You are writing for an audience. Whether it is a Kindle eBook or a paperback, that audience expects a certain amount of professionalism from you in return for their money. This means that you should exercise some care with your work. Give it an extra
Remember when I was doubtful that Amazon would feel like it was worth taking on Netflix over the video streaming market, no matter how important video was to the Kindle Fire? They still aren’t quite ready for head to head comparisons, but Amazon has taken another page out of Netflix’s book and will be developing their own content to lure in subscribers. Amazon Studios, as it is known, will basically be a step short of KDP for TV series.
Every month, Amazon will be looking at user-submitted content and choosing one series to option. Right now this is limited to Comedy and Children’s programming, but presumably a success story to work with would push them into other areas. Amazon Studios will option one series of original programming every month and begin testing it with audiences to determine whether it is worth putting into full production. Once established, the hope is clearly that this will further increase the incentive for Amazon customers to hold onto both an Amazon Prime membership and a Kindle Fire.
Those wishing to take part in the competition can submit their proposal through the Amazon Studios site. To be considered, your submission must have a five page description and a pilot script that is 22 minutes long in the case of comedy shows or 11 minutes long if you have a kid’s show. Within 45 days of the submission, you will be informed of whether or not Amazon has chosen to option your show. If selected, you will get $10,000 and your show will be tested for viability.
Anybody who ends up being picked up for a full production run will have further income. The creator will get a one-time $55,000 payment along with up to 5% of the various merchandising profits. There are other, undisclosed royalties involved as well that will presumably vary based on the series being selected and the level of involvement that the creator has in it.
Should you not be selected, you will be able to choose between pulling your submission from the site or leaving it up to get community feedback. While this is not necessarily going to be productive in many cases, there should be the potential for learning as you go and figuring out where a non-optioned script went wrong.
Amazon Studios is not likely to turn into the next big thing in television programming right away. It will allow aspiring creators and writers to showcase their talent in a way that is often hard to find through other means. If nothing else, this should result in some excellent participation.
The program is being led by experienced management and Amazon has made clear through their actions exactly how hard they want to push the Kindle Fire to do well. Since this will essentially create content that is difficult to view on almost any other tablet offering, it could be an important marketing tool. Assuming they have found a show to work with by then, look for Amazon Studios productions to play a big part in the marketing of the Kindle Fire 2!
The first major change in eBook pricing to come about since the launch of the iPad is at hand. The U.S. Department of Justice has already negotiated settlements with three of the six major publishing houses implicated in a DOJ price fixing investigation only shortly after the filing of the lawsuit. Kindle owners can expect to see an almost immediate drop in many eBook prices, once the court has had a chance to approve the settlement terms. Amazon has already declared this a big win for consumers and announced plans to drop prices on affected titles.
For those who have not been keeping track, the early days of the Kindle brought significantly lower eBook prices than we are now used to. This was the result of Amazon being able to buy their stock wholesale and price things as low as they wanted from there. Publishers were rather unhappy with this arrangement since it meant that customers might well become used to seeing affordable prices on their reading material and cause paper copies of books to lose perceived value.
When Steve Jobs approached the Big 6 publishers with the idea of moving to the Agency Model, wherein publishers would set prices and retailers get a fixed percentage for each unit sold, they jumped on it. As soon as the iBooks store opened, Kindle Edition prices began to rise. There was some drama when Amazon attempted to hold out in protest and pull titles from their store, but without those publishers it is hard to operate a major bookstore.
Since then, prices have remained high and those involved in the Agency Model arrangement have come under investigation in both the US and EU. The biggest being raised by the DOJ, aside from alleged secret meetings and clandestine correspondence between heads of supposedly competing publishers in the days leading up to implementing the Agency Model, is the Most Favored Nation Clause. Apple managed to get this introduced in their agreement with every publisher.
Typically, a MFN is put in place to prevent favoritism from allowing a wholesaler to sell more cheaply to another retailer at a lower price. In this case, since publishers were setting the price, the DOJ is arguing that it was meant to “protect Apple from having to compete on price at all, while still maintaining Apple’s 30 percent margin.”
The result of all this has been artificially inflated eBook prices meant to turn customers away from things like the Kindle. That last point is more fact than opinion, as any look at publisher comments regarding the “troublesome” convenience of eBook borrowing at libraries that has gone along with Penguin dropping out of the library system altogether.
So far we know of settlements with HarperCollins, Hachette, and Simon & Schuster. These will prevent use of the Agency Model for a number of years and create various other consumer protections. Apple, Macmillan, and Penguin are all still denying wrongdoing at the moment, but it remains to be seen how well they can hold out. Even if all three remaining defendents get off somehow, Kindle pricing will be completely altered for the indefinite future. The Agency Model could only be forced on Amazon through solidarity across every major player in the publishing industry. With that gone thanks to these settlements, things can’t help but improve.
The new rule for making a newspaper work seems to be maximizing its availability. This means that not only does it need to be at the local supermarket and gas stations, you also need to have editions available for the Kindle, Nook, iPad, general Internet, and more. Publishers are forced to jump through a lot of hoops to get this sort of availability built up and optimized for as broad a reader base as possible, but without that availability they tend to find themselves unable to compete in an age of increasingly all-digital, up-to-the-minute news sources.
Amazon has been doing a good job, up until now, of accommodating as many newspapers as were interested in joining the Kindle platform. Second only to iPad in terms of its subscriber base, papers are under a lot of pressure to make sure that they can maintain a place. So many have realized this that Amazon has been forced to temporarily suspend new publications until they can get things under control.
Multiple sources are now noting that newspaper publishers are being turned away. The situation is reported to be “not permanent but may be long term”. Amazon has responded by denying the existence of such a move, but then explained that they are running behind and can’t get to new things very quickly right now. Their suggestion for distributing to Kindle customers is to ask publishers to build themselves an app and submit it to the Amazon Appstore for Android.
Naturally this won’t be a huge comfort for many publishers. The Kindle eReader is by far the more widely distributed product at the moment, even if the Kindle Fire is quickly catching up, and that whole branch of the product line would be unreachable through Android perpetually. Also a factor is that any number of newspapers has been working hard to get their product in compliance with Amazon’s Kindle Newspaper guidelines with the express intent of reading the eReader side of things. To completely shift focus and abandon existing efforts in favor of an Android app seems less than ideal, when it would work at all.
The Kindle Store’s Newsstand currently stocks around 200 papers, with more being added all the time. While we can’t know the underlying cause of Amazon’s sudden hold on expansion, there are some speculations that make sense.
Possibly it is a matter of volume, given that this is something that requires trained oversight from Amazon staff to ensure quality integration. Also possible is the idea that this will force publishers to adopt KF8 and optimize for the Kindle Fire. Regardless of whether either of these actually works, it is hard to imagine that this is a major profit-building area of Kindle Sales and so it is highly tempting imagine a tactical move taking place here.
For now, what publishers have been pushed off are trying to work with Amazon to figure out where their options are. In the near future, we may find that only the biggest names in newspaper publication are available on the Kindle anymore.
Not much is known at this time about what options are being discussed by the publishers under attack by the Justice Department. We do have good information that there are settlement options on the table and that the Agency Model pricing model currently to blame for high Kindle Edition eBook prices will be on the chopping block regardless.
Reports from unnamed informants close to the matter have indicated that there is reason to expect a settlement within the next several weeks. Neither Apple nor the publishers have responded to any requests for comment at this time. The Justice Dept declined to say anything.
Whether this is a sign of consensus among the defendants or merely that one or two are feeling the pressure and wanting to end what they see as a losing battle should not matter much in terms of the outcome. In the event of one publisher involved in the price fixing scheme reaching a settlement, the terms would undoubtedly involve release of evidence necessary for ensuring a successful prosecution of the rest.
Basically, assuming the news is true, this means that the end of the Agency Model is at hand and that the Kindle has made it through possibly the most harmful barrier to eReader adoption without so far becoming irrelevant. A return to the wholesale model, even temporarily, will mean more affordable reading material for Kindle owners. This in turn should spur sales of the eReading line. Amazon’s willingness to take a loss on bestsellers to promote their product line is what game them over 90% of the eReading market before the Agency Model was imposed and there is no reason to see this practice changing overly much if the Agency Model is destroyed.
The big question will be what comes next. Settlement or unfavorable ruling aside, publishers are not going to give up on their position that readers have no right to expect inexpensive books. It is incredibly unlikely that they will all pull out of Amazon in reaction to this, but they’re going to have to find some new way to prevent Kindle customers from being too happy with digital books.
The case at hand is all about how the defendants collaborated to impose the Agency Model on Amazon. The means to achieve this goal is in question, not the model itself. Depending on the terms of the settlement, publishers could be permitted to go back to it in time. They could also turn to something even more unpleasant for potential customers. It is hard to tell at the moment.
In the short term, the clear winners will be customers. Prices on eBooks should drop abruptly, especially in the Kindle Store, following official announcement of the deal being made. In reality, expectations may need to change with regard to how profitable a new bestseller should be per unit sold. Big 6 publishers will be forced to come to terms with this. Beyond the immediate benefits to Kindle customers there is little that can be asserted reliably about the effects of this situation. It will be interesting to see how the situation evolves. Any thoughts or predictions?
It’s been clear since early this year that as the Kindle Fire was taking off so impressively, Amazon was experiencing some amount of decreased Kindle eReader interest among its customers. It is probably fair to say that most people expected this. The Kindle accomplishes its narrow purpose well, but many people will always prefer a device that does many things adequately over one that does one thing extremely well. As the trend continues, and as the Kindle Fire becomes the first in its own line of tablet products, do we have to worry about this being a popular enough substitution to lead to the end of the Kindle eReader?
A year or two ago I would have, and am known to have, argued against the idea. The strengths of the Kindle are things that you just can’t match in a tablet. The Kindle Fire’s inferior screen, shorter battery life, and greater weight all make it a distant second-best for reading activities by comparison. Clearly not everybody is agreeing with those points, as sales estimates for the popular eReader have been declining coming into this year.
I believe it is possible to argue against this being just a matter of one device being somehow better than the other, though. The real problem is the way that Amazon has segmented their customer base.
If we assume that the Kindle Fire is more appealing to people who only read occasionally, and who would like to get more regular use out of their purchase, that leaves E Ink Kindle buyers as the more dedicated reader base. Let’s face it, Amazon’s actions lately have not been entirely pleasant for many fans of literature despite bringing prices down.
People get very attached to their favorite authors, and to the idea of authorship in general. For many, the “One of these days I’m going to sit down and write a book” mantra is less a matter of actual intent and more a sign of respect for the craft. The cult popularity springing up around any number of self-published Kindle authors is just another sign of this. By pitting themselves against groups like the IPG, and thereby inspiring even more public condemnation from big name author and those speaking more or less officially on their behalf, Amazon is damaging their pro-reader stance.
I don’t believe that the eReader as we know it is on the way out. The E Ink Kindle remains one of the best options for reading that money can buy and the combination of great selection with commitment to customer satisfaction works heavily in Amazon’s favor. This sort of questionable behavior does much to dampen enthusiasm for the product among potential buyers, though.
So is Amazon biting into Kindle sales? Definitely. There’s at least as much interference coming from their heavy-handed negotiation tactics as their tablet alternative, though. The Kindle Fire is an amazing little device and most people seem glad to have it once they take it home, but for reading nothing can beat E Ink so far. Sadly, Amazon has been doing some work making sure people have doubts about tying themselves to the otherwise amazing Kindle ecosystem in the long term, and so there are issues.
Since the rise of the Agency Model that Apple made possible for publishers in a partnership surrounding the release of the iBooks application and store for the original iPad (a partnership now awaiting trial in an anti-trust case), there has been serious talk about how Amazon has set out on a crusade to utterly destroy traditional publishing with the Kindle. This isn’t news, exactly, but it has become an important and popular topic after the recent contract dispute that the company had with the Independent Publishers Group that has resulted in the ongoing absence of IPG titles from the Kindle Store.
There can be no question that Amazon is acting like a bully in this dispute. They want a lot and are in a position to demand rather than ask or negotiate. What has risen up in response to this anti-Amazon sentiment has been shocking to say the least, however. Scattered around popular blogs, we can now see any number of authors and publishers coming out against Amazon and claiming that publishers were somehow right to have engaged in price fixing and that even if it was technically illegal they should be allowed a pass because otherwise Amazon will win.
On the one hand, it is understandable sentiment. Thanks to the Kindle, Amazon controls around 75% of the eBook market already. Without their platform, the rise of eReading as we now know it would slow to a crawl. Nobody else has the resources, or seemingly the interest in customer satisfaction, that Amazon is willing to put into keeping such a platform going.
On the other hand, this is insane. Publishers were unhappy with how poorly the old business model applies to new media and so their potentially illegal activities should be excused. It makes no sense to me, somehow.
This is made to seem like it is a one-sided arrangement. I believe that to be a mischaracterization. If publishers lacked power, they could not have compelled the adoption of the Agency Model in the first place. They were just too concerned at the time with short term profits to be willing to take a stand and risk losing Amazon as a storefront. It was a move that only made sense for every individual company if they knew that none of the competition would be capitalizing on their threatened withdrawal.
Amazon’s acting like a bully aside (because in the matter of the Agency Model and its potential legal implications that that does not apply) they have built the simplest and most usable way for readers everywhere to access eBooks. Nobody else has come close, despite competing efforts from Barnes & Noble’s Nook line, the Kobo, and more. This does not mean that anybody has been compelled to use it.
There would be no case against them if the Big 6 Publishers had come out with their own Kindle competitor and started offering all of their titles through it. The Kindle would still be there attracting self publishers and generally making itself useful in various ways, but it wouldn’t have the content to be so important.
These publishers don’t want to have to deal with building new distribution channels, though. They also don’t want to have to adapt when other people build them. The fact that there is a power disparity is undeniable, but that doesn’t mean that these publishers were ever powerless. Nobody compels them to use the Kindle platform. To say that they should be able to get away with their own anti-competitive and manipulative actions because otherwise the Kindle line will make people start seeing books as more affordable and ruin their profits is just ridiculous.