reading machines

Pricing e-books

Counterintuitive hypothesis: The most significant thing that Amazon and now Barnes & Noble have done for e-books hasn’t been the creation and updating of their dedicated reading machines. It’s the creation of a genuine marketplace for e-books, where consumers can pick up titles easily, publishers can offer them and make at least a little money, and [in Amazon’s case] even little guys can get their stuff out there. You might have needed the reading machines to push the marketplace, but the marketplace will continue to be relevant even if everyone decides tomorrow that they don’t actually want a Kindle anymore. You can already read e-books on computers, smartphones, and pretty soon video game consoles. Amazon sold the razors, sure, but they can sell you the blades even if you don’t buy a razor at all. That’s big.

But creating a marketplace isn’t just about syncing to a device and matching readers’ eyeballs to content. You also have to establish, respond to, and eventually stabilize readers’ and publishers’ expectations about sales, especially about price. 

This is harder than it sounds. How much should an e-book cost? How much should publishers have to share with the retailer? Just what are you buying? For hardcovers and paperbacks, these expectations have built up over a long time. This tweaked a bit when online sellers and big-box retailers started offering moderate-to-steep discounts over cover. None of this makes establishing norms for digital sales any easier.

For music, Apple pulled this beautifully in the early days of iTunes. At the time, CDs sold between 10 and 18 dollars for a typical album. This was actually really frustrating, because percentage-wise, it’s a huge variation. It was also an uptick from cassettes, which had rarely cost over $10. 

Apple just perched on the low end: every track is 99 cents, every album is $9.99. They were competing with the free (P2P or friend copies) and the physical (real discs with better sound quality that you could play in your car), and they found a way out. Round numbers (good retail numbers for any product), close to what we were used to paying (but still offering competitive advantage). And they held it there, even when big media companies huffed and puffed because they wanted to charge more for high-demand (or high-cost) products. Apple’s establishment of trust with the music-buying public won out. And held out. Singles still cost a single. Which makes the digital music marketplace oddly pure.

At Booksquare, Kassia Krozser argues that the same price-stabilization is beginning to happen with e-books:

At Digital Book World, I’m going to do a brief presentation called “The Case for the $75 eBook”, because there is a marketplace for high-priced ebooks. In fact, I think there’s a robust marketplace for higher priced digital books, and I believe I can make a strong case for these price points.

That being said (ha!), I don’t believe the publishing industry can make a valid, solid, logical case for pricing most narrative fiction (and some non-fiction) ebooks above $9.99. Not only is this price point being cemented in the minds of readers by retailers, but, let’s be blunt, publishers have done a lousy job of making the value argument. The near-cynical approach of publishers to producing and selling ebooks has backfired. The process, the pricing, the product has been weighed by consumers and they are not amused. They like the $9.99 and below price point. It makes sense to them.

So, yep, I’m predicting publishers will have no choice but to swallow this one and figure out how to make their business work with ebooks priced below $10. It’s better to initiate this change rather than scramble when the retailers start demanding better terms. You can do it, publishing industry, you can do it!

It’s true! Maybe it’s just because we’re already primed by iTunes albums, or because $10 is the low-end price of a good trade paperback, or that $9.99 is one of those psychologically great retail numbers (Just dollars and cents! Not tens of dollars!), but it’s got real power. 

For instance, I priced Stanislas Dehaene’s Reading in the Brain at both Barnes and Noble and Amazon. The book lists in hardcover at $27.95. At Amazon, it sells for $18.45 in hardcover and $14.76 for the Kindle. At Barnes and Noble, it’s $20.12 (huh?), or — yes — $9.99 for the e-book. 

Now this was easier because I like the B&N app for the Mac and I preordered the Nook. But if B&N sells its e-book for $18, I either buy the hardcover from Amazon or pass altogether. At $9.99, I bought it right away. I did the same thing for China Mieville’s The City and the City: Kindle $13.73, B&N $9.99. On the other hand, I sprung for The Complete Short Stories of Ernest Hemingway for almost $18 and still feel like I got hosed. 

Now, digital books also offer the possibility that books, like CDs, can be split and sold separately. Maybe I just want to buy a copy of “The Undefeated” and “In Another Country” — a taste of Hemingway, not the whole short-form corpus. Big publishers haven’t really done this yet. But among independents and self-publishers, the other price point that seems to be emerging — the symmetry with iTunes is astonishing — is the 99 cent short story. And again — this feels just about right, especially appealing to folks reading these things on their iPhones, who don’t want to leaf through a whole novel or anthology, right around the same price as a cheap iPhone app or a single song. 

But Krozser’s hypothetical $75 e-book suggests that there are still plenty of other price points and formats to be hammered out. Maybe $25-$40 is the perfect price for an e-textbook. Maybe a short, indie nonfiction pamphlet — 2011’s version of New Liberal Arts — could sell well for $3.99. Maybe digital copies of new books will be free for readers who buy the hardcover (factored into the sale price). It’s still wide open. But with competition between sellers and tug-of-war between customers and publishers, we’re bound to figure it out.

 

What would a dedicated blog reader look like?

Jason Kottke wrote a nice concurring post (at least I think it was concurring!) to my look at single-use and call for integrated-use reading devices. Then in a follow-up, he expanded on his position that the correct single use [for an e-reader] isn’t buying and reading books, but READING, in all its forms:

I do a *ton* of reading, upwards of 100–150 pages a day when I’m working full-time. About 0.5% of those pages are from books. But the Kindle? I tried it and didn’t like it. The screen is still great…the rest of it didn’t work at all for me. And this is what is frustrating for me…the Kindle seemed right for buying books but not for what I want it for: reading all that other stuff. I know the functionality exists on these devices to read blogs, magazines, newspapers, etc., but they’re marketed as book readers (Arment even calls them “ebook readers” instead of “e-readers”), the user experience is optimized for book reading, and the companies (esp. Amazon and B&N) view them as portable bookstores.

Like Jason, any kind of single-use reading machine is pretty far from MY ideal solution. But I can imagine that it can be an ideal solution for some people. I don’t really need a dedicated digital camera anymore, but that’s partly because I’m at best an occasional photographer. The first (and last) person I recommended the Kindle to was my grandmother, whose reading of blogs and comic books is (ahem) light. I’d also recommend a Jitterbug cell phone to her. Me, I’ve got an iPhone.

Like Jason, too, a big chunk of what I read are blogs. If you add other online periodicals (whether web-only like Slate or web versions of mags like the Atlantic), we’re probably talking 60–70% of my total page count. I read a lot more books than Jason, because I’m a freaking literature professor — and still, books don’t begin to dominate, let alone exhaust, my reading.

But when I think about test cases for the mythical integrated-media reading machine of the future, I almost never think of blogs. Children’s books, comic books (and strips), textbooks, maps, pamphlets, restaurant menus, grocery store coupons — these are the text/image hybrids that I think 1) push the limits of what the Kindle can do and 2) are actually more central to the everyday experience of “reading” than full-length books. And I can start to think about how reading machines and reading software can best be designed and employed to perform those acts of reading.

But blogs? Is there a device, a software setup, a purchasing and subscription system, or delivery and commenting and reposting mechanisms, that are optimized for reading blogs — above and beyond what current exists for our PCs, laptops, and smart phones?

Maybe this isn’t really a problem. Blogs are web pages, and even though we haven’t figured out a good way for E-Ink devices or cheap cellular phones to display HTML, we’ve kind of got it figured out for computers and (increasingly) smartphones. To display and navigate HTML, you need 1) a decent-sized, decent-resolution color screen and 2) a web browser with a solid rendering engine, plus some minimal things like JavaScript support, bookmarks, and a way to select links and enter text. We don’t think about HTML because we feel like we’ve cracked it; we just haven’t gotten it on every device just yet.

To approach the books vs. blogs problem from the other side:

  • What would a reading machine designed and optimized for blog reading look like?
  • What would be the key differences between an electronic blog-reader and an electronic book-reader?
  • Likewise, how would the “marketplace” functions — purchases, subscriptions, advertising — differ on a blog-oriented reading machine?
  • How successfully would such a machine function as a general-purpose electronic reader? That is, how well could a blog-reading machine handle traditional books (and book sales), comics, newspapers, textbooks, etc.…
  • Since I’ve talked about this recently — could a blog reader have a different kind of relationship to places and spaces — maybe coffee shops and internet cafés instead of bookstores? — or are we back to the Kindle’s view from nowhere?

It’s worth exploring the possibility! I mean, unless you’re sinking capital into these things, what do we have to lose?

 

Books nowhere / books somewhere

Barnes and Noble’s Nook e-reader* has a lot of nice things going for it. But I’m really intrigued by a particular design/software/sales choice that’s gotten less attention than native PDF support or the color touchscreen or even the ability to “lend” e-books to friends. 

Barnes & Noble has figured out a way to tie the experience of using the e-reader to the experience of shopping in one of their brick-and-mortar stores. In principle, this could allow B&N to use an electronic marketplace not to substitute for retail shopping, but to augment it (and vice versa). And I think this shows us an alternate way to think about electronic reading than the delivery model that most of us have taken for granted.

Here’s how this is supposed to work:

In any of the chain’s 1,300 stores, consumers can download books on the Wi-Fi network. Outside the stores, consumers will access AT&T’s 3G network to download books…

In an interview, William Lynch, president of Barnes&Noble.com, said the company would aggressively market the Nook within its bricks and mortar stores. The Nook also has software that will detect when a consumer walks into a store so that it can push out coupons and other promotions like excerpts from forthcoming books or suggestions for new reading. While in stores, Nook owners will be able to read any e-book through streaming software.

The promise of the Kindle is that you can buy and read books anywhere at all — that is, nowhere in particular. The Amazon store has no location. You read the books on your screen, and they are technically stored on your device, but effectively, the books are likewise nowhere. 

Barnes & Noble, on the other hand, is still committed to the idea that books have PLACES, that they are most properly browsed and bought and read in specific locations. They say: yes, you can use your Nook anywhere — but the very best place to use it is in one of our stores. What’s more: as long as you’re in the store, you can read as much of as many books as you want. Just like if you were flipping the pages. That’s huge!

This choice may have been inevitable: B&N had to find some way to leverage its retail chain, the only real advantage it has over players like Amazon or even Sony. They also have customers who are accustomed to coming to their stores, flashing their discount cards, drinking coffee and eating scones in their cafés. For Barnes and Noble, THIS is the natural constituency for their e-readers — not the wandering digital nomads who might buy a Kindle, might buy an iPhone, might buy a PS3, or might blow it all at Newegg, depending on how long they stay online. And B&N can also partner with other businesses — offering its library to readers at Starbucks (or some other coffee chain) or the CTA. Wherever books are read!

If this works — by which I mean, not only that the Nook sells well, but that customers actually take their Nooks into stores to take advantage of these added features, and the wi-fi actually works, and the coupons and ads aren’t out-and-out bothersome, then we’ll have a new way of thinking about the use of electronic readers in all sorts of contexts: libraries, museums, elementary schools, civic centers, college campuses. The content and its delivery become not just user-aware, but location-aware. 

Above and beyond Nook’s competition with the Kindle as such, the fact that it actually offers a competing model for use opens things up quite a bit. Let’s see where this goes.

* I don’t like the term e-reader. The phrase I always WANT to use, which is justified nowhere, is reading machine. Is anyone with me?