Joe Wikert's DisruptorFest

"iBookstore vs Kindle Bookstore" & "Which Device Wins?"

Here are two somewhat related questions I'm being asked a lot lately:

#1: Which bookstore experience do you prefer, Apple's iBookstore or Amazon's Kindle bookstore?

#2: Which e-reader device do you believe is going to "win"?

My answers to both of these might surprise you.

Regarding the first question, I thought when I bought my iPad I'd never buy another ebook from Amazon.  Boy, was I wrong!  I've owned an iPad for almost 5 months and all but one of my ebook purchases have been from Amazon.  And the one iBookstore purchase I made is one I'd like to take a mulligan on and buy from Amazon instead.

Why?  One (hyphenated) word: multi-platform.

Although I'm extremely down on Amazon's continued investment in the e-reader hardware space, I'm a huge fan of their ebook business.  (Well, all except for the crazy DRM they still implement...but that's more a problem with publishers than Amazon.)

Towards the end of my Kindle usage I was feeling pretty stupid for buying all those Kindle ebooks.  Now I'm glad I did.  Anything I bought from Amazon can be read on my iPad, my iPhone, my Mac, a Windows computer and pretty much any other piece of hardware I'm likely to use.  Has anyone seen Apple's iBooks app for Windows?  How about the iBooks app for the Blackberry?  Better yet, do you think there's a chance Apple will release an iBooks app for the Android platform?  No, none of these exist today and the likelihood of them ever coming about is slim to none.  Steve Jobs makes some awesome products but he's not a fan of cross-platform usage.

So although the iBooks app is nice, I refuse to paint myself into a corner and be limited to a single platform.  Gee, that sounds like what I used to say about the Kindle platform, which leads me to the second question...

I'm lumping all dedicated e-readers (e.g., Kindle) as well as multi-purpose devices (e.g., iPad) into my thinking.  Sure, eInk is great in the sun, but as I like to say, if it's a sunny day I'd rather be doing something other than sitting around reading!  With that in mind, my answer to the "which device wins" question is...Android.

Yep, that's right, I'm picking the Android platform.  And yes, I know there's no single Android "device" and as of today you can't even buy an Android tablet.  But when the Android tablets start rolling out, I'll be exploring them for my next purchase.

I have about 10 months left on my current AT&T/iPhone agreement, so next summer looks like the right time for me to make the platform jump to Android for both phone and tablet.  The Android app market is still pretty thin and that gives developers even more time to fill in all the holes.  Everyone I know who has already switched from iPhone to Android loves the latter.  I'll probably also be ready to buy a new tablet next summer and you can bet the Android prices will be attractive compared to the iPad ones.

Then there's the Google Editions release that always seems to be "a couple of months from now."  You can bet Editions will support all hardware platforms, which probably means when it hits I may need to reconsider my answer to question #1!

Why Are eReader Apps Stuck in the DOS Era?

Imagine only being able to open one window or application at a time on your laptop.  Work for a bit in Excel and when you need to switch to Word, you've got to closer the former before you open the latter.  Or what if you want to open two spreadsheets at the same time?  Imagine you had to close the first before you could open the second.

That's silly, right?  On a regular computer, yes, it is.  So why do we accept those sorts of restrictions on our ereader devices?  I can't open two books simultaneously on my old Kindle or my new iPad.  I have to close the first book before I can open the second.

I know what you're thinking...  When you use your Kindle, iPad or other device you're only interested in opening one book at a time.  That's fine, but what about being able to open that book in two different places?  You've always been hold a spot with your finger and flip to another location in a print book.  It's so easy we often do it without thinking.  That includes the index, btw.  How often do you hold your place in a print book, flip back to the index to look something up, then simultaneously open another page in the book without ever having to close the original page?  I do that pretty regularly in print.  Good luck doing it in an ereader app.

Here's another common scenario: you're using a cookbook or reading a how-to-guide with step-by-step instructions.  There are definitely times when it's handy to be able to flip back and forth between an illustration and the written steps, for example.  Again, easy to do in print but impossible with today's ereader apps.

Now let's go back to the "one open book at a time" problem I started out with.  What if you're a student and you've got an etextbook as well as another ebook on the same topic.  Why shouldn't you be able to open them both at the same time to compare related explanations, diagrams, code, etc.?

I'm amazed that with today's state-of-the-art ereaders, you can't do something as simple as have the screen split into two panes for different views into the same book, let alone having two different books open at the same time.

Why am I highlighting such a simple missing feature?  Because it shows just how far we still need to go to implement common print reading capabilities in today's ereader apps.  I'm still a huge advocate for richer content models that truly leverage the ereader device itself, but I'd love to see Amazon, Apple or anyone else who's paying attention to build more basic functionality into their apps.  As it currently stands, every time I open the Kindle or iBooks apps on my iPad I feel like I'm using a time machine, heading back to the late 80's when DOS was king, only one app at a time could be opened on my 80286 computer, the music was bad and the hair was big.

Living through the 80's once was painful enough.  eReader developers, please, oh please bring us into the modern era by adding some cool functionality into your apps, OK?

The Truth About Paid Models, by Matt Mitchell, Founder & CEO of MediaPass

The following is a guest blog post written by Matt Mitchell, Founder & CEO of MediaPass.  I love what he has to say about the importance of balancing free vs. paid content as well as making sure advertising is a component of the overall revenue picture:

The process of launching, running and attracting paid subscriptions isn't a competency that online publications generally have. This was one of our assumptions when we started MediaPass but we had no idea the extent to which it would prove correct. We also had no idea that some of the smartest publishers in the world would commit some of the most egregious subscription strategy offenses. So I've decided to point out a couple of the more basic mistakes being made and also discuss the way publishers should be thinking about paid subscriptions.

Please Tease Me!
One of the greatest myths about charging for online content is that a publication will lose traffic. This is not to say that declines in traffic aren't possible. There are actually many ways to lose visitors and the Times of London picked perhaps the best: they ignored the fact that users need to be drawn in by the actual content. Go to their site and click on one of their sections such as Business or Life. The site will immediately take you to a subscription wall before you even see if there's an article you’d like to read. I'm not kidding. Check it out. This is not a good conversation to have with your readers:

Times: "Please pay us."
Visitor: "Why?"
Times: "Because we're the Times."
Visitor: "What articles are behind your pay wall?"
Times: "Pay us and find out."

People generally buy a subscription because they are interested in a specific article. When you're at the airport shop deciding which magazine to buy, do you pick one because every article in the glossary is something that interests you? No, you pick a magazine that has one or two articles that grab your interest. You do this because you are guaranteed to like at least something in the suite of content you paid for – even if the rest of the magazine isn't so great.

"Switching" to a Paid Model
Whoever said that free and paid models had to be mutually exclusive? Publishers don't need to "switch" to a paid model. Subscription elements should simply be added to better monetize the website as a whole. The key for any publication is finding the optimal mix of free vs. paid content that is right for their site. And it's rarely 100% one or the other.

Why Remove Advertising?
Some sites are now offering a paid model where users won't be forced to see ads if they are a subscriber. There is no benefit – either financial or usage related – to doing this. The core reason why online ads don't monetize well is that people have evolved over the last 10 years to the point where their brain doesn't even see ads anymore. Unless the ad is incredibly intrusive, users don't mind it being on the page. By taking the ad-free route, publishers lose additional revenue and get little-to-nothing in return. Advertisers will also pay much more for subscribed users because they are more engaged. So, publications that do this are getting rid of ad real estate that has doubled in value.

Many publishers are surprised when we tell them not to abandon their advertising. We think of advertising as a "why not." Ad monetization is very low but every little bit helps. There are actually many good ad networks and other companies trying to improve the poor performance of advertising. We're glad they are continuing their efforts because we all have the same goal of improving publishers' revenue.

Ads to Oranges
Forgive me for the cheesy title, but initial subscription results can't be compared perfectly to advertising monetization. The reason is simply that subscription revenue builds on itself over time through renewals and ads don't. The WSJ.com had only a few thousand subscriptions when they launched a decade ago. They now have well over a million. Luckily for the WSJ and others starting to charge for content, subscription monetization is usually so much better that it beats the performance of ads even when handicapped in the first few months.

There is a lot of speculation and commentary on initial numbers of large sites like the Times. They've been making the mistake of giving their great content away for a long time now. Unfortunately for them, they don't get to simply press a button and immediately recapture all the money they lost. They have clearly made some subscription process mistakes but luckily they are all errors that can be fixed. They have at least made the right move this year by beginning to charge for content. Now it's time for them to refine their approach and grow their subscription base the way the WSJ has. And I think they will.

Matt Mitchell is Founder and CEO of MediaPass, a service which helps online publishers increase revenues through the use of customized subscription model.

Digital Publishing & POD: What's "Good Enough"?

Over the course of this summer I've read a couple of great Yankees books: Munson and The Bronx is Burning.  The former was read on my iPad and the latter, because it's not available digitally, was read from a dead tree.  After seeing countless references in both to another Yankee classic, The Bronx Zoo, I decided that should be on my reading list too.  Unfortunately for me, that's another book that's not available digitally.  I also was unable to find a copy at the local brick-and-mortars or even the second-hand bookstore, which got me thinking...

What's the definition of "good enough" in the digital and print-on-demand (POD) worlds?  Ideally, when I couldn't find The Bronx Zoo in my local bookstore they would have offered to create a POD copy for me while I sip a cup of coffee.  On-site POD solutions like the Espresso machine have been "a year or so away" and I'm starting to think they always will be.  Not only are they prohibitively expensive but I'm also told they require 24x7 on-site tech support; think of the copy machine guy who's frequently at your office, only worse.

Are we over-thinking this?  I don't need an offset-quality (or near offset-quality) copy of The Bronx Zoo to be happy.  I'd take a copy machine-quality one.  And with FedEx/Kinko's outlets everywhere, why hasn't a partnership between brick-and-mortar bookstores and Kinko's developed by now?  Borders doesn't have the book?  No problem.  Pay at the counter (or online) and pick up a copy machine-quality version as you pass Kinko's on your way home.  No time to stop at Kinko's?  They'll be glad to put your copy on a FedEx Ground truck that's heading to your neighborhood later today anyway; for an additional small fee they'll bring it to you, that same day.

Isn't this Amazon's worst nightmare?  Btw, yes, I know I could order the book on Amazon and have it tomorrow.  That's not my point.  I'm trying to address those situations where you're looking for instant gratification but the local brick-and-mortar stores can't help you...today.  Again, I've seen plenty of POD-produced boks and they're great, but they require a hefty investment in hardware.  So what about an option that creates something that's not quite as elegant?  It would still be bound with a cover, although that cover might just be one-color.

Then there's the "good enough" question in ebook readers.  Thanks to competitive pressure from B&N Amazon recently reduced the price on their Kindles.  And then they announced the $139 wifi-only Kindle.  I think Amazon realizes they can't compete with the flexibility of the iPad; there's only so far the monochrome, animation-free Kindle can go.  And a lot of people are interested in a one-trick pony like the Kindle, so perhaps they'll continue to have that niche...until Apple creates smaller and less expensive iPads.

Yes, the $139 wifi-only Kindle is sold out, but if Amazon really wants to create an ereader for the masses they should come out with a sub-$100 device with no connectivity other than a USB port.  Just about everyone on the planet now has a smartphone.  Why not let this bare bones Kindle tether to a smartphone (or computer) for content purchases?  Imagine how many $79 tethering Kindles Amazon could sell.  Heck, I'd buy one for each of my kids.

An ereader with built-in connectivity is nice; market dominance is nicer though.

P.S. -- Btw, Amazon, if eInk is still the production bottleneck, get that problem fixed before it's too late.  You've still got a chance to own what's left of the dedicated ereader market, but if you don't act soon Apple will completely clobber you.

Maybe Amazon Just Doesn't Want Us to Gift Kindle Books

This is stupid.  Just flat out stupid.  I'm talking about the fact that you can gift a print book to a friend on Amazon but not a Kindle book.  This article talks about the issue and suggests one workaround is to have all your friends in your Kindle network and share the books with them.  The key, of course, is that you're limited to 5 "friends", which means it's not much of a workaround for most folks.

Another workaround is to give your friend an Amazon gift card.  The popular spin is, "that way your friend can buy what they want, not what you pick."  Woo-hoo.  Aren't gift cards mostly intended for givers too lazy to think of (and shop for) a good gift?

Amazon undoubtedly loves gift cards though.  First of all, just like every other retailer offering gift cards, they get their money now, well before they ever receive an order against it.  Secondly, there's a good chance the recipient will never use the full value of the card.  That's a tiny profit on an individual basis but adds up quickly if you're talking about millions of partially-used cards.

So why is it that I can gift a Kindle itself but not a Kindle book? Speculate all you want about legal ramifications and DRM but what if it has nothing to do with any of that?  What if Amazon just doesn't want to encourage Kindle book gift-giving?

Someone receiving a gift card might buy something other than a Kindle book with it.  Don't forget that Amazon loses money when it sells many of those Kindle editions.  From a profitability point of view, Amazon is much happier selling you the print edition of that book than the Kindle edition.

Here's the problem with all this: Before too long one ebook retailer will decide that gifting is an important customer feature.  I forgot to include this in my list last week but I believe it's something every retailer will have to offer to remain competitive.

So, Amazon, why not take the lead on this?  Let everyone gift Kindle editions to their friends and family.  If you don't do it soon someone else will and you'll be perceived as a follower.

P.S. -- Kudos to Amazon on the dictionary feature they added to the latest version of their Kindle app for the iPad.  It's a much better service than the clumsy dictionary offered on my Kindle v1.