Joe Wikert's DisruptorFest

Barnes & Noble: It's Time to Disrupt the Industry!

Three articles have sparked my thinking on this post. The are:

• The Charlie Stross piece entitled Cutting their own throats,
• Joseph Esposito's insightful post on How B&N Can Take a Bite Out of Amazon, and
• The New York Times article, The Bookstore's Last Stand

Stross talks about how the publishing industry has allowed Amazon to use DRM as a tool against itself. Esposito suggests "B&N needs an MCI solution" while the Times piece encourages B&N to have a sense of urgency in avoiding the same fate as Borders.

Rolling all of these together I have a radical, three-step suggestion for William Lynch, CEO of B&N:

1. Get publishers to understand they need to get out of their comfort zones before one player in the publishing ecosystem establishes what could become an irreversibly dominant position.
2. Start distributing ebooks not only in EPUB format, but also in mobi format.
3. Do it all DRM-free.

Yes, I realize I'm asking for a lot here, but I think it's time for bold moves from the brick-and-mortar leader. If Lynch implements what I've described above then suddenly bn.com is able to sell content to those millions of Kindle owners (not to mention owners of pretty much every other ereading device). More importantly, bn.com becomes the content destination for every smart consumer who doesn't want to get locked in to any particular hardware device or content vendor.

The risk to B&N? They lose some nook sales along the way...maybe. I'm not convinced that would happen though. What B&N would really do is radically expand their base of potential ebook customers and earn some serious goodwill as they break down the walls of DRM and platform lock-in. And so what if they were to lose some nook sales? All reports indicate B&N represents less than half Amazon's ebook device market share. Whatever they stand to lose in hardware sales could easily be made up in ebook sales to all those Kindle owners who want the peace of mind that they'll be able to read their library on any device in the future.

In today's world the winner is the company with the deepest pockets who can afford to sell devices and content at a loss longer than the competition can. In the world I'm describing the best device and content provider wins. I like the world I'm describing much better than the one we live in today. How about you?

iBooks Author: Appreciating Apple's Intent

Apple's recent announcement and release of their iBooks Author tool was met with plenty of controversy. This HuffPost article pretty well sums things up.

My question is simply this: Why all the fuss? Apple's intent has never been to improve the book publishing industry. Just like Amazon and any other ebook vendor, Apple's goal is to capture share of this rapidly growing segment. In Apple's case, they've simply decided to offer an authoring tool that's capable of creating some pretty darned cool products. If Amazon were to do the same thing and create a terrific authoring tool for mobi or KF8 format would the industry be as upset? I don't think so.

How is this any different from the App Store model itself? Developers are creating apps for the App Store and they know they'll only run on an iOS device. They also realize they'll have to go through Apple's approval process before getting into the App Store.

Prior to the release of iBooks Author the content creation and distribution model looked like this:

1. Author writes material in favorite word processor.
2. Author/publisher edit and convert that content into mobi format for distribution on Amazon, EPUB format for distribution through iBookstore and others, etc

The exact same model still exists today, even with the introduction of iBooks Author. That's right. Apple's EULA doesn't really lock you into their distribution channel for your content. That restriction only applies to a "book or other work you generate using [the iBooks Author] software." All they're really trying to do is prevent you from tweaking the output of their tool to create content for other distribution channels. OK, that's kind of annoying but far from the lock-in nightmare so many people are describing it as. Based on my interpretation, you're able to use the same content as input to the iBooks Author tool as you'd use for a mobi-formatted product you want to sell on Amazon.

(I should also point out that I'm far from an Apple fanboy. Anyone who knows me realizes I dumped my iPhone last year for an Android-based Samsung Galaxy S II (and yes, I love it). I also tried to dump my iPad for a Kindle Fire but found the Fire user experience to be very disappointing. I'll probably make the jump to another Android tablet later this year, once key apps like Zite are available. In the mean time though, I want to make it clear I'm not here to shill for Apple. If anything, I'm currently in a stage where I'd prefer to buy devices that aren't made by the content providers. Samsung is high on my list, for example.)

Apple doesn't have an objective to move the publishing industry forward. They see an opportunity to reinvent this industry and they feel they can do so within their own, closed ecosystem. It's as simple as that and it's consistent with everything the've done in the App Store up to now.

Let's also not forget that the iBooks Author tool is free. It's not like we paid Apple $50, $100 or more for some authoring tool that we thought could work for all content formats and distribution channels. If the tool's feature set is compelling enough I'd like to think the other ebook vendors (e.g., Barnes & Noble, Amazon, Kobo, etc.) will have to come up with something at least as powerful for their own platforms. If not, they get left in the dust and Apple gains share. Seems pretty fair to me.

In the mean time, I plan to do some hands-on testing with iBooks Author. At first I was discourged because you can't download iBooks Author unless you're running Lion. I'm still on Snow Leopard but an O'Reilly colleague sent me this link which shows you how to tweak a couple of settings so you can download and run iBooks Author on a Snow Leopard system. I just tried it and it works fine. (You just have to carefully read and interpret the steps since it's a translation from French to English!)

Jason Calacanis Shares His Thoughts on Amazon's Dominance

Jason Calacanis, co-founder of Weblogs, Inc. and currently host of This Week in Startups is never afraid to voice his opinions. One of his recent articles entitled The Cult of Amazon Prime caught my eye because it paints such a vivid picture of Amazon's growing market dominance. I appreciate the leadership role Amazon has played over the years but I'm also concerned about the dangers of one vendor controlling too much of the market. Jason agreed to discuss my concerns in this interview. Key points include: 

• Does Amazon Prime spell the end of the local mall?  -- It won't happen immediately, and there will always be some need for in-person shopping but Amazon Prime is already having an impact on the local shopping experience. [Discussed at :40]
• Serendipity is overrated-- Jason makes a good point about how what you discover at a brick-and-mortar store is often what the vendor or their supplier want you to discover and this experience can easily be recreated with the "people who bought X also bought Y" model. [Discussed at 2:40]
• Coming Soon to a Location Near You: The Amazon Store? -- Rather than continuing to use BestBuy and other stores for showrooming, Jason talks about the possibility of Amazon creating their own specialty retail presence where you could touch and feel big-ticket items and have them shipped to you the next day. [Discussed at 4:01]
• The instant gratification problem won't exist forever -- Amazon has already implemented same-day shipping in some locations and it's possible a resolution to the state sales tax issue Amazon is currently in the midst of could lead to broader same-day delivery service. [Discussed at 6:01]
• AmazonBasics is a preview of what's to come -- We're all familiar with private label goods at the local grocery store. AmazonBasics is a similar program. Today it only offers gadget accessories but it could easily lead to the Amazon toothpaste or Corn Flakes down the road. [Discussed at 7:22]
• Don't fear the controlling, manipulative market leader -- I'm skeptical of this but Jason believes that technology and other efficiencies make barriers to entry so low that a market leader who exploits their position will get knocked off by a new startup. [Discussed at 14:24]
• Walmart vs. Amazon -- Who will compete with Amazon to keep them honest? Jason believes Walmart is the only serious threat. [Discussed at 18:34]

Tools of Change (TOC) Executive Roundtable

Large conferences like Tools of Change (TOC) New York are a wonderful way to learn about new developments in publishing as well as spend time with many of our peers. And while the networking and idea exchange that happens at TOC is second to none I believe there's an opportunity for us to do more, especially for the executive community. That's why TOC is about to launch a new series of periodic meetings for publishing executives.

We're calling these the TOC Executive Roundtables and they're a way for CxO's and other senior level leaders to discuss and, more importantly, take action on the most pressing issues we face. Our first roundtable takes place on Monday, February 13th in New York. Even though that's the first day of TOC NY it's important to note that the Executive Roundtable is completely separate from the larger conference.

We'll have speakers and a schedule for this first Executive Roundtable meeting, but this will be a much smaller gathering. And the speakers won't just be standing at a podium offering one-way communication. After all, there's a reason we're calling them "roundtables." The speakers will be leading the discussion and encouraging all the attendees to share their point of view.

We've got a couple of terrific speakers lined up for this first event. Attendance at the TOC Executive Roundtable is limited to maintain an intimate setting and foster dialogue among all participants. As a result, registration is by invitation only.

If you're an executive in the publishing industry and you'll be in New York on 2/13 please email me your name, title and company so that I can tell you more about this unique opportunity.

Kindle Fire Lessons Learned

I don't regret spending the $200 I paid Amazon for my Kindle Fire. I tried it out and decided it wasn't for me, so I gave it to my daughter instead. Even though I no longer use the Fire I wanted to share the things I learned about the device and myself over the past several weeks. Let's start off with the good side of things.

Kindle Fire Pros

• Form factor -- I prefer the Fire's size to the iPad's. It's nice being able to wrap your hand around the entire device and the lighter weight is a big plus for the Fire. Of course, it's the same form factor as RIM's Playbook, and given how poorly that device has performed it's clear you need more than just a great form factor.
• Meets the needs of typical consumer -- The Fire wasn't for me but my daughter really likes it. That's why you see so many good and bad reviews of it. Consumers who want a cheap tablet are OK without all the bells and whistles of the iPad, for example. Early adopters, or those who want to push the technology to the limit, are disappointed though. More on the early adopter in a moment...
• Connection to Amazon content -- There's no question Amazon is using the razors and blades economic model here and the Fire is clearly the razor they're willing to sell at little to no profit. Connectivity to Amazon's ebooks, video and audio content is second to none with the Fire. And tying in the Prime membership program will only lead to more Amazon products being sold.

That's it as far as pluses go. Now let's talk about the minuses.

Kindle Fire Cons

• Connection to Amazon content -- As easy as it is for Fire users to access Amazon content it's just that difficult to access anyone else's. If there's one thing I've learned from the Fire it's that my next tablet will not be locked in to one provider's content. That probably means I won't be buying from the typical content providers, of course. I don't mind paying more for that capability, btw. So if Samsung comes up with a terrific tablet that meets all my needs, and it's $100 or so more than the Fire, I'm in.
• Awful for the early adopter/tinkerer -- As noted above, the Fire is pretty good for the typical consumer. But if you're buying it to root and open it up you'll be disappointed. Even if you go through the rooting process you'll quickly find some of the apps in the Android Market simply won't run on it (e.g., NHL Gamecenter App, the swipe keyboard, etc.) And if you do root it, watch out for those unsolicited auto-updates...
• Auto-updates -- This one's ridiculous. How in the world can Amazon think that forcing OS updates on every Fire owner is the right thing to do? Amazon, take a page out of the Apple book and let your customers decide when and if they want the update. I couldn't help but feel the auto-update was intended more to penalize rooters than to fix problems and offer more functionality. It also reminded me of the unfortunate "1984" debacle Amazon brought upon themselves a few years ago. Really stupid.
• "Silk" browser -- This has to be the biggest embarassment of all for Amazon. Remember how excited Bezos was when he demo'd the Fire's lightning-fast browser at the press event last year? It turns out the browser isn't that fast after all. In fact, in my totally unscientific side-by-side testing, the Fire almost always loaded pages slower than both my iPad and my RIM Playbook. Even with all these other issues I figured the Fire would offer a browsing experience that's second to none. The results were considerably weaker than promised. I'm disappointed that Amazon hasn't come out and admitted their failure here. It's remarkable that they still prominently feature the Silk browser on the Fire's product page. They seem to be in denial about it as they haven't even hinted it will be fixed in a future software update. As much as I criticize Apple, this is something Steve Jobs never would have let happen.
• Missing a "killer" app -- This is the reason why I had to keep my iPad handy throughout my Fire use and am stuck (for the time being) on iOS. Zite is my go-to app. I use it every single day. It's outstanding. It's a free app but I'd gladly pay as much as $10 or $15 for it, especially now that I'm totally addicted to it. There's no Android version of Zite...yet. I can't even consider another Android tablet till Zite is available. Flipboard is a close second and it too doesn't exist in the Android world. Amazon should have invested some money with the developers of apps like Zite and Flipboard to make sure they were available when the Fire launched. Better yet, wouldn't it be nice if a Fire-specific app or two came out that made the device irresistable? I'd love to be talking about a Fire or Android app that's unbeatable but not available on iOS. I can't think of a single one.

I realize I'm a fairly unique user and that plenty of Fire owners are perfectly happy with their purchase. That's great, but I'd also love to see Amazon step up, act like the market leader they're trying to be and address these shortcomings.

I'm convinced that my next tablet will be an Android-based one. The only Android tablet I'll consider though is one that gives me access to all types of content, not just content from the company who sells the hardware. Heck, as closed as they are, even Apple lets you install e-reader apps from Amazon, B&N, etc. One of the reasons they can do that is they're confident they've got a terrific piece of hardware and you'll want to buy it over the competition. They also charge a premium for it. I've learned it's worth paying a premium, as long as it's not ridiculously high, for the ability to choose from multiple content providers.

So while my next tablet won't be the cheapest on the market, I won't make the same mistake twice and limit myself to one source of content for it.