In the latest eBook news, yesterday the New York Times reported on a new Google eBook initiative – separate from its book scanning project. Google is in discussions with many book publishers to sell eBooks direct to consumers via Google. As publishers continue to fret over Amazon.com’s $9.99 pricing for eBooks that are currently available in hardcover (at higher price points), the story pointed out that Google has made it clear that publishers will be able to set the pricing for their eBooks.
Meanwhile, the latest Fortune magazine has a glowing cover story about Amazon’s Kindle, and the launch of the Kindle DX – a large-screen Kindle.
Despite Amazon’s success with the Kindle thus far, the Kindle’s only differentiation at this point is wireless connectivity. Admittedly, the ability to instantly download a title that you’ve heard about on NPR or read about in your morning paper drives unbelievable impulse purchases. And, those impulse purchases, are surely adding to the Kindle’s financial success thus far.
But, that wireless advantage could be short-lived. Ultimately – in the next 18 months – a competitor, Plastic Logic or Sony, will introduce an eReader with wireless connectivity. And, lurking in the background, is the 500 pound gorilla of well-designed consumer electronics – Apple. There have been plenty of rumors about a much larger iPod touch scheduled to be released. Regardless if Apple launches a larger iPod touch, as netbooks continue to grow, smartphones continue to grow, Apple will eventually release a device akin to an iPod touch with a larger form factor.
As eBook devices proliferate and eBook availability continues to expand via Google’s new initiative and others, will consumers continue forking over $359 for an Amazon Kindle? I doubt it.
Who is certain to lose regardless of how the eBook future unfolds? Sadly independent bookstores.
Joe Wikert’s post about Penn State’s Sony Reader experiment got me thinking about the Sony Reader again.
I’m a big fan of the Sony Reader, and I would love to see them succeed. But, I also feel that Sony has to gird for daily battle with Amazon. Jeff Bezos has proven over and over again that he’s willing to invest for the future regardless of Wall Street analysts trashing his decisions for long term success because of their impact on short term profit. (As an investor and someone passionately interested in business, that’s a Wall Street stance I’ve frankly never been able to understand. I guess I’m a value investor at heart. Give me long-term profit and invest for that profit any day over a short-term mindset – trash the company’s long term prospects to eek out good numbers for the quarter).
Back to the Sony Reader, I had an idea this morning about what could lead to a successful rival to Amazon’s Kindle. Drum roll please . . . Sony should seriously consider spinning off the Sony Reader (maintain the Sony brand and the Sony Reader’s stylish design) into a joint venture with Barnes & Noble.
Despite its many critics, I’ve often admired Barnes & Noble and the Riggios’ business acumen. Granted, as someone who loves bookstores of all kinds – locally owned independents, Barnes & Noble, Borders, the Strand, Powell’s, The Tattered Cover, etc. – it pains me to see any small independent bookstore go out of business. But, I also believe that Barnes and Noble has offered a wider selection of books ever available to many of the towns where they have stores. How can that be a bad thing for people passionate about books?
Again, back to the Sony-Barnes & Noble idea, I would guess that Len and Steve Riggio are watching the various Kindle sales estimates with heightened interest. Who knows? Maybe they’re writing off those Kindle owners as customers who would have purchased from Amazon anyway vs. buying a book at Barnes & Noble. So, they may reason that those Kindles really aren’t having much of an impact.
As a bibliophile, I would strongly disagree. I routinely buy buys via Amazon. But, I also love spending an hour or two browsing in Barnes & Noble at least once a week. If I don’t get my Barnes & Noble fix, my wife can tell. And, I routinely buy books at Barnes & Noble. Why? Because the physical bookstore browsing experience still hasn’t been replicated online, and I doubt it ever will.
Historically, Barnes & Noble has struggled with the rise of digital media and the online sales channel. Let’s be honest. If Amazon or any other sizable online bookstore didn’t exist, I’d wager many dollars that there would be no bn.com. Just look back at the launch of BN.com, the financial spin-off of the website, etc. It wasn’t pretty. And, every step of the way, the Riggios were dragged kicking and screaming.
But, at the end of the day, they’re business people who want to compete and succeed. Do they really want to wake up in 2015 and have herds of customers wondering around Barnes & Noble stores armed with their Kindles, discovering new physical books, then downloading them on the fly. I don’t think so!
So, why not take a very calculated risk, cut a deal with Sony now and hit the floor running. Does Sir Howard Stringer really want to be dabbling in the ebook business anyway?
Think about it. Barnes & Noble could create a unique sticker that they slap on every book when it comes out of the box? Buy this book today or download it to your Barnes & Noble-Sony Reader device right now. And, if you really want to think about the possibilities, that sticker could have a readable bar code – or a numerical code or something – that would allow a customer to access and start downloading the ebook with one shot.
And, if you think the barcode idea is farfetched? Seriously bar code technology is hugely popular in Japan and other countries. How hard would it be to release a next generation Sony Reader with a quick inclusion of a bar code reader.
Do you think this will happen? If not, what is Barnes & Noble’s planning to do to combat the rising sales of Amazon Kindles? I’d be interested to hear your thoughts.
John Gapper, a Financial Times writer, has written an interesting article about Sony’s fumbled Sony Reader. Gapper makes some interesting points and argues that Sony Reader’s lack of a wireless connection has doomed the device vs. the Amazon Kindle.
While I agree with much of Gapper’s article, I don’t necessarily agree that all is lost for Sony. However, for the Sony Reader to go head-to-head with the Kindle at this point, it would take a passionate, fanatical executive in charge of the Sony Reader team.
Here’s my prescription for the Sony Reader not to be an also ran vs. the Kindle:
Celebrate the design – Have you seen the Apple vs. PC commercials that have blanketed the TV and web for years now? Sony should follow Apple’s lead and immediately launch a marketing campaign celebrating the Sony Reader’s design vs. the Kindle. Would you rather pull the sleek Sony Reader out when you’re on a plane or in a meeting, or would you rather pull out the Kindle which could be mistaken for a 1980s PC keyboard chopped in half. And, if the Sony Reader team doesn’t have the budget for TV commercials (which I doubt they do), record some video spots on the cheap and get them on the Web tomorrow.
Newspapers-magazines – A Sony Reader contracts exec should buy a tent from REI and camp out in the New York Times and Wall Street Journal offices until they have a digital deal to offer those newspapers on the Sony Reader. And, why stop there? Once those deals are inked, Sony should go straight down the list of the Top 50 (hell the Top 100) newspapers in the U.S. and abroad and get those newspapers – and magazines – available on the Sony Reader yesterday.
Wireless – The next generation Sony Reader HAS to have wireless to compete with the Kindle. Is there a next gen Reader ready for production? Does it have wireless? If not, scrap it now Sony and integrate wireless in whatever next gen Reader you release.
Software – Do you own a Sony Reader? Have you ever connected a Sony Reader to your PC to download books? And, don’t even bother trying to connect your Sony Reader to a Mac, the Sony Connect software for the Sony Reader won’t work on a Mac.
Well, if you have tried the Sony client software for the Sony Reader, that probably has something to do with your early onset balding. You’ll pull whatever hair out of your head trying to use the Sony Reader software. I’m not a software engineer, but this needs serious work. Is it possible to scrap the client software all together and log in via a secure web page for your Reader downloads? Maybe that’s the way to go vs. trying to fix the Sony Connect client.
RSS – Currently, the Sony Reader supports limited RSS feeds. Going back to marketing vs. the Kindle, Sony should be crowing about the fact that they’re not charging for RSS vs. the Kindle’s nickle and diming RSS strategy. Also, open it up. Set up feed software that enables me to grab any RSS feed out there for the Reader – not just the RSS feeds that Sony has chosen.
Additional content – Sony should be adamant about not allowing Amazon to take the lead with more books available. If Amazon announces a new digital rights deal with a publisher that Sony doesn’t have a contract with, that contract exec noted above needs to pull out his tent and prepare to camp out in the publisher’s office until Sony has an equal deal. And, try to take the lead with the number of ebooks available on the Reader vs. the Kindle. Right this minute, there are probably more than a hundred literary agencies in NYC sitting on a goldmine of digital rights. Sony should be meeting with all of those literary agents to get thousands, hundreds of thousands, of long tail, out-of-print novels available for the Sony Reader.
In addition, Amazon has set up a process for authors, and others, to publish their own content digitally and make it available for the Kindle. Sony needs to set up a similar process. Right now, I can load a PDF on my Sony Reader. The formatting doesn’t always work great. But, there should be an easy way that I can upload a PDF and push it to the Sony store – or even push it to other select Sony Reader users. That would be a wonderful selling point for sales forces everywhere. Salespeople would no longer have to carry around briefcases bulging with documents and catalogs. It could all be stored on the salesforce’s Sony Readers.
Short stories – Sony is offering short stories now for the Sony Reader, but they should ramp up that process even faster. There are hundreds of thousands of authors sitting on previously published short stories, and they control the digital rights for those stories. Get those short stories available for the Sony Reader now.
Well, that’s all my ideas for now. Regardless of what happens, it will continue to be interesting to watch Sony’s competition against Amazon. Sony may have taken a few lumps, but they’re not out of the game by any means.
