Tag Archives: e-readers

Why Barnes & Noble’s Nook Failed

"I read all of Duane Gundrum's books because he's so dreamy...."
“I read all of Duane Gundrum’s books because he’s so dreamy….”

Unfortunately, it’s been predicted for some time that Barnes & Noble was going to distance itself from the Nook, and thus, the e-book market. So, it seems that moment is coming to pass. Speculators assume that Barnes & Noble will attempt to continue on as a brick and mortar (physical presence only) store and sell off all of its e-book stuff. Well, in case it’s not readily apparent, the problem with that is that without an actual device to continue to hype the market of products, the Nook is going to die out as people are going to see the Kindle as a continuing vehicle and the Nook as dead in the water. Sure, they can survive on apps for awhile, but eventually people are going to see the writing on the wall and choose to go with a platform that looks like it is going to survive the next wave of changes.

But the point of this post isn’t to talk about the future of Barnes & Noble, because to be honest, I have no idea what is going to happen to that company. However, what I can do is talk about what happened to the company, specifically as to why the Nook didn’t become the all-winning vehicle they were hoping it would be. To understand this, we have to use our little go back in time feature and see what was happening when the Nook launched with all intentions of challenging the new kid on the block, the Kindle.

Back then, Barnes & Noble was the big kid on the block. He’d already beat up every brick and mortar store that existed before him, and he was rearing to go after the next challenge. Only, the next challenge wasn’t another physical store, but an online one that promised to lower prices and produce a better shopping experience. Now, I wish to harp on the latter of those intentions because Barnes & Noble stupidly focused only on the first: Lower prices. And unfortunately, Barnes & Noble didn’t handle that one well either.

The Kindle offered books at lower prices than you could buy them at retail stores. This was huge. When the Nook launched, it attempted to “discount” prices as well, but if you held up both side by side (and I used to do this a lot), what you discovered was that most of the time the Kindle price was exactly the same as, or cheaper, than the Nook price for a book. And then you started to see more and more choices being offered on the Kindle, which made having a Nook kind of a stupid purchase because if you couldn’t find everything, and couldn’t find it cheaper, you bought a pretty stupid device.

But the second point is the one I want to talk about the most because that’s where I truly feel that Barnes & Noble failed with its Nook. What Amazon offered with its Kindle was not only lower prices, but it offered a better customer experience, meaning that if you were looking for something, the Kindle actually cared about helping you find it. This meant that as you bought more books, the algorithms that worked within Amazon served to make recommendations to help you find things that you might want in the future. The more you bought and searched, the more likely the device was going to serve to help you find exactly what you might want, even if you didn’t realize you wanted it.

The Nook, on the other hand, basically offered you whatever the publishers were selling, and it put its placement completely determined by the legacy model of the highest bidder (or largest publisher with more prestige). After a few purchases on a Nook, if you were looking for a new book, every new search was like starting out from the very beginning again. In other words, you were screwed. If you didn’t want only the most popular book out there, you had to figure out what you wanted on your own.

The problem B&N made was that it assumed that cheaper prices (less than you’d pay for the hard copy of the book) was more than enough to produce decent profit. But they didn’t take into account that they had to be cheaper than the competition, not just cheaper than their own posted price for the retail version of the hard copy. And then they made the customer experience as bad as an Internet search could be back before Google was invented. You basically had to do a search with the intention of hoping to get lucky in order to find the thing you were looking for. This was great if you were looking for a copy of 50 Shades of Gray, but it wasn’t so great if you were looking for new, independent writers who might be making a splash in an obscure genre, but a genre of which you often spent a lot of money. The Kindle, however, did this extraordinarily well.

So, it shouldn’t come as any surprise which device, and which company, won the battle. The war isn’t over, but quite a few of the initial battles were quite decisive, so the outcome seems somewhat conclusive.

Battling Through the Trenches of Publisher’s Row

"I read all of Duane Gundrum's books because he's so dreamy...."

In case you aren’t aware of it, there is a war taking place. I’m not talking about Libya, Afghanistan or Iraq. I’m talking about the war that is currently waging over the publication of books. What war? You say. Well, let me explain.

For years, in order to get published, you sent out your work to a publisher (or an agent in hopes of getting a publisher), and if you were very lucky, you might get a bit of an advance. Sometimes, those advances were for decent money. Around the 1970s and on, they started getting really small. Kind of dismal, actually. Unless you were already a famous author, like Stephen King. So, you would get about $5,000-$10,000, and then the publisher would take 18 months or so to create your book. Then it would get released. If it started to sell, great. You would receive about $1.67 for a $20 book for each sale, the publisher keeping pretty much everything else. After all, they were the publisher. That $1.67 would continue to knock down the amount of the advance you received until you actually started to make what are called royalties, which would be additional money the book made after you paid off the advance. Most books tended to not even make back the advance, so you were generally lucky enough if you made somewhat of a decent advance.

Well, recently, the publishing industry has kind of been turned on its side. E-books are becoming the new “in” thing, and strangely enough, publishers are still maintaining their dominance in the industry, because they are still the power brokers they used to be. In other words, in order to gain any attention whatsoever, you really needed the publisher to get the attention out that you had published a book. So, not surprisingly, publishers have been publishing e-books, too, and still taking that outrageous amount off the top, leaving writers with very little profit, even though the costs for publishers have diminished to almost nothing.

Something new has started to happen, which is turning the whole industry on its side now. Writers are going directly to the readers and selling their books without the publishers. And needless to say, this is causing a bit of a stir in the whole industry. Publishers need the writers to survive, and so they are doing everything possible to diminish the positive experience for writers, so that publishers still remain the power brokers that they have always been. Unfortunately for them, that model isn’t going to last that much longer.

The publishing industry is a lot like the music industry, and its current dynamic is going through a revolution much like the music industry has recently gone through as well. While there are still seriously powerful music leaders in the industry still calling shots, a lot of artists have gone directly to the Internet with their work, and are bypassing the profit model previously established by the RIAA and other such top-down industry leaders. This has caused all sorts of problems for the industry, but it has done wonders to present new opportunities for artists who may never have received an ounce of attention before.

Move this into the publishing world, and you see the same sort of thing happening there. The publishing industry is still in control right now, mainly because the model hasn’t completely developed yet. Online booksellers, like Amazon, Apple, and somewhat Barnes & Noble, are producing their own e-readers that allow writers to push their content to eager subscribers. However, the battle currently waging is who is going to control the process flow from this point forward.

The publishing industry is counting on its enormous clout to push their agenda forward. They have already pushed back against Amazon (which has forced the others to comply) where they forced the increase in the cost of books being sold on the Kindle. You used to be able to get brand new books for $9.99, but now you’re lucky if you can get one for $12.99. The game changer in the first battle was Ken Follett’s new book Fall of Giants, which publishers forced Amazon to sell at $19.99. The backlash against the book has been interesting as Kindle users included all sorts of bad reviews for the book based on the price alone, taking what would have probably been a five or four star reviewed book down to an average of about 3 stars. What’s interesting is that his reviews on this book tend to resemble an upside down bell curve, with 301 5-stars and 327 1-star reviews, with a tiny amount filling in for 2, 3, and 4-star reviews. In other words, the critics either really liked it or really hated it, and there’s no doubt that the really hated reviews come specifically from people who are pissed off at the price.

If this was the end of the fight, you’d think that the publishers pretty much won, but like most great stories, a new sliver has been added to the mix, with writers being that added variable. Writers, realizing that they need to somehow be able to take advantage of this new technology, have started to show up sans publishers (being their own publishers), and they’re starting to include their own novels at much lower cost than the publishers are forcing down the e-market’s throat. Rather than stick it out at $9.99 (or push it up to the publisher’s price of $12.99), writers are now starting to introduce their books at the $2.99-$4.99 range, providing a more comfortable area for readers to purchase on impulse alone. Some of the more prominent writers, instead of using their fame to push for $12.99, like the gas station economic model the publishers are following (one raises the price, the rest follow), are listing their books at $0.99. According to some of the better known writers doing this, they’ve pointed out that because of the amount of people willing to buy a book at that low price, their profit has actually been better than if they tried to sell their books at higher prices. The economic implications are staggering, the more you think about it.

The biggest problems facing the writers right now is how to actually get anyone to pay attention to them in the first place. The one thing publishers have going for them was that their clout actually got books into bookstores, and without that clout, an unknown writer is essentially that, an unknown writer. If no one knows you exist, the chances of selling a book are dismal, at best. So, right now, the battle has halted, as both publishers and writers realize they’re at an interesting crossroad where both can benefit, but neither seems willing to budge. Publishers aren’t interested in giving up their high percentages they receive for “publishing” books while writers are no longer interested in giving up the entire store just to get their work out there. Which means that once writers figure out how to jumpstart the system in their favor, the whole publishing industry is going to go the way of the recording industry.

But what can a writer do to become marketable without already being a famous writer who was selling books already? That’s an important question and one that I’m spending a lot of time studying.

I’ll let you know once I figure it out.

I’m Suspecting Amazon Doesn’t Actually Understand Writing

For a bit of time now, Amazon has been trying to herald the move towards electronic books, essentially ushering in a new medium for which books will eventually become the primary method of production. The Kindle, which is not a new story, was supposed to be their attempt to usher in this new era, and so far, it is doing a pretty damn good job of leading the industry. Sure, the iPad is an attempt to steal back some of that thunder, but it doesn’t take a rocket scientist to figure out that right now Amazon is in the driving seat with the capability of calling a lot of future shots.

Which is why I found it shocking that Amazon released the following statement:

Generally speaking, writers have two options when they sit down to create a new piece that can be distributed through conventional channels. They can author a short, attention-grabbing magazine-length feature that doesn’t require the reader to invest more than a few minutes of their time, or they can craft a long, 50,000-plus word novel that is meant to be absorbed over multiple sittings.

Now, if you’ve never been a professional writer before, this may sound quite innocent, and maybe even informative, but if you have any knowledge of the publishing business, and I mean ANY, you know that there are far more than two options an author has when sitting down to write a new piece. Basically, Amazon is stating a writer can choose from a short story or a novel, and now they have somehow managed to invent something in between that.

Writers have been writing all sorts of variations of those two models for centuries. Publishers have been publishing variations of far beyond those two models for centuries as well. Just recently, the whole unmentionable (by me, mainly) epic of Twilight released a novella, which just so happens to be a book that is too small to be a 50,000 normal novel and too big to be a short story. Sounds vaguely familiar, doesn’t it? Yes, writers have been tackling this genre long before Amazon came onto the scene.

To me, it appears that Amazon is attempting to somehow create a new category to invent a brand new revenue stream, even though that category has existed long before Amazon became a web site, back in the days when an Amazon was often referred to women I dated who used to beat me up when I didn’t comform to their expectations (but that’s a completely different article, of course). We don’t need this new category, especially when Amazon already charges different prices for different books based on the expectations and demands of the specific publishers.

To indicate they are somehow inventing a brand new length of writing after 4000 years since the first human scribbled some carvings on a cave is somewhat insulting to the rest of us. It’s not like they need special programming to release an e-book that has fewer pages than a “normal” e-book. The whole announcement sounds like a non-announcement to me, but more of an attempt to remain in the news now that everyone and his brother is releasing an e-reader and selling it at Best Buy.

(sources: TMC Net, Amazon’s web site)

Why $139 for Kindle Isn’t the Sweet Spot Amazon Would Like You to Believe It Is

The other day, Amazon announced it was releasing a new Kindle, and the price was lowered to $139. Now, this isn’t a big deal, and that’s great, if you want one of those things, but what’s amazing is that the boss of Amazon claims that the price is so low that people are going to rush out and buy several of them for the household. Yeah, right. Not going to happen. I love how the multi-millionaire boss of a major company thinks that $139 is the sweet spot for a tech gadget, so he makes a pronouncement that the end of the road is finally here. And then the tech nuts start talking about how $100 is the sweet spot for most electronic gadgets, the sweet spot being the price people will arbitrarily just throw money away without thinking about it.

Sorry, the Kindle isn’t there yet. You see, there are some problems that no one has addressed, and that’s the fact that people actually think about these things before they shell out a lot of money for products. Oh, you say that Amazon just announced they sold out of their Kindles until Sept. 4? So what? To me, that sounds like their marketing department made an announcement to create a “need” for this device when there really isn’t one yet. I don’t personally believe a lot of the hype that these companies put out, because what they’re trying to do is manipulate us into buying their products by pretending that if we don’t do soon, it will be too late.

I went to Amazon’s page today. They’re still hyping the new Kindle as if they have a gazillion of them. They’re not going to NOT take my order if I want one. The hype is just that: hype.

What no one really wants to talk about is the actual cost of this device. Unlike a cell phone, this is not a final purchase product, meaning that once you buy it, you still have to spend a lot of money on other things, like books. If you buy a Kindle, you still need to buy electronic books from Amazon. For Amazon, it’s the product that keeps on charging. Because of that, $139 is still too much money. To be honest, $99 is going to still be too much money.

A couple of experts have pointed out that the sweet spot for an e-reader is still $49. Until they start coming down to that level, the demand is never going to happen. Because there is no demand for an e-reader. People in America generally don’t read. So pretending there is a demand for a reading product is a joke. When people buy books in America, they still buy actual paper type books, and that’s not going to change any time soon. People are so aware of the fact that few electronic products are good forever, but books are. If you bought a computer ten years ago, you wouldn’t have much success getting it to run today. So, who knows what is going to happen with e-reader technology in the future? It’s like taking a bet on the Blu Ray vs. whatever that other standard was that was supposed to compete with Blu Ray disks. It’s like taking a bet on the betamax. Remember that? Didn’t last long.

That’s why e-readers still have a long way to go, because there’s been no standardization developed, and we’re still some ways off from that happening. No one wants to buy a useless piece of garbage that has a shelf life of a few years.

Until then, only the select few are really going to jump on the e-reader bandwagon, kind of like the select few who buy Ipads, convinced it will be the coming of the electronic messiah. I almost bought one, but I’m so glad I didn’t because it would be in the back of the closet right now with my Coleco and Atari machines.