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Amazon Jungle: Book Purchasing Models
Struggle in the Digital Objects Era |
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8 November 2005 |
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Who'd have thought that in the height of growth in online
content the sexiest thing out there would be...books? With
major announcement in recent weeks from Google, Yahoo,
Microsoft and now Amazon the stage is set for dramatic
efforts to digitize and commercialize book content. Yet
books have been digitized for online search, subscription
and enhanced functionality for sometime now by a number of
vendors focused on scientific and technical content. What
the new efforts lack so far are commercial models and
packaging that are clearly in the best interests of
publishers undertaking them. Time for some more careful and
creative thinking about what it means to offer digital
books for long-term commercial success. |
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As the pace of change in the
content industry accelerates with daily dot-com furor, it's
like a jungle out there for many publishers. In this
environment it's easy to overlook some of the details in recent announcements
that may have longer term implications beyond today's
headlines. The recent
announcement of Amazon's two new programs to support new
models for book sales has been covered by the press largely in
the context of the book-scanning efforts by Google Print and
the Yahoo-initiated Open Content Alliance. But as
CNET News points out this is more about getting press
momentum than product realities. The Amazon Pages and Amazon
Upgrade programs won't debut until sometime next year, so it's
more a matter of getting the attention of publishers and
consumers at this point before they lose track of Amazon as a
player in the digitized book game.
That seems to be only fair, given that Amazon initiated
their own book-scanning efforts some two years ago. Why should
book industry Johnny-come-latelys get all the attention,
especially when they're all novices in selling book content?
For it is ecommerce, not book searching or digitized books
per se, that's really at issue with Amazon's two new
programs. Premium online eBook libraries have already been made
searchable and viewable on a subscription basis by vendors such
as Knovel,
O'Reilly and Pearson's
Safari
Bookshelf and
Books 24x7, including the ability to purchase and view chapters. The key
factor in the Amazon announcement is that users will be able to
own the content that they purchase, presumably in perpetuity.
Amazon's program will be an important step forward in
drawing additional revenues to book publishers exploring
value-add online services for expanding their revenues. But the
pages, chapters and whole electronic books purchased on Amazon
will not be digital objects on purchasers' desktops: the
licenses will be for accessing the content online, presumably
through a personal online "bookshelf" feature or via a search
engine mechanism. The book viewing mechanisms created by Amazon
may allow some form of copying to a local cache or printing,
but it sounds as if these capabilities will be fairly limited
at best and captive to some form of browser-based control. This
may be exciting for some, but overall it sounds like pretty
tame and incremental stuff at best.
For all of the effort that's been put into getting books
digitized there has been very limited innovation in the
development of business models and product packaging for these
efforts. Here are a few thoughts as to what book publishers and
electronic book distributors should think about as they
approach new models of electronic bookselling:
- Is selling ownership of a book title stored online a
desirable business model? As short-term initiatives
the Amazon Pages and Amazon Upgrade programs may seem to be
highly cost-effective ways for publishers to gain a little
extra revenue from their titles and some degree of product
loyalty, but the benefits of a one-time sale for indefinite
online access seem to be somewhat askew when compared to
cost-effective online book subscription models. If I buy an
online book access upgrade for two bucks, that fee has to
cover both royalties and maintaining online access
indefinitely. This may provide some undercutting to online
book subscription services initially, but without recurring
revenues to underwrite maintenance and service improvements
book publishers are unlikely to invest heavily in online
content. The onus on Amazon and book publishers is to
encourage visits to purchased online book content and to
develop more revenue models such as Web site advertising to
exploit those post-purchase visits more effectively.
- It's time to liberate digital books from online
databases. The big leap forward being side-stepped in
this announcement is the ability to buy books as downloadable
rights-enabled content objects. It's great that we'll be able
to search books online, but with the rise of desktop search
engines it's not really necessary or desirable to do so in
many instances. One of the most desirable aspects of book
ownership is the ability to have a personal copy to
manipulate in private and without any network tether. While
the book industry will have its hands full just adapting to
online access in general, the real prize in book publishing
will be enabling electronic book content to retain more of
the aspects of book ownership most prized by book purchasers.
- The slow development of new commercial models for
books needs to accelerate. Amazon's new commercial models
for books sound innovative at first, but research reports
have been sliced and diced for separate page, chapter and
illustration sales for years. At the same time music
distributors are already quite successful in using
rights-managed digital objects to distribute content to
consumers. Both music distributors and courseware
developers provide bundled licensing for "hard" copy along
with digitally formatted online materials. So most book
publishers are just beginning to catch up with many obvious
and well-proven commercial models. Still largely unexplored
by publishers are such options as the ability to use their
audiences to encourage sales by lending electronic content
rights to people who would like to sample their content or
providing special functionality and features embedded in book
content. Thinking about how people really use and value book
content in its physical format is likely to yield at least as
many profitable ideas for electronic book content as are
business models for electronic versions being tested today. .
As new ways of developing, collecting and monetizing content
are accelerating in popularity, the book industry needs to
consider what it is that they can do best in this new
publishing environment. Some of the answer certainly revolves
around using existing book titles in more innovative ways to
increase revenues. But the larger question is whether the book
industry is willing to become technology leaders who are able
to edit and package many forms of premium electronic content
into books and book-like collections in both electronic and
physical formats. The Web has brought forth a veritable jungle
of options competing for the revenue streams of book
publishers. In this competitive environment "going native" with
your business models and product packaging is essential, but
without more creative thinking about what a book is and how it
should be used the jungle may yet get the best of book
publishers.
-
John Blossom
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