In showrooming, customers enter a retail store and, when they have located the product they’re shopping for, walk out, go home and purchase the item on the Internet at a lower price.  Some shoppers simply scan the barcode of the production in the store and order it online on the spot. This in effect makes the brick and mortar store a mere showroom for customers to examine products they have no intention of buying there. Last Christmas Amazon actually promoted the practice, outraging alarming and outraging many stores and store chains. We know of at least one publisher that fought back by discontinuing distribution of its books on Amazon.

The latest objector is Target, the giant retail store chain. Executives, reacting to what they perceived as showrooming of Amazon’s Kindle e-book reader, informed Amazon they would no longer carry it.

Though Amazon sells most of its Kindles on its own website, many customers like to examine them physically, just as they may now do with Kindle’s rival, Barnes & Noble’s Nook, which may be “road-tested” by customers in B&N’s brick and mortar bookstore.  Recognizing consumers’ natural impulse to touch, Amazon began distributing Kindles in big retail chains.

It’s hard to predict what impact Target’s action will have on Kindle sales.  With nearly 1,770 stores in 49 states and gross revenues of $65 billion, boycott of a product by Target can have some seriously detrimental impact on any supplier. More ominously, if Staples, Best Buy and Wal-Mart, which also sell Kindles, see themselves as showrooming victims and follow Target’s lead, it could put a crimp in Amazon’s sales – and its image.

For the complete story read Target, Unhappy With Being an Amazon Showroom, Will Stop Selling Kindles by Stephanie Clifford and Julie Bosman in the New York Times.

Richard Curtis

This blog post was originally published on Digital Book World as Target Targets Amazon as Showrooming Enabler

In showrooming, customers enter a bookstore, browse, then select (or scan the barcode of) the book they want to purchase, walk out of the store and order it from an online bookstore. Which makes the independent store a mere display space for customers to order books from its competitors. Last Christmas Amazon actually promoted the practice, outraging indy stores. One got so mad it stopped doing business with the behemoth. (See Can You Survive without Amazon?)

Barnes & Noble, the highest-profile target of showrooming, is now in a position to fight fire with fire. Microsoft’s investment in B&N’s Nook business gives the bookstore chain the potential for a showroom that loops back to its own inventory via the Nook.

“B&N CEO William Lynch says that the company plans to embed NFC (near field communication) chips into Nooks,” reports Owen. “Users could take their Nook into a Barnes & Noble store and wave it near a print book to get info on it or buy it.”

It’s an interesting concept, but there’s a big flaw in the reasoning.  Showrooming enables customers to scan a high-priced book in a brick and mortar store, then buy it at a discount on an Internet store.  In other words, if you scan a $20.00 book in a Barnes & Noble bookstore, then go to B&N’s online store, you’ll be able to buy it for, say, $16.00.  Then why, you will ask, can’t I pay $16.00 inside the bookstore?

For a showroom to work properly you need two components: a physical space with physical books to browse; and a virtual space to actually buy them. Think of a library where physical books are on display for browsing only. Customers choose the titles they want, swipe a credit card, and wait a short time while the book is printed on an Espresso-type printer.

We’ve been buttonholing readers with this mad scheme for years, and you can see some of our postings about kiosks here.

Richard Curtis

This blog post was originally published on Digital Book World as Showdown for Showrooms

Gutenberg's POD: prohibitively expensive

LightningSource Inc., a subsidiary of Ingram, has been E-Reads’ POD printer of choice since our founding in 2000. And because – through no fault of LSI’s – the high cost of on-demand printing has prevented the process from achieving its full commercial potential, our hearts beat a little faster when LSI announced in Publishers Weekly a number of initiatives suggesting POD prices could come down.

From the outset of the Digital Era, we have made our titles available in print on demand and steadfastly predicted that POD will become the principal means by which most books will be distributed (See A World Without Inventory, Part 1 and Part 2).

However, this progress has been compromised by the high cost of on-demand printing is a one-copy-at-a-time process, as opposed to traditional press runs. As with any form of individualized manufacture, the price per unit is very high. Where a 5,000 copy print run of a typical novel might cost $.50 or $1.00 per copy, a POD of the same book might cost upwards of $5.00. The result is 300 page trade paperbacks that cost $20.00 compared to $12.00 or $15.00 for that book produced as part of a long print-run.

In essence, Ingram has licensed print technology developed by the German company EPAC, and acquired two EPAC printing plants. “Incorporating the use of EPAC technology is expected to increase the number of copies Lightning can print cost effectively,” PW reports. Ingram Content Group chairman called the EPAC print technology “groundbreaking. With our years of print experience, Ingram will take the promise of print-on-demand to the next level.”

We look forward to standing beside LSI when it happens.

Details in Ingram Acquires Two EPAC Plants, Licenses POD Technology.

Richard Curtis
Note to readers: Digital Book World has invited me to post my blogs initially on its website before releasing them on E-Reads, and this content is re-published with DBW’s permission. Click here to view the original posting.

Staples® offers this fun test of reading speed and retention. Click on the red hot-button below and follow the instructions. It’s only a page. You’ll not only be tested on speed but recollection.

I read 38% faster than rest of population. I was informed by Staples that if I maintained that speed I could read War and Peace in 28 hours and 17 minutes. The thing is, I don’t want to read War and Peace in 28 hours and 17 minutes.

You’ll also discover how many books could you read on each eReader before recharging.

Though it’s a harmless little test, there’s a serious aspect to it, as educators debate how much our children retain after reading e-books. (See The Seductions of Tablets)
Richard Curtis

Source: Staples eReader Department

Copy the above HTML and paste it in your blog post to share an image with link.

A good book is hard to put down. But if you’re enjoying it on an eReader you eventually have to break and recharge. How many pages can you get through before your battery runs out? How fast can you read classics like The Lord of the Rings or War and Peace? Check your reading speed on this fun interactive infographic and compare it to the national average.

Created by the eReader experts at Staples®.

Can You Resist Temptation? Probably Not

We don’t need the New York Times to confirm something we’ve been saying for years but it’s always nice to be validated. Julie Bosman and Matt Richtel, writing in that august journal, describe growing concern that tablet computers have too many distractions to keep readers immersed in books they are reading on those devices.

We’ve been saying so for years, but now it’s official. “People who read e-books on tablets like the iPad,” the reporters write, “are realizing that while a book in print or on a black-and-white Kindle is straightforward and immersive, a tablet offers a menu of distractions that can fragment the reading experience, or stop it in its tracks.” “’The tablet is like a temptress,’” said a Forrester Research analyst, citing such seductions as YouTube videos and popup email alerts. In response to a Forrester survey, only 31 percent of publishers “believed iPads and similar tablets were the ideal e-reading platform.”

Three years ago we expressed concern about the allure of tablets. A former editor in chief of Nature Neuroscience, wrote that “people read more slowly on screen, by as much as 20-30 percent… Distractions abound online — costing time and interfering with the concentration needed to think about what you read.”

Her comments are particularly true for children. Maryanne Wolf, a professor of child development at Tufts and author of Proust and the Squid: The Story and Science of the Reading Brain, points out that “No one really knows the ultimate effects of an immersion in a digital medium on the young developing brain.” But “my greatest concern is that the young brain will never have the time (in milliseconds or in hours or in years) to learn to go deeper into the text after the first decoding, but rather will be pulled by the medium to ever more distracting information, sidebars, and now, perhaps, videos (in the new vooks).” (See The Medium is the Screen. The Message is Distraction.

Professor Gloria Mark, deeply concerned about the distractions engendered by screen media, expressed her own preference: “I’d much rather curl up in an easy chair with a paper book. It’s not only an escape into a world of literature but it’s an escape from my digital devices.”

Richard Curtis

Note to readers: Digital Book World has invited me to post my blogs initially on its website before releasing them on E-Reads, and this content is re-published with DBW’s permission. Click here to view the original posting.

Yesterday’s reports that the Justice Department may be near filing an antitrust lawsuit against five large trade book publishers and Apple is grim news for everyone who cherishes a rich literary culture.

The Justice Department has been investigating whether those publishers colluded in adopting a new model, pioneered by Apple for its sale of iTunes and apps, for selling e-books. Under that model, Apple simply acts as the publisher’s sales agent, with no authority to discount prices.

We have no way of knowing whether publishers colluded in adopting the agency model for e-book pricing. We do know that collusion wasn’t necessary: given the chance, any rational publisher would have leapt at Apple’s offer and clung to it like a life raft. Amazon was using e-book discounting to destroy bookselling, making it uneconomic for physical bookstores to keep their doors open.

Just before Amazon introduced the Kindle, it convinced major publishers to break old practices and release books in digital form at the same time they released them as hardcovers. Then Amazon dropped its bombshell: as it announced the launch of the Kindle, publishers learned that Amazon would be selling countless frontlist e-books at a loss. This was a game-changer, and not in a good way. Amazon’s predatory pricing would shield it from e-book competitors that lacked Amazon’s deep pockets.

Critically, it also undermined the hardcover market that brick-and-mortar stores depend on. It was as if Netflix announced that it would stream new movies the same weekend they opened in theaters. Publishers, though reportedly furious, largely acquiesced. Amazon, after all, already controlled some 75% of the online physical book market.

Amazon quickly captured the e-book market as well, bringing customers into its proprietary device-and-format walled garden (Sony, the prior e-book device leader, uses the open ePub format). Two years after it introduced the Kindle, Amazon continued to take losses on a deep list of e-book titles, undercutting hardcover sales of the most popular frontlist titles at its brick and mortar competitors. Those losses paid huge dividends. By the end of 2009, Amazon held an estimated 90% of the rapidly growing e-book market. Traditional bookstores were shutting down or scaling back. Borders was on its knees. Barnes & Noble had gamely just begun selling its Nook, but it lacked the capital to absorb e-book losses for long.

Enter Steve Jobs. Two years ago January, one month after B&N shipped its first Nook, Jobs introduced Apple’s iPad, with its proven iTunes-and-apps agency model for digital content. Five of the largest publishers jumped on with Apple’s model, even though it meant those publishers would make less money on every e-book they sold.

Publishers had no real choice (except the largest, Random House, which could bide its time – it took the leap with the launch of the iPad 2): it was seize the agency model or watch Amazon’s discounting destroy their physical distribution chain. Bookstores were well along the path to becoming as rare as record stores. That’s why we publicly backed Macmillan when Amazon tried to use its online print book dominance to enforce its preferred e-book sales terms, even though Apple’s agency model also meant lower royalties for authors.

Our concern about bookstores isn’t rooted in sentiment: bookstores are critical to modern bookselling. Marketing studies consistently show that readers are far more adventurous in their choice of books when in a bookstore than when shopping online. In bookstores, readers are open to trying new genres and new authors: it’s by far the best way for new works to be discovered. Publishing shouldn’t have to choose between bricks and clicks. A robust book marketplace demands both bookstore showrooms to properly display new titles and online distribution for the convenience of customers. Apple thrives on this very model: a strong retail presence to display its high-touch products coupled with vigorous online distribution. While bookstores close, Apple has been busy opening more than 300 stores.

For those of us who have been fortunate enough to become familiar to large numbers of readers, the disappearance of bookstores is deeply troubling, but it will have little effect on our sales or incomes. Like rock bands from the pre-Napster era, established authors can still draw a crowd, if not to a stadium, at least to a virtual shopping cart. For new authors, however, a difficult profession is poised to become much more difficult. The high royalties of direct publishing, for most, are more than offset by drastically smaller markets. And publishers won’t risk capital where there’s no reasonable prospect for reward. They will necessarily focus their capital on what works in an online environment: familiar works by familiar authors.

Two years after the agency model came to bookselling, Amazon is losing its chokehold on the e-book market: its share has fallen from about 90% to roughly 60%. Customers are benefiting from the surprisingly innovative e-readers Barnes & Noble’s investments have delivered, including a tablet device that beat Amazon to the market by fully twelve months. Brick-and-mortar bookstores are starting to compete through their partnership with Google, so loyal customers can buy e-books from them at the same price as they would from Amazon. Direct-selling authors have also benefited, as Amazon more than doubled its royalty rates in the face of competition.

Let’s hope the reports are wrong, or that the Justice Department reconsiders. The irony bites hard: our government may be on the verge of killing real competition in order to save the appearance of competition.

This would be tragic for all of us who value books, and the culture they support.

Sincerely,

Scott Turow
President

S&S Royalty Statements - Before

S&S Royalty Statements - After

In September of last year we took Simon & Schuster to task for its overweight and excessively detailed royalty statements. “Bloated” was the term we used. “The weight of the package has been known to induce hernias in even the stoutest of mail room clerks,” we observed, urging the publisher to reform its profligate ways. (See Simon & Schuster’s War on Trees)

What a difference one semi-annual royalty period makes. Our criticisms, reinforced by those of authors and literary agents including a committee of the Association of Authors’ Representatives, inspired Simon & Schuster to review its reporting practices and overhaul them from top to bottom. In the first week of March the publisher has opened its “Author Portal,” a dedicated, password-activated website containing PDFs of all statements and offering download and printing options. Furthermore, the statements have been “substantially redesigned” and streamlined.

One author’s statement shrank from 41 pages to 8, and an agent praised the new format as “concise, comprehensive, uncluttered, and easy to understand.” Our agency’s own statements slimmed down from 977 pages – two reams of paper – to 323. But we now have the option to print out any given page or produce a compact digital file to archive and/or email to authors. And because so many of those statements have had zero activity for years, the savings on our resources – and the environment – are tremendous.

Credit should be given where credit is due, and we take our hats off to Simon & Schuster for responding so thoroughly and swiftly to our challenge.

Richard Curtis

Note to readers: Digital Book World has invited me to post my blogs initially on its website before releasing them on E-Reads, and this content is re-published with DBW’s permission. Click here to view the original posting.

We’re far from sure about that, and we also wonder if anyone else wins, either. In the summer of 2010 we raised the question in Bundling: Publishing’s Next Battleground.  We re-post it here to push the dialogue where publishers may not want to go.

Richard Curtis

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The following question is deceptively simple, and we urge you to take your time responding. How much time? Three or four months. You’ll need that much. A lot rides on your answer.

Here’s the question:

When you purchase a print book you should be able to get the e-book for…

• a) the full combined retail prices of print and e-book editions
• b) an additional 50% of the retail price of the print edition
• c) an additional 25% of the retail price of the print edition
• d) $1.00 more than the retail price of the print edition
• e) free

The subject of this little quiz is bundling, a common marketing tactic in which two or more products are packaged and sold at a single price. In this case the package is a printed book plus its e-book iteration.

As simple as it sounds, bundling is shaping up to be the battleground for clashing publishing philosophies, and the time will soon come when publishers will have to choose one of the above strategies and put it into effect. Misjudging consumer attitudes could prove to be a big mistake and possibly a ruinous one.

The essence of bundling is to offer customers a discount for selecting the combo instead of the individually priced components, so choice a) above is a non-starter. But choices b), c) and d) reflect just how aggressive a discounter wants to be and the various thresholds at which consumer resistance is expected to melt. A good argument can be made for each and as the bundling issue warms up you can expect to hear them all endlessly debated.

Yet even the cheapest package – a dollar or even less than a dollar over the cost of the print edition – may not suffice to capture the consumer’s fancy. Why? Because many people believe they’re entitled to get the e-book free with purchase of the print book. How large is public support for that position? We need to take a poll to find out, but if anecdotal reports are any indication, they may be in the overwhelming majority and they are unquestionably the most vocal. You will certainly hear their outpouring of joy when one publisher steps up to offer a print and e-book combo for the price of the print edition alone. Our own prediction? Free will become the standard, and even ten cents above free will be a competitive disadvantage.

Economic factors aside, consumer negativity toward double-charging is a contributor to piracy. Comments sent to us in response to postings about piracy strongly suggest that the public expects digital versions of books to be tossed in for nothing when a printed book is sold, and if it isn’t tossed in, many of those customers will feel no compunctions about downloading an unauthorized copy. They simply feel entitled to it. Libertarian spokespeople like Cory Doctorow have articulated this sense of entitlement, and though some feel that their arguments go too far, there is a solid core of realism in their position. We can condemn the immorality of consumer attitudes ’til the cows come home; and we can (quite reasonably) complain that if people were willing to wait for the paperback reprint they should be willing to wait for the e-book reprint. It makes no difference: the public’s sense of entitlement creates an environment susceptible to the allure of piracy.

With so many sound arguments in support of heavily discounted bundles, why have we seen so little of it in book marketing? The answer is that it is harder to assemble print/e-book packages than it looks. Publishers that control both formats are in the best position to do it but the technology is not yet in place. Customers purchasing the latest James Patterson or Nora Roberts novel in a bookstore have no simple way to download the e-book in the same transaction. The publisher might offer a discount coupon but that requires a number of steps and clicks that discourage a quick and easy procedure.

What is wanted is a one-click experience: “Click here to order the print and e-book.” Such a deal might best be offered by a publisher on its website. However, the price of that bundle might undercut the prices offered by retailers or e-tailers for the individual components, and for publishers to compete with their own retailers is to cut their own throats.

Amazon is in a good position to offer print/e-book bundles but hasn’t done so yet, probably because it recognizes the complexity of the issues. Book pricing is already fraught with so much angst that adding bundling to the debate will undoubtedly induce cardiac infarction among book people already near apoplectic with worry.

For the record, we at E-Reads strongly support the position that the e-book version should be included free of charge with the purchase of one of our print editions and are working to overcome the technical obstacles to implementing our conviction.

We invite your comments and look forward to seeing the debate over bundling heat up on the next stretch of road to the future of books.

Richard Curtis

Though (full disclosure) my son is a reporter for The Daily, my enthusiasm for the app is completely independent.  I just happen to think it’s terrific. But don’t take my word for it – it’s the iPad’s third most popular app.

Though The Daily started out as a dedicated iPad application, it is now accessible on Android, but the eye-popping graphics play best on the iPad’s big bright touchcreen. Some fairly heavy-hitting advertisers like Verizon, IBM and BMW display their wares there.

“I think it is the future of print,” digitday quotes a media executive, an odd description since there isn’t a single drop of printer’s ink associated with the publication.  But that’s just the point: it delivers all the news, culture and entertainment of a printed newspaper or magazine, but the videos, popups, callouts and other dazzling graphics are exactly what the iPad was created for. If you don’t have one, borrow it, download a two-week free subscription and see for yourself.

By the way, I have dubbed The Daily a “zapp” – drawn from “news app” the way “blog” is derived from “web log”. I believe this term may be original with me and if it achieves wide circulation and enters the English language (Oxford English Dictionary are you listening?) I hope Rupert Murdoch will reward me liberally, or at least recognize me with an asterisked footnote in one of his, um, papers.

The Daily After One Year: Some Lessons Learned

Richard Curtis

Is that a bad thing?  Not necessarily.  Though more and more adults are adopting digital reading habits, they are encouraging their kids to read print books and in fact promoting something akin to Luddism, such as sending them to schools where no digital devices are to be found (see High-Tech Kids in No-Tech Schools).  At bedtime they will put their Nook or Kindle down and go into their child’s bedroom to read a print-book bedtime story. So  when it comes to e-books it’s a matter of Do as I say, not as I do. And though picture book apps, including stories that “tell” themselves without parents present, are great fun, they just don’t seem to have the same appeal as the warm body and familiar voice of mommy or daddy.

Schools and libraries do not seem to be tripping over themselves to promote e-reading either. One good reason is that the children’s print business is one of the few sectors of the publishing industry that are thriving, so there is a strong financial incentive for publishers to maintain the p-book status quo.

But children form their own opinions about e-books and many reject them for very practical reasons. Because mobile phones are the device of choice for teens, the small screen size and short battery life are deterrents to e-reading.  The price of e-readers is prohibitive for many kids, who get along fine with borrowing books from the library or from each other.  And speaking of borrowing, DRM restrictions on sharing e-books is another dampening factor for teens, just as it is for adults.

For years we have expressed skepticism that, due to their high distraction quotient, screens are the best medium for young readers (see The Medium is the Screen, the Message is Distraction), and (with the exception of autistic children), there has been little recent evidence to the contrary.   In a recent New York Times article, K, J. Dell’Antonia reported an observation by Lisa Guernsey of the New America Foundation’s Early Education Initiative that “when we read with a child on an e-reader, we may actually impede our child’s ability to learn.”

“Children sitting with a parent while an e-reader reads to them, Dell’Antonia writes, “understand significantly less of what’s read than those hearing a parent read. Researchers at Temple University, where the study was done, noted that parents reading books aloud regularly asked children questions about the book: ‘What do you think will happen next?’ Parents sitting with the child while a device read to them (like a LeapPad or some iPad apps) didn’t ask these questions, or relate images or incidents in the book to the child’s real life. Instead, their conversation was focused on how to use the device: ‘Careful! Push here. Hold it this way.’” (Details in Why Books Are Better than e-Books for Children)

Does that mean that the next generation will reject e-books?  Not likely.  But as research develops about the reading habits and learning and retention of children using e-books, we may see a greater balance between electronic and printed books than the e-fatuation that has us in its grips today. If we don’t – well, see Digital Distractions Producing a Nation of Morons?

Richard Curtis

One significant feature of iBooks2 is that it enables students to create their own books, enhance them with pictures, music, movies, videos, and texts from other sources and publish them, thus “inspiring kids to want to discover and want to learn,” as the Apple executive put it.

All well and good.  But isn’t it likely that the pictures, music, movies, videos, and texts from other sources published in these books will belong to somebody else?

These books will be published, uploaded into the iBooks store and sold there.  Unless the authors clear the rights to that content, such sales may be infringements of someone’s copyrights and Apple will be faced with the same kind of spamming that Kindle is combating.

Apple has the obligation to review the content it posts on the iPad and make sure that it does not infringe on the copyrights of others.  Will Apple have the time and manpower to police countless books and vooks, texts and theses? Not likely.  But surely they will not risk incurring liability for selling stolen goods.

If kids want to discover and learn, then the most important educational tool Apple could offer, as an adjunct to its iBooks2, is a primer on copyright. If Apple doesn’t instruct users on that fundamental legal principle, it will need to create an app for defending itself and its authors against copyright infringement lawsuits.

Richard Curtis