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

When electricity was discovered and harnessed, Jews applied the strictures against working on the sabbath to electric appliances and determined that activating them was a form of work. Today, observant Jews will not flip a light switch, turn on a stove burner or press an elevator button. (Some hospitals and other institutions visited by Jews on the sabbath have elevators that automatically stop on every floor.)

Now consider the Kindle. Though it’s commonly referred to as an electronic device is it an electric one? The prevailing Jewish wisdom is that it is, and reading a book on it is the equivalent of turning on an electric light. But there’s more…

Because the screen of a reading device is not a fixed medium – it is a blank matrix on which words are produced by running a tiny electric current through it – orthodox Jews believe that the act of turning a page is a form of writing. And writing is prohibited on the Sabbath. But there’s still more…

Even if one were to read the Torah – the core Jewish scripture – on the Kindle on the sabbath, it would still be unacceptable. Why? Because Kindles, one modern orthodox rabbi pointed out in an article in The Atlantic, “in epitomizing our weekday existence, aren’t appropriate for the Sabbath.”

Thus blogger Morris Rosenthal’s brainstorm – “a special Kindle that can bypass Sabbath prohibitions by disabling its buttons, turning itself on at a preset time, and flipping through a book at a predetermined clip” – would not get past rabbinical scrutiny. You can read scripture on your e-book six days a week, but on the seventh you have to give it a rest and read the p-book instead. Sorry, Kindlach, you’re out of luck.

Of course, you don’t have to be Jewish to put your Kindle down on the sabbath. Many moderns of all faiths observe Internet Sabbath, a day off from the frenzy of electronic communications and social media. Blogger Nat Friedman tried it a year ago and wrote “After just a few minutes, it felt like a vacation.” Somewhere a rabbi is smiling with satisfaction.

Read People of the E-Book? Observant Jews Struggle With Sabbath in a Digital Age by Uri Friedman. And here’s a fascinating Wikipedia entry on use of electricity and appliances on the Sabbath.

Richard Curtis

This blog post was originally published on Digital Book World as Talmud Scholars: OK to Read Scripture on E-Book on the Sabbath?

If Amazon’s policy holds true the books will be carried exclusively on the Kindle e-reader.  As Publishers Lunch‘s Michael Cader points out, however, the news “brings attention again for Barnes & Noble, and whether they will carry the print editions. Since Amazon says the ebooks will be Kindle exclusives at the outset, and BN has already declined to carry titles from Amazon Publishing in their physical stores, the policy is unlikely to change.”

B&N has stated its position about Amazon Publishing’s books in no uncertain terms.

Richard Curtis

This blog post was originally published on Digital Book World as Amazon’s Fleming Acquisition May Not Bond with B&N

Wired

The analysts were in agreement about how far e-readers have come since the first generation (or second, for the Rocket Book predates the Kindle by almost a decade). “Entry-level e-readers have become better, faster, and more stylish,’ they note. “Considering their low cost, featherweight portability (6 to 7 ounces), battery life (up to a month per charge), and superior readability, it’s easy to justify having an e-reader and a tablet. Also, the lack of distractions on a dedicated reader is nice.”

Weighing the comparative merits of the Amazon Kindle, Barnes & Noble Nook Simple Touch, Sony PRS-T1 and Kobo Touch, the team reviewed such features as the gadget’s price and depth of its bookstore. They also seized on the flicker factor.”Some e-readers flicker more between pages than others,” they write. “If you think a flicker is slightly annoying in the store, it will drive you absolutely nuts by page 200 of that Murakami novel.”

They rated the reading devices on a scale of 1 to 10:

1.  A complete failure in every way
2.  Barely functional; don’t buy it
3.  Serious flaws; proceed with caution
4.  Downsides outweigh upsides
5.  Recommended with reservations
6.  A solid product with some issues
7.  Very good, but not quite great
8.  Excellent, with room to kvetch
9.  Nearly flawless; buy it now
10. Metaphysical product perfection

We won’t keep you in suspense, but the top-rated e-reader turns out to be…the Kobo Touch, with a rating of 8 (Excellent, with room to kvetch): “Our surprise winner is the most natural e-ink reader we’ve ever used. Its touchscreen is the fastest and most responsive, yet it’s also smart enough to ignore unwanted inputs (a common failing in this class of devices). The shopping experience isn’t as personalized or directed as Amazon’s or Barnes & Noble’s, but the store’s pricing and selection are catching up.”  The kvetch? “No hardware buttons for page turns. Limited selection of periodicals. No Twitter integration.”

Alas, the Sony Reader merited only a 4: “Poky, cumbersome user interface. Disappointing store options. Expensive for what you get.”  For all reviews click here. But when you’re through, keep going.  The responses from readers started at vitriolic (“Is it too much to ask for basic relevance?”, “Brevity is no excuse for a level of incompetence on display here,” and “I already was pretty sure that you were a brainless blatherer when you name dropped Murakami. Then you confirmed it with ‘No Twitter integration’”) and descended to:

“Welcome to Wired…You are surprised by this ‘journalism’? You must not come here often. They have a bunch of kid contributors who are probably getting paid no better than the kids across the Pacific. Either the editors are non-existent, or they simply don’t care. It really seems sometimes these kids can write anything they want to and it just gets published.”

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.

“When customers subscribe to The New York Times ($19.99 per month), they get a Nook Simple Touch for free,’ writes Dara Kerr on CNET.

Can B&N, Amazon, or any other e-reader manufacturer afford to give away its hardware?  Sure.  Because as time goes by, the value of the gadget declines and the value of the content bundled on it rises.  And in the case of the free Nook Simple Touch, it’s a way of giving away an e-reader that may be a bit of a drug on the market anyway.  Sales of black and white dedicated reading devices like the Simple Touch or the original Kindle are sagging as consumers opt for the color and hyperactivity of tablets.  This was confirmed early in January when E Ink holdings reported an 84% drop in sales. E Ink is the print technology that powers black and white reading devices.

Read Barnes & Noble offers free Nook with NYT or People subscription

Content providers are given a choice ranging from a minimum of 20% to a maximum of 100%.  It’s a good policy, as it helps readers to browse.  In one case, however, readers were inadvertently given a window to get an author’s book free.

You probably don’t pore over the terms of your agreement with Kindle Direct Publishing, but if you did you would learn that one of KDP’s policies is that they have the right to lower the price of your e-book to match that of its competitors. This is an age-old marketing retail practice and far from extraordinary. However, the activation of this policy in the case of author James Crawford caused him serious inconvenience and potential losses in the thousands of dollars.

The problem occurred when KDP, believing that rival Barnes & Noble had dropped the price of Crawford’s book to free, changed its own price to zero as well. In point of fact, writes the author, B&N had not gone to zero.  It had merely offered the first three chapters at no charge as a come-on to customers.

Before he could straighten it out with Amazon he had lost revenues on more than 5100 copies given away at 100% discount.  We say “straighten out” but now that his book Blood Soaked and Contagious has been restored at his requested list price, Amazon has informed him it will not not refund revenues lost.  “We’re sorry, we’re unable to pay royalties for your sales when your title was listed at $0 on our website,” he was told in writing.  In writing because, as KDP users have discovered, “KDP does not have telephone contact with the outside world,” laments Crawford.

The complete cautionary tale may be read here. Two things you need to see for the following saga to make sense

Richard Curtis

Play nice!

When Amazon selected Laurence Kirshbaum to head its New York-based book publishing initiative, many publishing people greeted the news with unalloyed enthusiasm.The former CEO of the Time Warner Book Group is one of the few truly branded personages traditional publishing and it was hard to imagine a better choice to amalgamate the two cultures of pre- and post-Kindle. It still is, and with the spring 2012 debut of Kirshbaum’s first list we’re ready to welcome it with a cheer.

Not everyone else is, however. Articles describing Amazon’s move from retail partner of publishers and bookstores to feared rival have become a genre of their own, and journalists are vying with each other for purple prose awards. Hide your children. Amazon is coming to get you was the subheadline of an Atlantic Monthly editorial on the subject by Rebecca J. Rosen. Rosen’s remarks typify the terror expressed by fellow pundits: “Amazon’s conquest of every step of a book’s journey into existence is nearing its final stages. First, it pushed out the brick-and-mortar bookstores, shuttering even the giant Borders. Next, with its Kindle it began to step on the toes of book publishers. But now, it is going right for publishers’ hearts: their authors.”

These concerns are far from groundless, but what we have lacked so far is an objective evaluation of Amazon’s performance to date as a publisher.  Given Amazon’s notable secrecy, there’s little point in looking to the company for help.  But Laura Hazard Owen, writing for PaidContent.org, has rendered a masterful analysis drawn from a variety of sources, plus inference, intuition, educated guesswork and good old journalistic shoe leather.

Owen’s conclusion? “Amazon Publishing hasn’t killed print yet.” Like its legacy publishing competitors, Amazon has won some, lost some, and broken even on some others.

In order to play on the same stage as Knopf or Farrar, Straus, there is one major obstacle for Amazon to clear away. It will have to reach out to bookstores and chains, who have been so traumatized by Amazon’s steamroller approach that many, including Barnes & Noble, refuse to buy anything with the Amazon imprint. B&N insists that Amazon retail its titles on the Nook, the same as other trade publishers like HarperCollins or Simon & Schuster are permitted to do.  Amazon needs to woo some major authors away from their traditional homes, says Owen.  But if those writers fear that their books will not be distributed in stores, or that their e-books will not be sold on the Nook, it may be that no amount of money will lure them into Amazon’s camp.

If anyone can successfully navigate these rapids it’s Larry Kirshbaum. But he and his team have their work cut out for them.

The Truth About Amazon Publishing

Richard Curtis

The first shot was fired when Amazon acquired e-book rights to a trove of superhero graphic novels from DC Comics. Some one hundred volumes featuring Superman, Batman, Green Lantern, Watchmen and Neil Gaiman’s Sandman were secured to promote Amazon’s newly released tablet, the Kindle Fire.

All well and good – except that Amazon’s e-book rights were exclusive. Meaning that rival Barnes & Noble would be deprived of the right to carry the titles on its Nook e-reader.  B&N could still sell the print editions, however. But that’s a big however. B&N told DC that if they couldn’t have e-book rights they didn’t want anything. Whereupon they pulled the print editions of those DC graphic novels from 1300 stores.

The result was a lose-lose-lose-lose-win situation.  DC lost sales – as well as face for “placing greed over its fans.” in the words of New York Times‘s David Streitfeld. Barnes & Noble lost bookstore and Nook sales too, plus the nose it lost to spite its face.  Customers and fans lost access to the books in Nook (and Sony and Kobo and Apple iPad). And at least one author is unhappy – Neil Gaiman, who was blindsided by Amazon’s ploy. ““I was very excited when I heard that Sandman was coming out as an e-book, but was heartbroken when it was announced that I and my kids won’t have it on our readers.”

It will come as no surprise that the lone winner was Amazon, which nailed the exclusive and got a boost from B&N’s abandonment of the print edition.

This is just the first of many such battles. Says Streitfeld: “As Amazon seeks over the next few years to expand its tablet line, these collisions over content are likely to become routine.”

Details in In a Battle of the E-Readers, Booksellers Spurn Superheroes

Richard Curtis

Graph by Silicon Alley Insider

Years ago it became clear to us that we were heading for a Gillette Event.  That day may be only months away.

The Gillette Event is the day that the price of e-readers drops to $0.00.  The above chart shows that since 2007 the price of a Kindle has slid sharply from $399 to its current $79 (at least for one model). The slope is so steep it’s hard to avoid any other conclusion than that Free is inevitable.

The Gillette Event is named after King Gillette, the inventor of the safety razor and marketing genius who conceived the scheme of giving away the razor and selling the blades.  The analogy to e-readers is clear: give away the device and sell the content.

I’ve never believed that information wants to be free but it looks like the devices that provide it are just begging for gratis status.

Does it make sense for Amazon to go on charging anything at all for the Kindle?  There are compelling arguments in favor of taking the ball across the Zero goal line.

The first is that Amazon has never been afraid to sell the Kindle at a loss in order to undercut the competition. Some observers say that low-end models of the device are breaking even.  So, going into deficit to gain a competitive advantage would not plunge the company into trouble by any means. A million Kindles at $79 per is $79 million – hardly a ding in Amazon’s revenue armor. A free Kindle would give Amazon a decisive lead in the e-reader arms race from which rivals might never recover.

The second argument for free Kindles is that the amount of paid content carried on the e-reader has soared to the point where critical mass sustained by media sales is within reach. As an inducement to consumers the device would come pre-loaded with a starter set of rich content. No charge for your first set of razor blades.

These speculations were prompted by an interesting article by Pascal-Emmanuel Gobry in Business Insider Research, How Amazon Makes Money From The Kindle.

The author discusses the larger Kindle environment he calls the Kindle Ecosystem. At the headwaters of that ecosystem is the device itself.  A free Kindle could create a flood of business that would dominate the marketplace for the foreseeable future.

By the way, the Gillette strategy isn’t limited to Amazon.  Are you listening, Barnes & Noble?

Richard Curtis

But after extolling the zero returnability of e-books I am slightly abashed to report that -  at one venue at least -  e-books are indeed returnable for full refund, no questions asked.

How abashed am I? 1.15330021291%  That happens to be the rate of returns viewed on the retailer record of one publisher’s  sales database over a one month period.  The retailer was Amazon Kindle.

A 1+% return rate is infinitesimal compared to that of the conventional trade book industry, where returns of 50% are not uncommon and even 75% is not unheard of. So we are definitely not complaining.  But we’re curious to know how e-book returnability works and who besides Amazon offers it.

To answer the second question first, it is not easy to ascertain the returns policy of Amazon’s rivals, but from what I have been able to ascertain, Barnes & Noble, Random House, Wiley and Simon & Schuster explicitly prohibit return of e-books. The policies of Kobo, Sony and Apple are not clear.

Amazon’s policy is stated clearly on its website:

Content you purchase from the Kindle Store is eligible for return and refund if we receive your request within 7 days of the date of purchase. Once a refund is issued, you will no longer have access to the item. To request a refund and return, click the Customer Service button in the Contact Us box in the right-hand column of this page to reach us via phone or e-mail. Please make sure to include the title of the item you wish to return in your request.

No strings seem to be attached to Amazon’s policy,  But I wondered why anyone would return an e-book.  Fantasy author Lindsay Buroker speculates that customers simply order the wrong book. “It’s very easy to buy ebooks (one-click) straight from your device,” she writes. “The Kindle also promptly asks you if it was a mistake and you want to return the ebook. My guess, based on the fact that my returns usually pop up simultaneously with corresponding new sales, is this is what happens most of the time.”

Other reasons include excessive typos, formatting issues, and the old standby: someone just didn’t like the book. The latter may not be as prevalent as you would imagine because of look-inside-the-book sampling that helps consumers judge a book before clicking the Buy button.

And of course, some people may download the book, read it before the seven day deadline expires, and return it.  The low returns rate suggests either that only a tiny percentage of Amazon customers are moochers, or more of them would be if they could only read faster.

However negligible Kindle returns may be, accepting them is good policy and another example of Amazon’s customer-friendly approach to retailing.

Richard Curtis

But as much as he would like to focus on developing products envisioned by the retiring founder Steve Jobs (who will remain active in the company for as long as he is able), he may first have to shore up the iPad as it comes under fire from rivals seeking a share of Apple’s commanding market for the tablet computer.

In particular Cook will have to deal with Amazon, which is not only developing a tablet of its own but planning to offer it to consumers dirt-cheap.  Amazon has not concealed its strategy of selling its Android-driven gadget at a loss – hundreds of dollars below iPad’s base price of $499 – just to pull the rug out from its competitor, according to Garrett Sloan of the New York Post.

Amazon has a long way to travel to bite into Apple’s 25 million unit lead, but no observer of Amazon would bet against its coming up with a product, a price and a marketing campaign that could close the gap faster than anyone would believe possible. Maybe Jeff Bezos should name the new tablet Orange, to facilitate comparison between Apples and Oranges.

Details in $99 tablets: Price is right

Richard Curtis