Why has Amazon bought Mobipocket (a leading ebook reader software company and distribution channel) and booksurge (a POD company)?
That’s what everyone in the literary world is wondering. Here’s my guess. Amazon wants to back, support and control a ebook standard not backed by Microsoft or Adobe. And the first step to doing this is selling a dedicated ebook device.
If they weren’t going to champeon an ebook reader, why would they be so interested in ebook software? After all, they already offer ebook Microsoft Reader ebooks readable on PDA’s and cellphones. I can think of only two explanations: either they want to promote a nonMicrosoft standard for its own sake, or they plan to roll out a dedicated ebook reader for their standard. By controlling the hardware and software, they can also offer a platform for distribution which others can’t equal. Perhaps, like Netflix, they can offer exclusive content as well.
Amazon’s challenge is finding a way to sell ebooks at the premium price. The only way to accomplish this is to promote a platform and secure customer lockin. Offering a mobipocket ebook reader is an easy way to do this. If Amazon promoted one ebook standard (and endorsed one device or a family of devices), it would be hard for consumers to resist. Before it can convince consumers to pay $10 per ebook, Amazon needs to do everything possible to get a non-PocketPC/MS Reader reader into their hands (and before the market indicates a preference for one ebook standard).
Amazon should think about offering public domain works for free or next to nothing as an inducement to get devices into people’s hands and win reader loyalty. Owners of ebook devices are sophisticated enough to locate free content; a company that offers the right mix of free content with commercial content stands the best chance of standing out. As for me, I spend a lot of time on blackmask browsing through titles and reading comments. Amazon wants those eyeballs, and providing public domain titles would not poach off too much profits (especially if free sites are doing it anyway).
One important reason to sell ebooks is to control resale. People can’t resell ebooks (not without difficulty anyway), so amazon will always be able to sell things at “new” prices regardless of how old the ebook actually is.
Finally, it’s notable that amazon has gotten into POD with booksurge. I think they’ve recognized that self-publishing is going to overtake traditional publishing soon, and they want to get into it. (Amazon has a good infrastructure for setting up personal tipjars for example). Already Amazon took the lead in selling used books; if they charged people to upload/host ebook content, they could add a lot of value to the seller, buyer and the content creator (all at the same time!). It’s a fairly easy task to create content, upload it to amazon’s content management system and then output it in various formats (ebook, POD). If amazon doesn’t do it, somebody else undoubtedly will. Instead of being a company that sells book efficiently, they can become a bastion of self-publishing (in which they can extract profit from the content creator and the content consumer). At the moment there is a need for infrastructure that can receive, catalog and sell content in a standard way. All kinds of content, not merely content packaged by big publishers and copyright owners. That would be similar to the ebay business model, where the consumer brings the content to sell and ebay manages the commerce part. To close the loop, amazon needs to get a device in consumers’ hands capable of reading/playing their content. And Amazon needs to make sure that their content can’t be hijacked by someone in the hardware or software business. MS Reader, for example, could license its technology to certain vendors, or stop their support for Amazon content.
Amazon has substantial potential as a ebook platform. What stands in the way?
- Big publishers could balk at putting things into amazon’s proprietary format (especially if Amazon’s commercial licenses become ridiculously expensive or proprietary). The publishers could easily get together to back one kind of competing ebook standard. The fact that Microsoft has deeper pockets for DRM investment stands as a compelling reason to prefer Micosoft over mobipocket when push comes to shove.
- Mobipocket could suck as an ebook reader. Developers and content creators have complained about compliance with the OEBPS 1.2 standard. Quite frankly, if Microsoft produced a Tablet Reader with better quality print and features, unless the price were significantly higher, it’s doubtful that Amazon could compete.
- Consumers might never migrate to ebooks. That has been the case up to now, and it still requires a cognitive readjustment. This may have less to do with technology issues than the recurring fact that ebooks cost nearly as much as the book they are supposed to replace.
These are all reasons why Amazon’s gamble won’t pay off. On the other hand, amazon has a good brand name. Also, it is not wedded to traditional publishing in any way or to big publishing in general. Instead of publishing, Amazon can provide the tools for creating and selling content. It is in a better position to harness “micropublishing” and “self-publishing” than big name content distributors.
From my standpoint as an independent content creator, I worry that the Mobipocket Publisher program will be priced out of range of individuals. Right now it’s priced at $150. It probably is in Amazon’s interest to keep the mobipocket standard proprietary and yet open (like Adobe and PDF). But will they continue to keep the price relatively low?