Raja Jasti’s Blog - Renaissance Thinking

May 26, 2009

Transforming Books

Filed under: Internet, Media, Technology, Trends — Tags: — Raja @ 8:15 am

Fortune takes a look at Amazon’s next revolution:  transform the book business with kindle.

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(Fortune Magazine) — On a bright May morning Jeffrey Bezos descended from atop Mount Seattle unto the press corps. He appeared casually on stage in a standing-room-only theater in New York City. Like another messenger of long ago, he carried a tablet. And he said unto the people: “Ladies and gentlemen, I’m excited to introduce Kindle DX.” Keyboards tapped. Shutters clicked. And as the Amazon founder and CEO turned a 9.7-inch display toward the masses, they saw an inscription: The New York Times.

We live in a culture of product lust, in which every new release is hyped and deconstructed, only to be dismissed in favor of the next shiny web-enabled wedge of plastic. But Kindle DX, a large-screen e-reader designed to optimize the presentation of newspapers and textbooks, bears little resemblance to anything else in the gadgeteria. The $489 tablet technically is portable but slides comfortably into no pocket. With all the sex appeal of a bamboo cutting board, it would look more at home in Sur La Table than Best Buy (BBY, Fortune 500). It will impressively download any of the 285,000 e-books available at Amazon.com in less than a minute. But it features a black-and-white display with a crippled web browser, no video, and not even a backlight. It’s a brash example of a single function trumping broad ambition.

Apparently doing one thing well is enough, at least for now. Amid the malaise of the retail sector, Amazon (AMZN, Fortune 500) blew past expectations when it reported 24% year-over-year earnings growth in the first quarter. A key driver was Kindle DX’s predecessor, Kindle 2, a $359 device that made its debut in February. As consumers everywhere curtailed spending, Kindle 2 was flying off Amazon’s virtual shelves. “Kindle sales have exceeded our most optimistic expectations,” Bezos declared at the time.

And now, in rapid-fire succession, the company has unveiled Kindle DX to greater expectations still. While newspapers have always been part of the Kindle playbook, Kindle 2 presents content on a display roughly the size of a paperback. The large-screen DX is designed to favor the type of graphics-heavy presentation found in college textbooks. Thanks to an accelerometer, the display can also be viewed sideways, broadsheet-style. Which means that packed inside the device is a burden so large that one can hardly imagine it fitting within a 10.4-by-7.2-by-0.38-inch frame. It’s meant to be a savior.

The device has been called the iPod of reading, but unlike Apple’s music player, the new Kindle has been met less with lust and awe than with hope and wonder. Could this rather plain-looking and pricey gadget actually pull off something so monumental as reversing the slide in book publishing and saving newspapers? Um, maybe?

***

In the comfort of Seattle headquarters a week after the DX event, Bezos is surrounded by handlers who mind his clock, police his conversation, fetch water, and signal to him from the far side of the room. Dressed in jeans and an oxford shirt, he’s genial and conversational but religiously on message. Even his famous projectile guffaw seems premeditated, a human laugh track inserted to denote intended levity.

Kindle is sometimes referred to as an e-book reader. But that’s a bit of a misnomer, because even the original Kindle (which now looks clunkier than a first-gen iPod) was designed with all types of long-form narrative in mind. Newspaper subscriptions were available at launch (editorial content is delivered every morning by four for a monthly fee of up to $14.99), and they quickly rose to the top of the bestseller list, where they remain today.

The willingness of Kindle owners to purchase daily content should be an obvious lesson - the business is news, not paper - and further expose the foolishness of giving everything away on the web. “I don’t want to oversimplify what’s happening in media. It’s very complicated,” says Bezos. “But I find it hard to believe that the primary way of reading newspapers 10-plus years from now is going to be on printed paper.”

What’s Amazon’s interest in hastening the move to digital? “The math is compelling,” he says. “There is a genuine opportunity to make the cost structure of printing and distribution much more attractive.”

May 17, 2009

Are we wired to acquire?

Filed under: general — Tags: — Raja @ 2:52 pm

Seed magazine reviews the book ‘Spent’ written by univ of new mexico psychologist geofferey miller.

 

Why do some people pay a 100,000 percent premium for a Rolex when a Timex is such a sleek and efficient timepiece? Why do others kill themselves at work just so they can get there in a Lexus? Why do we pay 1,000 times more for designer bottles of water when the stuff that gushes from our taps is safer (because it’s more regulated), often tastier, and better for the planet? And how do we convince ourselves that more stuff equals more happiness, when all the research shows that it doesn’t?

In Spent, University of New Mexico evolutionary psychologist Geoffrey Miller contends that marketing—the jet fuel of unrestrained consumerism—“is the most dominant force in human culture,” and thus the most powerful shaper of life on Earth. Using vivid, evocative language, Miller suggests that consumerism is the sea of modern life and we are the plankton—helplessly tumbled and swirled by forces we can feel but not understand. Miller aims to penetrate to the evolutionary wellsprings of consumerist mania, and to show how it is possible to live lives that are more sustainable, more sane, and more satisfying.

Spent is about “display” consumerism. It leaves aside strictly utilitarian purchases like baloney or tampons. Understanding display consumerism, according to Miller, requires adding one part Thorstein Veblen to one part Darwin. From Veblen’s classic Theory of the Leisure Class (1899), Miller appropriates the concept of “conspicuous consumption,” whereby people live and spend wastefully just to flaunt the fact that they can. From Darwin, Miller appropriates sexual selection theory—“costly signaling theory” in modern parlance—whereby animals compete by sending signals of their underlying genetic quality. As with the gaudy displays of peacocks, purchasing decisions frequently represent attempts to advertise “fundamental biological virtues” like “bodily traits of health, fitness, fertility, youth, and attractiveness, and mental traits of intelligence and personality.” Why spend $160,000 on a prestigious university degree? To make a “narcissistic self-display” of one’s intelligence and diligence. Why stuff yourself into a push-up bra and smear pigment across your lips and cheekbones? To try to enhance—or fake—your fertility signals.

Eroding prices of books

Filed under: Media, Trends — Tags: , — Raja @ 1:24 pm

Amazon wants to be the itunes of books. This is a double edged sword. Users expect flat $9.99 pricing for any book. Can it work? NYT looks at this issue.

 

Just how much is a good read worth?

David Baldacci, the best-selling thriller author, learned what some of his fans think when “First Family,” his latest novel, went on sale last month. Amazon initially charged a little over $15 for a version for its Kindle reading device, and readers revolted.

Several posted reviews objecting that the electronic edition of the book wasn’t selling for $9.99, the price Amazon has promoted as its target for the majority of e-books in the Kindle store. Hundreds more have joined an informal boycott of digital books priced at more than $9.99.

“I love Baldacci’s writing,” wrote one reader, who decided not to buy. “Sorry Mr. B — price comes down or you lose a lot or readers. I’ll skip your books and move on!”

It was a chilling sentiment for authors and publishers, who have grown used to an average cover price of $26 for a new hardcover. Now, in the evolving Kindle world, $9.99 is becoming the familiar price. But is that justified just because paper has been removed from the equation?

For many readers, this may sound like sufficient reason. Buying music, after all, is so much cheaper now that there aren’t discs and plastic cases. Shouldn’t the same logic apply to books? And if not, won’t the temptation to steal electronic copies online simply increase?

Publishers and authors say it is much more complicated than the cost of paper and shipping. The lower e-book price “is not sustainable,” said Mr. Baldacci, whose novels regularly rise to the top of hardcover best seller lists. If readers insist on cut-rate electronic books, he said, “unfortunately there won’t be anyone selling it anymore because you just can’t make any money.”

Publishers are caught between authors who want to be paid high advances and consumers who believe they should pay less for a digital edition, largely because the publishers save on printing and shipping costs. But publishers argue that those costs, which generally run about 12.5 percent of the average hardcover retail list price, do not entirely disappear with e-books. What’s more, the costs of writing, editing and marketing remain the same.

“The concept that because a book is an e-book it should automatically be priced significantly lower than a paper book is one we don’t agree with,” said Carolyn Reidy, chief executive of Simon & Schuster. “What a consumer is buying is the content, not necessarily the format.”

In making such arguments, publishers risk being viewed much like recording labels were a decade ago: greedy corporate titans who hide behind claims of high costs and creative entitlement as they resist the transition to a digital landscape.

For the moment, say some publishers, Amazon is effectively subsidizing the $9.99 price tag for new book titles in digital form by paying publishers the same $13 it pays them for a new hardcover title with a list price of $26. It’s a classic “loss leader” situation. Although Amazon won’t comment on the arrangement, the online bookseller is using low-price e-books as a lure to persuade consumers to pay $359 to buy a Kindle, or $489 for the new, larger Kindle DX.

But Amazon presumably won’t be willing to take those losses forever. And publishing executives say they fear that Amazon eventually will pressure them to accept lower payments for e-books.

Of course, Amazon is not the only retailer in the e-book market: Sony sells popular new releases for its Reader device for an average of $11.99. Fictionwise, recently bought by Barnes & Noble, offers New York Times best sellers for $9.95, though it charges hardcover prices for some e-books.

But for now, at least, it is Amazon that publishers fear most, because it has spent the most to popularize the idea of the e-book. Already, Amazon, which commands 5 percent to 15 percent of the book market, claims that for titles with Kindle versions, digital sales represent about 35 percent of total sales.

As the critics of Mr. Baldacci and dozens of other authors whose Kindle editions have been priced higher than $9.99 show, any attempt to raise e-book prices will be met with fierce resistance from readers who, not so long ago, thought they were getting a bargain when Amazon offered a new hardcover title for closer to $17.

May 12, 2009

Print Book Piracy

Filed under: Internet, Media, Trends — Tags: — Raja @ 9:55 am

Printed book are not immune to online piracy. Onlide document sharing sites are posing a major piracy problem to the print book industry.

Ursula K. Le Guin was irked to find copies of her work online.

Ursula K. Le Guin, the science fiction writer, was perusing the Web site Scribd last month when she came across digital copies of some books that seemed quite familiar to her. No wonder. She wrote them, including a free-for-the-taking copy of one of her most enduring novels, “The Left Hand of Darkness.”

Neither Ms. Le Guin nor her publisher had authorized the electronic editions. To Ms. Le Guin, it was a rude introduction to the quietly proliferating problem of digital piracy in the literary world. “I thought, who do these people think they are?” Ms. Le Guin said. “Why do they think they can violate my copyright and get away with it?”

This would all sound familiar to filmmakers and musicians who fought similar battles — with varying degrees of success — over the last decade. But to authors and their publishers in the age of Kindle, it’s new and frightening territory.

For a while now, determined readers have been able to sniff out errant digital copies of titles as varied as the “Harry Potter” series and best sellers by Stephen King and John Grisham. But some publishers say the problem has ballooned in recent months as an expanding appetite for e-books has spawned a bumper crop of pirated editions on Web sites like Scribd and Wattpad, and on file-sharing services like RapidShare and MediaFire.

“It’s exponentially up,” said David Young, chief executive of Hachette Book Group, whose Little, Brown division publishes the “Twilight” series by Stephenie Meyer, a favorite among digital pirates. “Our legal department is spending an ever-increasing time policing sites where copyrighted material is being presented.”

John Wiley & Sons, a textbook publisher that also issues the “Dummies” series, employs three full-time staff members to trawl for unauthorized copies. Gary M. Rinck, general counsel, said that in the last month, the company had sent notices on more than 5,000 titles — five times more than a year ago — asking various sites to take down digital versions of Wiley’s books.

“It’s a game of Whac-a-Mole,” said Russell Davis, an author and president of the Science Fiction and Fantasy Writers of America, a trade association that helps authors pursue digital pirates. “You knock one down and five more spring up.”

Sites like Scribd and Wattpad, which invite users to upload documents like college theses and self-published novels, have been the target of industry grumbling in recent weeks, as illegal reproductions of popular titles have turned up on them. Trip Adler, chief executive of Scribd, said it was his “gut feeling” that unauthorized editions represented only a small fraction of the site’s content.

Both sites say they immediately remove illegally posted books once notified of them. The companies have also installed filters to identify copyrighted work when it is uploaded. “We are working very hard to keep unauthorized content off the site,” Mr. Adler said.

Several publishers declined to comment on the issue, fearing the attention might inspire more theft. For now, electronic piracy of books does not seem as widespread as what hit the music world, when file-sharing services like Napster threatened to take down the whole industry.

Publishers and authors say they can learn from their peers in music, who alienated fans by using the courts aggressively to go after college students and Napster before it converted to a legitimate online store.

“If iTunes started three years earlier, I’m not sure how big Napster and the subsequent piratical environments would have been, because people would have been in the habit of legitimately purchasing at pricing that wasn’t considered pernicious,” said Richard Sarnoff, a chairman of Bertelsmann, which owns Random House, the world’s largest publisher of consumer titles.

Until recently, publishers believed books were relatively safe from piracy because it was so labor-intensive to scan each page to convert a book to a digital file. What’s more, reading books on the computer was relatively unappealing compared with a printed version.

Now, with publishers producing more digital editions, it is potentially easier for hackers to copy files. And the growing popularity of electronic reading devices like the Kindle from Amazon or the Reader from Sony make it easier to read in digital form. Many of the unauthorized editions are uploaded as PDFs, which can be easily e-mailed to a Kindle or the Sony device.

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