if connected

At the 2011 Hay book festival I didn’t see a single eReader or tablet in the hands of a visitor. Yet main festival sponsor The Telegraph — a UK quality newspaper — devoted most of their stand to marketing their tablet app, and both Amazon and Apple advertised their eBook initiatives. The person giving away the free books for Apple’s iBookstore — see the lanyards below — was adamant that Apple would be offering iBooks on the PC/Mac soon as a part of iTunes. We’ll see, probably tomorrow.

While eReaders may seem to call book festivals and their featured author signings into question, I suspect the opposite will be book festival’s future: live performance by authors will become even more important.

Already, live music is critical for most artists, more so than recorded music deals. Already, book festivals are a forum for general debate on moral, political and other intellectual issues by panelists that have not just published a new book. eBooks will accelerate this trend. Authors’ role as pundits and live performers will re-kindle the oral tradition alongside digital print.

Also, eBooks will make it easier for festival attendees to choose a talk to attend on the morning of an event, download that author’s book immediately, read part of it, and come to the talk later the same day better able to enjoy the discussion and ask insightful questions.

For their Hay advert, Amazon amended their normal Kindle slogan to, “Telegraph Hay Festival finds in 60 seconds.” Smart. See below. (*)

* But they’re going to have to fix the mobile coverage first: UK Kindles had no reception! I only managed to download a book by using an Android smartphone to create a portable WiFi hotspot on a different mobile network.

This post was originally published on my Forrester blog.

Today, Amazon have launched a new Kindle that they are marketing internationally. Prior Kindle models were limited to use in the US. Key details:

• Big promotion in the centre of the front page of Amazon sites in the UK, France, Germany and Japan.
• Only for sale on Amazon.com and priced in USD at $279 (i.e. a $20 mark-up over existing Kindle2). Promotions above have links to Amazon’s US site to buy.
• Books are also for sale only via Amazon.com and are also priced in USD (at least for now).
• This is the first Kindle that uses a GSM-standard mobile phone radio — rather than CDMA — for wireless downloading of books, sync of reading position with other Kindles and the iPhone Kindle app (i.e. to drive Amazon’s Whispersync consumer cloud service).
• Uses AT&T’s mobile network and AT&T’s global mobile roaming partners for Whispersync.
• When outside the US, Kindle owners pay an additional charge for each book downloaded, currently USD1.99 per download. I imagine this also includes downloading PDFs via the email to Kindle conversion process and downloading small items like blogs or newspapers.

I’m frankly astonished that Amazon is marketing the above product internationally so strongly. Instead, it looks like a great fit for US residents who want to own a Kindle that works both in the US and when they travel abroad. Or, Amazon could have chosen a much softer and lower key international promotion on their various global sites.

For European or Japanese residents there are multiple barriers to adoption and use of this Kindle, which will cause serious issues for Amazon’s famed customer service reputation: As everything is currently priced in dollars, consumers outside the US will likely hit additional credit card fees when they buy; import of the Kindle will likely incur significant customs charges; and the per download roaming fee will rapidly add up to a significant sum given it hits on every newspaper or book download.

So, why have Amazon chosen to market this product so significantly on their various non-US websites today, ahead of the launch of international Kindle stores priced in local currencies?

I suspect this indicates that Amazon has failed to secure the international mobile operator partners it needs to offer Whispersync without per use fees, and by making such a big deal of this launch internationally Amazon hopes this will put pressure back on those partners to come back to the table. But if so, then why has the Kindle iPhone app not also been launched on those countries’ Apple App Store’s for use on the iPhone? The iPhone version wouldn’t have those same data roaming costs when a consumer is in their home country of the UK, France etc. as iPhones are sold with inclusive mobile data. Other thoughts? Please comment below.

Apparently the Palm Pre sends information about a users’ location, apps usage, and other diagnostics remotely to Palm every day. As the Palm Pre offers over the air software updates, Palm can alter the behaviour of the phone at any time during a users’ mobile contract.

The Pre isn’t alone in limiting what features a connected device’s owner may control:

• Cable and satellite TV providers routinely upgrade and change the functionality of their customers’ set-top boxes remotely and without asking permission first.
• Phones sold with contracts are routinely locked to that operator which limits the ease with which for people may re-sell phones that they own. (Although the practice of long contracts of this type is limited by law in countries such as Belgium and Denmark).
• The iPhone has the ability to report where it is without the current person holding it knowing — that’s what the find my iPhone function on MobileMe offers. Android phones with Google Latitude set up behave in a similar fashion
• Amazon’s Kindle eBook Reader enables Amazon to remotely delete books and other items from the device.
• Modern games consoles, PCs, even Blu Ray players could enable firms similar power over devices that consumers own as all of those devices now routinely have Internet connectivity.

In the analogue world, when someone bought a TV set it was theirs to do with as they wished. People that bought books, videos or records had de facto complete ownership, regardless of the more limited copyright declaration printed on a book’s inside cover or on a record sleeve.

Just as we’ve seen a clash between consumer expectations of digital content ownership — that’s resulted in the end of digital rights management (DRM) for digital music sales — we are about to see a series of clashes around device ownership and privacy. But this will be more complex to resolve as more players are involved, and it will be harder for consumers to see what is really happening under the bonnet.

The digital era is finally arriving for books. I wonder if publishers, retailers, and device makers realise the Pandora’s box that they are opening.

Books are one of the last analogue media formats, and as such have proved largely resistant to piracy. Music went digital with the CD in the 1980s while TV and movies became digital with the DVD format a decade later. Both of these physical digital formats opened up those media types to piracy as anyone could create exact digital copies of the content and share them online. The CD and DVD did more than anything else to lead to the piracy explosion, more than the actions of the original Napster, or Pirate Bay, or Kazaa or any other online site.

By comparison, to pirate printed books consumers have to manually scan each page. Then an OCR process creates an approximate copy that needs extremely time consuming and tedious proofing to fix errors. Result – only the most popular titles get scanned and shared online.

eBooks change everything. They open up the book world to the threat of piracy. eBooks provide an already-proofed digital version. Content protection for eBooks using DRM systems is not the answer. The music industry is switching away from DRM for music sales because it doesn’t work and causes legitimate consumers pain. Just one person needs to break the DRM system and then share that knowledge online and then anyone can make copies. eBook companies are still persisting with DRM but I don’t see this lasting here any more than it has for music sales.

There’s a prisoner’s dilmma at work here: Individual publishing companies have the potential to steal competitive advantage if they move first and execute well with eBooks. But for the publishing world as a whole, such individual innovation will accelerate the arrival of the digital era and open up greater piracy.

This risk is not stopping eBook and eReader innovation. The digital era is arriving for books:

Retailers are proving the most innovative, perhaps: Amazon have built on their acquisition of Mobipocket with the launch of first the Kindle eBook reader gadget and then with the Kindle application for the iPhone. Barnes & Noble are moving with their purchase of Fictionwise (which incidentally has a store available inside the Stanza iPhone eBook reader app).

Publishers are innovating too. Penguin see their eBook sales as a key growth area. Harry Potter-publisher Bloomsbury just announced a link up with Exact Editions to offer digital titles to UK libraries (see this item on the Writers and Artists Yearbook blog). Tech publisher O-Reilly and other tech publishers are the most cutting edge non-fiction innovators with an extensive offering. Random House, Harlequin, Pan Macmillan offer a mix of samples and promotional titles on the Stanza app.

Publishing companies I’ve spoken with say digital is inevitable and I think they’re right. But I question if it makes any sense to speed the arrival of the digital book era. There’s one exception. Companies that make eBook reader devices will benefit in any event, whether consumers buy books, read free out of copyright books, or if consumers pirate books.

For everyone else, innovate, but be prepared for the coming digital storm that will overturn existing business models and increase book piracy.

Today, Amazon announced a new Kindle, as the company continues its transformation from a retailer of physical goods to one that is a major digital content (music, books, video) and Internet service (e.g. S3) company.

Few notes:

Amazon’s strategy is extremely US-centric, unlike their traditional retail reach. By choosing to include a US-specific mobile phone radio under the bonnet — the so-called Whispernet that is used to download books without a PC — Amazon limit their global presence. If Amazon wished to create a foundation for a global strategy then Amazon, like Apple, should have used a GSM/UMTS mobile phone radio. Now, Amazon must release different hardware if they want to offer Kindle in Europe or most of Asia. For consumers, this decision decision hits the product’s convenience: Kindle will only download books in the US, and in the future perhaps a few select countries that happen to use the same mobile technology, such as South Korea and parts of South America.

Kindle demonstrates how mobile strategy is not just a telco thing. Mobile is like the Internet, every company should have a vision for where they are going and how to embrace, partner, or compete, with the mobile market and players.

Amazon has become a device company, and is no longer purely a content play. Kindle is a combined content / hardware business models. What Amazon is selling is content: The latest books, supplied for the relatively low cost of $9.99 for bestsellers. But to sell that content they have become a device company.

Surprisingly, Amazon have not leveraged other ebook companies that they own. Mobipocket supplies both free ebook software and sells ebooks protected by DRM. But to date, Kindle ebooks are not compatible with Mobipocket software. If Amazon does offer ebooks on mobile phones, which was reported on Friday before the Kindle announcement, then Mobipocket will be a core part of Amazon’s toolbox. Syncing reading position between multiple devices — Whispersync, announced today — will certainly help Amazon in offering a great complementary service, i.e. a consumer will be able to use both Kindle and a mobile phone in tandem. Additionally Amazon own Booksurge, which is a an electronic self-publishing company, and yet are not fully exploiting Booksurge via Kindle.

Amazon’s exclusive on a new Stephen King story will test the robustness of Kindle’s DRM content protection. As the content is only available on Kindle, if it suddenly appears online on one of the piracy websites then that DRM has been broken. It will only take one person to break the DRM for numerous people to download a pirated version.

Note – Originally this was going to be posted on the work blog, but for some reason I can’t get Typepad to work now, all it seems to want to do is let me create ‘drafts’….