Snowball careening downhill–look out below!

In the April 27 Industry News from Publisher’s Weekly, Amazon reported that sales in their ebook division jumped 63% in the first quarter of 2011.  That was pretty much their good news.   Their bad news, underlaying a certain amount of spin, was that even though revenues were up across the board, their actual income was down.  What’s up with that?  Amazon is investing in even more technology and more infrastructure to meet ever-increasing demands.

According to the report, Kindle owners are larger-volume ebook buyers than non-Kindle owners.  That can’t be a surprise, considering that Kindle owners are locked into purchasing ebooks from Amazon.  This is a marketing strategy that is older than dirt, after all.  The earlier version went something like this: “the razor is cheap, it’s the blades that are expensive.”  The new, cheaper advertising-supported Kindle is being released early in order to take even greater advantage of this.

Amazon’s recent announcement that they will provide Kindle format ebooks via Overdrive is also part of this strategy.  Up until this week, Kindle owners couldn’t borrow ebooks from their libraries.  Now, they know they will soon be able to, for an admittedly undefined value of soon.  This eliminates a clear advantage that Barnes and Noble’s Nook had.  However, to recap the latest round of the ereader wars, B&N just announced a major upgrade to the color Nook that pushes it way above just an ereader.  The review of the new color Nook in this morning’s USA Today shows that the new Color Nook is more of a baby Android powered iPad than just an ereader.

But back to the point about Kindles, what this means is, more reasons for people to buy Kindles or fewer reasons for people not to buy Kindles, so, more Kindles out there.  And Kindle owners buy more ebooks from Amazon than non-Kindle owners, however else they might get their ebooks.  The announcement about the Amazon/Overdrive deal got an amazing amount of press for something relating to libraries, but it was all related to the fact that the name “Amazon” was in it.  Amazon got a lot of mindshare out of something that will probably cost them next to nothing.

It’s also clear from the sheer numbers that ebook buyers actually buy more books than print book buyers.  No surprise there.  If you are sitting in an airport, shopping for ebooks before your flight, guessing what you’ll like, there is a certain amount of glee at the sheer ease of purchasing without having to think of carrying the things.  There are other factors.  Ebooks are still generally cheaper than hardcovers, Michael Connelly notwithstanding.  There is also the instant gratification factor that simply can’t be underestimated.

What does this mean for libraries?  Just Amazon saying that Kindle users would be able to borrow ebooks from libraries generated huge press, even without specifics.  Demand for ebooks, which is already huge, is going to skyrocket.  The amount of general interest press that covered the Amazon announcement showed that ebooks and ereaders have reached well beyond techies and young people and whatever early adopter market people might have thought and spread well into general users everywhere.  For anyone who doubts this, next time you travel, while you are at the airport waiting for your flight, just look around at the number of people reading on ereaders or iPads vs. “dead tree” books.  The percentage will be 1/3 or more.

Many public libraries have the collection philosophy “give ’em what they want”.  It is due to that philosophy that we have invested heavily in best selling fiction, and moved as deeply as we have into AV material.  But ebooks seem like a whole new ball game in some ways.  Especially since we are trying to divide a budget pie that is shrinking into an increasing number of pieces, and ebooks are just another piece.  The same title is now demanded in print, large print, audiobook, ebook, and eaudio, and multiple copies of each.  Meanwhile the demands for DVDs, music and children’s material certainly have not gone away.  Because ebooks are new, it can seem simplest not to invest, or not to invest a lot, to say that there isn’t enough demand in the community, or that the library can’t afford it. Or that people still want print books, not ebooks.  But if you build a good ebook collection, they will come.  It takes time and money.  Unfortunately, those are the two commodities no library seems to have enough of these days.

However, the demand for ebooks is like the proverbial snowball rolling down the hill and picking up speed, as well as rocks and twigs, as it rolls down.  If your library has that philosophy of “give ’em what they want”, then ebooks are looking more and more like what a significant segment of the public wants. The trick will be smoothing the rocks and twigs out of that snowball as we give it to them.

OverDrive and Amazon and Kindles

People who have Amazon Kindles will finally be able to borrow ebooks from their local library.  This is a good thing for user service, whatver questions librarians may have about the forces that are moving behind the scenes on this one.

Why do I say this is a good thing for user service?  Saying yes beats this scenario–excited patron calls up, because they just purchased a new Kindle and they want to borrow ebooks from their local library.  The staff has to tell them that the library doesn’t have anything for them, and has no way of knowing if they ever will.  Patron is generally upset, because, well, they just bought this new toy and want to use it.  Patrons do not want to understand about formats, they don’t care about Amazon’s lock-in on its consumers (if they did, they wouldn’t have bought a Kindle in the first place), and they pay taxes in the community and they feel entitled to the services they paid for.  If ebooks are available for other people, they should be available for everyone.  There is no survivable way to explain to a taxpayer that they should have done their research first.  For front-end service, this solves a major problem.

But all the questions about exactly how this is going to work are still open.  Based on OverDrive’s own blogpost/press release, they are going to simply make any ebook currently available to libraries available in Kindle format in addition to the current formats.  Whether this means both PDF and ePUB or just ePUB remains to be seen.  The OverDrive blog is very clear that there will not be anything available that isn’t available now, so Simon & Schuster and Macmillan are not coming to the library table, and the 26 lending limit for Harper Collins titles will still be crosses that libraries have to bear.  Or, to put it another way, #HCOD is alive and well, and it has been joined by #AZOD.

There is an awful lot that we still don’t know about this deal.  Just because there is no “up front” cost to libraries to add the Kindle format ebooks, doesn’t mean this won’t somehow figure into OverDrive’s platform fee.  And it probably has to.  And it’s worth it to be able to say “yes” to all those patrons instead of “no”.  But many libraries would prefer to see the price tag openly, and opt in or out accordingly. 

All the press releases agree that users will be able to retain their margin notes from one checkout to another, but none say how that will work.  It sounds like patron data is being retained, but by whom?  By Amazon?  Is that opt-in or opt-out, or is there any option at all?  OverDrive says that “users’ confidential information will be protected”, but who is deciding what is confidential, and who is doing the protecting?

Also, when is this actually going to happen?  Library users who have Kindles have probably been calling their local libraries all day.  Saying “soon” will only hold them for so long. 

Has anyone else noticed that this announcement came very hard on the heels of the announcement about Recorded Books moving their digital audio to Ingram?  And that was on top of the Ingram/OCLC announcement about making ebooks available to ILL through Ingram.  Wouldn’t it be great if a second player with good contacts in the industry challenged OverDrive for their monopoly?

Why I’m willing to pay for ebooks

Please don’t get me wrong, I like to get things for free as much as the next person.  But the word free has multiple meanings.  Free as in kittens, or free as in beer being two well-known examples.  Free kittens usually have long-term ancillary costs, such as food, vet bills, love, grief, scratched furniture, frayed electrical cords, aggravation, additional rent or security deposits, etc., etc., etc.  I am intimately familiar with this particular definition of “free”.  Free beer is free, unless you buy the next round.  But beer, well, someone gives you a beer, you drink it, it’s over.

Should ebooks be free because there are no costs to print, warehouse and transport them?  Ebooks don’t require a physical bookstore with rent and light bills and heating and A/C to sell them.  So they should be free, right?

What goes into the creation of a book?  Not the container, the content.  The book has to be written.  That’s a creative process on the part of the writer, or writers.  Whether the book is printed or electronic, the actual creation doesn’t change for the creator.  They have to invest time in that creation, whether it’s invention, research, or a combination of the two.  If the reading public desires more, the authors need to be compensated for their time, otherwise, they will have to find a different way to make a living.  There are people who write their first book, or first couple of books, in their spare time from a day job that pays the bills.  But they write a lot fewer books than folks whose full time job is writing.

There are other parts of the process that would still need to go on, even in an all ebook world.  Editing is importing!  Editing doesn’t have anything to do with whether a book is print or electronic, it has to do with making a book better.  Everyone who reads a popular authors’ work over time can tell exactly when that author stopped being edited.  The books get longer, and they are less “tight” and not quite as good.  I call it “describing the wallpaper”.

Crystal Dragon coverDragon Variation coverBooks sell better with covers.  Library books circulate better with covers.  Ebooks will probably sell better with good cover art.  A quote from science fiction editor Lou Anders in the January issue of Locus Magazine probably said it best. “I won’t buy a book with a crappy cover, and I am finding I won’t buy an e-book with one either.  E-books need to have compelling cover art…”   A picture really is worth a thousand words.  While there is a print edition, the print cover is used to sell the ebook.  When there is no print edition, the publisher has to create cover art.  Good cover art sells books.  Cover art is produced by artists, who are also creators who need to get paid for their work.

One of the things that has turned into a brave new world for everyone is promoting books, especially works by new authors.  How does anyone decide to spend money on someone they’ve never heard of?  It turns out that people are browsing “bricks and mortar” bookstores but buying ebooks.  We look, we touch, we click.  It turns out that Barnes and Noble had a really great idea when they allowed Nook users to browse the entire bn.com while they were inside a B&N store, just like you can sit and read any book on the shelf, as long as you don’t leave the store.  Sampling is good.

Books sell a lot by word of mouth.  I like a book, I tell everyone I know.  Blogs and lists and Facebook multiply that effect.  But how to get that ball rolling?  Different channels of promotion have been created.  Publishers need people to work those channels.  It’s an investment in keeping the company in business, so that it can, in turn, discover new writers, and promote them, which feeds my addiction to reading.

But I expect to pay less for an ebook than a hardcover, and so do most people.  Instinctually, the fact that there is no thing that I can hold, no physical piece that has to be toted and shipped and stacked and stocked, means that it should cost less than a hardback.  Also, I can re-sell or give a hardback (or paperback) away when I’m done.  An ebook still feels slightly ephemeral.  And Amazon or B&N can take it away without my consent if things go awry, and Amazon has done this in one famous case. (1984 anyone?)  When Michael Connelly’s latest best seller, The Fifth Witness, initially cost more on the Kindle than it did as a hardcover, Amazon users revolted by giving the book one star reviews and vowing to either wait or purchase it in hardcover elsewhere.  The Kindle price has since dropped below the hardcover price.

I’m willing to pay for the creative process.  I want more books that I want to read, and I expect to pay for that privilege.  One way of voting for which books I want to read more of is with money.  But not an unreasonable amount of money.  If I buy an ebook, I’m not willing to pay for the storage costs of the print book, since I didn’t purchase that and I’m not getting the benefits that go with buying a physical item.

Free ebooks make great teasers.  The freebies exist as introductions to new authors, or series.  They are designed to get me hooked, so that I will then purchase more books by the same author.  It is supposed to be a win-win.  If I don’t like the book, I’ve lost nothing but a little time.  If I like it, I’ll buy more, and the author and publisher win.  But I am willing to pay.

The only way Amazon gets me in the Kindle Store

eReaderIQ iconI just received an update from eReaderIQ.  This is a service that lets you know when there are new free books added to the Kindle store.  It will also tell you about price drops, and recent Kindlization of previously non Kindle titles, as well as an advance search feature for the Kindle store.  I don’t have a Kindle, and I don’t even like Amazon all that much, but I love this service.

Barnes and Noble logoWhen I was purchasing “dead tree” books, I got them from Barnes & Noble.  Strictly speaking, I usually got them from www.bn.com, but that’s still not Amazon.  They had a real store I could visit when I wanted truly instant gratification, and, when I only needed moderately quick gratification, B&N shipped faster without my having to pay extra for Prime Membership.

When I bought an ebook reader, I bought a Nook.  One of the big selling points was that it had some built-in flexibility.  I could use it for ebooks from the library, if I was willing to jump through some hoops (that process was fairly teeth-grinding the first time).  I could also get free books from Baen and Project Gutenberg, while still having the advantage of being able to shop for books in bed at midnight if I really didn’t feel like reading anything I had on hand.  (The local Barnes and Noble currently hands out a cheat-sheet with every Nook they sell that gives new Nook owners the handy-dandy instructions on how to borrow ebooks from the library and read them on their new Nook.  This is a win-win that Amazon just can’t match.)

But now I have an iPad, and it changes things.  An iPad is essentially vendor agnostic.  As long as “there’s an app for that”, it can be anything I want it to be.  Or, everything I want it to be.  It’s a Nook and an Overdrive Media Console and a Bluefire Reader and, occasionally, a Kindle.

eReaderIQ tells me when there is a new ebook available for free in the Kindle store.  Even if I absolutely hate the title, I absolutely love getting the information.  And, unfortunately for the state of my various TBR lists and piles, sometimes I find the title interesting enough to download.  I know this is a loss-leader for Amazon.  They hope that people will get the freebie and then buy other books by the same author.  If I want something that’s not free, I’ll either check the library, or, purchase from B&N, so it’s not working on me, but the concept is excellent.  And, it absolutely proves the point made by librarians that letting people read the actual work is what turns people on to getting more books, including buying more books!  The freebie is a teaser, and I’d be willing to bet that both Amazon and the authors who put their books up think it works for them in the long run.

Baen Books LogoBaen Books has a terrific explanation of this from their perspective, written by Eric Flint, who has also put his money where his mouth is as an author.  The Baen Free Library makes the first couple/three books in many of their most popular authors’ series (including Flint’s) available for free download.  They know that if a reader likes the first two or three books, they will feel compelled to read the rest of the series.  Think of it as a gateway drug.

Project Gutenberg logoBut it’s the service aspect of this that I keep thinking about.  As a service, this is absolutely fantastic.  Barnes and Noble does not seem to have anything to match it, or if they do, they are hiding it quite thoroughly.  Project Gutenberg even manages to do this, and they won’t make a profit on it, but Barnes & Noble can’t seem to manage it (neither can Google).  What’s up with that?

Can libraries do the same thing?  Just think about it for a second.  Send out an email to patrons of what the library added, today.  Just today.  Every single day.  And/or what the library placed on order today.  And/or all the ebooks added to the library’s ebook site.  There really isn’t any need to get fancy about this, eReaderIQ certainly doesn’t.  It’s the books, and it’s all the books. There’s no added text, there’s no filtering, just the publisher blurb and the cover picture.  If I don’t like the books, I can delete the email or ignore the twitterfeed.  This could be automated, and it would provide a daily reminder of what the library does that’s good for readers.  And it would be an automatic update to the library’s twitterfeed and Facebook page every day.  Think of the possibilities!