- Peter Thiel’s Class 4 Notes — in perfect competition, marginal revenues equal marginal costs. So high margins for big companies suggest that two or more businesses might be combined: a core monopoly business (search, for Google), and then a bunch of other various efforts (robotic cars, TV, etc.). Cash builds up because it turns out that it doesn’t cost all that much to run the monopoly piece, and it doesn’t make sense to pump it into all the side projects. In a competitive world, you would have to be funding a lot more side projects to stay even. In a monopoly world, you should pour less into side projects, unless politics demand that the cash be spread around. Amazon currently needs to reinvest just 3% of its profits. It has to keep running to stay ahead, but it’s more easy jog than intense sprint. I liked the whole lecture, but this bit really stood out for me.
- Kickstarter Disrupting Consumer Electronics (Amanda Peyton) — good point that most people wouldn’t have thought that consumer electronics would lend itself to the same funding system as CDs of a one-act play about artisanal beadwork comic characters. Consumer electronics as a market has been ripe for disruption all along. That said, it’s ridiculously not obvious that disruption would come from the same place that allows an artist with a sharpie, a hotel room and a webcam a way to make the art she wants.
- OmniOS — OmniTI’s JEOS. Their team are engineers par excellence, so this promises to be good.
- Understanding Amazon’s Ebook Strategy (Charlie Stross) — By foolishly insisting on DRM, and then selling to Amazon on a wholesale basis, the publishers handed Amazon a monopoly on their customers—and thereby empowered a predatory monopsony. So very accurate.
Subscription sales models tested, a "holy trinity" of web opportunities missed, and publishing's future assessed.
Here are a few stories from the publishing space that caught my attention this week.
Publishers test subscription model waters
TED Books launched a new app this week, TED Books for iOS, that not only allows them to sell directly to consumers, but also to experiment with a subscription sales model. Laura Hazard Owen at PaidContent notes that the app also is built on the Atavist publishing platform, which allows for audio features and embedded video. Hazard Owen describes how the app sales model works:
“Readers can buy the books a la carte for $2.99 each or can purchase a subscription: $14.99 for three months of books. That price includes six books, with one new one delivered every two weeks. ‘Founding subscribers’ — those who sign up in the first 90 days — get free access to all the books in the back catalog. (Authors are paid advances and also get a royalty each time their book is downloaded.)”
Jacqui Cheng at Ars Technica took a hands-on look at the app and concluded “that book and subscription prices were right in the sweet spot, though the app itself (while functional) could use a little more polish before it becomes great.” Her observations include issues with subscribers not being able to preview content before downloading; the comment system only applies to books as a whole — there’s no way to highlight a section and comment within the book; and comments also are only viewable to those who’ve already purchased the book, not to potential book buyers. Glitches in social media sharing features, however, seemed to present the most frustrations. Cheng writes:
“I tried to share a TED Book over Facebook via the app, but when I tapped the Facebook option, a white screen came up in the center for a second and then went away. And when I tapped the Twitter button, it simply brought up a blank Twitter box like the one built into the rest of iOS. There was nothing attached — no book summary, no screenshot, not even a link to TED for my Twitter friends to click on. The e-mail sharing option only starts a new e-mail with a picture of the book cover attached. Needless to say, I was pretty disappointed with the sharing options here — they almost may as well not even be included in the app for how limited they are by default.”
You can read Cheng’s entire account of the app here.
In other subscription experiment news, Next Issue launched its all-you-can-read magazine subscription app for iOS this week, a few months after launching on Android. Laura Hazard Owen reports at PaidContent that the platform currently offers 39 titles, “with more expected later this year,” and outlines the various subscription options, from $1.99 to $14.99 per month. But is it worth the money? Hazard Owen concluded that the $14.99 premium subscription ought to be a bargain for her family, “except it doesn’t include print issues and two of the magazines [they] subscribe to, Martha Stewart Living and the Economist, aren’t available, at least for now.” Lauren Indvik at Mashable also addressed the value proposition and notes: “According to the Bureau of Labor Statistics’s 2010 Consumer Expenditure Survey, the average American household spends $100 per year on reading materials, a category that includes books, newspapers and magazines.”
Value aside, is it even a model that will work in the age of digital disruption? Mathew Ingram argues at GigaOm that the biggest problem Next Issue faces is that its model of selling entire magazines doesn’t fit the way people are starting to consume content — articles-at-a-time, Flipboard style — and that the platform is “paving a cow path.” Ingram also describes the bigger picture issue that is plaguing magazines as well as newspapers:
“If Next Issue were to pull individual articles out of its magazines and collect them based on popularity or some other algorithm — or made it easy for readers to share individual articles and other content outside the walled garden of the app itself — that might make it more appealing to those who have gotten used to a Flipboard-style model for consuming content. But it’s not clear that magazine publishers would be interested in doing that. For them, the game is about increasing circulation figures so they can try to keep their advertising revenues from bottoming out as print-based revenue continues to decline.”
You can read more on Ingram’s thoughts here.
Battery life and device weight keep E Ink devices on wish lists.
Ereaders are now commodities — improvements are incremental at best — but the fundamental qualities of these devices still make them compelling.
Thoughts on how Microsoft could play a role in Barnes & Noble's stores.
Joe Wikert: Microsoft should use its investment in B&N's digital business to create an end-to-end consumer experience that rivals Apple's.
Trust your customers to do the right thing and you'll earn their business.
A DRM-free world is one where retailers will find it much harder to create a monopolistic position that locks you into their device or format.
Ending DRM is fine, but we also need great buying and reading experiences.
Abandoning DRM won’t change the publishing landscape unless B&N, Kobo and others force the issue through innovative devices and apps. In fact, Joe Wikert says that same innovation can occur with or without DRM — so why wait?
A good ebook sample can turn a browser into a buyer.
Joe Wikert: "My gut tells me the revenue missed by not converting samples into sales is a much larger figure than the revenue lost to piracy. And yet, the publishing industry spends a small fortune every year in DRM but treats samples as an afterthought."
Ebooks Numbers, Data Monopolies, Single Sign On, and Large Network Use
- E-Reading/E-Books Data (Luke Wroblewski) — This past January, paperbacks outsold e-books by less than 6 million units; if e-book market growth continues, it will have far outpaced paperbacks to become the number-one category for U.S. publishers. Combine that with only 21% of American adults having read a ebook, the signs are there that readers of ebooks buy many more books.
- Web 2.0 Ends with Data Monopolies (Bryce Roberts) — in the context of Google Googles: So you’re able to track every website someone sees, every conversation they have, every Ukulele book they purchase and you’re not thinking about business models, eh? Bryce is looking at online businesses as increasingly about exclusive access to data. This is all to feed the advertising behemoth.
- Building and Implementing Single Sign On — nice run-through of the system changes and APIs they built for single-sign on.
- How Big are Porn Site (ExtremeTech) — porn sites cope with astronomical amounts of data. The only sites that really come close in term of raw bandwidth are YouTube or Hulu, but even then YouPorn is something like six times larger than Hulu.
Agile FBI, Lucky Meat, Hiring Introverts, and Future of Reading
- FBI Uses Agile (Information Week) — The FBI awarded the original contract for the case management system to Lockheed Martin in 2006, but an impatient Fulgham, who was hired in 2008 to get the project on track, decided to bring it in house in September 2010. Since then, the agency has been using agile development to push the frequently delayed project across the finish line. The FBI’s agile team creates a software build every two weeks, and the pre-launch system is now running Build 33. The agency is working on Build 36, comprised mainly of features that weren’t part of the original RFP. Fulgham says the software is essentially done.
- Lucky Meat (Matt Webb) — the man is a mad genius. If you believe “mad” and “genius” are opposite ends of a single dimension, then I will let you choose where to place this post on that continuum. Then when you choose your tea (or coffee), the liquid is shot as if through the barrel of a gun BANG directly at your face. We use facial recognition computer chips or something for this. It blasts, and splashes, as hard and fierce as possible. And then the tea (or coffee) is runs down the inside slope of the “V” and is channeled in and falls eventually into a cup at the bottom apex where it finally drips in. Then you have your drink. (But you don’t need it, because you’re already awake.)
- Quietly Awesome — how are your hiring processes biased towards extroverts? See also I don’t hire unlucky people.
- How We Will Read (Clive Thompson) — Clive is my hero. I feel like we see all these articles that say, “This is what the e-book is,” and my response is always, “We have no idea what the e-book is like!” All these design things have yet to be solved and even thought about, and we have history of being really really good at figuring this out. If you think about the origins of the codex — first we started reading on scrolls. Scrolls just pile up, though. You can’t really organize them. Codexes made it easier to line them up on a shelf. But it also meant there were pages. It didn’t occur to them for some time to have page numbers, because the whole idea was that you only read a small number of books and you were going to read them over and over and over again. Once there were so many books that you were going to read a book once and maybe never again, it actually became important to consult the book and be able to find something inside it. So page numbers and indices became important. We look at books and we’re like, “They’re so well designed,” but it took centuries for them to become well-designed. So you look at e-books, and yeah, they’re alright, but they’re clearly horrible compared to what they’re going to be. I find it amazing that I can get this much pleasure out of them already. AMEN!