Amazon now rules eBooks, and Libraries should pay attention (or, why I’m not worried that Amazon will say “All your book are belong to us”, and even if they do, why it doesn’t matter)

Amazon got it right – again. Today, they released a Kindle app for the iPhone, thereby allowing iPhone users to access Amazon’s eBook collection. This is big; iPhone owners were already reading eBooks on their devices using one of a variety of eBook reading applications like AnyStories to read romance novels and other short stories on their device. Now, Amazon can leverage the iPhone user base, and dramatically increase the number of potential purchasers of eBooks (clarification: customers for Amazon provided eBooks). When Amazon first came out with the Kindle, I was a bit surprised; I never figured Amazon as a device manufacturer. I still don’t see them as a device manufacturer, in the long term at least.

What I did see (and still do) was Amazon wanting to shore-up the eBook market in the same way Apple has led the online music sales business. Up until Amazon released the Kindle V.1, the leading eBook device was the Sony Reader. When Sony produced their Reader, they also created an eBook store where owners of the Reader could purchase content. My guess is that this really got Amazon’s attention. If there was a future in eBooks, wouldn’t the world’s largest traditional book retailer also want to be the world’s leading eBook retailer? And there was Sony, selling not only eBook hardware, but also getting into the eBook retail game. So, I imagine Amazon looked at Sony’s activities, and looked at Apple’s success with iTunes, and realized that they wanted to be to eBooks what Apple was to digital music, and to do that, they were going to need to push the eBook industry forward by creating a device; this device would also allow them to grab (or maintain, perhaps) the market lead in the eBook retail sector.

Coming back to the present, Amazon has done that. They probably exceeded their own expectations with the success of the Kindle 1.0. They were able to create an eBook ecosystem where their customers purchased content solely through Amazon. As Apple had done with digital music, Amazon was now doing with eBooks. But then, today, came the truly inspired strategy – they decided to leverage the success of the iPhone! Risky? Nope. Not only did they open up their catalog to iPhone owners, they also made sure their content could still only be used within a controlled environment, in this case software instead of hardware. Without conjecturing too much about profit margins and such, I’m willing to guess that Amazon is not making a lot of money on each Kindle; their real income stream is the content (I’m not sure what Apple’s balance is in terms of profit realized from ipod / iTouch / iPhone sales relative to content sold for those devices, but Apple has historically had very good profit margins on its hardware products), and Amazon is at heart a retailer, not a hardware vender. The more devices running Amazon eBook software equals more purchasers of Amazon eBooks.

I don’t see Amazon stopping with the iPhone. I see them cutting deals with other eBook manufacturers and other eBook-capable devices. And I think this is brilliant strategy on their part.

So, Libraries need to pay attention –  not because this will have a negative impact on libraries, because I don’t think it will. Libraries need to start paying attention because eBooks are now going to be big – very, very big. This doesn’t mean people will stop reading / purchasing / borrowing traditional books, but it does mean that we should expect to see a big increase in the use of eBooks and eBook content. And if I am correct, and we start to see the Amazon eBook application on additional devices, we will need to start paying very close attention to how our users interact with eBooks. The Kindle, while it has a nice display, has limited functionality outside of allowing a user to consume content. Might we start to see some additional functions showing up on devices that might be capable of more? Perhaps on the iPhone, we might see some touchscreen capabilities showing up, such as the ability to annotate. Perhaps, as e-Ink technology improves, and as additional devices support the Amazon eBook ecosystem, we’ll start to see more electronic textbooks, with not only static, but multimedia content imbedded within. And maybe, if the academic / research sector of the eBook market takes off, we might start to see a variety of scholarly support tools embedded in the Amazon eBook application, taking advantage of the hardware capabilities of the device on which it resides. As long as Amazon can maintain a significant marketshare in selling eBook content, they will have incentive to develop new features and capabilities to support use of their content, not just in a consumptive role, but in a more interactive mode as well. Gather, create, share(1), all on your iPhone, there’s a thought.

Another thought: Amazon will have this feature-forward incentive, as long as there continues to be enough competition in the general eBook ecosystem. If there is not robust competition, then Amazon’s financial incentive to increase functionality in their eBook software will diminish.

A final thought: Libraries provision access to information. We are now about to experience a rapid shift over the next 2-3 years in how many of our users consume book-length resources. How they interact with this content is going to change as well. We need to pay very close attention to these changing use patterns, so that we can understand how to support our users digital lifestyles. What we do isn’t changing; how we do it is. If we pay attention properly, we’ll create new and exciting service which support learning and research, regardless of how that content is acquired by our users.

1. “Gather, create, share” is a phrase credited to the extremely insightful Raymond Yee. But you probably already knew this.

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2 Comments on “Amazon now rules eBooks, and Libraries should pay attention (or, why I’m not worried that Amazon will say “All your book are belong to us”, and even if they do, why it doesn’t matter)

  1. One interesting thing is that Apple has always appeared to be using the iTunes Music Store as a loss leader for selling iPods, where the real profit for them was. Amazon appears to be doing the reverse, and planning on making the real profit from the content sales.

  2. Too true, just recently my local library gained amazon access for the Kindle books and everywhere you turn on the net is a promotion or prompt to buy the books and not just rent or checkout.

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