As someone who makes a living in the advertising industry, I have a vested interest in seeing the adoption of emerging platforms, like the eBook Reader, reach levels that make them attractive to big brands. Right now, there are too few devices in the hands of consumers to attract any of our clients.
In the interest of tenable analysis, this post will focus on end-to-end reader platforms with persistent connectivity supported by a publishing and distribution platform. No one knows exactly how many eBook readers have been sold, but reputable sources peg Amazon as having sold somewhere north of 3 million Kindles and Barnes & Noble at 70,000 Nook(s or i?). At the time of publication, Apple has sold zero iPads.
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Publishers are thrilled by the iPad because it gave them leverage to negotiate with Amazon. Using that leverage they negotiated 'agency' pricing which means higher prices at launch that go down when paperbacks get released. This means that they've bet heavily on an unproven distribution model, the iPad, and simultaneously angered 3 million kindle owners who now have to pay higher prices for new releases.
Some may say this was bound to happen as new hardware proliferated, but if the aim is to sell eBooks to more than a narrow sliver of the potential market, this approach is at best wishful thinking on the part of publishers and at worst futile protectionism. Those expecting consumers to pay full price for eBooks with clearly lower production and distribution costs are dreaming in technicolor. The kind of rapid adoption we've seen with 'smartphones' and MP3 players before them, will require a pricing model that passes lower production and distribution costs on to consumers is critical. There is piracy risk here.
It's easy to look at the way publishers have moved to preserve their current pricing structure and come to the conclusion that they are making the same mistakes record labels and, to a lesser extent, film studios did before them but it's not that simple.
One difficulty with comparing eBooks to music is that consumption dynamics are very different. People simply can't consume the books the same way they do MP3s. Subscription pricing makes sense for music because people can consume thousands of songs each month. Not so for books.
When MP3s hit the music scene, CDs were chalk full of filler tracks that no one wanted. It took massive piracy and the near total destruction of the once powerful recording industry to pry the album model from the hands of the execs that controlled it. People may object to the high price of new releases, but there is not the same sort of palpable dissatisfaction with the the product itself.
Another angle to consider is delivery. MP3s are vastly superior to CDs because they aren't dependent on physical media and specialized hardware for playback and storage. Books are their own delivery vehicle that have at least one 'hardware' advantage over eBook readers, battery life. And, very few people have the need to carry more than one book around at a time.
Replay value has an inverse relationship with time invested to 'consume' a piece of media. On average it takes approximately three minutes to listen to song, two hours to watch a movie, and at least a week to read a book (with breaks). Anecdotal evidence suggests that, in the course of a year, people have appetite to listen to a single song perhaps 100 or more times, a really good movie perhaps two or three times, and a really good book perhaps twice in a lifetime.
Thus, it stands to reason that digital storage and delivery adds tremendous value to media that has high replay value and that value diminishes as the amount of time required to 'consume' a single piece of that media increases.
Other forms of print media that require less time to consume are perhaps better suited to these types of devices but are not yet set-up for it. For instance, there was a great deal of speculation around the iPad launch marking the New York Times' move to a subscription model. This makes sense only so far as it does online. People can get free news all over the place, so will they pay for The Times on the iPad. Some will, but most won't.
