Round up #29: China, UK Agency Model, Overdrive to phones

Round up #29: China, UK Agency Model, Overdrive to phones

One note on the Round-Up category: these are now sometimes stories I’ve already tweeted.  That’s where I often first report news stories, but I obviously can’t comment on them much there…and I’d rather do it here for you. 

Kindles leap the Great Firewall of China

This story has been somewhat widely reported and is really significant. 

China famously blocks access to some websites, including Twitter and Facebook.  That doesn’t mean that you can’t tweet at all when you are in China (you may be able to do it at your hotel), but the average citizen doesn’t typically have access.

Since the Kindle can connect through 3G (at least the more expensive of the Kindle 3 models), it appears to be able to reach sites while in China in a pretty unrestricted manner.  People in China are reporting getting access through their Kindles to otherwise restricted sites.

The Kindles are there unofficially.  Amazon can not currently ship Kindles or Kindle content to China.  Yet, some people in China are recommending getting the devices (you can get them on auction sites, on the gray market, or by bringing them in yourself).  That’s right…they can’t buy directly from Amazon (unless they indicate an outside residency) but they still suggest the devices…partially for the web access. 

Once the government realizes this access exists, they may shut it down somehow…but I’m not quite sure how.  I don’t think they want to shut down cellphones, and that’s what these devices look like to the network.  They can probably figure out a way, though.  It becomes increasingly difficult to contain technology, however…

BreitBart article

The Agency Model arrives at Amazon.co.uk

 Yes, it’s been a busy news year…but I’ve been surprised that the Agency Model hasn’t been a bigger story in the mainstream news.  Maybe it’s that book buyers are a smaller group than, say, soda buyers.  If Coke and Pepsi had said that they would set consumer prices (not the grocery stores), I think that would have brought the media outrage.  Especially if they said they were also going to typically raise prices a quarter.  I know, this isn’t paperbooks…it affects e-books.  Maybe e-books are seen as being an elitist thing…they may not think of this as raising prices on disadvantaged people who read.  There was a sense that e-books were anti-book somehow…although it was booklovers who really embraced them.

I think there is a pretty good chance that the Agency Model goes away in the US within 18 months.

So, it was disappointing to see that Amazon.co.uk is now on the Agency Model with Hachette, HarperCollins, and Penguin.  There was some thought that set prices might not fly in the UK…there was a big deal about that with paper. 

Amazon had sent an e-mail to UK customers, saying that it would fight against higher e-book prices.  It also said some interesting things about Agency Model books in the US in this post in the UK Amazon Kindle community:

 Agency Pricing

Thanks to The Bookseller for linking to that post.  I don’t follow the UK Kindle forum…it would take up a lot of time, and I can’t post there.  Honestly, I’d be frustrated that I couldn’t help people.

This, though, is a really interesting post for US Kindleers as well. 

One of the more interesting points:

“Unsurprisingly, when prices went up on agency-priced books, sales immediately shifted away from agency publishers and towards the rest of our store. In fact, since agency prices went into effect on some e-books in the US, unit sales of books priced under the agency model have slowed to nearly half the rate of growth of the rest of Kindle book sales.”

Yes, they flat-out say that based on their experience, the higher Agency Model prices in the US “… have caused booksellers, publishers and authors alike to lose sales.”

The obvious question then is why would publishers put the Agency Model in place?   Well, it’s possible that their analysis doesn’t match Amazon’s, but there is more to it than that.   With higher prices they don’t need to sell as many books.  Those newer prices aren’t half as again as much, but Amazon was talking about a slowed rate of growth…not that Agency Model books only sold half as many books.  Controlling the prices probably sounds good…but it’s really hard work and hard to do well.  As a former bookstore manager, I have an empathy with consumer price-setting.

Publishers also suggest that the Agency Model creates more of an equity between small sellers and big sellers.

Yes, that’s true.  Before the rise of the internet, there was a concern in the US that large chain bookstores were crushing what we call “Mom and Pop” stores.  Are those “Mum and Da” stores in the UK?  Anyway, small stores tended to charge full price, large stores tended to discount at least some books.  The large stores would make it up on volume and lower costs of sale.  Are there equivalent smaller and larger e-book stores?  Sort of…but is the solution to eliminate discounting?

It may be the threat of legal action in the US (for one, by the Attorney General of Connecticut) that causes publishers to abandon the Agency Model here.  If they drop it here, would they drop it in the UK?  Maybe…it’s going to be interesting to watch.

The Bookseller article

Public library books to iPhones, iPads, and Android Devices

Some people who own a Kindle also buy a NOOK, a Sony, or other EBR (E-Book Reader).  Why?  So they can get public library e-books. 

Amazon could easily allow that, and I’ve written previously about why I don’t see a high priority of it happening in the near future (although it certainly might happen).

When you get an e-book from a public library, you probably get it through Overdrive.com

Overdrive has announced that it is going to have apps for iPhones, iPads, and Android devices.

That means you’ll be able to read public library e-books on those devices.

There are Android tablets, with more likely to be on the way.

This may be a good thing for Amazon…some folks might feel that satisfies their need for that library book they might need once in a while.  It does mean you’d probably be reading it on a backlit device, at this point.  However, someone who owns both a NOOK and a Kindle might break either way at some point…better if they don’t own both, at least for Amazon.

When Android E Ink devices are a market force, this could be more of a popular choice…and that might hurt the NOOK more than the Kindle.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

4 Responses to “Round up #29: China, UK Agency Model, Overdrive to phones”

  1. gous Says:

    Safe to say that Amazon will not allow library lending anytime soon. Bet you that the coming Amazon tablet will accept only apps from the Amazon Android market and will not allow any Overdrive app!
    Also fail to see how B&N loses as you suggests, any Nook sold for mainly library reading is simply a loss to them, why do you think they have never advertised this function? The name of the game is store lock-in and library book lending is no good in that respect.

    • bufocalvin Says:

      Thanks for writing, gous!

      If there is an Amazon tablet, it may, as you suggest, behave similarly to the NOOKColor and have a specialized store.

      Barnes & Noble loses if people do not buy NOOKs for library use because they have less opportunity to seduce them to the NOOK side. If you have a NOOK, and B&N signs an exclusive deal for a title, or a family member gets a NOOK, you might begin to use it for other purposes than library books. There are a lot of possibilities for how things might go in the future, and it’s better to have established a beachhead. 🙂

      It also seems to me that they don’t lose if someone buys a NOOK and only uses it for library books…they just don’t gain much on the transaction (except that beachhead).

  2. Tom Semple Says:

    Overdrive support is contingent on publisher agreements. They determine which titles are available and on which formats. Their library lending model enforces artificial scarcity since each book can only be lent out to one patron at a time. Any given library has nothing like the selection available at any of the major ebookstores. Therefore the feature actually encourages sales, which is the only reason publishers and device makers go along with it.

    Some Mobipocket format titles are available through Overdrive. Some people even go to the extent of changing a bit so they can load these on their Kindle – and the book ‘expires’ at the lending period! This is because Mobipocket DRM is the same as .azw DRM. If Amazon is not currently exposing this feature, it is because they have other priorities and opportunities and/or do not have the necessary agreement to do so from publishers. It is a business decision, but it is not driven by the threat library lending would pose to Amazon sales. There is no such threat. A Kindle that supported library lending would inevitably result in additional Amazon sales.

    • bufocalvin Says:

      Thanks for writing, Tom!

      You make some interesting statements in your comment. I do believe Amazon would lose sales if library lending of the most popular titles were available. I’m basing that in part on anecdotal evidence from people who say that they borrow library e-books (on other devices) in lieu of buying them. That doesn’t mean that additionally generated sales might not be more than the lost sales, of course. In many cases, the borrowed book might not have been purchased…that’s another factor. I’m curious: are you aware of any studies (or market research) that show that making an e-book available for public library lending increases the sales?

      My guess is that EBRs are now moving more towards the more casual reader…I don’t have any studies to back that up, though. 😉 Casual readers may be less concerned about owning the titles than serious readers….making the 14 day lending period more attractive to them…even if they don’t buy the book afterwards.

      I certainly think library e-book loans could encourage sales…I just don’t have the data. Businesses don’t always make their decisions based on data, certainly. That’s a complex process.

      By the way, I was curious (that’s the way I am) 🙂 , so I took a look at the most popular fiction e-books at my local library. One thing before I run some numbers: they do buy more than one license for some books. Each license typically is for a single user, but a library can buy more than one…just like they might buy more than one paperbook copy.

      Rank at Library/Rank in Kindle store

      1/5
      2/150
      3/631
      4/18
      5/73,356
      6/3,299
      7/140,526
      8/1,944
      9/970
      10/7,359

      That doesn’t mean that having the e-books didn’t increase the sales, and of course, I’m only looking at a tiny sample by using one library.

      I think that libraries lending the EBRs (E-Book Readers) themselves is something of which we will see more in the future…it is happening now, but I’ve had people ask me about it.

      Interesting times, hm? It’s all pretty complicated…and that can make it fun to examine. 🙂

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