Amazon announced on Friday that the Kindle will make a “lending” feature available, allowing “owners” of a Kindle file to enable somebody else to read the book or magazine or newspaper for 14 days. Each purchaser of each ebook will be allowed to make only one such loan one time. They will not have access to the file themselves during the time it is “on loan.”
When Barnes & Noble announced exactly the same feature with the same limitations for their ereader about a year ago, in advance of the Nook’s arrival, many ridiculed the limitations. Among those who thought the offering was laughable was Jeff Bezos of Amazon.
I think this decision by Amazon makes some key points.
1. Whatever we call it, the “purchase” of an ebook is not a purchase in the way we buy a print book or a light bulb or a box of chocolates. It is a “license” more akin to what we buy when we purchase software online.
2. The corollary to the first point is to reinforce, once again, that publishing is a rights business and that all the thinking publishers do about commercial reality needs to take that point into account.
3. It is more difficult to introduce innovation successfully from a secondary market position. In this case, that’s true for two important reasons.
4. Behavior that has its analog in the non-connected world we used to live in will have entirely different applications with the capabilities that exist in a connected world.
Buying an ebook is a license, not a purchase
There has been high dudgeon in parts of the digerati world over the fact that people don’t “own” their ebooks the way they own print books. This often takes the form of opposition to DRM and pleas for open and standard formats that will allow anybody who acquires an ebook to treat it the way they treat a print book (sharing and lending and re-selling) with the exception, of course, that the person making the original purchase gets to do all these things without giving up possession of the item they bought.
That’s a pretty substantial exception.
Many publishers and many authors have seen allowing just about the same first use rights as ultimately untenable, although there are major exceptions concerning the application of DRM. O’Reilly Media and the new Harlequin imprint, Carina Press, for example, offer all their books DRM-free. They believe, and they are not alone, that enabling some open sharing induces far more sales than it cannibalizes.
Neither of these publishers put software barriers up to prevent behavior that would be commercially damaging, but you can bet if a marketplace developed for the files they sold for an individual user, they would find ways to at least attempt to prevent it. I asked, and Carina has told me explicitly that they still insist on protecting copyright, even though they don’t do so with software barriers.
We’re vending rights
The fact that publishers in the ebook realm are actually vending rights rather than making an outright sale has enormous implications. It means that the relationship with the end user is never done, quite a change from the 20th century paradigm where the end user is never even known! (Of course, publishers’ end users are often not known now because the retailers don’t share that information, but over time, despite some enormous complications because of regulations and entrenched positions, I still believe that is bound to change.)
Publishers run up against the rights question all the time. Enthusiasts for the emerging practice of “social reading”, which is built on the sharing of annotations of various readers, may not be thinking through all of the rights implications. If I write a book advocating gun control, for example, do I have the right to insist that my work not be “sold” with annotations by a member of the NRA taking issue with everything I write? Or, turning the question around, am I happy to have my account of the 1963 World Series turned into a more robust piece of IP with thoughts added by three old sportswriters, assuming I got a royalty on the new product they create?
Agents and authors are going to have to get into this to decide what works for them and what doesn’t. And, no doubt, they will come to a variety of different opinions, which will mean that different books will come with different rights offers. This increases the complexity of managing rights metadata across the supply chain and beyond the supply chain to the consumption chain.
Kindle’s move will increase the uptake for lending on the Nook, but will introduce some competitive disadvantage
The “lending” question was a pretty easy one for publishers to ignore when only B&N offered it. It could require going back to the agent in some cases and, in any case, it seemed to offer no real competitive advantage for any particular book title. I am told (I don’t have a Nook so I’m not sure there is any way for me to check) that B&N had something over 100,000 titles available for sharing, but they offer over a million titles on their site.
Now Amazon will bring their muscle to bear — the same muscle that enabled them to deliver more than twice as many titles on Kindle as had been available on Palm and an even higher multiple of what had been available on Sony when they introduced the Kindle device — to get publishers to agree to license the lending. And publishers will see no reason to discriminate against B&N in this case, so Kindle’s efforts will result in Nook having far more titles available for lending in a pretty short time.
An ebook market share for Kindle that I’d guess is at minimum between three and six times Nook’s will make publishers more likely to enable sharing. But a universe of device holders that much larger also means the sharing feature has that much more actual value. So Kindle’s participation makes the B&N feature more useful, on the one hand, by putting more books into it but disadvantages it competitively, on the other hand, by the same capability being enabled in an ecosystem with so many more participants. Overall, this isn’t necessarily helpful to the Nook, but I think headlines suggesting it will kill the B&N device like this one are, to say the least, a bit overwrought.
Lending isn’t just between you and your friends anymore!
Googling doesn’t eliminate serendipity! While doing some research for this post I was directed to this post on GoodReads where somebody is organizing around the Nook lending feature to enable sharing among complete strangers. This isn’t surprising but it demonstrates the creation of crowd-sourced infrastructure that converts the replication of the physical ownership experience into something that will systematically, without question, convert paid readers into free readers.
Of course, the current offerings from Kindle and Nook where each purchase can, at most, turn into one free rider, is controlled and manageable. But this demonstration of the ability of people to communicate and collaborate in networks should give some credibility to the notion that absolutely free and unfettered sharing, such as would occur in a world totally without DRM, will result in an acceleration of free-riding (or freeloading) replacing purchases.
I do believe we’re going there in the long run. I’ve said repeatedly that the price of content will be pushed inexorably downward and that over the coming decade or two it will be harder and harder to have a business built on selling content alone. But authors, publishers, and all those profiting by today’s content-selling paradigm need as much time as they can get to convert to completely different models. Some may manage to get there through my notion of “verticals” and garnering and then monetizing eyeballs. Others see a path through enhanced content and social sharing that could lead to different monetization opportunities (and social sharing, of course, is a component of verticalization as well.) But almost nobody is “there” (wherever “there” is) yet, and very few people even have an idea of what a future profitable world looks like.
I have mentioned more than once that I haven’t read a print book in three years. And although there are fewer doubters than I used to have, my expectation that the world of books becomes predominantly screen-based over the next decade still raises a lot of eyebrows. But I want to report that we’ve found a book that can not be replicated on a screen or in any app. It’s a great kids book from Workman called “Beautiful Oops” by Barney Saltzberg. The use of die cuts and foldouts and telescoping paper to change what you first see into someting else just wouldn’t have the same impact in an app. Congratulations to Peter Workman and his team for demonstrating that, sometimes, you can’t do better than you can do with print!
We bought “Beautiful Oops” for our 5-year old niece and I will admit that I read it (16 pages, maybe?) before we sent it off. I will continue to say I haven’t read a print book in three years; I’m admitting here that I’ll claim a short kids’ book doesn’t count. But everybody who read to the end of this particular post will know the truth.