Why Amazon is winning the ebook format war

Two things have completely changed the ebook market in the past year in 2010:

  • Apple entered the ebook market with iBooks
  • Agency pricing comes into force

When Apple entered the book market, via the iPad in April, they didn’t make many impositions on publishers who wanted to sell books with them, only that they follow a single, particular rule: don’t sell your books cheaper anywhere else.

This didn’t mean that Apple was dictating price, but that they didn’t want to be undersold anywhere else. A publisher could set any price imaginable for their books, but Apple had to have the lowest price. This affected the book market in a few ways. Many ebookstores that were offering discounts and rewards programs (buy a book, get 10% in in-store credit) had to pull books from their shelves immediately or raise prices as the publishers started to raise prices. That led us to the second point: agency pricing.

Agency pricing in essence is the right of the publishers to set prices for their books.

While this may seem like a simple concept, before this Amazon put pressure on publishers to sell trade and hardcover books at its $9.99 price point. This resulted in prices that were very favorable to consumers, but publishers were not as happy. In the beginning of 2010, several publishing houses got together to put their own pressure back on Amazon, and to be allowed to set prices for their books. Prices of bestsellers were raised in most cases to $13-15.

Whether the price has been set by the publisher or by Amazon is now denoted on every Kindle book’s page when you go shopping on Amazon – it will indicate “the price was set by the publisher”:

A very interesting thread on agency thread. Here’s when Amazon caved to Macmillan about pricing, and Sony and Amazon adopted agency pricing with Hachette, Penguin and Harper Collins in April, too.

The backlash has unfortunately punished many independent bookstores, but now it’s clearer to the user that the publisher is the one setting the price, not the bookseller.

Apple has come out with its competitor to the Kindle, iBooks on the iPad in April 2010, Sony released new readers in September 2010, and Amazon has released the 3rd version of the Kindle, and B&N’s Nook has generally underwhelmed audiences. More ebook readers are planned for future releases, though it seems not as many that were predicted before the launch of the iPad. The Skiff reader, proposed by Hearst is dead.

I’m an iPad owner myself, and I have several ebook applications downloaded and installed. Amazon’s Kindle app, B&N’s Nook, Kobo, and of course Stanza. I love Stanza as I’m able to bring over all my eReader format books and still access them, but I’m buying the majority of my new books in the Amazon Kindle format.

Though I’ve never been a Kindle fan, and doubt I will ever buy one, I am becoming a fan of Amazon’s Kindle ebook format.

Why? Here’s why:

  • Mobility

This is the most important point, at least for me, and it’s what keeps me buying more ebooks in general. Amazon has been working hard to make sure you can access your books from wherever you are and has made a Kindle application available for many devices: your PC, Mac, Kindle, iPad, iPod Touch, iPhone, BlackBerry, and Android, too. I have a strong feeling that whatever new tablets and devices come out, the Kindle format team will work hard to make sure you can read your books there, too.

iBooks is only available for the iPhone, iPad, and 3rd generation iPod Touch. That’s it. Sony lets you read ebooks on your Mac or PC as well as the Sony Reader.

  • Selection & buying experience

Amazon has 670,000 Kindle books. And it has a popular recommendation system that I’ve never stopped using, even when I wasn’t buying books from Amazon. I would consistently check popular titles, recommendations and use the Amazon website as a reference for book information before buying in a bookstore or from another reseller. They’ve worked hard on their interaction with the reader and it’s still the best book and ebook research website in my opinion.

Amazon’s Kindle app has a 1-click experience that makes things really easy to buy books, and buy, and buy, and buy. One touch of a button from within the Kindle App on my iPad and I’m in the Kindle store on Safari, and another click later and I have bought a new book. When I close Safari and launch the Kindle app, it’s downloading automatically.

  • Samples

This has been a revolution for ebooks, in my opinion. Amazon and iBooks provide samples of ebooks for free. So you can download a few pages, or in some cases up to a few chapters of a book to see if you’re interested in it. At the end of the sample, there’s a convenient link to buy the book if you want.

On a recent trip to visit a friend whose reading taste is very similar to mine, I asked her what she’s been reading lately. We used to trade books, but with me living in another country, and reading mainly digital books, we’ve been reduced to exchanging emails with titles and suggestions. This visit I took that a step further and downloaded a dozen ebook samples directly to her iPad, so she would know exactly which books I recommended and could check them out before buying them.

The one suggestion I would make to Amazon is to update the buying experience to be within the book sample itself, and download the full version directly in the icon itself instead of a duplicate, full-version one, and making me delete the sample book, and lastly, that when I open the full version, have it open to the page where I stopped reading the sample.

DRM

This is not a point why I think Amazon is winning the ebook war, rather I think it’s the big elephant in the room that no one is talking about. DRM still exists on almost every book sold commercially today, and does not appear to be going anywhere in the near term.

Who are you buying ebooks from?

Image by jblyberg

Categories: Ebooks

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5 replies »

  1. I just got a Kindle for a couple of months ago, and it now goes with me everywhere. It’s a rectangular, electricity-hoarding pimple of relative joy on my ass. And for all the dithering about it that I did about buying it, not to mention my chronic inability to avoid buyer’s remorse after purchasing any non-food related item over $5, I’m actually not feeling any shame over getting the damn thing. I have on it work PDFs for study, random reading for entertainment, Pulitzer prize-winners I bought in print and then stacked up beside my bed 2 years ago and never read for guilt, and even a couple of really silly games that Amazon came out with for who knows what reason.

    Here’s what I don’t love about it, though.

    1) I spend too much money on books now, dammit.
    2) A lot of e-conversions are really, really sloppy. Special characters have been rendered oddly; line spacing and formatting is weird, links are broken, and table of contents are indecipherable. It’s plain that no editor came along afterwards to do any cleanup. While the highest purchased books are usually taken care of by conscientious publishers, in almost everything else I’ve run into obvious cases of “let’s see if we can squeeze a couple more bucks out” rendering.
    3) I hate hate hate not being able to share my books. HATE. One of my greatest joys in reading a good book is passing it on to someone else. It’s like addicting friends to TV shows that have just been cancelled, except without the overt schadenfreude. Until this feature gets implemented, the Kindle will remain a pimple on my ass, and will never graduate to the glorious effulgence of a full-grown wart.

  2. I get most of my ebooks via Kindle app for my iPod Touch; I haven’t explored iBooks too much yet, mostly because I tend to use Amazon Associates credits/gift cards for purchases, and that can only be done on Amazon, obviously. I don’t plan on having any other ebook reader besides my iPod, so the compatibility really isn’t much of an issue for me, at least at this point, but I suppose that’s just another plus for Kindle.

    I wholeheartedly agree with Yuhri on his “don’t love” points, especially the last one — I hate not being able to pass along a book I really love!

    Another thing that still annoys me with Amazon/Kindle is that you can’t gift someone a Kindle book….

  3. Great post Sara, I’m starting to see here in Italy more people interested in buying various e-book readers, which is a much needed item considering how expensive (old economy) books are here.

  4. I mainly look for non-drm books. If its in epub or mobi and pdf its compatible with everything I care about, aldiko and kindle on android and my laptop. I wanted to buy an ebook the other day but it was wrapped in adobe epub drm. I’ve since discovered there’s a way to remove it if your on windows on mac, but why should I have to? Honestly I really like the approach some book sellers have which is to personalize the copy with your name in the footer. This should be sufficient to keep the honest peope honest. Copyright infringers will never be stymied by drm, and they often don’t have the money anyway. Think of it as a way to build a fan base. In later years this will have it’s rewards as these former infringers become full members of society, with disposable income and tastes to go with them.

  5. Diesel has 2.4 million ebooks and counting. 80 percent are no DRM. I have had some success there while the DRM ebook slugs are shut out of the market. It is really ludicrous.

    However, I heard that Amazon is going to accept epub, and maybe make epub a central part of their ebook business. That will allow a lot more ebooks on the site and will allow worldwide distribution of those that are no DRM.

    We will see won’t we?

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