OverDrive and the Library eBook Convenience Paradox

The OverDrive iPad App, released just last week, is nice. Luckily, it's not TOO nice. Let me explain.

But first- a bit about OverDrive. OverDrive, the leading provider of ebooks in public libraries, has been battling some user experience issues. At last week's Tools of Change conference, librarian Katie Dunneback (@younglibrarian) went through the twenty-one steps a patron needs to take before they can read a library ePub book on their ebook reader. Kirk Biglione joked on Twitter that "it's actually easier to make an ePub file than it is to check one out of the library".

Once the initial configuration process is done, however, it's not so hard to start reading library stuff in the Overdrive App (actual name: "OverDrive Media Console"). I find Overdrive's discovery interface- which is a website and not part of the app- to be a bit mystifying. For my local library, which gets Overdrive books through the "ListenNJ" consortium, the main problem is finding an ebook I want to read that hasn't already been checked out.  The growing popularity of ebooks  is such that most of the ebooks are checked out, and since these use the "Pretend-It's-Print" model, I can't read them when someone else is doing so. Worse, the Overdrive website doesn't let me browse just the books that are available. Do people really exist who want to browse books that are checked out?

The browse interface also mixes up audio books with ebooks. I think most users want one or the other. It lets you sort by "creator" (Do real people know what a "creator" is?) but it doesn't provide a list of creators to browse. Granted, most library websites don't do much better, but isn't that why they still have stacks to wander?

Luckily, Overdrive also distributes public domain books from Project Gutenberg. These have the magical property that a new copy appears on my library's e-bookshelves as soon as one is checked out, like the milk cartons that get restocked from the rear in my grocer's refrigerator. If there were Creative-Commons licensed "unglued ebooks" in the library, they would behave the same way.

Although the public domain ebooks are a real godsend, the Overdrive website handles these clunkily, too. When I first searched for "Moby Dick" I found only a Penguin "enhanced" ebook version that was already checked out. I had to do a separate search in the Project Gutenberg section to discover the public domain Moby Dick that's always available.

The OverDrive iPad app itself delivers a nice reading experience. There's a single app that works on both iPhone and iPad - if you already had the iPhone version, you just need to update it. It's not as slick as some e-bookstore apps, but pretty good for a first version. And the books are quite readable. I borrowed Christie Golden's Omen, a Star Wars novel. The reading experience is on par with the Kindle App; I particularly liked the positional indicators: OverDrive's "7 pages left in chapter" is much more helpful than the Kindle App's "Location 3013-3019 --- 44%". The best part of the process was I was sitting in a ski lodge 259 miles away from my library.

Despite the the website issues, this whole lending thing seems great all around. Library patrons like me get to read books from the library in our preferred environment. We're exposed, without risk, to a variety of books we might not have considered acquiring on our own. And apart from feeling obligated to support our library when the friends group asks for money or raising our voices when the municipal budget gets cut, it doesn't cost us anything.

So what's the problem? Why am I going around showing demand curves and mathematical inequalities, claiming that lending ebooks doesn't create economic value like it's some mathematical proof or something?

In doing that, I'm guilty of some oversimplification. So now I'm going to show you yet another demand curve and recomplexify everything for you.

Remember print books? Let's review the book industry's method of squeezing every last dollar out of a book's demand curve. It's done by segmenting the market. When a hot new book comes out, it's a hard-cover that costs maybe $30. The people who buy the book are those that value it the most and the truly impatient. If the book is successful as a hard cover, then maybe a year later it comes out as a softcover priced at $12.95. A whole new wave of purchasers buy and read the book. The hardcover and softcover markets are segmented because they attract a different audience. Consumers perceive this as fair because the softcover feels like an inferior product, even though the manufacturing cost differences are quite small.

Consumers who don't even want to pay for a softcover are served by libraries and used book stores. Although it doesn't cost anything to borrow a library book, you may have to wait for it to be available, you have to get yourself to the library, and when you're finished with it, you have to take it back. Instead of the cover price, you pay the price of time and inconvenience.

Another form of market segmentation is accomplished by splitting regional rights. A book might be priced lower in India than in the US (and higher in the UK) because consumers in each country have somewhat different expectations as to what a book should cost.

Market segmentation is harder to achieve with ebooks. You can't put a hard cover on an ebook, and price differences are harder to sustain across national boundaries when the commodity is purely digital. A publisher can drop the price of an ebook with time after publication, but this can be hard to do because of supply chain issues, author royalty contracts, and consumer perceptions of value.

The library ebook distribution channel presents another opportunity for market segmentation. Libraries "buy" the ebooks, resulting in revenue for rights holders. Consumers can read the books without paying for them, but they have to be willing to put up with 21 step configurations and account IDs, and face the possibility that a book might not be available right away and may have a long lending queue. At least with ebooks, there's not the inconvenience of going to the library again to return the book at the end of the lending period!

But imagine if the Overdrive website made it as easy to find and borrow a book  as Amazon's makes it to get a Kindle Edition. Imagine that you didn't need an Adobe ID separate from your library card number. What would happen to the inconvenience barrier that allows publishers to still capture the high end of the price curve at full price? It seems clear to me that without the inconvenience barrier, publishers would quickly remove their desirable content from library lending programs to protect their retail sales.

So here's the paradox: libraries can only be successful at ebook lending if they do a bad job of it.

While I don't think it's tenable over the long term for libraries to specialize in inconvenience, I still think it's very important for libraries to be offering ebooks through services such as Overdrive. Even if the lending models of today turn out to be transitional, they help everyone involved become comfortable with library ebooks. Once the library ebook experience becomes embedded in our everyday lives, readers, publishers, authors and librarians will be able to recognize the novel digital distribution models that benefit everyone.

Introducing the Totebag for eBooks

As we hurtle towards a future where books come on Kindles and iPads and Nooks, we tend to overlook the loss of many products and services attached to the print book ecosystem. Tens of thousands of people whose livelihoods depend on books will suffer tragic dislocations in their lives. While many bemoan the plight of bookstore workers, librarians, editors, and authors, there are other small industry segments no one ever thinks of.

Totebag manufacturing is just one of these overlooked industries. Half of the world's  novelty totebags for books are manufactured in a single town in China called Shu Bao (书包). Shu Bao is located in an inland area of China that has concentrated on book related products; neighboring towns specialize in bookmarks, dust covers and those little alphabet labels used in dictionary manufacture. At this weekend's American Library Association (ALA) meeting in Washington DC, I had a chance to speak with Shu Bau's mayor, Yi Rui-Da, who doubles as a sort of totebag ambassador and salesman to the world. Yi was in town to start getting the word out about digital book totebags.

Yi told me that the central committee of his town has been closely watching the shift to eReading for at least 10 years. They've seen one of the neighboring towns become quite wealthy by shifting their manufacturing to iPad covers, and hope to make a similar transition themselves. The lesson of what happened to buggy-whip manufacturers after the introduction of the Model T is known to the committee. Some committee members thought the town was in the luggage business, and preferred to stay in the luggage business. Other committee members, aware of the specialized fibers that must be added to their totebag fabrics, argued that the town was really in the information portability business; these voices prevailed.

To make the transition to transporting eBooks, the town had to nurture its programming talent, of which it has an abundance. Totebags are made in factories that employ hundreds of teenage girls. But it's not like the old days, when the girl were virtual slaves, sewing everything by hand. In a modern totebag factory, the girls program automated sewing robots using specialized smartphone apps. Over the past 5 years, the top sewing machine programmers have gone on to advanced operating system hacking; before, they would get bored with programming and get married.

The culmination of this program of training and development is the digital book totebag. I got a demo of this widget in a private suite at one of the conference hotels, but was not permitted to photograph it. The prototype looks nothing like a canvas totebag of course- it's more a mess of wires and connectors. The functionality is quite impressive, however. I was easily able to download an eBook from a Kindle to the "totebag" using a red suction-cup connector that came with some sort of special grease. I then attached an iPad using a USB connector and viewed the book in iBooks. I was also able to connect the totebag to my Google Books account and use the Kindle book there. Yi had a number of other devices to try; each of them had its own quirks, but more or less worked.

I asked Yi how this seeming magic had been accomplished; the most I could get out of him was that any book is "just another sewing pattern". I also asked him if standards for content and DRM would make ebooks portability possible without his digital totebag widget. We had a good long laugh at that one.

BookExpo, Digital Book 2010, and eBook Messes

When I was 5 years old, I wanted to be either a doctor or a garbage man. When I got my Ph. D., I thought that I had checked off the first option; that was stretching a 5-year-old's conception of a doctor pretty far. Looking back on my career so far, however, I see that using machines to get rid of dirt is a much more consistent theme. In graduate school, I used high vacuum systems to remove impurities from semiconductors; at Openly Informatics, we built software systems to clean up electronic resource metadata.

This week at IDPF's DigitalBook2010 Conference and BookExpo America, I was reminded over and over again how messy the so-called "supply chain" for books had become, and how the transition to ebooks from print is just making everything that much messier. I had known about the ebook ISBN mess, the book metadata mess, the territorial rights mess and of course the orphan works mess, but the presentations at IDPF on the "agency model" staggered me with the realization that big publishers were dumping a huge load of local sales-tax excrement on their channel partners. The last straw for me was a BISG presentation on rights standards. The speaker was trying to convince the audience that huge piles of money were to be made if only content rights could be efficiently chopped into smaller, more insidious pieces.

I hit the floor of the expo hoping to find solace in some shiny clean gizmos. I found all sorts of reader devices that I hadn't seen before, along with the alluring iPads and the competant Sony readers that I'd seen before. I didn't see a single Kindle on the entire show floor.

Well maybe I wasn't looking too hard. But it was hard not to get the impression that IDPF and BookExpo was a gathering of the anti-Amazon forces of Openness.

It's easy to swallow the story line that Amazon is building a closed, sterile system with its Kindle and that B&N, Sony, and all the others are unleashing a torrent of innovation with their open ePUB standards and promises of interoperability. This story line usually makes an analogy with the early days of the PC, in which Apple's proprietary Mac system was swamped a wave of innovation fostered by the PC's open design and Microsoft software that worked with all the hardware. The irony of Apple using ePUB for their iBookstore on the iPad is dutifully noted and left unexamined.

Somehow, BEA failed to sell me on the open vs. closed story line for ebooks. I don't see how open standards are going to clean up the scrapheaps on which the current book industry is built and in which the ebook industry is stuck.

I've mentioned that I've been reading about the early days of Intel. The Windows-Intel platform was never an open one; it was designed to sell Intel chips and Microsoft software. Apple's strategy, in contrast, was designed to sell computers, and avoid all the mess of keeping the hardware compatible.

After a day to reflect on Book Expo (and some time to sleep off a very nice party!) I came to a different story line that I find more useful in giving insight into the future course of the ebook industry. I think the key to understanding the different entrants in the ebook race is to understand which messes they're trying to tidy.

Amazon, with its Kindle, has focused on maintaining a clean shopping experience and a clean reading environment. By eliminating the computer tether with wireless Whispernet, they avoid a hardware compatibility mess. By choosing a proprietary file format, they avoid a document compatibility mess. By launching only in the US and extending to other territories slowly, they avoid all the territorial mess. Since their online bookstore had already addressed all the messy details of e-commerce for a huge catalog, the execution of Kindle was in large part an exercise in avoiding having to deal with any new messes.

Overdrive had a surprisingly large presence at BEA- they had two separate booths. Working with hardware makers such as Sony, Overdrive has attacked the problems of messy distribution channels- libraries and bricks and mortar retailers, in particular. The work of Overdrive has allowed publishers to pretty much forget that libraries use ebooks- the only place that libraries were mentioned on the show flow in connection with ebooks was in the Sony booth- they work directly with Overdrive to surface the library channel to consumers through their Library Finder feature.

The company that made the biggest impression on me this week was Kobo, the ebook seller that spun out of Canada's Indigo Books. More than any of the current ebook players, Kobo is emphasizing an any-screen strategy. Unlike Amazon, Kobo is not afraid to takle the mess of making a consumer's ebook work on all the devices they own. Kobo's $150 ebook reader device, which launches in the US on June 17, looks and feels like the device that Apple would have designed if Steve Jobs  bothered to reads books anymore. Perhaps most significantly, Kobo is tackling the ebook territorial rights mess. At IDPF, Michael Tamblyn, Kobo's Executive Vice President for Content, Sales and Merchandising, described Kobo's global reach. On one day last month, Kobo sold books to customers in 174 countries. Kobo does business in 6 different currencies and has agreements to sell books from 1600 publishers.

Apple's Disneyfied approach, as expressed in the iPad, is to sweep all sorts of application messes into app sandboxes. Apple has done very little, though, to clean up ebook messes, and their complicity in letting the big 6 agencies dump on the supply chain suggests that they want to be like Target and Walmart and just skim the blockbuster cream off the incumbent publishing ecosystem. I agree with Mike Cane that Apple will open the digital book floodgates by targeting the ebook creation tools mess.

There are still a lot of ebook messes looking for entrepreneurial sorts to show up with a broom, or perhaps a tsunami to just wash away the whole rickety shantytown. It should be an interesting couple of years.

I hope this piece has cleaned up the picture for you a bit!

Monstrous eBook Sales...in Japan

This Friday, May 28th, 2010 is the day the Apple starts selling the iPad in Japan.

It's easy for Americans to forget that there is still a big world beyond our borders. No, Europe didn't get swallowed up by a volcano in Iceland. And while the International Digital Publishing Forum (IDPF) just released some astounding sales figures for January and February ebook sales, the Japanese market helps provide some perspective. US trade wholesale ebook sales for the first two months of 2010 totaled $60.8 million, roughly matching sales for the entire first half of 2009. Extrapolated to a full year, this would be over $360 million, which doesn't even begin to account for any bump caused by the iPad, which launched after the reporting period.

Over in Japan, they're also expecting big things from the iPad (the iPhone has been a huge hit in Japan, capturing 72% of the Japanese Smartphone market.) But the Japanese ebook market is already huge. In 2009 ebook sales in Japan totaled $600 million, more than triple the US sales, and without any Kindles! These numbers are from this morning's presentation at IDPF's DigitalBook2010 conference by Daihei Shiohama, Head of Corporate Strategy at Voyager Japan Inc.

According to Shiohama, 80% of that $600 million is sales on mobile platforms, i.e. phones. The most avid consumers are women aged 20-30, and the most popular ebook content is manga. In Japan, everyone has a mobile phone capable of delivering rich content, and people spend on lot of time commuting on crowded trains. eBooks on phones are very practical.

I had a chance to speak to Shiohama and Voyager President Masaaki Hagino, who demoed Voyager's iPad ebook reader applications for me. The T-Time App and DotBook store make use of a format (dotBook) which is specialized for Japanese books, which not only use four different scripts (Kanji, Hiragana, Katakana and Romanji) but are often rendered top to bottom and right to left. Voyager has been active in the ePub standards process because the current ePub standard doesn't quite support everything these books need- yet. For example, a manga will have an irregular layout and flow of frames within pages that are arranged opposite to a typical English language book. On the iPad, the navigation of such a book using the T-Time App is simple and natural.

It's interesting that Voyager is so eager to have an international standard to work with, given that it owns and controls a format that already works. Shiohama explained that Japanese ebooks have been like the iguanas that evolved separately on the Galapagos islands. The market and technology for the ebooks produced by Voyager will be much larger and more efficient if it can use the same technology and standards used by the rest of the world.

I should note that the iguanas I saw last year in the Yucatan were smaller and probably lazier than Galapagos iguanas, but that's a lizard of a completely different color.

iPad People, Here's What You Missed

I didn't get an iPad this weekend. I'll probably get one sooner or latter (I have a birthday coming up, hint, hint), but for those of you who spent your Easter weekend playing with your iPad, the first picture should give you a taste of what you missed.

I entered some data into a spreadsheet to see if ebook reader pricing shows any trend. The data comes mostly from the MobileRead wiki. I've added two arrows to indicate two possible evolutionary paths for ebook readers.

One path, the tablet, is exemplified by the iPad. The tablet roadmap is characterized by a relatively constant price and ever increasing computer power and display functionality (color, speed, resolution).

The other path, exemplified by the Kindle, is the dedicated ebook reader. The reader roadmap is exemplified by relentless price reduction and gradually increasing accommodation for reading ebooks.

If you believe my extrapolations, the dedicated ebook reader will cost as little as $25 in 2014, and the iPad will still cost $400. You heard it here first.

After 25 Years, My Mac Plus Still Works

On this day 25 years ago, I got my first Mac.
It had 128KB of RAM, a single-sided 3.5 inch internal floppy drive and a Motorola 68000 microprocessor running at 8 MHz. The black and white 9-inch CRT screen had a resolution of 512×342 pixels. My purchase was a bundle that included a 1200 baud modem, an Imagewriter printer, an external floppy drive, and a copy of MacPascal. As a Stanford student, I was eligible for a discount, so the whole package cost me $2,051.92, including sales tax. About a year later I got it upgraded to a Mac Plus.

I'm currently typing on the 8th Mac that I've used as my main computer. It's a MacBook Pro.  It has 4 GB of RAM, a 320 GB hard drive, An Intel Core 2 Duo Microprocessor running at 2.53 GHz, and a 15 inch color LCD screen with a resolution of 1440x900 pixels.

I never got rid of my original Mac. To celebrate its 25th birthday, I went up to the attic to bring it out for some air. My kids were excited to get a look at the antique. It still works.

What was interesting to me is that apart from being alarmed at the disk drive noises, and asking "is this what they called a floppy disk?", my teenagers sat down and immediately knew how to use MacPaint, MacDraw and Word 3.0. They understood how to interact with Ultima II. The graphical user interface notions introduced with the Mac are still alive and well.

This got me thinking about the longevity of user interfaces. For example, the rotary dial telephone that I grew up with was an interface introduced in the US in 1919. It lasted about 60 years. The Model T Ford that I wrote about last July had the same basic driver interface as my car does today and is still going strong, but the television I grew up with has almost nothing in common with the one I own today.

My all-time favorite YouTube video is taken from a Norwegian comedy show. It imagines what it might have been like for users when the new-fangled "book" came along:


The book's "user interface" (more precisely, the Codex) has had a pretty good run; it's in its third millenium. Kids 25 years from now will know how to use the codex interface, though I'm guessing they'll consider books to be hopelessly out of date, like the vinyl LPs that I had to move around to get at the Mac in my attic.

It won't be the Nook that replaces the book, though. I got to play with one the other night, and while it has some pretty interesting features, the user-interface, which uses a small touch screen and a larger e-ink display, is not long for this world.

It's possible that my long run of Macs will eventually end with a touch oriented device, such as the iPad. Its hard to imagine the devices that, 25 years from now, will make my very nice MacBook Pro seem as much an antique as my Mac Plus.

The kids lost interest in the Mac Plus after about 20 minutes. It had no internet.

More pictures of my Mac are on the Facebook fan page.