The German gadget maker is going to be delivering an early Christmas gift this year: their first frontlight-equipped ereader.

The Pyrus 2 LED might have a funny name, but it also has a 6″ E-ink screen (600×800), 2GB of storage, and a microSD card slot. Unfortunately this ereader is lacking a touchscreen or Wifi, but that’s what happens when you drive the price down to 80 euros.

This ereader is licensed from the same OEM as Trekstor’s other ereaders, but as you may have noticed, the Pyrus 2 LED doesn’t have the "Digital Ink" knockoff E-ink screen found on its 4.3″, 8″, and 6″ siblings. Instead this ereader has a real E-ink screen.

The shift from one screen supplier to another is likely due to the frontlight. E-ink is capable of attaching a frontlight to their screen and selling the assembly to ereader makers, but they’re not all that interested in simply selling the frontlight component. And apparently the OEM who designed and built the Pyrus 2 for Trekstor can’t yet make their own frontlight.

The Pyrus 2 LED is a basic ereader, and its eBook format support includes Epub, FB2, PDB, and PDF. The Pyrus 2 can also read html, rtf, and txt files and display BMP, GIF, JPEG, PNG, and TIFF image files.

There’s no information yet on battery life or weight, but I do know that the Pyrus 2 LED will officially debut in October at IFA-Berlin.

This is going to be a rather curious product at its price point. It’s going to cost 80 euros, or about 10 euros more than the Trekstor’s other 6″ ereader. It’s not the cheapest ereader on the German market, but it is the cheapest one with a frontlight. I think I can see the appeal.

lesen.net

There’s been a brouhaha this past week over the recent book sale data from the AAP, and I just realized this evening that I am at the center of it.

As you probably know, last month the AAP released sales data from the first quarter of this year. Some segments were up, some were down, and the overall reported sales were down (more details here).

One detail that some have focused on was the 5% growth in ebook sales. Nicholas Carr wrote a post last week in which he bashed ebooks with statements like:

E-books are still taking share from printed books, as overall trade sales declined by 4.7 percent in the quarter, but the anemic growth of the electronic market calls into question the strength of the so-called “digital revolution” in the book business. E-books now represent a bit less than 25 percent of total book sales. That’s an impressive share, but it’s still a long way from dominance.

He also made a graph, thus making his story very repostable, and it was reblogged by Neil Irwin in the Washington Post, Om Malik of GigaOm, and David Ulin in the LA Times.

Update: We can now add Slate and Publishing Perspectives to the list.

Normally I would ignore posts like this because the conclusion is simply wrong. To put it simply, I think that Mr Carr misunderstood the context for the ebook sales data and failed to take into account an anomaly in the sales data.

How do I know he’s wrong?

Because I am his original source.

Yes, he took the short post I wrote last month and came up with the idea that a slight growth in a down market is best described as anemic. Needless to say, I disagree. In fact I took the exact opposite position last month:

The overall ebook market grew from $374.8 million to $393.6 million, or about 5%. That is far below the growth reported in previous years, but it is still good news. The AAP also reported the total reported book sales dropped by 4.7% (from $1.5 billion to $1.4 billion) thanks to a severe drop in the children’s and YA segment (24.6%).

In that context the 5% growth is not bad. Audiobooks also increased by 14% ($24.8 million to $28.3 million), so there is some good news.

I’m not the only one who disagrees with Mr Carr et al. I came across this story via Nathan Bransford, who (also working from my post) went on to point out a detail that I had missed:

And for the first time ever in Q1 e-books are now the leading format in the adult market, even more than paperback (note: percentages don’t add up to 100% because I’m just including the three largest formats):

Hardcover: $226.5 million (22% of the adult market)
Paperback: $306.6 million (30% of the adult market)
E-books: $328.2 million (33% of the adult market)

In fact, when you compare the share of market over the past few years you see a pretty consistent pattern.

E-book market share in the adult market:
23% in Q1 2011

33% in Q1 2013

That is just a single segment, but it’s a strong argument against flattening sales.

And it’s not the only one. Mr. Carr carefully neglected to factor in certain details like the fact that this data doesn’t include all publishers much less the self-published titles, and thus it doesn’t reflect the actual US book market.

For all we know the ebook and book sales not included in the AAP figures might have seen a surge in that quarter.

And that’s not the only problem. There’s also an anomaly in the AAP data.

The sales data for that quarter, both for ebooks and the overall market, is skewed thanks to an unexplained drop in the YA/children’s market. YA ebooks dropped by 30% and YA hardcover dropped by 35%.

The conclusion that ebook sales are flattening is based in part on a data point that could well be a fluke occurrence. For all we know sales in the YA segment picked up again in the following months.

I am not arguing that the sales did pick up, just that the data set contains an anomaly. It might be a drop in sales or it might be sales which occurred but went unreported (publishers sometimes forget to file the paperwork).

Update: It turns out I missed something. I just got an email from Andi Sporkin, the VP of Communications at AAP. She reminded me that she had already offered an explanation for the severe decrease, which was:

While the Children’s/Young Adult category for Q1 2013 showed significant gains vs Q1 2011, the huge and unprecedented Q1 2012 C/YA numbers (those three months were the lead-up to the March 2012 film premiere of “The Hunger Games”)  resulted in declines for C/YA for Q1 2013.

I had forgotten that this explanation had been included with the original data, and it explains a lot. It also adds a lot of strength to Nathan Bransford’s point about the adult ebook market.

That segment didn’t have the anomaly, and it had very healthy ebook sales. I would argue that it is a much better indicator of how ebook market share grew in the first quarter.

Second Update: Slate is continuing to point to the Neilsen data in support of their article, so I am going to post an excerpt here for the sake of debunking them. Neilsen said that the decline they saw was due to an anomaly. From The Bookseller:

Sales in April fell for the third consecutive month, and for the first time ever have shown a year-on-­year decline. Nielsen Kantar data reveals that e­book sales totalled 3.3m units – down 9.8% on the previous four-­week sales period and down 0.1% on the comparative period last year. However, the number of new ebook buyers was up on the March figure, bringing the total number of e-­book buyers in the UK market to 9 million. Nielsen said the decline in e-book sales was down to a fall in sales of children’s e-books, principally sales of Suzanne Collins' Hunger Games trilology that received a considerable boost in sales when the first film of the first novel in the series was released last year.

Clearly there is no evidence to support the claim that ebooks are over.

I’ve jut come across an infographic that claims that the US isn’t the country with the highest adoption rate for ebooks. If the data in this infographic is correct then Russia, with 70% of readers having tried ebooks, takes the crown.

That’s much higher than the 23% of Americans who had read an ebook (according to Pew Research Center in December 2012). It’s even higher than the data from Scholastic which shows that 46% of kids in the US had read an ebook.

Of course, this chart also shows that Russians aren’t leading the world in buying ebooks; 92% download ebooks from the internet, 36% copy from friends, and yet only 15% buy ebooks.

Russia Beyond The Headlines

As much as everyone likes to bash Amazon for supposedly selling ebooks below the point anyone else can match, that’s not the only reason that Amazon continues to dominate the ebook market. In fact, it’s not even the leading reason for Amazon’s success, which is:

Amazon’s tech just works.

I was reminded of this today when I came across a post by Matt Asher. He blogged about his frustrations with Kobo and how much of a pain it was to buy an ebook and load it on to the Kobo Aura HD.

Anyone who has used Kobo’s ereaders knows exactly what he has gone through, especially the middle section. Steps 14, 17, 18, 23-26 inclusive, and step 29 are painfully familiar to this blogger:

14. Figure out that you need to use their software to download the book, which you already have installed because the Kobo required that it be installed just to begin using the ereader when you first purchased it.
15. Connect the ereader to your computer.
16. Start the Kobo software.
17. When the Kobo software demands to be upgraded (not suggests,  demands), do an upgrade.
18. Try the upgrade again after it appears to fail on the first try.
19. Once Kobo software is back up and running, log out of your old  Kobo account since that one used an anonymous spam-catching email because there was no reason why you would want Indigo Inc. to know all your books and reading habits.
20. Still in the Kobo software, log in to the new account you created to purchase the book.
21. Read with incredulity as Kobo informs you that you will loose all existing books on your Kobo Aura HD once you sign in with this new account.
22. Backup all your ebooks just in case it really does this.
23. Click Accept.
24. Sign in to confirm that you accept this.
25. Sign in again when the same message pops up.
26. Wait impatiently while the Kobo takes a long time updating, showing the sequence of square progress indicators fill and unfill over and over. (Note to whoever programmed this, a sequence of progress markers should give an indication of how close you are to the end of the process, otherwise you should just show a spinning thing that indicated the operation is in proccess, but it could still take an undetermined amount of time.)
27. Optional: get upset with yourself for not returning this damned device before the return period ended, especially since its software is absolute crap for reading PDF’s, that is to say the format of most ebooks you already have on your computer.
28. When the Kobo is finally done updating, unplug the device to see if it really did clean off all of your books.
29. Go through the whole setup procedure for the Aura HD again, because apparently it not only deleted your old books, it did a full format/reset.

The thing about this list is that it details user experience problems that Kobo has inflicted upon readers with their first apps and ereaders and which are still present to this very day.

Ask anyone who has dealt with Kobo and they will tell you that this list is quite familiar. I can attest to that just from my own experiences.

Every time I buy a Kobo ereader, and this has happened every time without fail, I have had to go through the same 11 steps before I can use the ereader for the first time:

1. Set up Wifi.
2. Register my account.
3. When the ereader demands to be upgraded (not suggests,  demands), do an upgrade.
4. Try the upgrade again after it appears to fail on the first try.
5. Reboot.
6. Set up Wifi.
7. Register my account.
8. When the ereader demands to be upgraded AGAIN (not suggests,  demands), do an upgrade.
9. Reboot.
10. Set up Wifi.
11. Register my account.

I can understand Kobo demanding that I install an update, okay. That demonstrates a lack of respect for the user but I can understand the desire to have the latest software installed.

What I can’t understand is why Kobo can’t be bothered to keep the Wifi and account info rather than wiping it during an update. Amazon certainly seems to be able to pull it off; what makes them so special?

Heck, Amazon is so good that they can install an update without my even noticing. My KFHD was updated to the latest firmware without any fuss, which is exactly how it’s supposed to happen. Buying ebooks are also a heck of a lot easier via Amazon than via Kobo. That has been true since the very beginning.

Perhaps if Kobo didn’t have such a terrible user experience, maybe they wouldn’t be in 5th or 6th place in so many markets.

Say what you will about Amazon, but their stuff works.

Did you catch the story that was posted over at MobileRead yesterday  about the major ereader companies trying to get out of complying with accessibility laws?

The title is a pretty innocuous phrasing of a great big bombshell. A coalition of e-reader manufacturers consisting of Amazon, Kobo and Sony, filed a petition requesting the FCC waive its rules requiring e-readers to be accessible by people with disabilities.

I wouldn’t read too much into the petition or the uproar that will soon surround it. IMO MobileRead is misreading what the coalition is asking for in their petition.

While there is a petition for a waiver from accessibility rules, the waiver would only cover an exemption from a single regulation, not all accessibility regulations. I’ll explain the regulation in question, but first let me give you an idea just how narrowly focused this waiver really is.

If this waiver is granted it will not, for example, affect the regulations that require schools, institutions, and libraries to provide electronic equipment that can be used by the disabled.

The lawsuits won by the NFB against the Sacramento Public Library and the Philly Free Library will not be affected by this waiver. Similar lawsuits filed in the future will also not be affected; schools and libraries will still have to support the disabled. That’s not the only regulation that will be unaffected, but IMO it is one of the more important ones.

So what is Amazon et al hoping to accomplish here?

In the words of the petition, they want to be exempted from:

Sections 716 and 717 of the Communications Act of 1934, as Enacted by the Twenty-First Century Communications and Video Accessibility Act of 2010

The latter section appears to consist only of rules about documenting compliance with the former section so I’m going to refer to them as a single regulation. According to the FCC these new regulations, which weren’t technically passed as laws, are intended to accomplish the following:

Section 716 of the Act requires that providers of advanced communications services and
manufacturers of equipment used for advanced communications services make their services and products accessible to people with disabilities, unless it is not achievable to do so. Where it is not achievable to do so, these covered entities must make their services and equipment compatible with commonly used assistive technologies. Section 717 requires new recordkeeping and enforcement procedures for these covered entities.

The new regulation was announced in 2011 and it’s not clear whether it is already in effect. This is a rather broadly written regulation that covers everything from ISPs (not kidding) to tablets to ereaders to reading apps.

Just to be clear, the ereader makers are only asking for ereaders to be exempt from this regulation; they didn’t ask for an exemption for their platforms and they didn’t ask for an exemption for their reading apps or tablets.

I am specifically bringing up reading apps and tablets because I want to point out the accessibility features that the several ereader makers have added in the past couple years. B&N, for example, announced late last year that they would add accessibility features to the Nook HD. Amazon made a similar announcement about the KFHD, and they also released a new version of the Kindle app for iPhone and iPad. I would bet that the new features were added in response to this regulation, though I cannot say for sure.

So at first glance this looks like companies trying to avoid complying with regulations, but in reality what we have here are companies that are already complying with the new rules. They just want a waiver so that ereaders won’t have to be changed in order to comply with the law.

This waiver would cover not just the branded ereaders but also the more basic devices on the market, including devices like the Nook Touch or Kindle Paperwhite which never could be updated to comply with the law (no sound). But it would not cover the most basic and cheaper devices which for example lack Wifi. The lack of communication ability in certain devices renders this regulation moot.

The coalition is asking for an exemption for ereaders because they are a unique class:

• they have no LCD screen;
• they have no camera;
• they are not offered or shipped to consumers with built-in email, IM, VoIP or other similar ACS client applications and the device manufacturer does not develop ACS applications for them;
• they are marketed to consumers as reading devices and promotional material about them does not tout the capability to access ACS.

That is an interesting argument but I am going to have to come out in opposition.

Just because the most basic ereaders lack accessibility features and just because ereaders serve a tiny niche market doesn’t mean that ereaders are special snowflakes. Furthermore, the details that define ereaders and separate them from tablets aren’t inherent in the very concept of an ereader but came from deliberate choices to make limited function machines as a way of reducing cost.

There is no technical reason preventing the ereader makers from adding accessibility features to their next models; it’s just that they don’t want to do so. Or in the case of Amazon, they don’t want to do it again.

Amazon had already moved a step in the right direction with the release of the Kindle Touch and the Kindle 3. But then they released the Paperwhite, which is essentially the Kindle Touch minus the sound (but with the better screen). It’s not clear why Amazon did that but it could prove to be a costly mistake.

In conclusion, I think the ereader makers are on the wrong side of this issue just based on existing market realities. Sure, they might get the waiver they seek, but wouldn’t it be a better idea to comply with the regulation?

If ereaders met accessibility standards then they could be sold to libraries, schools and everyone else who has to be careful what they buy.

In case you didn’t know, many of those potential customers are currently buying accessible iPads at $500 a pop. If you were an ereader maker wouldn’t you want to pursue that market with a $100 ereader? I would.

images by kodomut,

The tech mecca of South Korea will soon get another reason to gloat. While the rest of the world has to content itself with E-ink Android tablets running Android 2.3, South Korea now boasts a 6″ ereader (with an E-ink screen) which runs Android 4.0.

The Crema Shine  is a rather generic looking device with a 6″ Pearl HD E-ink display, touchscreen, frontlight, and Wifi. It ships with 8GB of storage, a microSD card slot, and it ships with a limited reading app which supports Epub and PDF.

According to the product listing, this tablet/ereader runs Android 4.0 on a 1GHz CPU. That means it is running a considerably newer version of Android that the Tolino Shine (available in Germany) or the Boox i63ML Maxwell (available in Russia).

That makes it a much more appealing device than either of the models available at the moment, and the low retail price only helps make it more attractive.

The Crema Shine has a retail price of 149,000 South Korean won, or about $133 USD. That is about the same retail price as the Tolino Shine (99 euros), though of course the taxes differ (and shipping will add considerable cost).

This device is up for pre-order in South Korea at Yes24 and Aladin. It’s expected to ship on 26 August, almost a year to the day after the release of its predecessor.

When I last heard the name Crema, it was in relation to the Crema Touch, a 6″ ereader launched last August. At that time I noted that the Crema Touch was backed by a coalition of 5 Korean publishers and the ebook service firm Korea Epub. This coalition also has reading apps for Android, iPad, and iPhone as well as their own ebookstore which is accessible from inside the Android app and on the Cream Touch and Shine.

BetaNews via MobileRead

MobileRead

No, I have not been replaced by a nice robot (the evil one is still in control).

As much as I like ebooks even I will admit that it often makes sense to buy used books. They’re often cheaper than an ebook, and when you know in advance that you will want to sell the book again (textbooks for example) the paper copy is often a much better deal.

And that’s why I am pleased to share this infographic with you today. I found it via Dear Author, and it covers the used book market. It’s the work of ThriftBooks.com.

When B&N announced a couple months ago that they were/weren’t getting out of hardware development, just about the only safe conclusion that could be drawn from the news was that there would probably be new devices this Fall with the Nook brand stuck on them somewhere.

I still don’t have anything new on the technical details of B&N’s new hardware, but today I did get a hint about possible new names.

A reader has tipped me to several new product listings on the B&N website. The listings are for accessories and not the new devices. They have the bare minimum of data (no images and no description), but they do hint at the names for the new Nook hardware.

The 3 listings mention a clip cover, a stand, and an anti-glare screen film kit for 2 devices mentioned only as AV and SW. The accessories won’t be available until 1 October, and they carry prices ranging from $18 to $36.

My source also told me that there are a number of other product pages already in B&N’s system that mention accessories for the SW and AV. He thinks that the new devices will be called the Nook SW and Nook AV. He could be right but at this point there’s not enough info to say for sure.

Again, there are no pictures, so this leak isn’t nearly as useful as the similar leak from 2010 that showed us the Nook Color for the first time. That too was an anti-glare kit, and we even got to see a reasonably accurate render.

But even though there are no images, this leak does offer us a time frame for the launch. If these accessories are going to be on the shelf by 1 October then the related devices will be launched some time in the next 2 months.

TBH that doesn’t tell us anything we couldn’t have guessed based on past launches but it is more definite than a mere guess.

B&N’s current ereaders were originally released in 2011 (with only a slight update in 2012), so they are getting rather long in the tooth compared to the Kindle Paperwhite or the Kobo Aura HD and its 6.8″ screen.

And of course we all know that the Nook HD and Nook HD+ Android tablets were such a huge success that they were put on clearance 2 months back. At their current prices they are a great deal, but curiously enough they’ve been on clearance for 2 months and are still available just about everywhere.

I point this out because it is either a sign of just how badly B&N over-estimated demand or it is a sign that the average consumer is using their wallet to give B&N a vote of no confidence. If the latter is true then B&N would be better off not launching new hardware. No one is going to buy the new stuff either, so it would just be more money down the drain.

B&N, B&N, B&N

When Overstock.com announced last week that they were going to beat Amazon’s book prices by 10% on all 360,000 titles carried by Overstock, it looked to be a classic first volley in a price war. Amazon returned fire a day later with their own sale on best sellers, and now Overstock  is back with their next maneuver.

Overstock announced today that they were extending their sale. The deep discounted prices are going to stay in effect at least through 7 August, and possibly even later. The CEO told PW that he plans to review the situation in a week and consider the matter then.

There’s no word yet on how Amazon plans to respond, though I would not be surprised if they also continued to offer the deep discounts on best sellers. Amazon has always had a policy of matching competitor’s (most of the time), and they’ve never been one to step away from a fight.

That is certainly one way to describe the last time Amazon got into a price war over books. Back in 2009 Amazon, Walmart, and Target  got into a 3 way tussle over new best sellers (followed by another war over DVDs). That war was started by Walmart, which first announced that they would sell 10 new hardcover titles at $9.99. After Amazon (and later Target) matched the price, Walmart lowered their prices again.

I have no direct info on how long that war lasted, but I am told that the 3 retailers went through several rounds of price cuts before someone blinked. There is a good chance that the same thing could happen in the Overstock/Amazon price war.

PW

Amazon rolled out a new update for their iOS app.

This update doesn’t change as many details as the several updates released over the past few months, but it does add a few useful features. In addition to the  stability improvements and bug fixes, there’s also an incremental improvement to the Skynet AI that Amazon has secretly installed on all of our devices.

Update: The new version of the Kindle iPad app apparently now offers better support for KF8, Amazon’s newer ebook format. This wasn’t mentioned in the changelog but one of my readers regularly uses his iPad and he noticed the difference (and another confirmed it). Thanks, Rob!

It’s not clear whether the iPhone app supports KF8, but I do know that this new support only works in ebooks bought from Amazon and not ebooks which are sideloaded or emailed to the app.

Here’s what it looks like. As you can see, the formatting now more closely resembles an Epub ebook.

Amazon has also finally added support for third party dictionaries. Have you bought a dictionary in the Kindle Store? Assuming it was formatted correctly, it should now work on the Kindle iPad app.

Amazon has also added a custom search for free samples. You still can’t search for paid ebooks, but when you search for ebooks you’ll now also be offered free samples that match your search terms. Curiously enough, there’s no way to buy the full ebook once you’ve read the sample. I would think that would be the whole point of offering samples (maybe it’s coming next week).

Here is what is new in version 3.9.0.0.0:

• Kindle Free Sample Search – From the existing Library Search, customers can now search Amazon’s catalog of millions of Kindle books and download free samples from within the app. New books are easier than ever to find.
• Bring Your Own Dictionary – Customers can now use previously purchased Dictionaries, such as medical, legal, or other translation references to define words in any of their other eBooks. Dictionaries downloaded to the device automatically appear in the selection list.
• Accessibility Quick Reference – Accessibility gestures for blind and visually impaired customers are included for quick reference and can be found under the FAQ section in settings. The guide has been translated for all supported languages.
• Instant Cover Loader – Book cover art displays quicker and more fluidly.
• Bug Fixes/Stability Improvements

iTunes

The local prices for digital content and software are so high in Australia that the Australian government is recommending that Australian consumers ignore geographic restrictions and buy their content from cheaper websites in other countries.

This recommendation comes as the conclusion to a year long investigation into why Australians are charged so much more than the rest of the English-speaking world for tech products and services. The "Inquiry into IT Pricing" was a far-ranging look into everything from Windows licenses and related services to digital content, including music, video, and ebooks.

Yes, ebooks. The report mentioned receiving a number of complaints about ebook prices:

• E-books: submitters compared the prices of more than 120 e-books. Price comparisons of books sold both in Australia and the US revealed average price differences of 16 per cent, while the median difference was 13 per cent.

You can find the report here, but the tl;dr version is pretty simple. Prices are too high, and the report includes ten recommendations that are intended to help Australian consumers find ways around geo-restrictions so they can legally acquire content sold in other countries.

One section of the report even suggested that Australia’s copyright law should be amended to make it clear that it is legal for Australian consumers to get around geo-restrictions.

Recommendation 5: The Committee recommends that the Australian Government amend the Copyright Act’s section 10(1) anti-circumvention provisions to clarify and secure consumers’ rights to circumvent technological protection measures that control geographic market segmentation.

The report goes on to suggest that the Australian government should teach consumers how to get around restrictions:

Recommendation 6: The Committee further recommends that the Australian Government investigate options to educate Australian consumers and businesses as to:

• the extent to which they may circumvent geo-blocking mechanisms in order to access cheaper legitimate goods;
• the tools and techniques which they may use to do so; and
• the way in which their rights under the Australian Consumer Law may be affected should they choose to do so.
  

And it gets better from there. The next recommendation is that Australian laws be amended so that consumers have a clear right to sell the digital content they legally purchased (I am not making that up, I swear), and that consumer protection laws should be amended so that geo-restrictions in terms of use contracts are legally unenforceable in Australia.

I cannot comment on whether any of these recommendations will be followed, but I sure hope they are. Many of these suggestions cut through the legacy media’s nonsensical restrictions.

We live in an age where the web makes it possible to communicate with, work with, or sell to just about everyone anywhere in the world, and yet some moribund media companies want to restrict who can buy what based on your physical location. In 2013 that is simply nonsense, and it is high time that those restrictions are done away with.

Some not so sure that this report will be as influential as I would hope. I found this story via The Age, and they pointed out that some of these recommendations might cause Hollywood and its ilk to simply not license content in Australia at all:

While it’s great to see the IT Pricing Inquiry have the guts to actually point out the flaws in the current system, it’s hard to see the recommendations coming into effect. Hollywood’s international licensing deals are built on the foundation of territorial rights and geo-blocking. No amount of complaining from one country on the other side of the world is likely to change this. If the Australian government does declare their terms of service null and void, they’ll simply take their bat and ball and go home. Apple could refuse to offer service to Australians, while Netflix and Hulu could simply ramp up their geo-blocking efforts. Hollywood studios could refuse to license movies to Australian rent services such as Quickflix and Bigpond Movies. It’s unlikely to come to this, but Hollywood really holds all the cards in this game.

I could see this happening. It would be a stupid move because it would remove any possibility that Australians could pay for the content, but it could still happen.

The Age

image by “Caveman Chuck” Coker

Barnes & Noble filed their annual report with the SEC today, and it revealed a few hints about their future plans. This report covered the 12 month period ending 27 April 2013, and it includes specific details on how much B&N still owes to manufacturers on the Nook hardware contracts, who owns Nook Media (B&N still controls 78%), as well as some hints about B&N’s future plans.

Barnes & Noble had previously announced plans to launch the Nook Store in 10 countries by June 2013. There was evidence to suggest that B&N was looking at Germany, Russia, and the Netherlands as possible next steps, but unfortunately June came and went without any showy launches.

B&N may have missed their goal by a whopping 90%, but that doesn’t mean that they’ve given up. The filing today mentions that B&N is still planning to expand their ebookstore into 10 countries by the end of the year:

The Company sells digital content in the U.K. directly through its NOOK devices and its nook.co.uk website. The Company plans to continue to expand into additional international markets and believes that its partnership with Microsoft will help foster that expansion. Under its partnership agreements with Microsoft, the Company previously disclosed that it expected to be in 10 international markets by June 30, 2013. While substantial progress has been made towards meeting the target expansion requirement, the Company now expects expansion into these 10 markets to be accomplished by the end of 2013.

It’s not clear to me whether these new ebookstores will be branded Nook or whether they will carry some Microsoft brand. It’s also not impossible that these new ebookstores will be part of the Windows Store.

BTW, did you notice how it’s taken B&N 4 years to take the Nook Store international when Amazon managed the same with the Kindle Store in just 2 years (and Kobo managed to do it the day they launched)? Of course, if B&N had kept Fictionwise open instead of closing it earlier this year B&N would still be selling ebooks in a couple hundred countries, not just the US and UK. But I digress.

In other news, B&N reported that they still have commitments to buy millions of dollars worth of Nook hardware. B&N expects that it will cost the company $14 million to

The Company has arrangements with third-party manufacturers to produce its NOOK ^® products. These manufacturers procure and assemble unfinished parts and components from third-party suppliers based on forecasts provided by the Company. Given production lead times, commitments are generally made far in advance of finished product delivery. The holiday sales shortfall resulted in higher than anticipated levels of unfinished goods. As a result, the Company is in negotiations with certain vendors for purchase commitments totaling approximately $55.0 million. Based on current negotiations and product development plans, the Company has recorded a provision of $13.8 million for commitments which it estimates as the most likely outcome. Future charges may be required based on the final result of these negotiations as well as changes in forecasted sales. The adjustment in NOOK’s hardware strategy is expected to result in the rationalization of its cost structure. The Company expects to incur restructuring charges as a result of this adjustment. These amounts are currently not estimable.

But in spite of the generally poor performance of the past year, B&N is still planning to sell new hardware, and they are still planning to design and release new Nook ereaders.

While the Company experienced disappointing NOOK ^® device sales over the most recent holiday selling season, the Company’s digital strategy is to offer customers any digital book or magazine, any time, on any device. The Company remains committed to continuing to have a premier digital bookstore. In terms of its device strategy, the Company intends to reduce its existing cost structure. Further, the Company’s business plans are being adjusted to reduce its investment in sourcing, assembling and manufacturing the Company’s own NOOK ^® tablets and to explore outsourcing or co-sourcing such functions. This revised strategy is intended to capitalize on the Company’s design capabilities in partnering with third parties to source co-branded tablets with NOOK ^® content. This new partnership model may reduce the Company’s risk associated with designing and manufacturing its own tablets in the competitive tablet market, while allowing the Company to offer its vast digital catalog, and high-quality digital bookstore service. NOOK expects to continue to innovate and design best-in-class dedicated eReaders.  

TBH, it wasn’t clear whether B&N was going to have new Nooks. Sure, their past press release could be read that way but it still wasn’t clear. But the details in this filing could mean that the Nook HD that B&N passed on earlier this year could indeed be released.

B&N originally launched the Nook Store 4 years and 9 days ago. After seeing a couple years of decent growth, B&N’s turned sour in late 2011 / early 2012 with a marginal performance in the holiday quarter. That unsatisfactory performance led to a reorganization in April 2012 which split off Nook Media and drew in investment from Microsoft.

That reorganization did little to improve B&N, which went on to report a dismal holiday quarter in 2012 and poor Nook revenue in FY 2012. B&N’s response was to reduce expenses by abandoning plans to develop any more tablets and instead rebrand someone else’s hardware.

There’s no solid info yet on when or if any new Nook branded hardware will be released, but the intentions stated in the SEC filing tell us that it could happen.

Barnes & Noble

If you have any paper books on your wish lists at Amazon.com or Overstock.com, now might be a good time to double check the prices. The 2 web retailers started a tussle over book sales last week and while this still appears to be a small scale conflict we could be looking at the beginnings of a price war.

Late last week Overstock.com sent out a press release which announced a sale. I didn’t write about it at the time (there’s no need to cover every sale), but in the press release Overstock promised to undercut Amazon.com’s prices on books:

For a limited time, we’ve priced our books at least 10-percent below Amazon.com’s prices, as of July 22, 2013. This move immediately affects hundreds of thousands of titles.

The offer is only good for the books sold on both sites, which according to Internet Retailer is around 360,000 titles, but that’s still a decent sale price. It’s also a sale that other retailers like B&N have not decided to match.

I ignored the Overstock.com sale, but apparently Amazon did not. Late Friday night Amazon responded to with their own sale. Shelf Awareness reported on Saturday that:

Yesterday Amazon.com quietly began discounting many bestselling hardcover titles between 50% and 65%, levels we’ve never seen in the history of Amazon or in the bricks-and-mortar price wars of the past. The books are from a range of major publishers and include, for example, Inferno by Dan Brown, which has a list price of $29.95 but is available on Amazon for $11.65, a 61% discount; And the Mountains Echoed by Khaled Hosseini, listed for $28.95, offered at $12.04, a 58% discount; Lean In by Sheryl Sandberg, listed at $24.95, available for $9.09, a 64% discount; and The Fault in Our Stars by John Green, listed at $17.99, available for $6.55, 64% off. A notable exception is The Cuckoo’s Calling by J.K. Rowling, using the pseudonym Robert Galbraith, which is discounted 42%.

I have no details on the Amazon.com sale myself, but if the SA report is accurate then it would tend to debunk the commonly held belief that Amazon is willing to lose money with wild abandon. Instead Amazon has chosen a measured response that goes one small step further and hurts their opposition even more than Amazon.

The difference between Amazon’s sale and what many would assume Amazon was going to do could best be described as the difference between a game of chicken and MAD. Like most of Amazon’s other pricing decisions, this sale is based on the idea of going one step further than any of their competitors would dare.

The Overstock.com sale is reportedly only going to be lasting for a week, so there’s a very good chance that neither party will be crazy enough to drop prices any further.

And thanks to the settlement between the US govt and the 5 publishers who conspired with Apple, we’re probably never going to see a similar price war in ebooks.  Remember, the settlement agreement included a clause that Amazon could discount ebooks from one of the settling publishers up to the point that their marginal cost hit zero for the ebooks from that publisher.  That means that Amazon could at best offer an average of a 30% discount on ebooks published by the Big 6/5.

That’s a shame, because there are a lot of ebooks that I won’t touch at $10 that I might buy at $5.

image by dfbphotos

Here’s a surprising bit of news that first appeared last month but seems to have gone unnoticed by pretty much everyone. A new benchmark showed up on the  GLBenchmarks website last month and it reveals some fascinating details about Kobo’s future hardware plans. It looks like someone at Kobo tested a new tablet codenamed Macallan last month. It’s going to be called the Arc 10HD, and it is running Android 4.2.2 on an 1.8GHz Tegra 4 CPU. But that’s about all I can tell you for sure.

I do not have access to the benchmark results (they were removed) so I can’t even confirm that this is legit. But the screen shot that I did see showed that this device had a screen resolution of 2560×1504. That’s the same screen resolution as on the Samsung Nexus 10, which suggests that the Kobo Arc 10HD is indeed a 10″ tablet.

There’s no information yet on the rest of the hardware specs, nor do I know when this tablet will be released. Odds are it will show up some time this Fall, but that is just an assumption. Kobo has released new 7″ Android tablets in Fall 2011 and in Fall 2012, and I would not be surprised to see yet another 7″ tablet show up alongside the Arc 10HD this Fall.

One thing I can add is that this tablet has yet to hit the FCC website.  Kobo’s new ereader showed up last week, but it has not been joined by the new Arc 10HD.

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