First, apologies for the radio silence--it's end of quarter here at Forrester, and I've been busy adding to shareholder value, etc.But I did want to add a quick comment on what's happened on the Google/publisher/eBook scene this week, as Google:
Launched the Fast Flip application. Google's launch of the Fast Flip application is an olive branch extended to publishers. For those of you who haven't used it, it's pretty cool: You search for a term, like "Kindle," and the results are presented as screenshots of major media publications (BusinessWeek, Fast Company, The Atlantic, NYTimes, Slate, etc.) that have covered the topic recently. You can read about a screen's worth, and flip to the next one by clicking the big arrows on the left or right, or click into the story to go to the publisher's web site and continue reading. Google shares ad revenue with publishers, and shows just enough content to encourage click-through to the publisher's site, where users see more ads.
Our take: For Google, the Fast Flip is an attempt to be a better partner to publishers. As much as publishers would like to think that Google needs them, only the reverse is true. But Google is starting to invest more in creating goodwill for publishers in the newspaper, magazine, and book sectors, and the Fast Flip is part of that effort.
A new Forrester report on the eReader market just went live (clients can access the full version here).
In brief: We surveyed 4,706 US consumers in an online survey to find out what value they place on eReader devices. We used a Van Westendorp Price Sensitivity Meter methodology to ask consumers four open-ended questions:
At what price would you consider an electronic book device/eBook reader a bargain?
At what price would you consider an electronic book device/eBook reader expensive but still purchase it?
What price would be so inexpensive that you would question the quality of an electronic book device/eBook reader?
What price would be so expensive that you would not consider buying an electronic book device/eBook reader?
We plot all the data and to find the optimal price range for different segments of consumers--what price you'd have to charge for the device to get the maximum number of consumers buying an eReader.
What we found was that the price points for how most consumers value eReaders is shockingly low--for most segments, between $50 and $99. (Currently, eReaders in the US are priced between $199 for the Sony Pocket Reader and $489 for the Kindle DX.)
Here you can see the breakdown for how different segments of consumers answered the question, "At what price would you consider an electronic book device/eBook reader expensive but still purchase it?":
A new report from the Cleantech Group (available for purchase or to Cleantech clients) takes on a big question: Are the Kindle and other eReaders really "green"?
In Forrester's surveys, we've found that of US online adults who are interested in eReaders, 51% say they're interested because they think that eReaders are "better for the environment." But I've often wondered if consumers just believe that eReaders are green, or if they really are.
Today CourseSmart, a joint venture of five of the biggest textbook publishers, is launching an iPhone app to augment its Web subscription service for eTextbooks. Its subscription service offers access to more than 7,000 textbooks, at an average of 50% off print prices. Currently, CourseSmart has a few hundred thousand student subscribers, out of a potential addressable market of 13 million US college students (they only target higher education, not K-12, for now).
The iPhone app is nice, with a snappy thumbnail browse feature. It's not something you'd read on, per se, but offers easy access to look up something, search for something, or access your notes. Having the option of mobile access will undoubtedly increase the appeal of CourseSmart's subscription service, assuming the company is successful at marketing the new feature.
Currently, CourseSmart's content isn't integrated into the Kindle or other dedicated reading devices; this app marks its first move into increasing access to eTextbooks on any kind of mobile device. Maintaining print-identical formatting and pagination is a crucial aspect of its product; eReading devices aren't ready to support this type of content yet, but the iPhone is a move that makes sense.
Just a quick note to say that we've got a new report up on the changing demographics of eReader buyers: "Who Will Buy An eReader?," available in full to Forrester clients.
First, eReader interest and awareness is definitely growing, as you can see:
Second, the types of consumers likely to buy an eReader are changing. While early adopters of eReaders were a perfect storm of demographics for Amazon (they could afford the device, they have a need for the device in business travel and urban commuting, they like technology, and they buy lots of books online), future prospects for the devices look completely different. They're more likely to be female, less tech optimistic, and they read a lot (on average, 5 books per month) but they buy and borrow books from multiple sources, as opposed to buying lots of books online.
The big takeaway is that this could spell trouble for Amazon, if competitors can move in to better serve the later waves of adopters who don't have as strong a relationship with the eCommerce giant.
I've heard from clients that they're already seeing this shift--more women buying the devices and shopping for eBooks. Looking forward to continuing the discussion...
Today Sony announced that its public domain offerings from Google in its eBook store has reached 1 million volumes. That's a lot of eBooks. For context, the Library of Congress has 32 million books and is the world's largest library; Harvard's collection is 5th largest at 15 million books. (Thanks, Wikipedia.) So we're merrily trucking along at digitizing the world's collection of books.
A reporter asked me yesterday whether I thought Chris Anderson was right, or whether I thought he was too glib. I don't think an either/or question.
What I've come to realize while researching and writing reports like our paid content forecast is that yes, free can be a business model--but only for much, much smaller businesses than most media companies as they exist today, with their Manhattan skyscrapers or sprawling Hollywood studios, thousands of employees, unions, factories, warehouses, and debt obligations.
So Anderson is right, but not right enough to be much comfort to the media companies on which we depend.
Amazon dropped the price of the Kindle 2 today from $359 to $299. Are we surprised? No. It's predictable that prices decrease for consumer electronics as manufacturing volume scales up (just ask those poor saps who paid $499 for a 4GB iPhone in 2007). But there's also some pricing pressure specific to the eReader category that Amazon is responding to. In particular: