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Old 06-06-2006, 05:07 PM   #1
Alexander Turcic
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Sir "Sony" Stringer is in love with his e-book reader

If you want to believe Sony CEO Howard Stringer, the Sony Portable Reader is going to be a huge success. Here is the relevant excerpt of an interview he gave to technology columnist Walt Mossberg during the WSJ D conference last week:

Quote:
Mr. Mossberg: Let's talk about the Sony Reader, which is a new and quite different e-book device. ... This is not just a device. You have to pull off something sort of akin to iPod and iTunes with this, where you have a device people like, at a price they will pay, and very good software on the computer to handle it and then a good service with a lot of content where the DRM [digital rights management] isn't too intrusive.

Mr. Stringer: You're right, that's a lot of pieces to put [together], that sort of end-to-end model that Gates was saying no one wants, but everyone does, actually. I've put my name on this damn thing. I'm a reader. I know that's an odd phenomenon these days, but I carry books all around the world, so when I saw this I fell in love with this device. The fact that you can store 80 books on this and more on the memory stick, the fact that its battery life is seven-and-a-half thousand pages, which means about 25 books. ... The publishers love this ... Dan Brown [author of "The Da Vinci Code"] endorsed this at the Consumer Electronics Show.

Mr. Stringer: He was in love. ... I have to do a kind of Steve Jobs salesmanship job, which is a fairly intimidating thought. My colleagues in Japan don't believe I can make this work in the United States because they actually don't think Americans read. ... But I think the demand for this [is huge]. I get called every day about it.

Mr. Mossberg: There has to be a lot of content there.

Mr. Stringer: There's plenty of content. We've got thousands of books. I'm not worried about that. I'm really worried about -- can I create a business model where the demand is great enough to create the numbers? Part of Sony's problem is, in order to sell almost anything, you're talking about building a demand for millions of things, always millions, not thousands.
Of course Sir Stringer forgot to address the other part of Sony's problem - the company's insistence on 'standards' which no one else either wants to or is able to use.

Thanks to Liviu_5 for the tip!
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Old 06-06-2006, 11:12 PM   #2
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The major difference between this and an iPod being...

Most consumers have a large collection of music that is easily put on an iPod.

How many people can say that about the Sony Reader?

How long will Mr. Stringer wait for his "millions" before he gives up and cans the project?
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Old 06-07-2006, 07:47 AM   #3
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I want this to work, but its a little different than the ipod. People buy dozens of songs a month, I doubt they will buy that many books. Lets think about what music means to us vs our books.

Music is essentially omnipresent. We purchase songs and listen to them constantly, while performing various other actions such as work or exercise. How many times will you read a book, and when? You will likely only read a book once, and have to dedicate yourself 100% while you do it (ie, you aren't driving while you read). Music consumers will buy 10 songs and add them to his/her "song pool", which complement their lives.

Now look at the energy that goes into writing a song vs a book. Its very expensive (time consuming) to write a book. Im a book guy, but I have purchased over 50 songs on my ipod from the last two years. No way Ill ever buy that many books in that same timeframe.

I think there is a market for this, but it won't see itunes numbers.


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Old 06-07-2006, 08:09 AM   #4
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You may be right. However in the last 2 years I've bought 10 songs from iTunes and on average buy 5-6 books a month. I have an extensive library which I enjoy repeatedly. Some of my books have been replaced 5 times due to being worn out. Music may be everywhere but there are still people like me who read at every opportunity.
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Old 06-07-2006, 09:56 AM   #5
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That sounds familiar ultim8fury...

I read on average at least 2-3 books a week.

I buy 4-8 a month.

I often spend more on books than on food (I can survive on pasta and tomato sauce).

I can't tell you how many times I have replaced books like Ender's Game or Space Cadet (though in the case of EG it's because I've lent it out rather than it died).

As for music I buy maybe 1 cd every 2 months.
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Old 06-07-2006, 10:03 AM   #6
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LOL I don't think the same person repeatedly buying the same book make a fraction of a blip on the book sales radar. Remember we are talking sales in millions for the business model. Ender's Game was good, but not THAT good
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Old 06-07-2006, 10:17 AM   #7
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Err, you've missed the point entirely.

Your implication was, in your post, that because you wouldn't buy 50 books over 2 years that no one would and thus there will be little/no market for these e-readers. Unlike songs.

The point ultim8fury and I were making is that we would easily buy more than 50 books in an e-book format. Which shows there will be at least some market.

One of the advantages of e-books is that publishers will be able to relatively easily distribute books which havn't been re-printed recently (Space Cadet for example).

Not to mention the advantages of a searchable text/reference books.

No I don't think you are looking at 'itunes' numbers. But I can see there being a good market for it.

And as for Ender's Game if it's not that good why is it that my copies keep getting borrowed by people and never given back? I mean seriously I lose at least one a year.

Last edited by Riocaz; 06-07-2006 at 10:26 AM.
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Old 06-07-2006, 10:56 AM   #8
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Riocaz, Im not poo-pooing the reader concept. I understand the publisher's cost and the attraction to e-publishing. I want all of the end-user benefits that come with that.

The Sony CEO coughed up they need sales in the millions to make their model work. Im saying based on the nature of books, I don't see it happening. People are spending an amazing amount of money on iTunes. Go to work and ask how many songs vs books (electronic or otherwise) they have bought in the current year, then translate that to $ (one dollar a song, 7 dollars a book or some such). Its staggering the advantage that songs have, and I posit its just in the nature of how we enjoy songs as a complement to what we do rather than occupying what we do.

Again, I think everyone wants the same thing here but I wonder what Sony and the publishers will do long term after the glory visions of iTunes fade to a more reasonable set of expectations.

Let me save everyone time: You disagree. Thats fine!

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Old 06-07-2006, 10:58 AM   #9
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Quote:
Originally Posted by Riocaz
One of the advantages of e-books is that publishers will be able to relatively easily distribute books which havn't been re-printed recently (Space Cadet for example).
As long as an electronic manuscript is readily available. The time and effort it takes to do a quality OCR and proofreading job on older material is not insignificant, and if sales are projected to be low, why bother when new works will sell in more volume?
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Old 06-07-2006, 11:00 AM   #10
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dugbug -- since this is the mobileread forum, you're mostly talking with folks who read perhaps more than most.

ultim8fury & Riocaz -- since this is the mobileread forum, we're mostly folks who read perhaps more than most.


That being the case, the music industry differs from the publishing industry in another rather fundamental way. The music industry expects, needs and is structured for a very high volume. Part of this is because their product is such a short format, part is because it's kind of a background to our worlds (as dugbug pointed out).

The Publishing industry on the other hand is arranged around a much lower product flow. Again, a lot of this is the nature of the pruduct; using it does take a focus of time and attention.

Something they share, however, is that a large chunk of their costs are tied up in physical packaging of their product -- a product that can easily survive and work without that physical packaging.

The Music industry has discovered that if they sell their product digitally, they lose the cost of that packaging. What does a CD cost? About 15 USD? Now if you buy 15 songs as MP3's, at .99 USD each, hmm. that's 14.85 USD? (I don't trust my arithmatic unless I check it with a calculator ) so their getting almost as much revenue with less cost. I have no idea what packaging and shipping a CD costs, but I'm guessing that it's more than .15 USD apiece.

I do know that the majority of the cost of making a book is the printing, and shipping is not inconsiderable either.

So, if a publisher were to convert even a portion of their sales to digital they would increase their profit on those sales to the difference between the cost of delivering it electronically vs. paper. Even if they gave buyers a discount of part of that difference they still come out ahead. Add in that all modern books exist in an electronic format to begin with (so there's no extra cost to make them that way), and you can see that the publishing industry would have a vested interest in e-books -- if they can get past their pirating concerns.

The main reasons that e-readers have not done well in the past are readability, poor battery life, and that getting an e-book to read onto whatever you're reading it on (what with getting it electronic in the first place and converting it to a format you can use) has been a major pain in the sitter-downer. Of course, when they insist on charging more for the product than they do for the new-published hardback version....

I think that a reader with excellent readability, great battery life, and ability to handle a wide variety of formats (or a single generally accepted standard format) would go a long way toward changing the public opinion on e-readers. It wouldn't happen quickly, which means it will be difficult, but I think it would happen. But we are going to have to reach some sort of mutual happy place on the piracey issue with the publishers, and they seem to be giving some, anyway.

BTW, I read more than 50 books in a single year. And I read 'em multiple times, if they're any good, that is -- I don't consider a book to be good unless I want to read it more than once.
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Old 06-07-2006, 03:51 PM   #11
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Perhaps the better business model is to pursue more ephemeral print media such as newspapers and magazines, as Irex are doing? More volume like songs, and still considerable production costs.

Regarding the iPod comparison - someone mentioned that we all have lots of music that can be put on the iPod easily, and that this is different from reading material - sure, we are not about to scan our book libraries. But, I am guessing that many also have lots of pdfs and/or free ebooks. I am a scientist and almost all the publications we read are pdfs. At the moment I have two bad choices - print and kill trees to read something that is easier on the eyes, or read on the computer screen, which is hard after the many hours a day I aleady spend staring at it.

I am leaning towards the Iliad because I want to dump my hundreds of pdfs onto an open format reader, and always have them handy. Sony should consider this, and devote effort to a good open format reader. If I knew that I could easily read my pdfs on the Reader (with zooming, reorientation etc) I might consider it after all.
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Old 06-07-2006, 03:58 PM   #12
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Quote:
I have no idea what packaging and shipping a CD costs, but I'm guessing that it's more than .15 USD apiece.
Replicating a compact disc costs pennies. Literally. My wife spent seven years making the glass masters the stampers are cast from.

It is no secret that the RIAA cartel has propped up CD prices. The FTC even spanked them for it, but in a very 21st century business friendly sort of way that accomplished nothing.

The point that was being made is that people consume books differently than they consume music; that Sony is stating outright they are going after the blockbuster business model, and that that model will not work here. The fact that someone on this forum may consume 50 titles a year does not mean that the audience of people who buys 50 titles a year is big enough to sell MILLIONS of Reader devices.

People will buy a $300 iPod to listen to music when they're working, driving their car, or mowing the grass. You CAN'T read a book while doing those things (not that some idiots don't try).

Today: Pay $5.99 for a mass market copy of "Angels and Demons".

Tomorrow: Pay $300 for a Sony Reader, and $5.99 to download a copy of "Angels and Demons".

Conclusion: Tomorrow's solution is about $300 too expensive. Most consumers aren't faced with the problems the people on this board are. The real upside of this business could be maintaining titles in "print" without having to pay taxes on inventory, but this is not the model Sony appears to be pursuing.
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Old 06-07-2006, 05:01 PM   #13
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"People are spending an amazing amount of money on iTunes. Go to work and ask how many songs vs books (electronic or otherwise) they have bought in the current year, then translate that to $ (one dollar a song, 7 dollars a book or some such). Its staggering the advantage that songs have, and I posit its just in the nature of how we enjoy songs as a complement to what we do rather than occupying what we do."


In the U.S. alone, book sales for 2005 were $25.1 billion according to figures released by the Association of American Publishers. CD sales were $11.2 billion and digital download sales were $503.6 million according to the RIAA.

I think the reason books outsell songs is a reason you stated. A song gets listened to over and over, while once a book is read, the reader moves on to another one.


Itunes songs only make up around 4% of total music sales. If Sony could do 4% with ebooks, then they can be considered a success.

Last edited by pitcher23; 06-07-2006 at 08:48 PM.
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Old 06-07-2006, 10:13 PM   #14
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Sony makes dozens of products that do not need an aftermaket of some kind. Why would'nt they do the same thing with an e-book reader ?
Apple really opened a Pandora box with the Ipod/Itunes thing and every bigger company will now mostly focus on this type of market strategies.
When Sony started the Walkman, It did not have Its foot in the music industry at the time. Nowadays it's "create a need and then the the tool".
I'm sick of It. That is why I prefer a small company like Irex, although the Iliad is way too expensive for what It does. They could have made a killing with the novelty of the tool but lost most of the advantage they had by making everyone wait so long.
Ahhh! patience...time will tell.
I'd sure like to see other player in that arena, maybe Samsung or RCA ?
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Old 06-08-2006, 07:41 AM   #15
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Well either way I want one of the damn things, so Sony get to it *whip*....
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