Discounted E-Readers: Don't Call it a Price War -- It's a Wake-Up Call

(MoneyWatch) 

Barnes & Noble (BKS) just made another (quietly) aggressive move to stay ahead of its competition and dropped the price of its Nook e-reader to $149 (that's the WiFi only version, the 3G + WiFi is $199). In an expected comeback, Amazon (AMZN) countered by lowering the price of its Kindle to $189.

But while the spotlight glares on the two retailers duking it out for digital domination, there's a mighty storm brewing on the e-publishing horizon. And publishers and booksellers just don't see it.

So many devices, so little functionality

This so-called price war isn't really a war as much as posturing. Borders (BGP) had already announced the Kobo e-reader for $149 and the Libre reader for $119, and Sony's (SNE) basic models are between $169 and $199. The problem is that each of these is a dedicated device. Oh sure, you can play chess on a Nook or tweet and Facebook favorite passages from a Kindle, but none of these offers much beyond a reading experience. (Some argue that between e-ink's slowness and bugs, turning actual paper pages would be better).

Apple's (AAPL) iPad with its multiple functions is a clear winner with shoppers. Digitimes reported that global shipments of e-readers reached 740,000 in the last two months (Nook took 37 percent of that pie), while iPad sales topped 2 million in the same time period.

You have to wonder why then, would anyone want to add to the glut of devices, especially when as my BNET colleague Erik Sherman points out, mobile vendors have shown they can combine a mid-sized screen, significant computing power, and long battery life for just a bit more money. Yet Sony is launching a new reader in July, Amazon is set to trot out a new Kindle in August, and B&N will have a new Nook later this year. These only serve to stoke the flames of another digital pyre.

Dedicated devices don't play well with others

And they should. Part of the issue is that publishers have zipped digital files up tightly, ostensibly to protect their biggest name authors from being pirated (at the publisher's expense). But the bigger deal, as publishing consultant Mike Shatzkin notes in a point-by-point breakdown, is that between DRM and a dedicated device, downloads are prevented from crossing platforms.

The e-ink devices generate the real lock-in, or, more often, lock-out, problem. It is your Kindle device that locks you into the Kindle store; your Kindle file can be ported to a non-Kindle device using the Kindle reader software.

Even the non-dedicated reader iPad fails in this regard. Digital files downloaded from iBooks can only be read on iPad and soon, the iPhone -- but nothing else.

Pissing Customers Off

There are a lot of readers out there and guess what they want to do? Read! It's amazing that with multiple channels of communication available to both publishers and retailers, no one is paying attention to what the readers want. This was clearly evident at the Untethered Conference. Publishing Perspectives writer Ron Hogan has a thorough report on this glaring omission, but here is a choice nugget:

Perhaps part of the problem was that the closest Untethered came to giving voice to user experience was in the opening remarks from Washington Post Company CEO/chairman Donald Graham, who noted that he liked being able to make the print bigger. Other than that, speakers were more than willing to talk about the cool things their devices and apps could do, and how widely we could expect them to spread in the near future, and there was even some talk of being responsive to consumer feedback, but nobody explained what readers were experiencing right now or what they really want from future devices.

I've said this before but it bears repeating: publishers and retailers both large and small need to experiment beyond traditional processes and devices. Listening to what readers want is a good place to start.

Image via Flickr user Billaday CC 2.0

Related:

• iPad's Coming Ready or Not, Publishers and Retailers Have Their Pants Down
• A Cheaper Apple iPad Could Short-Circuit Publishers' Victory over Amazon
• Demise of the E-Reader is Looming