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Blio's Debut Has Game-Changing Potential on the Publishing Business

Move over Kindle, Nook, Sony, et. al. There's a new e-book technology on your block. Meet Blio, the fresh-faced neighbor that's poised to take a bite out of your market.

Blio is entering a landscape littered with e-readers, to be sure. It officially debuting at the Consumer Electronics show on January 7th, the same time Plastic Logic will be trotting out their new Que. Apple's long-rumored tablet is not far behind. But amid all the bells and whistles of current gray-scale technology, Blio will steal the show anyway.

Here's why.

Blio was born out of a strong digital media partnership. Baker & Taylor, a distributor of paper and digital books and entertainment products, will provide K-NFB Reading Technology with digital content for an e-reader platform developed by Ray Kurzweil and the National Federation of the Blind. As such, it features enhanced text-to-speech capabilities.

Some argue this will undercut the audiobook market, but Peter Balis, director of digital content at John Wiley & Sons is pleased with the prospects. "We have not had a good solution before," he observed, adding that Wiley previously used a third party to publish audio versions of their print books.

In collaboration with Nokia, the reading software is especially designed for their mobile phones to create the smallest text-to-speech reading devices available thus far. But it's not exclusive to them. Even though it's a proprietary product of Baker & Taylor, the K-NFB e-reader can run on PC or Mac laptops and desktop computers, as well as netbooks and other mobile phones such as the iPhone, no dedicated device required.

And while industry experts such as Mike Shatzkin, CEO of Idea Logical Company and a 40-year publishing veteran, wax poetic about Blio's functionality, Shatzkin thinks Blio has game-changing potential on the business of e-books:

The setup and tool kit for the publishers is without cost; Baker & Taylor plans to make its money on the transactions. They're wholesaling on whatever the established terms are with that publisher. B&T will also host and provide e-commerce support to bookstores and publishers who sell direct. There are potential devils in those details but, to start, it is obviously hard for any publisher to resist incremental revenue for no setup cost.
Indeed, Balis said that some of Wiley's titles (think cookbooks) are hard to convert to e-books because of special formatting. He's particularly intrigued by the opportunity to turn over a PDF rather than fully tagged XML files. "These are nascent days and the infrastructure for digital is costly," he said, which makes a free conversion that much more attractive.

Addressing the incompatibility of Blio ebooks with other e-readers, Balis did note that Wiley will continue to offer e-books in multiple formats to multiple retailers so that the choice will be the consumers'. That's also the potential challenge, according to Shatzkin.

He said Baker & Taylor is set to deliver 50,000 e-books at launch, and has commitments to convert as many as 180,000 titles from various publishers. "The problem is not product," he said, "Publishers need to have a direct relationship with the consumer." Shatzkin believes the equity in this business model comes, "not from IP (intellectual property) but from eyeballs. The question becomes, how are you going to gather and hold the audience?"

Publishers with niche markets such as John Wiley or Harlequin have dedicated audiences, and in Shatzkin's opinion have mined them successfully to maximize sales. The introduction of the Blio can only further those prospects, with multi-dimensional functionality that can capture new segments of the audience -- if publishers can continue to develop sound sales and marketing strategies.

If that proves true, it makes the recent stand against Amazon e-book pricing by HarperCollins, Hachette and Simon & Schuster seem even more short-sighted.

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