Oh no!

Lessons (not) learned

or how Apple will conquer the eBook market.

Apple is on the verge of conquering both a significant share in the eBook market (as it did with the cellphone industry with the iPhone) and aggregate book publishers content on iTunes (as it did with music and the film industry).

I discovered Steve Chazin’s blog last year : www.marketingapple.com and downloaded its free keynote on Apple’s marketing strategy.

In this keynote, he kindly offers his vision, as a former Apple marketing employee, of Cupertino’s marketing strategy:

1. Don’t sell products
2. Never be first to market
3. Empower early adopters
4. Make your message memorable
5. Go one step further

The January 27th event is quite close and chances are Steve Jobs will introduce the much-awaited tablet after the “usual” massive Apple buzz campaign. If it’s the case, how does it fit with M.Chazin’s vision of Apple strategy and what consequences could it have on the publishing industry and ebook sellers ?

1. Don’t sell products. Apple has already proven that they’re not selling an eBook, they will be selling a new reading and content consuming experience. With a rumored new touch-based iLife, more than 100,000 apps to play with, the iTunes Music & Movie Store, (obviously the soon-to-come iTunes BookStore) and the many features Apple is certainly keeping in their hat, the Tablet will allow users to enjoy a brand new experience with no comparison with the Kindle or the Nook.

One…Check!

2. Never be first to market. As I have read somewhere, the Kindle and eBooks in general can be compared to early digital cameras. They’re hard to use, suffer from many problems and, at the end of the day, are not doing their job that good. Anyway, early adopters are buying it, experiment with it, like it but the truth is, the whole experience is not that great. Apple has been watching their futur competitors place their pawns and is about to unleash hell as they did with the MP3 player market and the iPod.

3. Empower early adopters. Get ready for thousands of unboxing videos on Youtube and demonstration of the new multi-touch features. People will show their tablet to their friends and the world because it would be the first eBook-sized device that does not look like a calculator coming straight from the 80’s or like it was made of old PC monitor (yes, Kindle I am looking at you). It will be easy to use and pleasant to hold and look at. How could you expect someone to do this with any other eBook ?

4. Make your message memorable. “The computer for the rest of us”, “1,000 songs in your pocket” and “3 steps to the Internet”. What would it be for the Tablet ? I have no idea but be sure it will be simple and crystal clear. Steve Chazin writes “Apple’s marketing is so good it creates purchases even before people see it. That happens when people do your marketing for you”. Judging by Google Trends graphs, this part of the job is done.

4. Go one step further. What kind of surprise Cupertino has succeded in concealing this last months ? I can’t say and I hope I will be amazed on the 27th of January as all of you. No one knows what’s the “one step further” will be but so far, the strategy has been applied without any mistake.

What does it mean for eBook sellers ?

I am quite sure Apple has developed a native eBook reader with its own format. Will it support ePub ? I doubt it given the level of control Apple wants on the content it distributes (which has, by the way, proven its efficiency both for users and developers).

eBook sellers will soon be in the exact same position Nokia, Sony Ericson, Motorola and others are today. Facing an opponent that has a developed a verticaly integrated ecosystem disrupting the way things used to work. Amazon has adopted the good strategy but it seems to me that the Kindle will not suffer the comparison with the Tablet, in terms of design, user interface, features, and content richness.

What does it mean for publishers ?

History will repeat itself. As with the music industry and the iTunes Music Store, Apple will get a grip a way or the other on publishers’ content and will channel it through the iTunes Book Store. As the music industry a few years ago, the book industry is composed of a few major companies and many small independent ones. And as always, these oligopolistic industries have proven and continue to prove their inability to agree on building a common distribution platform and on setting standards. The unsurprising result is that they loose total control of their digital distribution channel to the benefit of…     computer companies.

At least, that’s what happening in France where publishers are still competing to impose their own reader and cannot seem to reach an agreement. French publishers Numilog, Eden-Livres and e-Plateforme are apparently forming a GIE to give birth to a common distribution platform on January, the 18th (see Le Figaro’s article)! If he Tablet is announced in 9 days and released in March as rumored, it seems that reaching a potential agreement now is far too late to have the slightest hope to compete with a possible common distribution platform.

No matter the resistance the publishers will oppose and their unwillingness to sell books through Apple, users, by adopting the simplest and the most elegant device to download and read an eBook, will force them to make their content available where the demand is.

The press industry has been hurt so bad these last few years that it was the first to clearly express its interest for the Tablet (or the most easy to convince). Today, Harper Collins announced it was in talk with Apple (see NYT article), many will follow.

Apple will certainly offer publishers (and hopefully writers) a better deal than Amazon or Barnes and Nobles and will settle a standard in the industry. Does $0,99 seems a good price for a song ? I bet Apple will be setting the digital book price in the months to come.

Apple also offers publishers an opportunity that Amazon and others are unable to provide: avoiding a price drop. Enhanced books could indeed be a solution to justify higher prices.

The publishing industry is about to enter the digital age for good and, as the music industry in its time, has not succeeded in taking control of its destiny.