There are many reasons to be bullish for ebooks. On the device side, the iPad set the standard (rather high) and triggered an intense competition among manufacturers and operating systems providers. On the people side, just take New York’s subway, or a high-speed train in Europe. And we’ve seen nothing yet: tablets prices will go down as cell phone carriers – and eventually media companies – subsidize e-readers. Before year-end, European telcos will offer the Samsung Galaxy — an Android-powered tablet — for €300 or less, preloaded with access to online bookstores and electronic newsstands. For the industry, this Christmas season is critical: tablet makers must secure defensible market territory before Apple’s probable roll-out of its next generation iPad.
The content side remains more complicated to figure out. A first phase is likely to consist of an extension of what we have today, i.e. a transaction system based of book files: text-based books or richer media products. The main players will remain Amazon, or the Apple iBooks store. But, in five to ten years, this way of dealing with intellectual content will be seen as primitive.
The true revolution will be a shift from a files transaction system to a rights transaction system. This transformation involves radical changes in the way we think of digital content, books, videos or even games.
For now, let’s focus on books. Here is how it could work.
We’re now in 2015. I read books-related contents on a number of different devices: my smartphone, my high definition tablet, and even my PC some times. (I personally do not believe in TV for such products). I want spend a long weekend in Rome. Instead of buying a couple of books – one to organize my trip and another to use on location – I will buy rights to both.
As I download the books I bought rights to on an iPad or a Samsung Galaxy, the content takes advantage of specific screen features and displays large pictures, some of in 360° panoramic format and zoomable. My Microsoft tablet uses the extraordinary DeepZoom technology connected to the Bing Maps Live View…
In Rome two weeks later, on my smartphone, the same book morphs into a handy city guide: maps, museum locations, places to stay or eat. The contents use my phone’s geolocation capabilities, helping me find my way and manage my itinerary.
None of the files associated with the guide ever appear as such on the device. The contents are transparently stored on a caching system intelligent enough to adapt to my reading conditions of the moment: type and capability of the device, processing speed, network configuration: full broadband at home, 3G — or 2015’s 5G — in Rome.
For as long as I own the rights to my book (I can buy rights “for ever”, or for a limited time), and since the files are stored in the cloud, I get the most recent version. If I go back to Rome in spring, the list of restaurants and museum programs will be updated.
Alternatively, if I’m fond of art history, my first purchase preparing for my Roman trip could take place in a regular bookstore. Attached to this €49.99 coffee-table book will be the rights to use/download the adaptive travel guide. In fact, I’ll do the transaction through my beloved local bookstore. This “with-it” establishment also offers a virtual store on Google Editions (launched in 2011), which provides storage for the contents files, processes the transaction and manages the caching process for my devices. Thousands of bookstores across the world uses Google Editions.
My digital rights are also transferable: I can loan or give the book by simply transferring the rights attached to the digital files. In retrospect, this feature makes 2010 digital bookstores look primitive. For instance, in the Apple iBooks Store, I was forbidden to offer a book to anyone or even to access to a iBooks in a foreign country – thus negating key advantages of dematerialized contents.
Buying a right of use instead of an actual file will profoundly change the landscape and the role of the different players.
Back to the present, here are few things to consider.
- The importance of identifying the user. Dealing with rights means, first and foremost, being able to certify the ID of the person who paid for it. In this field, telcos are well-placed, especially mobile carriers. They own the customer relationship, the contract, the billing arrangements. In addition, carriers know how to track the digital subscriber in order to adjust connectivity to the device currently used and to the location of the moment.
Put another way, a mobile carrier can assume the role of a trusted digital locker and thus become accountable for the management of piracy problems. Today, piracy involves the illegal use or transfer of a file. Tomorrow, the problem will be displaced to certifying the ID of rights holders.
Another key success factor for the move from files to rights will be the carriers’ ability to work together, to interconnect their platforms and services. ‘We vastly underestimated the importance of the network effect’, said to me one executive of a major European carrier. ‘Since we “owned“ our customer, we were confident they would be happy and faithful. They taught us a completely different lesson.’
- Mastering the cloud. In this field, Google is the dominant gatekeeper. By a large margin. Thanks to its huge infrastructure, the search giant is able to guarantee the scalability, the speed, and the safety of data. It will also be able to offer a reliable and inexpensive transaction system.
- Google and mobile phone carriers are likely to become entangled in a fierce and strange competition on the following grounds:
- Google owns the cloud to store and secure data (Microsoft also has significant capabilities).
- Mobile carriers own the customer base. By the millions: 564m for China Mobile; 430m for Vodafone; 278m for Telefonica/Movistar; 215m for America Movil, etc. (see full list here).
- They know how to make their customer pay.
- But they don’t have search engines. Google does, and to some extent, Microsoft does as well.
- To further complicate matters, Google and the carriers are intertwined through the Android operating system, which is powering an increasing number of handsets (Microsoft largely missed that train).
This petri dish will be quite interesting to observe as colonies of bacteria and fungi fight for space and secrete toxins to kill competing species.
Coming back to the subject of this column, the shift from paid-for files to rights for books or digital contents won’t come easily. As a telco exec told me last week: ‘It took centuries to convince people their money was more secure in a bank than under a mattress; convincing them they should trade ownership for access rights will take some time’. But this is the logical way to go.
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