Sony has recently announced that it will be converting ebooks sold in its ebook store to the ePub open format instead of its current proprietary BBeB LRF format. The ePub format is supported by an increasing number of publishers and ebook readers. This is good news in that hopefully someday we will have an open ebook format that will work across most or all ebook readers. In a perfect eworld any ebook we buy at any store would work on any ereader.
Unfortunately, it's not time to break out the Champaign just yet. Sony's ebooks will still have DRM, thanks to Adobe Content Server. Currently there are 17 ereaders that are compatible with Adobe's system. Something that is not compatible: Mobipocket DRM. Bebook owners who update to the August 2009 firmware which adds compatibility to Adobe Digital Editions are finding that they can no longer read Mobipocket DRM'ed files on their readers, rendering any previously purchased titles in that format useless. This is because Amazon, which owns Mobipocket, doesn't at this time permit Mobi DRM to co-exist on the same device with other DRM systems. Hopefully Amazon will change this.
Nevertheless, Sony's announcement is a direct shot over Amazon's bow, and a brilliant strategic move. Will Amazon maintain its current fortress mentality, locking Kindle users into buying their ebooks primarily from Amazon, and not opening the Kindle ebook store to users of ebook readers other than the Kindle? A couple of years ago when Amazon opened their music download store, they played the part of the liberator; so it is ironic that they now find themselves on the opposite side of a similar battle. In fact, Amazon's Jeff Bezos has dropped hints in the past that there are plans to make Kindle books available to other brands of ebook readers.
What would the effects be if Amazon decided tomorrow to match Sony's move? Personally, I think it would be beneficial for Amazon and the Kindle ebook store, and most definitely good for ereader owners of all stripes. Most of the negative comments that I've seen about the Kindle specifically (vs. ebook readers in general - i.e. people who can't imagine a device replacing a dead tree book) have to do with the closed format. I think Amazon would gain a lot of new converts if they made the Kindle more open.
If we were no longer forced to buy our ebooks from specific sellers, but could choose to purchase from any number of ebook stores and still expect the title to be readable from whichever device we happen to have, how would it change the way that ebook stores compete?
Brand Loyalty: Both Sony and Amazon have their devotees.
Price: Traditionally, product competition by price usually leads to price erosion - good for consumers in the short term, but maybe in the long run less product to choose from as producers go out of business or are consolidated. When it comes to ebooks though, the publishers will probably be able to draw the bottom line. What would happen to bestsellers for $9.99? Reportedly Amazon looses money on a lot of these, as they have to pay the publishers more than that. There would obviously be no reason for a loss leader program like this if you do not need to buy a Kindle to read them. Perhaps Amazon would continue to subsidize bestsellers for registered Kindle owners?
The Shopping Experience: Which ebook store is the easiest and most intuitive to use? I think Amazon is a clear winner here, but that's just my opinion.
Finally, where would a Sony matching move by Amazon leave Barnes & Noble? They are obviously hoping to position themselves as the main Kindle alternative when the Plastic Logic reader comes out early next year. I'm not sure at all if that boat would still float. B & N's ebook store is also built around a proprietary format and DRM; reportedly even DRM'ing free public domain books.
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