And unlike the Kindle, which shipped to Australian buyers almost a year before New Zealand customers got it, the Sony range has been absent from both markets until now. It’s a delay that will cost Sony some momentum but it’s certainly good news for the Kobo-powered ebook stores on both sides of the Tasman (Whitcoulls in New Zealand, Borders and Angus & Roberston in Oz).

Sony’s offering provides a premium brand name reader that will be tuned for easy access to these Kobo-powered ebook stores. Sony has been an early champion of the book industry’s open ePub ebook format in contrast to Amazon with its proprietary Kindle format.

Sony will release two of its units, the Sony Reader Touch Edition which sports the same 6-inch diagonal eInk  screen as the Kobo and Kindle, and the smaller Pocket Edition with a 5-inch screen. Both editions have a touch screen which many people prefer for navigation though usually at the slight expense of lower contrast.

Neither Sony model sports wireless, either via WiFi or 3G, so like the Kobo will need to be connected to a PC to load up on ebooks. Sony does have such a model, the Daily Edition, a slightly larger 7-inch model with both WiFi and 3G (cellular) wireless access but there are no plans at this stage for it to come to New Zealand.

The Pocket Edition will be NZ$299 and the Sony Reader Touch Edition will be NZ$399. NBR has a good comparison table showing how Sony’s line-up will compare with the new Kindle and Whitcoulls’ Kobo eReader.

And here’s a video intro from Sony New Zealand.

Vodafone—the accused-but- never-admitted cause of the hold-up—will be the mobile carrier, providing local 3G support for Amazon’s Whispernet system by which Kindle books can be delivered wirelessly over the cellular network with the communications cost built into the price of the ebook. As well as downloading ebooks wirelessly, Whispernet is a boon if you’re reading on multiple devices as many of us do. It synchronises gadgets so that when you later fire up your book on your iPhone, for instance, it will take you to the last page read. This is a major time saver, especially on slower eInk devices.

New York Times bestsellers are mostly US$11.99 (no NZD pricing but it equates to about NZ$17). This indicates an international download charge of about US$2.00 a book added to the typical US domestic price of US$9.99 for the same bestsellers. That’s still pretty good value and, of course, ebooks from Amazon currently escape the 12.5% (soon to be 15%) sales tax levied here, a tough reality for local booksellers who must charge it.

Notwithstanding the benefits of 3G, especially with no monthly charges, I’d guess most New Zealand buyers will opt for the new US$139 WiFi model rather than the more expensive US$189 3G + WiFi model.  At about NZ$200 plus NZ$30 freight, the WiFi model is cheaper than the $295 Kobo unit sold by local bookstore chain Whitcoulls. That gap might narrow if buyers are hit with sales tax at the border but the Kindle’s low value makes it likely it will slip through Customs without a whisper.

More here from NBR’s Chris Keall who also promises a review shortly.

From the August 2010 iss ue of News on Bookselling: The Official Journal of the Australian Booksellers Association.

By Martin Taylor

Most booksellers I speak to are keen, or anxious, to get into the ebook market. So how do you do it? Here’s a quick guide to the issues and challenges you’ll face today as you set up your online ebook store. As you’ll see, it’s no walk in the park and you’ll have to get technical. It will certainly get easier as time goes by but the trade-off, of course, is that the easier it gets, the more competitors will jump into the game.

The website

Booksellers’ natural inclination is to add ebooks to their existing website. This might be right, especially if your current web operation is very successful. But there are fewer things in common between print and ebook sales than you might think so consider starting with a clean slate.

The first place to start in either case is with the user experience. If your site has printed books as well as ebooks, mixing them up can leave ebook buyers sifting through irrelevant listings and search results. Cross-selling from your printed book site should be done carefully and its value not overplayed. If it’s a combined site, it should still have a distinct ebook section with separate stock items for ebook editions (and separate ISBNs for each digital format), and it must have its own merchandising. Ebook bestsellers and attractive offers won’t always match their print stablemates and you’ll almost certainly find the profile of your online shopper is different from your in-store shopper profile.

Ebook buyers will increasingly buy ebooks using mobile devices rather than PCs so your site should work on smaller screens: browsing, searching and buying on an iPhone or ebook reader can be frustrating on websites designed for a big PC screen. The way to do this is with a range of style sheets tuned to the different browsers.

A very important issue is the online payment process. This is often overlooked but a poorly executed check-out will make it hard to draw users away from the top sites. While a PC user might put up with a clunky payment system and extensive form-filling, mobile users will abandon sales at the checkout and be reluctant to return to your site. Amazon has patented the ’1-Click’ ordering technology behind its check out (and Apple, whose own online payment systems are legendary, has licensed it.) You’ll need to compete with this but help is on the way through companies like PayPal whose payment technologies are becoming simpler to use.

Finally, your website is just a part of your total online marketing programme. You’ll have to get really good at internet marketing to succeed with ebooks. The good news: it won’t be wasted, you’ll need to be really good at internet marketing to sell printed books too.

Getting ebooks to sell

The website is only a part of the business of selling ebooks online. One of the trickiest aspects today is acquiring rights to the ebooks themselves so that you’ll have a meaningful collection to sell. Since the ebook is a file that can be endlessly copied without trace, publishers understandably keep a tight rein on them. With printed books, if you sell one, you have to reorder it from the publisher before you can sell another but not so with digital files. So when you try to acquire inventory for your ebook store, you’ll be confronted with lengthy and onerous contracts. Typical matters covered will be:

Security. You’ll need to satisfy nervous publishers that the physical and IT security measures you’ve taken will stop any hacking or break-in that could see master files stolen.

Audit. You’ll also have to satisfy publishers that you’re honest and competent by agreeing to a random audit. Among other things, this shows publishers that you’re meticulously recording, and paying for, every ebook downloaded.

Restrictions on sale and use. There are few restrictions publishers can place on how and to whom you can sell a printed book. But ebooks are not sold, they’re licensed for use and the terms of usage are controlled through contract by the publisher. The bookseller must adhere to these terms. If you can’t, or are less than scrupulous in following them, it won’t be long before your ebook supply dries up.

Territorial restrictions. For the foreseeable future, you can throw away those notions that an ebook store will open up your neighbourhood bookshop to the world. You’ll have to follow the territorial restrictions imposed by publishers, most of whom won’t grant worldwide rights. This often frustrates consumers and will certainly add a pile of complexity to your own budding ebook operation. But rather than curse it, keep in mind that if the industry can make it stick, it’s likely to be one of the best tools to help the survival of local independents against the forces of global megasites.

Customer restrictions. Unless you can make special arrangements with publishers, your retail customers will be restricted to buying (actually, licensing) their ebooks for personal, non-commercial use. In particular, libraries will be excluded from your customer base since terms will generally restrict the lending, transfer or resale of ebooks. Your website’s terms of sale must make these restrictions clear to customers at the time of purchase.

Pricing. The usual process is to set a wholesale price based on a discount off the suggested retail price of the ebook or the printed book equivalent (expect smaller discounts than you’re used to). Retailers then set their own selling prices. This well-trodden system was recently complicated by the arrival in some markets of the so-called agency model. So far, it’s being trialled by a handful of major publishers who enforce fixed retail prices and pay the retailer a commission. As the name implies, the retailer doesn’t make the sale, the publisher does for which the retailer receives a commission. If it takes root and spreads to this part of the world, it will create its own issues for budding ebook retailers, not just by restricting their ability to set selling prices and margins but by greatly complicating operations so that sales, taxes etc can be attributed directly to publishers.

On this face of it, the agency model seems to be unfriendly to retailers, removing a key competitive tool. But, like territorial restrictions, it could lead to a much more diverse marketplace by ensuring that a handful of global giants can’t use deep discounting to squeeze smaller retailers out of the market.

Digital Rights Management (DRM). The retailer is generally responsible for encrypting files with DRM before they are delivered to the consumer. You’ll have to offer this service, either directly or through a trusted third party supplier (if you can find one) since most major publishers require it. Several online retailers have developed their own DRM systems but it’s not for the small or faint-hearted. For the rest of us, an increasingly popular solution is Adobe’s Content Server 4 (ACS4). Anyone can purchase a license for this system but again, installing and operating the service is not for the faint-hearted. One problem: there’s still no freely-available ebook reading app for smartphones and the iPad to read the Adobe-encrypted files. For the foreseeable future, though, you won’t get into the game without it.

Metadata. While the ebooks get the attention, expect to spend a lot of time acquiring and massaging the metadata that surrounds them. This includes the basic bibliographic data but extends well beyond it to include information about ebook usage and terms (geographical restrictions, DRM requirements, etc) and, most importantly, comprehensive selling information, an essential part of any online store and a key competitive issue.

Distributors and turnkey hosted systems

Like its print equivalent, the digital world is seeing the emergence of wholesale aggregators. They can simplify the job of connecting a diverse group of digital publishers to an increasingly diverse group of retailers. Distributors offer a fairly large range of ebooks, though not enough to match any of the large, dedicated ebook retailers such as Amazon or Kobo. Be aware that their quoted ebook numbers are frequently inflated by inclusion of ebooks in legacy formats that are irrelevant in new markets such as Australia and New Zealand. And at this time they offer minimal coverage of local titles.

If by now you’re despairing at the scale of the project to assemble a well-stocked, competitive ebook retailer, help may be at hand. Many of these distributors can supply not just a collection of ebooks but a customised website, payment system and DRM to get those ebooks to your customers. With a turnkey, hosted service you’re effectively acting as a shopfront for the distributor’s ebook collection. And there’s room to customise the look and feel of the hosted service so that visitors will think they are still on your site.

This comes at a cost that can still be quite steep, especially if you want extensive personalisation. But it’s a way to dip a toe in the digital water. Some drawbacks include dependence on a single distributor’s limited ebook range and dependence on them for feature upgrades. This can be especially vexing for customers in smaller markets whose local needs are low priority. Among the established names offering turnkey services are US companies Overdrive, Ingram Digital, and Libre Digital.

The elephant in the room in this space is Google which has been leaking scant details of its planned Google Editions ebook store. Unlike Amazon, Apple and other major retailers, Google plans to provide a wholesale option as well as selling directly. If it delivers good technology, and a substantial catalogue of commercial ebooks, it could change the landscape for booksellers. At the time of writing, Google Editions’ detailed capabilities and roll-out dates were still to be announced.

Is it worth it?

For a lot of booksellers, especially indies but also many chains, my guess is the answer to this should be, “No”. It’s tempting to think that, if you’re in the business of selling books, then selling ebooks is a natural extension and an essential one at that. But the reality is that there are probably more differences than similarities between traditional bricks and mortar book retailing and ebook e-tailing. It’s really a new business. Given the challenges today of starting and operating a credible ebook operation, it’s legitimate to ask whether that stretched cashflow and those hard-earned reserves should be applied to ebook retailing or invested somewhere else where the return might be better, including your bricks and mortar bookstores.

Another option to consider is picking a niche rather than trying to compete on a broad range. Even some of the big ebook retailers can be fairly sparse in their offerings as you drill down. We’ve yet to see solid bookseller (as opposed to publisher) examples of this strategy but there’s plenty of smart opinion favouring this route.

My advice is that, if you’re getting into the market reluctantly as a defensive strategy, you’ll probably do it badly and are better off skipping ebooks and doing a great job in bricks and mortar. On the other hand, if you’re serious about getting a stake in this market, you should tackle the challenges head on and get started soon.

- By Martin Taylor. Blog: activitypress.com/ereport; Twitter @nztaylor

Bezos is busy on the talking circuit following the announcement of the third generation Kindle ebook reader.

A somewhat more dubious part of the same interview was Bezos’ reply to the question of why Amazon still doesn’t support the industry standard ePub format.

We are innovating so rapidly that having our own standard allows us to incorporate new things at a very rapid rate. For example: Whispersync (which uses wireless connections to sync your place in a book across devices) and changing font sizes.

The innovate argument might work for Bill Gates or Steve Jobs but it sounds glib in Amazon’s case. Kindles are not high end technology and it’s hard to see how control of the Kindle’s mobi format has been essential to the innovations he cites. Changing font sizes is hardly unique to Amazon. And, given that both ePub and mobi formats use an underlying, easily accessible XML structure, it’s hard to see how Amazon’s Whispersync technology, or something doing the same job, wouldn’t have happened in an ePub world (latecomer Barnes and Noble is rolling it out, for instance).

And according to this NBR story, the Kindle will finally ship to New Zealand with the new device’s release. We’ve been mysteriously Kindle-free for almost a year since Kindle’s widespread international release.

The Kindle ebooks have been available to New Zealand buyers since late last year. I’ve been a regular buyer via my iPod Touch and now iPad.

The new Kindle is 21 percent smaller and 15 percent lighter than the previous model. It has a 20 percent faster refresh rate on its E Ink screen, longer battery life (1 month without wireless, 10 days with wireless on), and a larger 4GB storage. It comes in white and a slate grey. Endgadget briefly got their hands on the gadget and report that:

… the Kindle is still very much the reading device you know and love (or hate, depending on your preferences). The build quality and materials used did seem slightly more polished than the previous version, and we really liked the new, more subtle rocker. We can also attest to screen refreshes and overall navigation feeling noticeably more responsive and snappy compared with the previous generation.

The US$139 price point of the WiFi model might be the final push the market needs to get below the US$100 mark for basic models such as the Kobo or BeBook One. The latter is still a ridiculously expensive A$449 for a non-WiFi e-Ink reader. It’s a perfectly good eReader but it’s hard to see how the smaller independent makers like BeBook can survive when they remain so far out of line with market trends.

Amazon's third generation Kindle

When Apple banned Adobe’s Flash from its iPhone and iPad, it knocked the wind out of Adobe’s strategy to bring its widely-used design tools to the emerging smartphone and tablet platforms. This has left most publishers in limbo without a clear strategy to get onto these platfoms.

Of course, no-one expects it to be quite as easy as this video shows, and there are some well-founded concerns that Adobe’s first-generation solution might turn out to be a fair bit of smoke and mirrors.

But put all this aside for a moment and just dream a little about how things might be soon.

One of the big issues looming on the digital horizon is the role libraries will play with ebooks. A pre-emptive move earlier this year by the UK government has upset booksellers and shows that the industry here, too, needs to get involved in this debate.

So far, libraries’ digital activity has mostly been confined to research uses. The prevalence of the cumbersome PC as the main reading platform means the bread and butter of the book trade, fiction and general non-fiction, has barely been touched. But mobile reading devices and a surge in availability of popular ebooks are pushing libraries into the digital mainstream.

The few libraries experimenting today with ebook downloads typically have very thin collections. This is partly due to tight budgets but also stems from concerns by publishers and authors about how—indeed whether—libraries should lend digital editions of their books.

It’s the latter that has prompted the UK government to legislate so that patrons in libraries can download digital editions to their ebook readers without libraries infringing copyright. At the same time, it will issue an order under legislation “preventing libraries from charging for ebooks lending of any sort, including remotely.”

On the face of it, this looks like a big win for the reading public. Most people I speak to about ebooks get excited by the idea that they’ll be able to borrow them free from their libraries. And most people have a visceral sense that borrowing from a public library should be free to all. But this excitement is not shared as acutely by publishers, authors and booksellers.

Macmillan US CEO John Sargent put the industry problem succinctly when he said recently, “In the past, getting a book from libraries has had a tremendous amount of friction. You have to go to the library, maybe the book has been checked out and you have to come back another time … With ebooks, you sit on your couch in your living room and go to the library website, see if the library has it … You get the book, read it, return it and get another, all without paying a thing … How is that a good model for us?”

For much of the public, politicians, and librarians, this seems like a perfectly good model which accords with the common view that the digital world should operate the same way as print. But it is likely to be bad news for publishers, authors and booksellers. The former might lose sales because libraries can lend ebooks more efficiently (they need fewer websites than physical libraries) and they don’t wear out or get lost. And publishers, authors and booksellers all potentially suffer if the free option is as “frictionless” to get as their more expensive paid editions. And there might be less desire to “own” an electronic file than a real book.

Perversely, libraries are likely to suffer too from the UK government mandate to lend all ebooks free of charge. Most will not be able to afford a serious ebook lending programme without painful cuts to other services. If no other measures are taken, the result will be a crippled ebook service with a very limited selection. Ironically, booksellers concerned about competing with free loans should probably cheer the unintended consequence of this heavy-handed move.

But let’s not cheer too soon. Faced with this outcome, the government might tip the balance in libraries’ favour by forcing rightsholders to make big concessions, effectively subsidising libraries and setting up an even stronger competitor for booksellers. Its planned copyright changes to let libraries lend ebooks with or without publisher permission shows it’s not averse to forcing rightsholders’ hands.

So what is a reasonable role for libraries and how do we achieve this balance of interests? To avoid the heavy-handed legislative approach we’re seeing unfold in the UK, we need to talk directly to the library sector and other stakeholders in our own part of the world.

And we need to consider how the ebooks ecosystem will evolve.

If we look at the film industry as a comparison, there’s an initial cinematic release followed by release to rental and sell-through channels, then pay TV, then free-to-air TV. Through this measured roll-out, the industry manages to extract value at every price point, including free, and sells through many channels to reach as much of the market as possible. About 80% of the film industry’s income is earned after cinematic release.

Ebooks need a range of channels and price points too, to properly service the market and maximise the value of our creative assets. And with books it’s not just an economic equation: we have to consider social impacts.

So which channels will open up for ebooks? We’re in the early stages of developing a “full price” channel and still have a lot of work to do selling the value of digital books to consumers. And we can expect that libraries will offer some sort of free channel, whether selectively or open to all. Other (legal) free-to-consumer channels might emerge, perhaps through ISPs—and might have to develop to stem piracy.

I personally would like to see a vibrant rental channel for ebooks. And I’d like to see both libraries and booksellers participating, perhaps with release dates delayed just as DVDs today follow cinematic release. This would be an interesting “back to the future” scenario for booksellers. Before the public library movement, they had a thriving book rental market and in their heyday, there were more than 1000 “circulating libraries” in mid-nineteenth century Britain.

A paid rental option could bring much-needed money into libraries’ strained coffers, resulting in a better service to patrons who can pay and, with this improved funding, a better free service for those who can’t. For publishers and authors, it offers the prospect of fair compensation for readership through libraries.

While booksellers might be concerned that libraries are straying into commercial territory, it will be worse all around if they are backed into a corner by politicians and a public with high expectations, while not given the resources to deliver on these aspirations.

We’d then confront two equally grim scenarios: a high quality free service competing aggressively with booksellers and largely paid for by onerous terms thrust on publishers and authors by legislation. Or a crippled public library service struggling with dwindling patronage and increasing irrelevance.

These are tough issues with far-reaching impacts. Time to start talking and find a way through this.

A new usability study by leading usability researcher Jakob Nielsen lined up the printed book against digital editions on the Kindle, iPad and PC. It came up with results that might surprise advocates of the printed book.

After using each device, we asked users to rate their satisfaction on a 1–7 scale, with 7 being the best score.  iPad, Kindle, and the printed book all scored fairly high at 5.8, 5.7, and 5.6, respectively. The PC, however, scored an abysmal 3.6.

The poor showing of the PC was predictable but it’s interesting to see just how well these first-generation e-readers stack up against the printed book. Admittedly, my headline is a slight beat-up: the lead that Kindle and iPad had over print was not statistcally significant. But it’s a strong showing, especially since the reading material being tested was narrative fiction so e-readers would have gained no advantage from digital-specific functions such as search or portability.

In case you think these results might have been biased by a bunch of geeks in the survey sample, it seems the main criteria for selecting participants was that they like reading and frequently read books.

Nielsen’s study did find that electronic readers still can’t match the printed book for reading speed: the iPad was 6.2% slower than the printed boook and the Kindle was 10.7% slower.

Nielsen says the difference between iPad and Kindle reading speeds was not statistically significant but the difference between electronic and print was. However, the e-readers are already close to printed books and will rapidly improve.

And as this blog post from The Digital Reader points out, the results might have been even better if the participants had been experienced e-readers rather than (probably) newbies.

Amazon dropped the price of its Kindle almost 30% to US$189 from US$259. This is less than half the original US$399 price tag when it was launched two and a half years ago. Amazon’s move trumped Barnes and Noble which just a few hours earlier cut its Nook eReader’s price from US$259 to US$199.

These big price cuts from the top sellers mean the gap has narrowed considerably between them and the low cost Kobo Reader. In the US, the Kobo is sold by Borders at US$149. While its no-frills package of essential features looked attractive when the gap was large, it will put pressure on that strategy now. Rather than cutting the Kobo’s price, Borders in the US has offered a US$20 gift card to effectively cut its price to US$129.

No sign at this stage that Australian and New Zealand prices for the Kobo reader will change. In Australia, where both the Kobo and Kindle are available, the Kobo is still A$199. A Kindle including freight will cost A$235 at the current exchange rate, plus GST if any is levied. In New Zealand, the Kindle — frustratingly — remains unavailable so the price drops in the US are mostly academic at this stage. But, if it were available in New Zealand, a Kindle would be about NZ$290 landed. The Kobo is currently NZ$295 incl GST.

While it might be tough on margins, the momentum of the iPad and the push for further price drops for the e-Ink devices is going to be great news for ebook sales.

• Apple’s iBooks
• Amazon Kindle for iPad
• Barnes and Noble eReader
• Kobo Reader (which is also the Borders eReader and will soon be the Whitcoulls eReader for the iPad)
• Ibis Reader (this is interesting because it’s actually an HTML5 web app rather than a native iPad/iPhone app)
• Stanza
• vBookz (actually a text-to-speech reader app rather than a traditional e-reading app)

Among Perlow’s findings:

• Apple’s iBooks is the flashiest but “of all the reader applications we’ve looked at, it is actually the least functional. Apple designed iBooks to behave and act like a real book, and focused more on the aesthetics and UI than actual App functionality with the initial release.”
• Amazon’s Kindle wins in terms of the size of its 600,000-title ebook store but “from a feature perspective, the Kindle software is pretty weak when compared to its hardware counterpart.”
• Interestingly, it’s the Barnes and Noble eReader that wins the highest plaudits from Perlow. “Of all the paid content readers, by far the best one in existence is probably the Barnes & Noble eReader application.” But it’s probably not so useful outside of the US because of its ties to the very US-focused B&N store.
• Of particular interest in this part of the world is the Kobo which will shortly be released in this part of the world as the Whitcoulls reader app. For Perlow, it stacks up pretty well. “It’s extremely polished and very well-designed,” he says.
• The Ibis Reader is different from the others in being written in HTML5. It reads non-DRM ePub files. “Compared to the other reader apps on this list, the reading features within Ibis Reader are pretty spartan. … However, the interface is very clean and simple to use, and the reading experience is actually pretty good when compared to the native apps.”
• Stanza was the original e-reading app that popularised e-reading on the iPhone. It’s the latest to the iPad party but the result is good according to Perlow. “Stanza is by far the most sophisticated e-Reader application for iPad, as it supports not only the open EPUB format but also the legacy Mobipocket, PalmDoc (DOC), Microsoft LIT formats as well as HTML, PDF, Microsoft Word and Rich Text Format (RTF)…. If you have lots of content that you’ve collected over the years, Stanza is definitely a must-have app. There’s absolutely no downside, it’s free to use and does more than any e-book reader app on this list.”
• vBookz is a US$2.99 text-to-speech reader which works only with public domain ebooks  at this stage. Perlow concludes, “vBookz is an extremely interesting and exploitative iPad application, and one which may be good for getting children interested in classic literature and also a useful app for the visually impaired.”

Read the full ZDNet e-reader app review here.

UPDATE: ZDNet has also posted a comparison of ebook reader apps for the Google Android platform. Check it out.