This post originally appeared on Joe Wikert's Publishing 2020 Blog ("iBooks Author: Appreciating Apple's Intent"). It's republished with permission.

With all the buzz about the agency model, the Justice Department, allegations of collusion, etc., I figure the time is right for a post about ebook pricing. Here are some quick thoughts as both a consumer and a publisher:

Eliminating waste is always a good thing — Walmart has mastered this for years. They squeeze every bit of waste out of the supply chain and generally end up with the lowest prices. I'm a frequent Walmart customer, and I greatly appreciate this. In fact, the only people who don't like this are (a) other retailers who can't match those prices and (b) ecosystem players who are part of the waste that's being eliminated, including suppliers.

Loss leaders are a great retail model — Selling some products at or below cost is a great way to bring customers in the door, regardless of whether that door is physical or virtual. I'm sure I've bought many cartons of milk at a loss for the retailer who made it up by selling me other items at a nice profit. It's a model that works, but have you ever seen a store that sells most of their products at a loss, every day?

Taking loss leadership to a new level — Remember when Amazon first launched the Kindle and pretty much every ebook was $9.99? It's no secret that Amazon was losing money on the majority of those sales. In fact, they still are. Prior to the agency model, Amazon was free to set whatever customer price they wanted for ebooks, even if it meant they were selling every single one of them at a loss. That brings up the razor/blades model, where it's not unusual for the razor to be sold at a loss, but the profit is made on the sale of the blades. So, if ebooks are the razors, what are the blades? The ereader device? According to iSuppli, the Kindle Fire's manufacturing cost is slightly higher than its retail price. How long can a retailer stay in business when they're losing money on both the razors and the blades? Presumably, they're making some money on other products they're selling (e.g., shoes, electronics, etc.). Perhaps. Then again, if they have deep enough pockets they can continue selling all their products at a loss until the cash dries up. In the meantime, competitors will find it difficult, if not impossible, to compete, so they'll disappear. What happens after that? Do prices remain low as products are still sold at a loss? Not if that company wants to stay in business.

The agency model prevents brand erosion — Think of the premium products you've bought or admired. Oftentimes, their prices are higher than most of the competition's. What would happen if those prices were suddenly significantly reduced? Would those products retain the full value of their premium brand? Highly unlikely. And shouldn't the owner of that brand have a say in what price is associated with it? Again, it's OK for a short-term loss-leader model, but I'm talking about selling something at or below cost for years and years, not just for a day or two. Over time, the value of that brand is affected. That's why I think publishers should definitely have the option to go with the agency model so they can manage retail prices and not let their brand lose value. By the way, consumers will ultimately vote with their wallets. If they feel the publisher's prices are too high, they'll stop buying and that publisher will either need to make adjustments or go out of business.

Fixed prices vs. price-fixing — In the U.S., we're so used to competitive retailer discounts that we're surprised to hear of the fixed price models used in other countries. For example, in Germany the price you pay for a book doesn't change from one retailer to the next. They're all required to sell them at the same price. Obviously, there's a huge difference between Germany's fixed price law and the price fixing the Justice Department is alleging. Germany's model doesn't lend itself to squeezing out waste like the U.S. model, but I'll bet it prevents one deep-pocketed retailer from putting its competitors out of business.

I don't work at a big six publisher, but I believe publishers should have the option to choose between the agency and wholesale models. The key issue though is that the Justice Department has suggested that Apple and a number of publishers colluded to keep prices high. I think this article by Gordon Crovitz in The Wall Street Journal sums it up quite nicely, particularly in the closing two paragraphs. Read that piece and ask yourself if the Justice Department's efforts will actually fix or merely add to an existing problem.

What's your opinion of the pricing questions and allegations currently facing the book publishing industry?

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Related:

Ebook pricing power is undermined by perceived value
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This is part of an ongoing series related to Peter Meyers' project "Breaking the Page: Transforming Books and the Reading Experience." We'll be featuring additional material in the weeks ahead. (Note: This post originally appeared on A New Kind of Book. It's republished with permission.)

I've been fiddling with the idea of using multiple displays to give a presentation — putting different slides on different screens. One design sketch — working title: "Documan" — has gotten some chuckles around my office (yes, I work alone):

Man-mounted iPads, plus a nearby monitor. A few possibilities not shown: each iPad could contain images, not just text; objects could move between iPads or from iPad to monitor; and presenter could rotate one or more iPads.

Why on earth does the world need to see a man strap on a half dozen iPads? And, more importantly, what kind of message would benefit from a rig like this?

Beats me. But I do think that content experiments, designed expressly for the screens we all use — rather than our ancestors' print pages or single PowerPoint slides — are the best way to figure out how stories and teaching change when they move onto the touchscreen.

I'll spare you, for now, the words and images I'm testing out to fill those screens. (One teaser, though: think about how easy Keynote for iPad makes it to build an action that exits screen right and enters screen left. Now, if you could just get the timing right when using two iPads ...).

Clearly, I'm not the only guy playing around here. Ahead, I round up a few content confections that span multiple screens. Some involve separate physical displays, others use different virtual windows. Not all of this stuff is new. But I find it thought provoking how creative types are using the small, medium, and large screens that increasingly coexist near each other.

iPad + projector

Joe Sabia calls himself an "iPad storyteller" — love it! He showed off his stuff at a recent TED talk where he uses his tablet and a variety of different apps (iBooks, a drawing app, Google Earth, Photos, and so on) to entertain an audience that is variously fixed on him, the big projector screen which his iPad is attached to, and the iPad's display itself.

iPad + magician

Sleight-of-hand artist and iPad maestro Simon Pierro pulls off some awfully clever tricks with his iPad and a real tennis ball, a glass of milk, and a weather forecaster's hair (she's on a video inside the iPad). I have no idea what's magic, what's video editing trickery, or what he and the iPad are actually doing. And, you know what? It doesn't matter. What he demonstrates here is how man and machine can team up to entertain in really innovative ways. Don't miss his part two, where he — sorta/kinda — sheds light on what he's done.

iPad-powered window displays

Gin Lane Media filled up three of Saks 5th Avenue's storefront windows with 64 iPads and nine 27-inch displays.

iPad/iPhone partnerships

A few apps use the big and small screen of a tablet and a smartphone in tandem. The iOS app Scrabble, for example, lets you conduct group games in which the iPad serves as publicly viewable board and the iPhone is each player's private letter stash. Remote Palette is a painting app where the iPad is the canvas and the iPhone is the paint palette.

Multiple browser windows

The band Arcade Fire worked with director Chris Milk to compose this mind-blowing HTML5-powered interactive video for its song "We Used to Wait." You give this web app the address of the house or building where you grew up in. It then whips together a custom-built video (woven around some stock footage) that incorporates Google Maps footage of your old neighborhood and other graphical magic mashups … all in multiple browser windows of various sizes. (It only works in the Chrome browser.) If you like this one, you'll love sour-mirror.jp, which uses snapshots of you from your laptop's webcam, and your Facebook and Twitter feed, to compose a multi-window extravaganza. It all culminates in a mosaic of your face built out of pix pulled from your social media feeds.

Multi-screen patterns

Here's a pattern-style analysis of different content and interaction designs for multiple displays, from the basic (how Amazon uses Whispersync to keep book location and notes coordinated across a user's different reading devices) to some innovative software that helps end users take an image, chop it up, and display it on their own collection of displays. That's what the next item is about.

Junkyard Jumbotron

Free to use (beta) software from some MITers that automatically splits up an image and displays it on whatever collection of screens (smartphones, tablets, PCs) you assemble. This demo shows it in action.

The multi-screen experience

Here's a five-minute video, with a bunch of TV and consumer electronics execs and analysts. Nothing hugely revelatory, but a nice little brain-tickler about how we are entering an age wherein audience and content producers alike are thinking about how to create and consume stories that play across displays of many different sizes.

Splitscreen: A Love Story

Heartwarming. Winner of a Nokia smartphone video-making contest, this video shows how split-screen stories can add up to more than the sum of their parts.

Google Wave cinema: "Pulp Fiction"

Not really — okay, not at all — safe for work, but a really nifty example of how innovative, multi-pane software (in this case, the soon-to-be late Google Wave), allowed one artist to take a scene from "Pulp Fiction" and render it within this program, weaving in videos, image, text, and maps.

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Related:

What we could do with really big touchscreens
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As we move toward a data economy, can we take the digital content model and apply it to data acquisition and sales? That's a suggestion that Gil Elbaz (@gilelbaz), CEO and co-founder of the data platform Factual made in passing at his recent talk at Web 2.0 Expo.

Elbaz spoke about some of the hurdles that startups face with big data — not just the question of storage, but the question of access. But as he addressed the emerging data economy, Elbaz said we will likely see novel access methods and new marketplaces for data. Startups will be able to build value-added services on top of big data, rather than having to worry about gathering and storing the data themselves. "An iTunes for data," is how he described it.

So what would it mean to apply the iTunes model to data sales and distribution? I asked Elbaz to expand on his thoughts.

What problems does an iTunes model for data solve?

Gil Elbaz: One key framework that will catalyze data sharing, licensing and consumption will be an open data marketplace. It is a place where data can be programmatically searched, licensed, accessed, and integrated directly into a consumer application. One might call it the "eBay of data" or the "iTunes of data." iTunes might be the better metaphor because it's not just the content that is valuable, but also the convenience of the distribution channel and the ability to pay for only what you will consume.

How would an iTunes model for data address licensing and ownership?

Gil Elbaz: In the case of iTunes, in a single click I purchase a track, download it, establish licensing rights on my iPhone and up to four other authorized devices, and it's immediately integrated into my daily life. Similarly, the deepest value will come for a marketplace that, with a single click, allows a developer to license data and have it automatically integrated into their particular application development stack. That might mean having the data instantly accessible via API, automatically replicated to a MySQL server on EC2, synchronized at Database.com, or copied to Google App Engine.

An iTunes for data could be priced from a single record/entity to a complete dataset. And it could be licensed for single use, caching allowed for 24 hours, or perpetual rights for a specific application.

What needs to happen for us to move away from "buying the whole album" to buying the data equivalent of a single?

Gil Elbaz: The marketplace will eventually facilitate competitive bidding, which will bring the price down for developers. iTunes is based on a fairly simple set-pricing model. But, in a world of multiple data vendors with commodity data, only truly unique data will command a premium price. And, of course, we'll need great search technology to find the right data or data API based on the developer's codified requirements: specified data schema, data quality bar, licensing needs, and the bid price.

Another dimension that is relevant to Factual's current model: data as a currency. Some of our most interesting partnerships are based on an open exchange of information. Partners access our data and also contribute back streams of edits and other bulk data into our ecosystem. We highly value the contributions our partners make. "Currency" is a medium of exchange and a basis for accessing other scarce resources. In a world where not everyone is yet actively looking to license data, unique data is increasingly an important medium of exchange.

This interview was edited and condensed.

Photos: iTunes interface courtesy Apple, Inc; Software Development LifeCycle Templates By Phase Spreadsheet by Ivan Walsh, on Flickr

Related:

Video: Hjalmar Gislason on data discovery and search
Data markets aren't coming. They're already here
The black market for data

Liza Daly's recent piece in the New York Times inspired a great back-channel discussion among O'Reilly's editors. The subject: pros and cons of ebook links, annotations, and notes. There was a lot of interesting back-and-forth, so I asked participants if we could publicly share a handful of excerpts.

Mike Loukides on the reading path:

... inasmuch as I have lots of questions when I'm reading, I don't think I'd like to have the tools to answer them right at my fingertips. It's too easy, at least for me, to move from Little Dorrit to the entry on the Marshalsea in Wikipedia to a history of debtor's prisons, and sooner or later: what was I reading?

I suppose it depends on the implementation. The "Annotated" series from the 70s was, I think, just annoying. Better to just read the book and go back later for the commentary, rather than shoving it all in the reader's face.

There's an excellent book titled "What Jane Austen Ate and Dickens Knew" that goes into all the nitty-gritty background: how much was rent, how much did bread cost; if someone has an income of 500 pounds, is that a lot or a little? But it's a good thing that this information is packaged up in a separate book, not embedded into my copies of Dickens' books. But if someone could figure out the right way to build this kind of reading experience in a way that wasn't intrusive, that would be really good.

Adam Witwer on annotations as an option:


As a formerly serious student of literature (I got better!), I couldn't agree with Mike's sentiments more. The more difficult and rewarding stuff that I've read required all of my focus and attention. The only secondary aid I wanted was a dictionary, which is why the built-in simplicity of the iPad dictionary is such a beautiful thing.

Still, there are some texts for which the annotations are an indispensable part of the experience. I would have found "Ulysses" to be nearly impenetrable in places if I didn't have the annotations handy. To have those annotations somehow built in to the ebook so that I could easily flick back and forth between text and annotation sounds very appealing to the grad student in me.

Tim O'Reilly on anticipating a reader's needs:

The Oxford edition of Trollope has amazing footnotes, but they really get in the way of reading the book. If you don't ignore them, you don't get the benefit of the narrative because you're constantly distracted.

But I still think back to my days editing. One of my principles was that you had to anticipate the reader's questions and objections, so that just when they were about to leave you anticipated their need and filled it. It's what makes a great book compelling. I was so delighted when a reader wrote in about one of our "X" books to say that just as a question was starting to bubble to the top of his mind, Adrian [Nye] answered it. That's an awesome technical book. So even if the reader can go out for more info, it increases the need for thoughtfulness about what the reader really needs to know.

Russell Jones on a toggle solution:

There's a difference between linked information (where links can become obsolete) and embedded information, which is persistent. I'm sure you've all had the frustrating experience of clicking on a link only to find that the information is no longer available. In contrast, footnotes or endnotes in a book are always available. Ebook publishers can use both, as needed. If the information is critical (and small), embed it; otherwise, link to it.

The UI problem of all the ancillary material getting in the way of a clean reading experience can be solved easily, by simply making the links/extra info invisible until the user reveals them. That can be done through a gesture, a Ctrl+Click or some other unused-in-ebook-reading action. The reveal would be a toggle, so users could turn it off equally easily. That lets publishers include as much ancillary information as they wish without interfering with the reading experience.

And because I can't resist adding my own two cents ...

Ebook discussions sometimes degenerate binary debates. Digital vs. print. Disconnected vs. connected. Sometimes even good vs. bad (although that's a bit much). But what I found most interesting about this conversation is that everyone approached the topic from a use-case perspective. And use cases vary wildly between people, and even within people. It all depends on the particular need, goal or subject. That's precisely why I find the toggle solution proposed by Russell Jones so compelling. There's no "or" involved. You'd have public and private, disconnected and connected. Just flick a switch for your desired experience.