The Xplanation

Welcome to this morning’s Daily Research Update. Today’s themes are e-book resellers, O’Reilly, and Scribd. If you want more context for this research, take a look at our Education and Technology Trends for 2010. You may also be interested in our Weekly Research Index, or you can follow our live, daily research on our Current News page.

(Click here to see a simple listing of today’s suggested reading)

Today’s update focuses foremost on the rise of the e-bookstore and possible implications. At the O’Reilly TOC conference this week, Google Editions Product Manager Abe Murray spoke about the need to “buy anywhere and read anywhere.” His point was that today, a consumer can buy the same print book from any book retailer and take that book with him/her wherever he/she goes. In the e-book universe, the same is not true. Major players are forcing users to buy content through a single bookstore — like Amazon — and use those books in a limited manner. The Google solution is to allow users to buy books through any reseller and have Google “control” the copies that are distributed to the users.

From an e-retailer and market perspective, everyone wants to become one of those major “locked” distributors and own a significant portion of the entire e-book market. That’s certainly true of Barnes & Noble. CEO Steve Riggio spoke about company earnings in the third quarter on a conference call Tuesday, and outlined his company’s strategy to become a major e-book retailer.

Its experience since returning to the e-book market last year with the purchase of Fictionwise has further convinced Riggio that the market will be more consolidated than the traditional bookstore market where it took B&N years to get its 18% (and growing) market share. He predicted that B&N will top the 18% mark in e-books “overnight.” While some analysts questioned the need for B&N to develop its own e-reader, Riggio said the device helps bring people into stores and that the retailer plans to invest even more in its in-store Nook displays. He said its booksellers will become “e-book evangelists.” Riggio said he expects pricing of e-books to evolve with the agency model likely to become the dominate form of sale and said that eventually B&N will earn better margins from e-books than print books.

At the same time, O’Reilly announced yesterday its new O’Reilly Digital Distribution program, a move to position that company as a contender with Amazon and Google. What makes O’Reilly particularly interesting is the company’s historical aversion to DRM, a factor which would not only allow O’Reilly books to be purchased in multiple places, but also to be more open and mobile than other solutions.

In an interview conducted at O’Reilly’s annual Tools of Change conference in Manhattan, Laura Baldwin, chief operating officer of O’Reilly Media, said the new service will offer free conversion as part of a comprehensive program that will secure and store a publisher’s digital files and market and distribute them into 24 digital e-book retail channels (with 40 more under development) and in every format. ODD can turnout e-books for any format–from Kindle to iPhone to Stanza and Android readers like Aldiko. Publishers pay a fee of 25% of sales–no fees, she emphasized, until the e-books are in the sales channels. “We’ve automated the process of digital title conversion and production and for us this is all about sales and marketing,” Baldwin said. “It’s about getting e-books into the retail channels and there are more channels coming online all the time.”

On a similar trajectory but serving a different market, Scribd continues to innovate and provide extended features and distribution options for its self-publishing customers.

Scribd’s mobile deployment has two parts to it–the main one being compatibility with as many devices as possible. This includes Amazon.com’s Kindle, Apple’s iPhone, and Windows Mobile devices, alongside newer products like Barnes & Noble’s Nook. These options materialize when people click on the new send button. People can then register their devices with Scribd, either with a phone number or device-specific e-mail address. This makes it a two-click affair to send on future visits to the site. The second part of the equation is an array of native, device-specific apps. In the iPhone’s case, this will let users store local copies of Scribd documents right on their phone. It will also be able to save your location if you’re reading long-form content. As it stands, Scribd’s send-to-mobile tool simply sends along a link to the PDF, which then needs to be downloaded in order to be read on the device.

Wrapping up the e-book news for the day, here are notes to the TOC presentation by Perseus Book Group on the 10 secrets of digital publishing no one will tell you. A great quote from this presentation: “Quality assurance is the new editing and it’s 10 times harder. Test title on each device, test what happens to rendering at each font size, test each live link, test each functional action, test product discovery, test purchase, give it to a newbie and re-run, who will the consumer complain to if it doesn’t work properly?” Also, CNET has a good review of the upcoming tablet competitors to the iPad and how those competitors may or may not target e-books.

Finally, please note that Apple has served up its 10 billionth song on iTunes this week.

Suggested Reading

Riggio: Barnes & Noble to Become E-Commerce Retailer | Publishers Weekly

O’Reilly Digital Distribution Debuts at TOC | Publishers Weekly

Scribd goes mobile, adds sharing to iPhone, Kindle | Web Crawler | CNET News

Reading the tea leaves of iPad competitors | Circuit Breaker | CNET News

TOC Report: 10 secrets of digital publishing no one will tell you | TeleRead: Bring the E-Books Home

Apple serves up 10 billionth iTune, smiles all the way to the bank | Engadget