Hiptype offers third-party analytics for eBooks...with a catch

PaidContent reports that Hiptype, a company that offers third-party analytic reporting for eBooks, has launched. Amazon, Barnes & Noble and other eBook vendors can gather a variety of information about how their eBooks are read--how far a reader gets into an eBook, how often they open it, what notes and highlights they add, etc. However, that information is rarely shared with publishers. Hiptype allows publishers to independently gather similar information. The information is anonymized, but consumers can opt-out of Hiptype's data collection completely (assuming, of course, that they know that Hiptype is collecting information.)

There's a huge hole in Hiptype's data collection that may make it unattractive for most publishers: It requires eReaders that support both HTML5 and JavaScript in order to work, but according to paidContent, neither web-based eReaders like Kindle Cloud nor desktop eReaders, even those that are browser-based, will work. Black & white eReaders are also unsupported. That limits the usefulness of Hiptype to Apple's iBooks and a few iOS and Android eReading apps. Frankly, I'm surprised that they even released the service when its practical value is so low. This isn't a Minimum Viable Product--there's virtually no value in the current offering for most publishers.

They're offering a 30-day trial with service for one book, or programs priced at $19 or $99/month. The $19/month program is limited to 1,000 readers, so it's not useful to anyone other than self-publishers and very small publishers.

Apple accuses author of naming the eRetailer that she dare not name

Apple's never had much love for that pesky First Amendment, and The Digital Reader reports that the company has now banned an eBook from its iBookstore simply because it mentions Amazon. Here's a summary:

Author Holly Lisle was asked to release her series of eBook lessons on writing in Apple's iBookstore, which she did. Everything went swimmingly until she reached Lesson 6, which teaches authors how to do research in order to identify other genres in which to sell their books. As part of the lesson, she included an example with links to Amazon's website. Apple rejected the eBook on the basis of the links to Amazon (something that Apple's done in the past,) and Lisle edited the eBook and replaced the links to Amazon with links to her own site. Then, she resubmitted the eBook, and Apple rejected it again, this time because it simply mentioned Amazon. (To be completely accurate, Apple rejected the resubmitted version because it claims that Lisle didn't remove the links to Amazon, even though she actually did remove them and has uploaded the new version of the eBook without the links multiple times.)

It's not unusual for eBookstores to delete, or fail to approve, eBooks due to plagiarism or because they reproduce public domain content that's already available in the bookstore in multiple forms. However, Apple appears to be only eRetailer that refuses to carry eBooks that even mention competitors. Lisle claims that Apple's actions aren't censorship because Apple isn't a government entity, but it's a distinction without a real difference. If, instead of having 10% market share, Apple had 90% market share and engaged in this behavior, it would be de facto censorship.

Update, August 2, 2012: Apple has apologized to Holly Lisle and has reinstated her Lesson 6, including the links to Amazon. However, the decision to allow Lisle to sell her eBook should be seen more as a response to negative PR than as any change in Apple's policy of banning eBooks with links to competitors.

Business Insider iPad usage survey

Business Insider has done a survey of more than 2,200 iPad users to find out how they use their tablets. Here's a summary of the findings:

• Most respondents (almost 47%) use their iPads two to five hours a day on average. 
• 64% of respondents say that their iPad usage has increased since they first got their tablets. 
• iPads are quickly becoming users' primary computers. In the November 2010 survey, almost 71% of respondents said that a laptop or desktop was their primary computer, vs. 29% who said that their iPad was their primary computer. However, in the new survey, only 53% say that they use a laptop or desktop computer most often, vs. 47% who use their iPads most often. 
• Respondents said that they spend 41% of their personal computing time using an iPad, vs. 25% for a laptop computer and 17% for a desktop. (They also said that they spend 17% of their time using a smartphone.) 
• 71% of respondents say that they read eBooks on their iPads. 
• Apple's iBooks format has become the most popular eBook format for survey respondents, with 51.3% preferring it, vs. 36.5% for Kindle format and 12.2% for other formats. (In the November 2010 survey, the Kindle format was most popular, by 50% to 42.4% for iBooks and 7.6% for other formats.)
• iPad owners have little interest in tablets from competitors; only 10.4% are interested in the Google Nexus 7, and 5.5% are interested in the Kindle Fire. 
• Only 30.2% of current iPad owners have any interest in a smaller iPad. 

Reviews of six eTextbook platforms

On The Textbook Guru blog, Jeff Cohen has reviewed six eTextbook platforms: Chegg, CourseSmart, iBooks, Inkling, Kindle and Kno. Cohen doesn't pick a "winner," but he does a good job of reviewing the pros and cons of each platform as they relate to eTextbooks. Here's a brief summary:

• Chegg: Based on HTML5, has a built-in "Ask a Question" feature for getting more information from experts, and its purchase and usage models are based on how students actually use textbooks. It's biggest downside is that it's online only and requires an Internet connection at all times. 
• CourseSmart: It allows both online and offline access to eTextbooks. Individual pages, along with highlights and notes, can be shared with classmates and instructors. Up to ten pages from any title can be printed. However, CourseSmart only rents eTextbooks, and they're disabled at the end of the rental period. It only has one level of zoom and no multimedia features.
• iBooks: It brings Apple's ease-of-use and user interface design to eBooks. eTextbooks can include 3D models, embedded video and interactive quizzes. There are also virtual study cards that contain chapter-specific glossary terms. iBooks eTextbooks work both online and offline. The biggest downside is the still-limited number of eTextbooks available for the platform. 
• Inkling: Works on the iPad and in some HTML5-compatible browsers. Allows students to purchase eTextbooks by the chapter or by the entire book. Supports online and offline reading. Video, audio, interactive and 3D content can be incorporated into the eTextbooks. Notes can be shared with other students. The biggest drawback is a strict returns policy. 
• Kindle: Has the most flexible rental and returns policy--eTextbooks can be rented for 30 days and extended as needed, or returned within the first seven days for a full refund. The "X-Ray" feature gives the definitions of important words, phrases and names, and visual diagrams of where they're used in the text. The biggest drawback is that most eTextbooks don't use Kindle Format 8, so they're black & white only, with no 3D, animations or video, and very limited audio support. 
• Kno: Supports iPads and HTML5 browsers, but not all titles work in both eReaders.  eTextbooks can be returned within 15 days, so long as the user hasn't gone past the first 20% of the book. Notes, bookmarks and annotations can't be transferred between platforms--for example, notes made in the HTML5 version can't be accessed when the eTextbook is opened in the iPad eReader. Cohen found that Kno's beta "Quiz Me" feature, which turns sections of the eTextbook into fill-in-the-blanks quizzes, didn't work properly. Some images were left out due to copyright restrictions. 

New Blurb plug-in for InDesign creates eBooks

Blurb, which specializes in self-published photo books, has updated its plug-in for Adobe InDesign to support creating fixed-format eBooks for the iPad. The plug-in creates layout templates for any of Blurb's supported print sizes, as well as the iPad. However, eBooks created by the Blurb plug-in are sold through Blurb, not Apple's iBookstore, which means that they don't use Apple's iBooks format (EPUB 2.X with proprietary extensions.)

Inkling and Vook: Is B-to-C to B-to-B really B-to D(isaster)?

Let me explain that title: If a company moves from selling to consumers (B-to-C) to selling to businesses (B-to-B), are they setting themselves up for failure? Recently, a couple of well-known electronic publishing names have changed their focuses from selling eBooks to consumers to selling eBook creation tools to writers and publishers. Vook had a highly-publicized launch in 2009 as a publisher of enhanced eBooks, which included audio and video along with text. In the second half of last year, the company changed direction ("pivoted", in the current vernacular), and focused on selling its enhanced eBook production tools to other publishers. Vook's toolset remains in beta, but the company is hinting about "major announcements soon", suggesting that they're getting close to general availability for their software.

Earlier this week, Inkling, an eTextbook publisher focusing on the iPad, announced a similar shift in strategy. Even though Inkling has been in business for about 18 months and has deals to reformat textbooks from a number of major publishers, it's only released about 200 titles so far, just a tiny fraction of the number needed to be truly competitive in the eTextbook market. In order to stimulate production of additional titles, Inkling announced that it would 1) Deliver its eTextbooks in HTML5 format that will work in many browsers, and 2) Release an eBook authoring and production service called Habitat. Habitat, which is in an early closed beta, will be licensed to publishers at no cost.

Like Apple's iBooks Author application for OS X, eBooks created with Habitat can be distributed anywhere for free. However, eBooks created with Habitat for sale must be offered through Inkling's own website and iPad app. In the case of sales through the website, Inkling takes a 30% commission. They also take a 30% commission from sales through their iPad app, but Apple takes another 30%, leaving only 40% for the publisher. Unlike Apple, which limits sales of titles created with iBooks Author to its own iBookstore, Inkling allows Habitat-based eBooks to be sold through other outlets. However, publishers have to plan for the probability that most of the sales will go through Inkling's own channel, with as little as 40% of the sales price coming back to the publisher.

Both Vook and Inkling are moving from B-to-C to B-to-B. In Inkling's case, it's using Habitat in part to increase the number of titles available in its format, but Vook is now out of the B-to-C business. Both companies are hoping to find a successful business model, but history suggests that this kind of pivot is rarely successful. In the early days of online video, many companies launched advertising-supported streaming video sites. Other than YouTube, only a handful of those sites have been successful, and a good number of the unsuccessful ones pivoted to sell the technology they had developed for running their sites to other businesses. In some cases, they sold what's now termed  "white-label online video platforms" for uploading, compressing, storing and displaying video content, while other startups sold technology for video ads. Most of the companies that pivoted to B-to-B were no more successful than they were when they were focusing on consumers. One of the few that pivoted successfully was Brightcove, which just went public today. However, even though they launched in 2004, the company has never been profitable.

Selling to businesses is very different than selling to consumers:

• You actually have to collect revenue from your customers when you sell to businesses, which means that your product or service has to have real value and be positively differentiated from competitors.
• You need a sales force, whether in-house or reps, to call on potential customers.
• The sales cycle (the amount of time needed to close a sale) can be very long, and many people are likely to have input into the purchasing decision. It may take six months or more for the customer to evaluate your solution and decide whether or not to purchase.
• Business customers demand a high level of customer and technical support. You may need to have support engineers available on call 24/7.

I've seen startups use this pivot enough times that it often seems more like a desperation move than a successful strategy. If a company wasn't successful using its tools, why is it likely that anyone else is going to be more successful using those same tools? The tools might solve a problem that doesn't exist, or provide features that the vast majority of customers don't want or need. They might be too difficult to use or too slow, which will lead businesses to try and then abandon them. Or, they might not be differentiated from other products and services already in the market.

I'm not saying that Vook's or Inkling's tools are bad, or that the companies' efforts to pivot will fail. (I've not been able to test either Vook's or Inkling's software.) However, both companies have a steep uphill climb, as does any company that tries a B-to-C to B-to-B pivot.

Apple's eTextbook announcements: Far from a slam dunk

This morning, Apple announced:

• A new version of iBooks that supports eTextbooks.
• Distribution agreements with five textbook publishers (Pearson, McGraw-Hill, Houghton Mifflin Harcourt, DK and the E.O. Wilson foundation) covering 90% of the high school market.
• eTextbooks priced at $14.99 (U.S.) or less.
• A free eTextbook editing application for OS X called iBooks Author.
• A revamped version of iTunes U for higher education, with a dedicated iOS app.

Apple's announcements could be very important, but the company has a long way to go, for several reasons:

• Apple's focusing on the high school market, not colleges and universities, and it's trying to convince parents and students to purchase eTextbooks directly from Apple. In most U.S. schools and districts, students get their textbooks from the school, either at no charge or as part of an activities fee. Why would parents who don't have to pay for textbooks now or get them automatically start paying for them? Thus, Apple's plan only impacts those parents and students who have to pay for their textbooks now.
• Parents also have to be willing to buy an iPad for their child. That cuts out low-income and many middle-income families.
• There are currently only eight titles in Apple's eTextbook collection--not even enough to be called a good start.
• Although iBooks Author creates eBooks that are based on EPUB 2.0, it uses Apple's proprietary extensions for supporting multimedia, animation and JavaScript-based new features. Thus, titles created with iBooks Author can only be used in iBooks. (This might change in the future, when Apple fully implements EPUB 3 in both iBooks and iBooks Author.)
• If you use iBooks Author and create eBooks that you intend to sell, according to the EULA for the software, you are prohibited from selling the eBooks anywhere except through Apple.

Apple's decision to focus on high school textbooks before going after the college market is questionable: College students pay far more for textbooks than do high schoolers, and parents are far more likely to purchase a tablet for a new college student than for a high school student. However, that's not the most important reason why I believe that Apple will have an uphill battle. When Apple launched the iBookstore initially, with the support of five of the "Big 6" trade publishers and the agency pricing model to eliminate Amazon's price advantage, it looked as though Apple would eventually become as dominant in eBooks as it already was in music. The results, however, have been far from what Apple and its boosters expected.

Even today, Apple has a minuscule share of the U.S. eBook market, far below those of Amazon and Barnes & Noble. Apple's eBooks can only be used on Apple's devices, while Amazon's and Barnes & Noble's eBooks can be be used on those companies' popular eReaders and tablets, as well as with software eReaders on PCs, tablets and smartphones. Amazon in particular has set up an effective self-publishing program for authors, while Apple is just taking the first tentative steps today.

In short, Apple's new eTextbook initiative could make a big difference eventually, but it's far from a slam dunk.