November 8, 2012

A Kindle killer?


I’m surprised I haven’t heard more about ebook start-up BookShout, which I first learned of through a Frankfurt Book Fair profile of the company by Laura Hazard Owen at PaidContent.

There are of course lots of new ebook vendors launching these days, but BookShout has an impressive pedigree, including backing from Ingram Content Group’s CEO John R. Ingram, and a significant list of publishing partners.

The chief virtue of the site as compared with the other new ebook retailers is that BookShout enables customers to import ebooks they have purchased via Kindle or Nook into the company’s Android, iOS and web apps.

This is done not through Kindle or Nook APIs — which are not public — but rather:

BookShout users log in to the app with their Amazon or Barnes & Noble user name and password. The app verifies their purchases and then — if a consumer has bought a Kindle or Nook book from one of the publishers that BookShout is working with — lets the user access the publisher’s version of the file through the app. These publisher files are protected by DRM.

The ebook files, in other words, aren’t ripped from Amazon or Barnes and Noble servers but instead come legally via publishers, which control the licenses that govern ebook distribution. (BookShout also sells ebooks.) According to Paid Content, “the startup has already signed deals with Random House, HarperCollins, Macmillan and Wiley, and is ‘finalizing’ agreements with Simon & Schuster, Penguin and Hachette, along with other publishers.”

As an earlier Publishers Weekly report on the company notes, “The new function addresses one of the biggest drawbacks of digital reading at the moment, consumer e-book purchases are walled off with DRM and must be read in different e-reading applications depending on the retailer they were purchased from.”

The site is limited in that it doesn’t yet have agreements with many publishers and thus its import function won’t work for a wide array of titles. And, as PaidContent points out, BookShout is at the mercy of Amazon and Barnes and Noble, which could “shut down BookShout’s import function” at any moment and, it would seem, have an incentive to do so.

But all that said, BookShout shows that it’s possible to disrupt the hugely expensive work that Amazon and Barnes and Noble have done to “lock” users into Kindle and Nook. Both companies have spent millions developing reading devices that are sold below cost; both sell ebooks at a loss to retain customers. The goal of these strategies is widely thought to be customer acquisition and retention, with a promise of big profit on content sales — ebooks, movies, music — for years to come.

Will other publishers join BookShout? It seems likely they will. One story being told about the merger of Penguin and Random House is that the newly combined company wants to pull power away from Amazon. My own speculation is that the merged firm will invest millions trying to sell ebooks directly to its customers. And it will surely support new ebook vendors in an effort to diversify the market, as most large publishers already do.

These goals will require migrating Amazon customers away from Amazon, or, in other words, un-doing the lock that Kindle’s proprietary DRM format imposes on its customers. BookShout is not likely to do this mammoth task on its own, but the company’s model shows that Amazon’s customers might soon have a way to walk … and take their ebooks with them.


Kelly Burdick is the executive editor of Melville House.