Amazon.com is signaling its intent to make e-books currently licensed for the Kindle e-book reader available on a range of PDAs and smartphones. This development — including the fact that Amazon has uncharacteristically pre-announced it, without a launch date — is as fascinating as it is ambiguous.
Before I discuss the significance of this announcement, it’s worth understanding that Amazon intends to use a technology it has owned for several years to make content available on devices other than the Kindle: the e-book platform from Mobipocket, a small French company that Amazon acquired almost four years ago. Mobipocket created a proprietary e-book format, DRM, and reader software for a number of different smartphones and PDAs. It also created an online store, Mobipocket.com.
Amazon uses an enhanced version of the Mobipocket .PRC format and DRM for the Kindle. The Mobipocket format is more of a l0west-common-denominator plain text format.
Mobipocket’s platform became fairly popular for professional (medical, engineering, etc.) and reference content. Mobipocket.com currently offers tens of thousands of titles in all genres — though mostly self-published, small-publisher, and backlist works.
Now Amazon wants to do two things. First, it wants to make Mobipocket-format e-books available directly on the Amazon.com site alongside Kindle-format content, instead of on Mobipocket.com. Second, it wants to get licenses from publishers for Kindle-licensed content for the Mobipocket format and DRM. There is several times as much Kindle content as there is on Mobipocket.com, including major publishers’ frontlist content.
The first of these is easy — it’s a straightforward engineering task. The second may not be so easy. Which may be why Amazon has broken with its usual policy and announced its intent to license Kindle content for Mobipocket rather than announcing actual licensing deals with publishers.
What’s going on here? Many questions arise:
- Is Amazon anxious to cannibalize its own Kindle dominance by enabling the sale of e-books onto other platforms?
- It is looking to grow the overall e-book market by consolidating it under its own retail store now and worring about device consolidation later?
- Does it hope to upsell smartphone e-book readers to Kindles?
- Is the market dominance of the Kindle — which everyone assumes, even though Amazon will not release its sales figures — more hype than reality, given how many other e-book platforms are out there?
- Or is Amazon looking at an e-book revenue strategy more in terms of sales commissions from Amazon.com than from Kindle hardware sales?
Any of these are possible, but the latter rings truest. It’s fair to say that publishers are not exactly falling over themselves agreeing to license their content to the Mobipocket platform, just as they haven’t been in the past. Editorial execs, which hold major clout at publishing companies, may say that the Mobipocket format doesn’t look very attractive.
But strategy execs may not like the idea of Amazon controlling so much of the economics of the e-book supply chain. Amazon.com is, or will be, the largest of the many, many e-book retail sites — by several orders of magnitude. That ought to scare publishers. And that’s why I believe Amazon is pre-announcing — as a means of creating momentum among publishers to license content for the Mobipocket platform.
Amazon is betting that its retail size advantages outweigh the consumer confusion over e-book platforms that it stands to perpetuate by diversifying from the Kindle. Keep in mind that Mobipocket is not the only cross-device e-book format — Fictionwise’s eReader shares that distinction.
Yet in addition to seemingly smaller players like Fictionwise, Amazon has to have two bigger fish in its competitive sights: Apple and Google. Notice that Mobipocket supports neither iPhones nor Google Android devices. But that’s another subject for another time.