Who knows what evil lurks in the hearts of men? I imagine anyone taking a large investment from Microsoft spends at least a moment wondering what The Shadow knows that they don’t.

Microsoft’s $300 million investment in Barnes and Noble’s Nook subsidiary turned heads, and is seen as an interesting, if confusing effort for Microsoft to get back into ebooks, and to find early traction for Windows 8 devices.

I think there’s a much better reason for them to have made the investment.

Apple’s wild success with its mobile devices is closely tied to the strength of iTunes stores: apps, music, video, and, to a lesser extent, books. Anyone who uses an Apple device knows where to go and knows how to get what they want. iTunes has its problems, but it’s available, it’s comprehensive, and it works.

Google, with their rebranding of the Android Marketplace as Play, is trying to build the ecosystem Apple has in the iTunes stores. They see the value in a one stop shop.

Amazon and Kindle are exactly the same.

So what about Microsoft and Barnes and Noble? Microsoft has an app store for Windows Phone, but they don’t have all of the other content. Barnes and Noble already sells ebooks on the Nook, plus music and video in physical distribution. It seems a shorter hop to take those existing distribution relationships and turn them into working electronic relationships than it does for Microsoft to create them from whole cloth.

Purchasing content for Nook needs a lot of work and polish. Barnes and Noble has struggled there, but they’re really a retailer, not a software company.

If Microsoft is smart about this, Nook will be the way to buy content for Windows mobile devices. With just a $300 million investment, Microsoft got a big jumpstart on a complete content ecosystem.

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In a move that should have shocked no one, Apple updated their iBooks Author EULA. The new EULA clearly confirms what calm and patient folks said from the beginning: Apple isn’t interested in restricting your ability to distribute your content. They only want a piece of what is built specifically with iBA:

this restriction will not apply to the content of the work when distributed in a form that does not include files in the .ibooks format generated using iBooks Author. You retain all your rights in the content of your works, and you may distribute such content by any means when it does not include files in the .ibooks format generated by iBooks Author.

Don’t worry, though. I’m sure there’s still something scary hiding under your bed.

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Stop Hyperventilating Over iBooks Author

by Rich on January 26, 2012

I think everyone is seriously overreacting to the iBooks Author EULA. I don’t particularly like the EULA. I think it’s overly restrictive. But I also think everyone is focusing on the wrong part.

There’s no disagreement about the terms surrounding “Distribution of your Work”. It all hinges on what is “The Work”.

If you’re talking about selling a rich multimedia immersive super whiz-bang text book that takes advantage of all of iBooks Author’s magic, you must sell it through iBookstore. This isn’t (only) because of the EULA. It’s because your book is only viewable inside iBooks. You can’t play it on a Kindle, a Nook, an Fire, or anything else. It’s an Apple proprietary format in exactly the same way that mobi is an Amazon proprietary format. Except for Amazon, it’s proprietary solely for the sake of control. For Apple, .ibooks has unique features impossible in ePub3. So what’s the problem?

If you write the great American novel, or the great Victorian bodice-ripper, or the great vampire/werewolf/zombie death match chronicles, and you produce a .ibooks file with iBA, you must sell that in iBookstore.

But “The Work” is not your copyrighted text. “The Work” is your finished iBooks product (which, for technical reasons, is only usable in iBooks). You can paste your text into Pages, export an ePub2, and sell it on Barnes and Noble, save a .doc and upload it to Smashwords. Sell a PDF on your website to your heart’s content.

Does anyone really believe Apple is going to stop people from doing that? Do they continue to believe it if their tinfoil hats are on correctly?

Apple’s EULA is clumsy in not making that adequately clear, and I strongly believe they will update it to reflect that, but I don’t believe they’re claiming control of your text. They’re claiming distribution control of the finished product produced using a remarkably advanced tool they’ve made available for free which is only usable in their marketplace anyway. If you don’t like that because you want the same product everywhere, make an ePub (still the default format for iBookstore) yourself. You can do it in Pages with just a couple of clicks.

Honestly, just breathe into a paper bag for a minute. You’ll feel better.

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Apple Adopts Cold War Tactics

by Rich on January 19, 2012

Apple’s recent announcement that it joined the Fair Labor Association is good news for the effort to promote humane labor standards. As a cynical and tactical effort, though, I think it’s comparable to the US military buildup during the Cold War which contributed to the collapse of the Soviet Union.

Apple is the only consumer electronics manufacturer with anything other than razor thin margins. Most manufacturers subsist on single-digit margins and squeak by on volume and struggles for efficiency. Apple, thanks to Tim Cook, is incredibly efficient, and their ability to focus on a small number of products and premium profits (at comparable prices) make their margins the envy of the electronics world. That’s how they sell a small fraction of the world’s mobile phones but rake in 2/3 of the world-wide mobile profit.

With a huge margin advantage, Apple can press the fair labor issue. If they’re able, though public pressure, to set expectations around labor standards for electronics manufacturers, they can raise the cost of manufacturing a few percent. Samsung can’t absorb this increase. Neither can LG, HTC, or HP.

For Apple, a few percent is unfortunate for their bottom line, but they’ll still make a fortune. Competing on labor standards could move Apple from being perceived as a premium price/premium quality participant to comparable or even value priced while maintaining premium quality.

How can HP, Asus, or Samsung compete with that?

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SOPA and Lost Sales

by Rich on January 16, 2012

A lost sale is customer demand that can’t be filled. SOPA, and most discussions of digital piracy, treat every illegitimate download as a lost sale. I’m not pro-pirate, but that understanding of lost sales is a bad reading of the issue.

Tim O’Reilly nailed the problem in a recent Google+ post: The lack of clear evidence in economic harm due to electronic piracy. There’s plenty of emotional baggage evidence in the form of “he’s watching my show/reading my book/playing my game and never paid for it.” This is absolutely true, absolutely unfortunate, and absolutely indicative of bad action on the part of the pirate.

But illicit use doesn’t translate to lost sales. O’Reilly points out that his books are widely pirated. I’ve been an enthusiastic customer of O’Reilly for well over a decade, and his company produces great books. They are, almost always, the best technical resources on the topics they cover. With a highly technical audience, his customers and potential customers are also the most able to find a way to pirate his company’s material. I have to think that O’Reilly books are pirated at a higher rate than most.

But, he argues, if the pirates would never have bought a copy anyway, there’s no economic harm.

Most people in the world will never buy an O’Reilly book. They’d be better off if they did, but for lack of interest or lack of honesty, they won’t. 0% of those people count as lost sales, so 0% of their activity contributes to economic harm.

When we’re talking about electronic good, that little group in the middle are the ones who hurt O’Reilly’s (or any other producer’s) bottom line. The rest are wrong, annoying, and bad-actors. But they’re not taking anything from O’Reilly in any sense other than an emotional one.

I’m not condoning piracy, but O’Reilly is right that pro-SOPA politicians and media companies are asking the wrong question. They’re assessing the problem based on the size of the circle of crooks, not the subset of crooks who are doing more-than-emotional harm. That’s not a recipe for success.

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In an interview with Digital Book World, Hyperion CEO Ellen Archer spoke candidly (for a CEO, at least) about the changes to publishing caused by the growth of digital media. It’s a good interview, and well worth a read.

Some of her points showed that she understood the concerns propelling indie publishers better than traditional publishers are expected to understand them. What interested me the most was around funding, sales, and advances. The quote which has been singled out is

We’ve been able to provide advances to authors and unfortunately most of those [advances] don’t drive revenue.

Most of the comments I’ve seen express severely burned bacon. Wading through the commentors’ sarcasm, the complaint with Archer seems to be based on reading this as distaste for having to pay authors. I don’t think that’s what she meant, and I don’t thing it’s fair analysis.

Most traditionally published books don’t earn out past their advances. There are lots of reasons for this which encapsulate many indies’ frustration with traditional publishers, but regardless of the reasons, it’s still true. An advance is exactly what its name implies: an advance against future payments.

Advances are important in publishing risk management for a simple reason. They transfer risk from the author to the publisher. If publishers are losing their taste for taking on that risk, the only one left to bear it is the author. I suppose you could devise some sort of “crop insurance” program for your novel, but good luck getting someone to underwrite it.

If the future of traditional publishing is to expect the author to take on more risk (which is certainly the case in indie publishing), authors ought to reasonably expect more return. That’s the balance. Risk vs. reward.

Ultimately, that’s the publishing calculus, for traditional or indie. Traditional seems primed to shift more of the risk burden toward authors. That means authors should be prepared to pull some of the reward with it.

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The end of the year brings a flood of lists purporting to sum up the the year we’re leaving or to make bold predictions about the year to come. Far too many of them predict exponential growth of something. I understand that, to most people, “exponential growth” is really just an expression which loosely translates to “really freaking fast”, but come on. It’s math.

Being cavalier with math never pays off in the long run.

So, I have produced a handy guide to growth rate taxonomy.

Linear Growth

Linear Growth

Linear growth occurs at a constant interval. If it went up by one over the last period, it will go up by one over the next period. If it went up by 1,000,000 last time, it’ll go up by 1,000,000 next time. The size of the steps is constant.

Here, the blue line grows at a rate of +1, the red line at a rate of +5. Both are linear. They will each always increase by +1 and +5 per step.

Geometric Growth

Cubic GrowthIn geometric growth, size of the steps increases by a constant multiple. So in linear growth, the same number was added with each step. In geometric growth, the same number is multiplied with each step.

Here, the blue line is our linear +5. The red line is *2 (doubling with every step).

Exponential Growth

In exponential growth, the steps increase by a constant exponent. So the rate of growth increases with each step. In geometric growth, we multiplied by 2. In exponential growth, we raise to a power of 2 (or whatever), so we multiply by an ever increasing amount.

Here, the blue line is geometric growth of *10, the red line is exponential growth of *2. You might notice that the scale on this one only goes out five steps, instead of the ten the other graphs covered. That’s because exponential growth increases so quickly in the “out years” that everything else looked flat.

Like this.

Say what you want. I’m all for colorful language. I’ll grind my teeth and smile when I hear it.

But you’re not talking about exponential growth.

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Google Bookstore – Now With Engineering

by Rich on November 1, 2011

Google’s launched its online bookstore. It’s a storefront inside Google Books, so much of it should be familiar to the three people who use Google Books.

Steve Jobs Details from Google BooksThe bookstore is clearly commercial, with new titles and prices which look roughly comparable to Amazon’s for electronic editions. What struck me was what Google included in the ebook descriptions (this taken from their listing for Steve Jobs). I’m glad to no what devices can handle their ebook file, but the explicit disclaiming of scanned pages is something new to me.

It’s a really nice piece of information. Too many ebooks are scanned from print and read terribly because of it. Print books are fallible on their own, and scanning/OCR inevitably introduces errors.

This is a nice mark of quality for the product from Google, presented in a way that someone who knows how ebooks work will understand. I have no idea if mainline ebook consumers will get the significance of non-scanned pages. My hunch is that it’s a key details which most people will miss. Had Google described it as “Clean copy” or “Print Quality” or something, it likely would have been more helpful and successful for them.

It’s a microcosm of what makes Google wonderful and sad at the same time.

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Apple Made Siri for Minnesotans

by Rich on October 26, 2011

I own many pairs of gloves. With so many weeks of winter, most Minnesotans do. Only one of them allows me to use my iPhone. It’s a really nice pair with a conductive thread pad at the fingertip lets me do basic things when it’s cold: answer a call, start a playlist, launch an app. It’s not fine enough to type, but it beats freezing.

It hit me today, though. Siri was built for me.

Gloves don’t prevent me from hitting the home button. Without the touch gloves, it never mattered. I couldn’t work the unlock slider. (OK, I could work it with my nose, but it looks goofy.)

With Siri, though, I hit the button, I raise the phone, and I’m on fire.

“When’s my next meeting?”

“Where’s the nearest Panera?”

“How much does a ferret weigh?”

All winter long. It’s better than a car with heated seats.

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Pick Three Words from my Hat

by Rich on September 16, 2011

I tackle another Chuck Wendig challenge: The Numbers Game. My entry is Final Round. Enjoy.

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