Technology of the Week: information goods (group 32)
Reading has been revolutionized with the arrival of the eBook. Never before was it possible to obtain books with a few clicks of the mouse. Never before were the production cost per additional copy literally 0. Never before did we encounter so many problems with maintaining copy rights.
A growing number of users is unwilling to pay for these products entirely, yet other costumers feel the need to consume their literature legally. Despite their willingness to pay, most of these customers are becoming unwilling to wait. They want to obtain their books through the internet because of the convenience it brings.
Two different models have been found to satisfy these paying customers. In essence both models are extensions of business models of the physical book market. Amazon’s Kindle uses the classic retail model. Customers can buy books and lend them to others if they want to. The only difference is that this now happens through web interfaces and apps rather than through brick and mortar stores.
Debibliotheek.nl is an extension of existing Dutch libraries. If you have a library subscription you can use this service for free. Just as in the brick and mortar libraries you can choose a book and borrow it for 21 days. A copy of an eBook can be borrowed by only one customer at a time.
We were curious what the benefits and costs were of having these specific business models.
One of the largest differences is that debibliotheek.nl despite being an online entity is still hyper local, while Amazon is very global. Debibliotheek.nl is in fact location dependent, for it requires customers to subscribe to a local library before one can make use of the website. This has two implications: on one side debibliotheek.nl lowers the barrier for customers of libraries to start using the service; on the other hand the cost of joining for non-library members is significantly higher. Debibliotheek.nl has a large assortment Dutch book as well, which suits the needs of their customers. Amazon Kindle is much more globally oriented and has a wide assortment due to their deals with publishers. Unfortunately they are currently unable to enter several European Markets due to their inability to comply with local legislation. For instance, the Dutch market requires (e)Books to comply with a standard price, which Amazon is currently unable to do. This inability means that books in specific languages are unavailable through Amazon.
Another difference is in the pricing model. Amazon charges a price per book and allows you to keep it afterwards. Conversely, deBibliotheek.nl charges a flat subscription fee, for which you are allowed to have 10 books on your account at any given time. If you prefer to have new titles you might be willing to take the premium account for €20,- extra, which gives you access to all titles published within the last three years.
Which model suits a consumer best depends on their willingness to pay and their reading speed. For some people 21 days is too short a timeframe to read a book. Buying the book means buying extra reading time as well.
We do believe that both models will have a place in the Dutch markets and might supplement each other rather than exist in direct competition, rather like their brick and mortar equivalents have done for years.