Bookstores Can Still Compete By Combining Traditional Strengths With Smart Innovations

from the that's-how-it's-done dept

When Authors Guild boss Scott Turow said that brick-and-mortar stores are the future of book sales, it was hard not to laugh. Tim Cushing & I joined forces to supply him with an ad for his quixotic campaign, and as expected, defenders of the joy of printed books and brick-and-mortar bookstores appeared in the comments to sing their praises in a non-satirical fashion.

But the thing is, if people love bookstores, then bookstores will survive. But the market will inevitably scale according to demand—and there can be no doubt that demand is declining. I count myself among those who get a warm feeling from shopping in a nice independent bookstore full of mismatched shelves and handwritten signs, and I think that's what most people are pining for when they talk about bookstores, not big box retailers with display tables of pop-psychology books and extraneous Twilight supplements. The latter originally thrived on convenience, selection and price—and in those areas they have been rendered completely obsolete by online retailers. But the former subsist on community, personality and charm—things that can be accomplished online, but in a much different way that will never wholly replace a physical space, and that are not really a part of Amazon's arsenal. That doesn't change the fact that independent bookstores are struggling, or that many have shut down and many still will, but the impassioned defenses of the neighbouhood bookstore that pop up in every discussion of this topic show that there is absolutely still a market to be served, even if the size of that market is still uncertain.

There's an additional fear that even if stores offer a superior experience that keeps customers coming in the door, many of those customers will simply browse and then order the books online at a lower price, thus reaping the benefits of the small store without paying for them. I'm not sure how justified that is. People still like to leave a store with something in their hands—and if you build an engrossing retail space with a sense of community, where people interact with the books and each other, they won't be thinking about their smartphones or Amazon's superior prices. A bookstore can also go a step further: Jim O points us to the story of the Harvard Bookstore, where the new owner set up an on-demand printer/binder to see if he could leverage the opposite trend. People don't just shop physically then buy digitally—they also shop digitally and buy physically:

Maybe access to the vast universe of digital content could also save the bookstore. Maybe the bookstore, while limited in inventory, could evolve in the digital world and become a destination where people had access to every digitized book ever published.

To truly compete, he would also have to solve consumer’s expectations for instant gratification and delivery. Jeff needed a complete production, distribution, and fulfillment model. He has likely shocked a lot of people by building one in his own backyard.

Essentially, Jeff installed a printing press to close the inventory gap with Amazon. The Espresso Book Machine sits in the middle of Harvard Bookstore like a hi-tech visitor to an earlier era. A compact digital press, it can print nearly five million titles including Google Books that are in the public domain, as well as out of print titles. We’re talking beautiful, perfect bound paperbacks indistinguishable from books produced by major publishing houses. The Espresso Book Machine can be also used for custom publishing, a growing source of revenue, and customers can order books in the store and on-line.

You can walk into the store, request an out-of-print, or hard-to-find title, and a bookseller can print that book for you in approximately four minutes. Ben Franklin would be impressed.

I've been excited about the prospects of the Espresso Book Machine for a while. Though print is obsolete in many ways, a lot of people still like printed books and express distaste for e-readers. Personally I don't see myself ever giving up printed books entirely (or selling my small collection of antiques), but I also don't mind reading electronically—and unlike many print defenders, I don't condemn those who do truly make the switch. Print still has value to the end consumer, and as such it is not entirely obsolete as a product—but the incredibly wasteful system of printing off huge runs of books and shipping them thousands of miles is. On-demand printers could solve that paradox.

So how is it working out for the Harvard Bookstore? There are no firm numbers, but the owner reports double-digit sales growth monthly over the past year. Can every town and city support a store like this? Certainly not—nothing changes the fact that demand for bookstores has gone down, and it's naive for those who still love them to expect the market not to shrink accordingly. But the reverse is also true: as long as some demand exists, smart entrepreneurs can find ways to stay relevant and succeed.

Filed Under: authors guild, espresso book machine, harvard bookstore, printing, scott turow

Techdirt To Not Charge Readers For Content

from the just-saying dept

Okay, this one's just for fun, but seeing that Canadian national newspaper the Globe & Mail has announced that it's following on the pointless trend of putting metered paywalls up for online publications, and announcing it like it's a big deal, we figured it might be nice to remind people that some (actually, er, most) online publications are still doing just fine publishing for free. But, if they can get news out of making life worse for their readers and community, why can't we make some news out of the fact that we like to treat our community right, and let them read our stuff for free, and freely share it and talk about it? I don't see how making life more difficult for readers, limiting them, demanding that they pay and letting them do less in terms of sharing the content will do much to make people more interested in the site. As for the claims that the Globe & Mail is struggling, as Globe alum Mathew Ingram points out, perhaps they shouldn't be building new office space...

Filed Under: canada, globe and mail, mathew ingram, news, paywall

Indie Film Maker Is Creating A DRM-Free Open HD Video Format

from the killing-DRM dept

In most areas of entertainment, DRM is an option. If you want to publish an ebook, you don't have to use DRM. Same for video games and music. While these others areas of entertainment are moving away from DRM, there is one prominent holdout on the DRM front: movies. Every official distribution and streaming service for the movie industry has some form of required DRM. This includes streaming services such as Hulu and Netflix, download services like Amazon and iTunes, and even the physical media such as DVD and Blu-ray. According to the larger studios, DRM is a necessity, even though its effectiveness is questionable at best and customers hate it. But what about those studios that want to deliver a High Definition experience without the burden of DRM? What choices do they have? If all they want to do is allow people to stream or download the movie, they have plenty of options, but what if they want to include the full feature list available via Blu-ray?

This is one quandary that Terry Hancock of Free Software Magazine found himself facing a little over a year ago. He had been working on two films and wanted a High Definition feature rich experience without the hassle of Blu-ray DRM. He had looked at multiple options, many of which fell a little flat in the end. However, one stood out as the most reasonable option for what he wanted to do. He had to write his own open, DRM-free, HD video standard.

Thanks to Nina Paley, we learn that Terry has started a Kickstarter Campaign to help fund the creation of this open HD video standard called, Lib-ray. Terry describes the motivation behind this campaign as follows:

This may sound like a quixotic goal for a lone individual without corporate backing to develop, but most of the money spent on developing Blu-Ray was spent on the DRM technology -- meaning the technology to make it not play under certain circumstances. The actual business of getting menus and video to work is much simpler, and a lot of the work has already been done. So a format without DRM, based on open standards is intrinsically more attainable.

Think about that. Designing DRM is designing ways in which your movie will not play. Why would anyone want to waste time and money on such an idiotic goal? You would think that movie producers would want people to watch their movies. This idea is what pushed Terry to this point. Why waste time and money on using a DRM'ed media like Blu-ray to release what he wants to be a free culture movie? Even if he tried to work around the DRM of Blu-ray, there is no guarantee that the movies would play in standard Blu-ray players and he would still have to deal with licensing issues.

Terry has not set himself up for disappointment with this standard. He recognizes that it will not unseat Blu-ray as the mass market standard but rather is looking at this for use as a promotional format for those who want to distribute physical media. His examples include using the standard for films as Kickstarter rewards or to distribute films at conventions. There are a lot of opportunities for this to be successful in the indie scene.

On top of this, Terry plans to make the standard completely open and open source. While he does not have an open source web destination yet, he plans to have one ready soon. This choice is probably the key to gaining a more wide spread adoption. If he had tried to keep it locked up in the same way as Blu-ray or DVD, it would never take off.

I applaud the effort Terry is putting into this project. However, it is frustrating that such a project needs to exist. The insistence of the movie studios that all distribution of their films be burdened with DRM is not only ineffective, but it is also harming indie artists who would love to access the features without the restrictions and massive licensing fees. Hopefully, this project will succeed and give those artists the control (or lack of control) they want over their work.

Filed Under: blu-ray, drm, dvd, free software magazine, hd, lib-ray, nina paley, terry hancock
Companies: kickstarter

Why Patent Injunctions Are Even Worse For Open Source

from the yes,-hard-to-believe dept

The damage that software patents cause to innovation in the computer world is a constant theme here on Techdirt. But as a fascinating new paper by James Boyle explains, the threat to open source, particularly from patent injunctions, is even greater because of the special characteristics of that software development methodology:

If open source innovation has great social benefits in fostering competition and innovation, it also has particular vulnerabilities. First, precisely because open source development takes place in a network and allows both small and large players to participate by building on a common technology, it is particularly susceptible to attack and disruption. A proprietary monopolist fully internalizes both the costs and benefits of policing its technology and its intellectual property. Members of an open innovation network, however, do not. Individual members can be "picked off," forced to abandon promising lines of technological development, or to pay ruinous "stacked" royalties because the costs of litigation are too burdensome for any one member of the network to bear. It is in this context that the threat of injunctions is particularly worrisome. In fast-moving technology markets, the dead stop forced by an injunction can be enough to doom a product. An entire network of innovation could be shut down by an injunction obtained against a single small participant who lacks the resources necessary to challenge the patent or defend against the injunction.

Second, most of these markets are characterized by strongly cumulative innovation. A finished product may "read on" literally thousands of potential patents.

Boyle explores these great points at length in his paper, which is well-worth reading. He also offers some suggestions for ways in which the threat of patent injunctions against open source can be reduced thanks to a ruling by the Supreme Court, eBay, Inc. v. MercExchange, L.L.C, and the four-part test it introduced:

the Court held that permanent injunctions in patent law are governed by the same equitable four-part test as injunctions in other areas of law.

A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.

Boyle writes:

this Article argues the Supreme Court’s test in eBay, properly understood, offers some constructive ways to respond to both the benefits of open source innovation and the threats posed to it by injunctions. In particular, the third and fourth factors -- the "balance of hardships" component and the "public interest" component -- are ideally suited to allow recognition of the unique vulnerabilities and the unique competitive and innovative value of open source production.

As open source becomes more widely deployed, so the potential damage that software patents can cause to it grows. Boyle's paper is a timely reminder that judges need to take into account the special nature of open source when considering whether to grant patent injunctions if society as a whole is to benefit, and not just the patent holders.

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Filed Under: development, injunction, innovation, software patents, supreme court

Honeywell's Lawsuit Against Nest: The Perfect Example Of Legacy Players Using Patents To Stifle Innovation

from the if-you-had-invented-nest,-you'd-be-making-nest-devices dept

I'd been meaning to write about this lawsuit ever since it was filed, but other stuff got in the way, so this is a bit of a catch-up post, to go along with Honeywell's response to Nest's counterclaims (which we'll get to in a bit). But the key to this highly questionable lawsuit is that electronics giant Honeywell wants to use the patent system to effectively kill off the well-hyped Nest thermostat. Nest, a company that launched just last fall, got some well-deserved attention for applying an Apple-like design sense to everyday gadgets -- starting with the lowly thermostat, a device that really hasn't seen that much innovation in quite some time. The product was, indeed, a pretty big leap forward, and I know a bunch of people who have Nest devices and love them.

But, of course, under a crony capitalist system, the incumbents can't have any of this nasty "disruption." Honeywell was not pleased. Bizarrely, just days before Honeywell filed the lawsuit, it had told GigaOm that it had built something similar to Nest but killed it off because consumers weren't interested. Yeah, this certainly sounds like a company jealous that Nest actually figured out how to truly innovate (bring something to market in a way consumers want) rather than just invent (create something new).

The simple fact here is that consumers really seem to like the Nest, and apparently Honeywell is ill-equipped to compete in the marketplace. So it's response is to sue and try to kill off the competition. It's a sickening display of a legacy company resting on its laurels afraid to actually compete in the market against a disruptive player that's younger and nimbler and actually in touch with what consumers want. Out of this, we get some absolutely ridiculous claims, such as the suggestion that Honeywell has patented the idea of a thermostat asking you what temperature you like, and only Honeywell could do such a thing:
Honeywell also seems to suggest that merely connecting a thermostat to the internet infringes on its patents, because, of course, no one else could have possibly thought of connecting home devices to the internet before Honeywell came along. While the filing also does highlight some evidence that Nest looked at Honeywell thermostats, isn't that how competition works? You look at what others are doing, and figure out how you can do it better? Basically, what Honeywell seems to be admitting is that it can't do it better, so instead it will sue.

Nest's counterclaim hit back pretty hard on a bunch of these points, stating upfront:

This lawsuit is a bald effort by Honeywell to inhibit competition from a promising new company and product in a field that Honeywell has dominated for decades. Nest Labs, with its Nest Learning Thermostat, has generated consumer and critical enthusiasm around the home thermostat -- a device that most people had long since written off as a bland, dumb appliance.... That "blah-looking controller" on the market today is very often from Honeywell, which has long dominated the thermostat market, but has yet to generate a device that offers ordinary consumers as much as the Nest Learning Thermostat. Instead of countering product innovation with its own new products, Honeywell has a track record of responding to innovation with lawsuits and overextended claims of intellectual property violations.

Nest also points out that Honeywell has lost previous lawsuits that similarly appeared to be bullying competitors. The Nest response doesn't just call out the company for what it's obviously trying to do, but further claims that all of the patents are "hopelessly invalid" and points to prior art that raises significant questions about the validity of the patents in play.

Nest also files some counterclaims for declaratory judgment -- which basically start out as a long commercial about Nest and how awesome everyone thinks it is. While this may seem out of place, there's a reason for this. The company is trying to demonstrate that it's not just a clone of Honeywell, but that it (not Honeywell) is the true innovator here. It not only pumps itself up, but provides plenty of evidence of Honeywell's own failures to innovate.

The latest news is that Honeywell has now filed its own response to Nest's counterclaims and (not surprisingly), Honeywell is not at all happy. It says that Nest's counterclaims are "self-serving characterizations based on Nest Labs' unfounded opinions and speculations that are irrelevant to Honeywell's valid claims..." These are legal filings, so I'm pretty sure that all of them are "self-serving." As for whether or not they're "unfounded opinions and speculations," that seems like a pretty big stretch from Honeywell, in an attempt to smear any competition making valid legal arguments against them.

Either way, it does not seem like either side is likely to back down any time soon. So, what remains is a classic case of a legacy industry player who failed to adapt reacting to the young upstart everyone likes by going legal, rather than actually competing. This is pretty short-sighted. If it actually competed in the market it might learn why people like the Nest device and why they're buying them instead of Honeywell thermostats. All I know is that my house has a Honeywell thermostat currently, and this lawsuit makes me much more interested in buying a Nest device to replace it.

Filed Under: competition, design, monopoly, thermostats
Companies: honeywell, nest labs

Do You Owe Your Crappy Shave To Patents?

from the might-be-a-bit-extreme dept

As some people know (my colleagues at work are sick of me talking about it), I recently became slightly... er... obsessed with the wonders of shaving with an old fashioned double edge safety razor. I won't go into the details, but in reading about shaving with such a device, I couldn't get it out of my mind and have been happily shaving with one for a few weeks now. To be honest, I never thought that I'd ever have reason to mention this in any way, shape or form on Techdirt, but just weeks after I started using one, I saw Stephan Kinsella point to a story by Callum Makkai entitled How Intellectual Property Destroyed Men's Shaving. Given my (entirely separate) interest in both subjects, I dug in. It kicks off with a reference to Andy Kessler's Eat People story about King Gillette's disruptive manufacturing of disposable blades that "challenged at least two professions: the barber with his straight razor and the blade sharpener with his strop."

From there, however, Makkai suggests patents have actually been making shaving worse. His argument is that as the makers of shaving equipment have been fearful of competing with commodity products, they keep "inventing" new ways to shave that they can lock up under patent -- and then try to convince you that it creates a better shave, even if none of the "improved" razors come close to one of those old safety razors:

The commodification of the razor blade was punishing to the profit margins of the razor companies. So the way ahead was clear: come up with new designs, patent them, and make a killing selling the disposable blades.

Thus the 1970s saw the emergence of the BIC disposable razor. Why replace just the blade when you can throw out and replace the whole razor?

Then in the 1980s, Gillette introduced the double-bladed Sensor cartridges. Now the question was: Why throw out the whole razor when you can just replace the cartridge?

Needless to say, these innovations were driven not so much by an improvement of the shaving experience but by the need to create a technology which could be patented.

Indeed, the injector razor did not improve the shaving experience compared to the classic double-edged safety razor, and the disposable razor was in no way superior to the injector razor. Likewise, the Sensor cartridges did not improve on the disposable razor. These developments only made shaving more expensive.

Admittedly, this is a bit of a cynical view on things. And one could make the argument that this isn't so much about patents as it is about marketing -- though it could be a combination of both. Frankly, the story reminds me of what we see all too often in the pharmaceutical world these days -- where when Claritin is about to go off patent, suddenly we get Clarinex, with an associated marketing campaign about how you have to use that rather than the original (much cheaper and equally effective) Claritin. Of course, if people didn't fall for the marketing campaigns, none of this would matter -- but they do. So combine that with the ability to charge monopoly rents due to patents, and voila, many of you are getting a crappy shave, despite the ten blades or whatever they're shoving on those darn cartridges these days. We should always be wary when life imitates The Onion, and wonder if, perhaps, the incentives are screwed up somewhere along the line.

Filed Under: razors, shaving
Companies: bic, gillette