Nor was Amazon about to let B&N take mindshare control in to so-called “reader tablet” market with its $249 Nook Color which features a version of Android as well as enhanced content from publishers and a variety of apps. At the same time, Amazon needed to face pending efforts in the color reader tablet space from Kobo and Sony—a lethargic but potentially dangerous competitor—in this arena.

Amazon’s frontal assault on its e-reader competitors is on price, undercutting the current market by about $40 for its new touch version and $60 for the new non-touch version. In addition, Amazon is offering a 3G model for $149 which is within $20 of its competitors’ WiFi only e-ink readers. As Gartner has predicted, the price point for e-ink readers would fall below $100 in time for the holiday shopping season. What remains to be seen is whether Amazon will be alone in that distinction or whether B&N, Kobo and Sony—whose new Pearl screen, WiFi device has yet to hit the market—will follow suit. The thinking is price cuts will be fairly dramatic market wide in Q4 along with perhaps some innovative campaigns which include product or service bundles.

This is not a straightforward Amazon vs. the market event; the dynamics are complicated. Amazon’s new lower-priced e-readers could thwart B&N’s efforts in non-U.S. markets. B&N only offers Nooks domestically but has talked about global distribution; Amazon’s ability to sell internationally a popular device at a low cost could keep B&N from becoming a global player. Such a move would challenge Kobo which has set up a number of intentional distribution agreements as well as put a major dent in any plans Sony—a global player—would have in this market.

The $199 Kindle Fire initially would attempt to undercut B&N’s Color Nook in price and functionality. The Fire would not only be ideal for enhanced books (books with audio and video) but also offer streaming media services, something the Nook Color does not offer. And while a 7-inch tablet is not an ideal screen size for newspaper and magazine publishers, Amazon might offer some ways to render such content better than the Nook Color and become an initial volley in a longer-term newspaper/magazine strategy which fully blossoms when Amazon releases a 10-inch tablet. Amazon will not have to make a big effort to be more newspaper and magazine friendly than Apple has been regarding in-app purchases and sharing consumer data.

Amazon’s double tap has the impact of targeting its e-reader competition today and the media tablet market as a magazine and newspaper device in short order. Holiday shoppers will have a cornucopia of digital media devices to select from this year. Amazon’s hope is it sits under more trees at home and abroad than any of its competitors.

Was Netlfix’s change (met with discontent by investors and many subscribers) music to Amazon’s ears? If rumors of a pending Amazon tablet are true (and given the Asian manufacturing pipeline is not known for secrecy), then Netflix will face some major competitive challenges especially after a slowdown in subscribers in Q2 and an expected continuation of the same in Q3. With a device in place—especially one that may come in priced well below the iPad—Amazon will have content (among its recent deals is one with CBS), devices (Amazon Prime and VOD are both on Roku and other boxes) and a global audience/database of customers who are prime (pun intended) to buy more Amazon goodies. With profits from its other businesses (cloud, for example) Amazon could afford to sell its tablet at a loss to build marketshare for its tablet and content services.

Netflix is determined to retain its place as the number one Over the Top content service. There are some who believe Netflix’s decoupling of its streaming and DVD services was a doomsday plan to eventually shut down its DVD service which costs more to operate that its streaming business. Netlfix is determined to upgrade its content library signing deals with Miramax and Dreamworks. Netflix also has an enviable position in the key distribution endpoints—HDTVS. The service is bundled into internet-connected TV from Vizio, Samsung, Sony and others. That position may be somewhat precarious when competitors (or the manufacturers themselves) come up with similar streaming content services. Walmart (the leading retailer of TVs) is likely to be a power there with its Vudu service and its announcement of a new streaming service.

One area Netflix should target is original content. One of the hottest made-for-multiplatform content producers is Vuguru, producers of “Back on Topps” and “Prom Queen.” The company’s most recent show, “The Booth at the End” is available on Hulu and causing a stir among TV watchers. There’s plenty of new original content in the pipeline; Netlfix would be wise to focus a bit more on new shows looking for a home rather than somewhat stale material looking to squeeze a few more dollars out of a protracted viewing life cycle.

First, Amazon: The Seattle-based company is likely to come out with some sort of tablet device which no doubt will be color, and support both support web browser and video. It will be touch screen because in Feb. 2010 Amazon bought Touchco, a company specializing in touch screen design. It will support Android, but like Barnes and Noble, it will have its own implementation of the OS for its devices and sell resulting apps in its marketplace. A new device for Amazon makes sense given its vast products and services in the publishing and entertainment sectors.

A new tablet device for Amazon mostly threatens Apple’s role in the publishing space. Amazon has more publisher relationships, a larger global publishing footprint, a self publishing unit, and exclusive deals with some high profile authors and book buying data from millions of shoppers. Amazon’s role in the newspaper and magazine industries are a bit more opaque; the company delivers text versions of both media but could be positioned to quickly upgrade those relationships.
A new media tablet from Amazon threatens Google’s position as an embryonic e-book force (does it force Google to go the device route?) and perhaps even Netflix. Amazon’s streaming movie services will greatly benefit from being baked into a branded device. And tuck this into your pocket: if Amazon’s new device has a built in camera, imagine the bar code/NFC shopping apps that could be part of the device’s core features. Here’s a scenario: you are in Wal-Mart, find a HDTV you want to buy; you snap a picture of the device or scan the barcode and Amazon will give you comparison price and allow you to buy it from them in One Click.

As for Barnes and Noble, in a meeting with investor analysts on May 4, “Barnes & Noble, Inc. … indicated it expects to make an announcement on May 24, 2011 regarding the launch of a new eReader device,” Barnes & Noble said in a filing with the Securities and Exchange Commission. With a recent upgrade to Android 2.2 on its Nook Color, what could be in store?
Here’s a SWAG with some degree of logic: Barnes and Noble might be the first to come out with a device using the Mirasol screen technology from Qualcomm. Qualcomm said earlier this year that it would have a device in the marketplace in 2011. A Mirasol device, which uses Interferometric Modulator (IMOD) element is a simple MEMS (micro-electro-mechanical system) device that is composed of two conductive plates. The net result is color which uses less power in a non-reflective display. In short, a color screen which supports browser and video with an e-paper like “easy on the eyes” experience. A Mirasol device could be positioned between the Nook Color and the Nook B&W (call it the E-Nook?) and offer the reading experience of the black and white with the ability to offer enhanced books and magazines. Pricing? Good question.

Amazon and Barnes and Noble’s new device plans raise the issue of the fate of its existing black and white line of e-readers. Two things make sense: one is that the price drops to around the $50 mark and is marketed to those whose only aim is to read trade fiction and the like (perhaps an older demographic). Second, is they are given away by book publishers to customers who sign up for book clubs that carry a monthly purchase commitment. (Bertelsmann, take note).

The e-reading space is one in which speculation has become a blood sport. Microsoft, Sony and other consumer electronics companies will be watching this space. If my speculation is on the money, see you at the race track.

So, what new in the Froyo upgrade? There’s now an app marketplace with Android-based apps built for the Nook Color using a Nook SDK. Apps, which predominantly sell for $2.99 or less, run the gamut from games (Angry Birds) to Pandora internet radio. There is also email with seamless account setup for most popular POP-based email accounts (Yahoo, Hotmail, Gmail). The device now will support Flash which means it will play Flash video and audio. On the deficit side, it lacks Bluetooth, has tiny audio quality through small speakers in the back of the unit and while it plays Flash, a great deal of Web video is not optimized for mobile.. The experience can be hit and miss: on The New York Times site, video worked well; on Hulu, not so great.

The best things about the new and improved Nook Color are all reading related. After all, isn’t this “the reader’s tablet”? The Nook Color is a strong device for kids’ books with more than 350 kids’ digital picture books which take advantage of the new Froyo features such as video and embedded games. Nook Color V1.2 (as it’s called) does a nice job of handling the emerging category of enhanced books which incorporate video, audio and interactive social features. B&N says it has 225 (and counting) multimedia books including “Knitting for Dummies,” Raising a Child” and Elle: Workout Yoga starring Brooklyn Decker.
Nook Color V 1.2 might provide some help for the Nook Newsstand. I am among those who believe replica or enhanced versions of existing print pages not only don’t work on a tablet device, they look especially weak on a seven-inch screen. At launch, the upgraded device will have the Pulse “social magazine” app which hopefully will encourage newspaper and magazine publishers to build apps that look less like copes of their print products and more like Pulse and Flipboard.
Saving one of the better features for last, there’s a beta version of Nook Friends, a social application that shows great promise for sharing, recommending and buying books in one integrated site. The site also makes the “Lend Me” feature for sharing B&N titles much simpler. There are really good sites to share what you are reading and some where you can compare what you are reading to various parts of the social graph, but none that combines those two elements with the ability to buy a digital copy once you’ve discovered a new title.

It’s a bit hazy to gauge the impact of the Nook Color V1.2 in the e-book marketplace/e-reader landscape. While it might seem logical for Amazon or Kobo to build an app for the new Nook Color app marketplace (as they have for other marketplaces), none is in the offing, says B&N and neither Amazon nor Kobo has requested a developer’s kit . The same goes for digital magazine marketplaces such as Zinio. Will B&N keep them out of their marketplace? Better yet, can B&N keep them out of their marketplace?

So, bottom line, is the Nook Color a tablet? Well, it always was a tablet—a reader’s tablet—which is a device whose form factor and functions facilitate an enjoyable reading experience across books, newspapers and magazines. Now, it strengthens its position in that space and offers enough gaming, entertainment and productivity apps to keep consumers not so much from buying an iPad, but more from buying whatever Amazon or Sony might come up with for readers “who want more.”
The Nook Color with its new Froyo upgrade is not an iPad—not even close. But those who are looking for a great cross-media reading device with some nice new multimedia bells and whistles, it remains a go-to device.

The eBook story is simple: Google will offer a device agnostic scheme that allows consumers to buy and download content from either Google’s eBokstore (more than three million titles with “hundreds of thousands” for sale) or from one of the search giant’s partners (Powell’s, Albris, etc…). Their digital content on the Google online store will be powered by Google’s eBook infrastructure.

Google will deploy whatever model a publishers selects: agency model with fixed pricing or wholesale retail with suggested pricing and fixed margins. Keep in mind, Google will be competing with its partners, but it also contends its partners can add quite a bit of their own brand and value alongside the bookstore. As both an arms dealer and arms retailer, Google puts itself in the rare position to get a piece of every transaction that flows through its pipes.

Google has licensed Adobe’s ACS4 DRM,which means the content can be read on e-ink based black and white devices aside from Amazon’s Kindle which uses its own proprietary DRM. Google will have an eBook application for the iPad, Android devices (but of course) and presumably ever other flavor of device platform on the horizon that supports a web browser. Consumers can access their books (and presumably later, newspapers and magazines) from any device simply by entering their Google account and download the appropriate app or, in the case of a e-ink reader, side load the content using Adobe Digital Editions.
A few issues to note: books purchased prior to the launch of Google’s eBookstore cannot be transferred to the cloud. So, a book purchased from Barnes and Noble for the Nook cannot be deposited in the Google cloud due to DRM issues which tie content to devices. Books purchased from Google will be paid for using Google Checkout which, while having millions of users has not been a popular payment service when compared to the payment experiences of Paypal or iTunes.

While Google’s pending case over unauthorized use of copyrighted material has an impact on its eBook launch (settlement would add millions of new titles to the content tank), the negative PR Google has suffered from its prolonged battle with publishers will require some marketing and goodwill spin to prove themselves a friend rather than foe.

The big picture: The eBookstore launch and parallel efforts with Google TV must be viewed as companion efforts to establish a cloud-based media storefront. Add in the purchase of Widevine (multiplatform DRM and content optimization platform) and you see the formation of two content services with the ability to share customer behavioral information, advertising targeting and a device agnostic distribution engine. A book purchased by a consumer on the wine regions of France could likely result in the delivery of a TV clip, pushed to a user via Google TV, on a related topic complete with targeted advertising. User behavior data collected and collated across Google’s content services and Google’s search engine creates a scary scenario of cross-media dominance.

The fruition of Google’s media cloud plans likely will lead to positioning of competitors in this rarified space: Apple, Amazon and perhaps Microsoft. A few of the major CE companies who have devices across the content consumption landscape—Sony and Samsung to name a few—will want a piece of the media cloud either through ownership or partnership. It can be profitable to sell a consumer a TV set or e-reader, but far more profitable to have that device owner come back and use your storefront as a content hub.

Certainly a pressing question is how Google’s entry into the eBook distribution space impacts Amazon. Google and the Seattle-based giant etailer have similar positions in that they own large pieces of the e-book value chain. Amazon is in the device business as well, but its proprietary stance seems close to being a major liability. This leads Amazon with some pragmatic choices: move to the ePub/Adobe DRM standard or get out of the device business. With assets that go beyond books (movies, music, shopping) it’s much more reasonable to expect Amazon to remain in the device space, adopt open standards and even come out with a tablet device that has cross-media capabilities and some sort of location-based shopping capabilities.

Possibly, Google’s eBook service will not emerge out of the gate like a bolt of lightning. The market of content supply and consumer demand is unstable, fraught with battles between proprietary stakeholders. Google can patiently sit back and wait for consumers to demand open, portable standards and raise its hand as the device-neutral, consumer-friendly answer. Sounds like a good position in this ever-changing space.

1. Adobe unveiled the Digital Publishing Suite at MAX, its annual worldwide developer/industry conference. The product/service, built on Adobe Creative Suite and Adobe InDesign CS5, adds cross platform distribution for magazine publishers as well as a hosted service that facilitates a new work flow/collaboration scheme for resource-constrained publishers.
2. As reported in my blog post on Oct. 27: Barnes & Noble, the nation’s largest physical book retailer, is following up its November 2009 release of the Nook, an e-ink e-reader, with the NOOKcolor, a device that uses a 7-inch LCD/LED screen to display books, newspapers, magazines and a few additional services such as Pandora. The device is scheduled to be available on November 19th and will retail for $249. NOOKcolor uses WiFi to harvest content. It will be built on the Android 2.1 platform which means it will not be able to run Flash, but as the device’s OS is updated, Flash support is likely. The device will not have access to the Android Marketplace at launch. NOOKcolor will support Adobe’s DRM which means it’s likely to continue to allow download of e-books from public libraries.
3. Even before Windows 7 Phone has hit the mass market, Amazon has announced a Kindle App for the smart phone, giving it yet another platform for readers who purchase e-boos from Amazon.

I couple these formal announcements with two key take-aways from panels I moderated at MAX.

1. Magazines are still in their earliest days of understanding the digital opportunity as it relates to reading devices such as the iPad. Two fatal flaws that seem to be a common occurrence are taking published magazine content and created what I’d call “enhanced replicas.” Some are even proud that there’s minor incremental content cost by re-purposing print content for the tablet.
2. The more erudite book design world agrees that interactivity for the sake of interactivity is lost on most consumers as it only causes confusion. Publishers view interactivity as a “bright shiny object” (my words) and have yet to find its proper place in their respective internal hype cycles.
Piecing together these data points, consider the following:

1. Magazines may have a powerful trajectory ahead, but liftoff will not take place until they redefine the term periodical (why publish weekly when new efficiencies allows you to publish in real time if need be) as well as view the digital channel and device capability as a new publishing paradigm as opposed to a channel for somewhat dressed-up recycled. It will be a pity if publishers don’t view services such as Adobe’s hosted publishing suite as a mean to build collaborative efforts with new visionaries.
2. Magazines cannot get by much longer by ignoring or stating that the lack of advertising solutions for new digital channels is “uncharted.” It’s understandable that warring stakeholders in the device world stand in the way of scalable open solutions, but it’s time for publishers to demand open platforms to capitalize on bringing new, measurable ad experiences to the tablet and other similar devices.
3. Being a Libra gives me the excuse of looking at multiple sides of any issue. I now believe Amazon may not rush into the tablet market because it believes the digital magazine and newspaper opportunity isn’t close enough to build a hardware solution for an unproven market. As the world’s largest bookseller, why not continue to do what you do best.

Skiff, at launch, was a device and a platform for “content.” While somewhat nebulous in its position, given the company was part of the Hearst Corporation, the emphasis was on magazines and newspapers in that order. News Corp, with no magazine holding, will clearly be using Skiff for its global newspaper assets as a platform for distribution across myriad devices, none of which will likely be a Skiff.

While the news releases are somewhat ambiguous, it appears the Skiff device is not part of the Hearst-News Corp deal. The smart money says that Hearst is giving up on the device space especially since e-ink-based devices appear to be on a slippery slope with the advent of multimedia e-readers and tablets which offer color, video and web surfing in addition to a “good enough” reading experience. The somewhat sad irony is that Hearst was one of the prime forces behind the development of e-ink at the MIT Media Lab. Also feeling the pain on the possible shelving of the Skiff is Sprint, the hard luck telco, dumped by Amazon in favor of AT&T, looking for its niche in the new content ecosystem.

That takes us to News Corp and its deployment of Skiff. The biggest challenge for the global media giant is where best to house and deploy Skiff to leverage its capabilities. News Corp has struggled with leadership and direction in its digital strategy much of which has resulted in a series of soiled assets (Fox TV/films, newspapers, sports league relationships, MySpace) that are not able to play in the same sandbox not because of technology limitations but rather a common vision. Unless News Corp has a plan—and a good one at that—Skiff will go down as one of those e-publishing pioneers that seemed like a good idea at the time and nothing more.

That’s just the start–it gets more complicated. It is Google’s desire to offer books via web browsers as the reading interface. Google would prefer Chrome as the browser of choice, but its e-book reader will no doubt work with any popular browser. That said, the current crop of e-ink based e-readers (Nook, Kindle, Sony) either don’t support web browsers or do a terrible job in rendering browsers. Even the Alex, which has both an e-reading screen and a smaller LCD screen, does a poor job in displaying web browsers. So, unless e-ink, e-reading devices, which offer a more comfortable e-reading experience embrace new LCD technology that offers color, faster refresh rate and a low-glare display that comes close to e-ink, Google’s plan will have to focus on tablets and other similar devices. New suitable LCD displays from Qualcomm’s Mirasol and Liquidvista shows great promise, but have no public roadmap for e-reading deployment.

There’s more. It’s unclear whether Apple will allow Google’s Chrome browser on the iPad. Yes, Google Editions will work with any browser (including Safari) but there may be features in Chrome that can optimize content. From a precedent standpoint, can Apple keep Chrome off of the iPad when, in 1998, the U.S. courts forced Microsoft to allow Netscape’s browser in its OS alongside Explorer?
And just how will Google Editions render e-books in its browser? Anyone who has read an e-book in a web browser would agree it’s a poor substitute for an e-ink, e-reading device. Google Editions will probably rely on HTML 5’s ability to create browser-like containers for e-book applications. How long will it take Google (and possibly developers) to create nifty value-added e-books for that platform?

And yes, there’s even more. There are issues around DRM, support of ePub, whether or not Google plans a device to support Google Editions and how Apple will maneuver to head Google off at the pass. The e-book/e-reader wars are still in pre-game mode. Look for a number of announcements to come from the upcoming Book Expo America show in New York.

Film rentals are a natural progression for YouTube and hardly a major surprise, given the number of competitors that range from Netflix to Apple TV, and clearly not part of a first-mover strategy. The areas of filmmaker control over pricing, rights and rental windows is a market differentiator but is it enough to evoke more than a tremor in the consumer media marketplace?

The answer requires a broader view of Google’s media cloud strategy. Simply put, it is Google’s intention to become the leading distributor of consumer-oriented content—books, newspapers, magazines TV, movies and (perhaps) music. All content will be stored in Google’s cloud and distributed—primarily through a browser interface—to any device associated to a individual consumer ranging from Smartphone to tablet to televisions via a set top box. Google will provide the tools for varied monetization schemes in a revenue sharing model as well as seamless integration into the leading search engine.

The key consumer-facing components of this cloud strategy are YouTube (all things TV, film and video) and Google Editions (all things print). As YouTube rentals unfold, you will be able to see a set of attributes that show elements of this cloud strategy: the rental service will likely expand to include distribution to mobile platforms and OTT TV platforms on which YouTube already have a presence (i.e. Apple TV, Boxee, Wii, PS3) with such features as enhanced search and discovery via closed captioning/auto speech recognition.

Google’s media strategy is geared to take dead aim at Apple. Both companies (along, perhaps with Amazon) will likely become the future archetypes for successful media titans with an emphasis on friction-free, content agnostic, multiplatform monetization. At this point, it’s an interesting blueprint; the devil will be in the details.