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Google Takes Publishers, Consumers to the Cloud

by Allen Weiner  |  December 6, 2010  |  3 Comments

Google’s entry into the digital publishing space with the launch of its eBookstore, partner program and device neutral distribution scheme is a big deal. On first look, there is the significant impact on rivals in the distribution space (Barnes & Noble, Kobo, Apple and Amazon) as they face new competition. However, as the first “media in the cloud” provider that has retained full control of the media value chain, the stage is now set for a high-powered battle – one that will separate the true contenders from pretenders.

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.

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Allen Weiner
Research VP
7 years at Gartner
23 years IT industry

Allen Weiner shares insights on how to monetize digital marketing through commerce. His focus on “Commerce Everywhere” provides perspective on how social, mobile, search and emerging channels can be tapped to improve customer experiences and drive business results … Read Full Bio

Thoughts on Google Takes Publishers, Consumers to the Cloud

  1. […] advertising targeting and a device agnostic distribution engine," Weiner said in a Dec. 6 blog post. On the Google TV connection, he surmised that a book purchased by a consumer on the wine regions […]

  2. […] “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,” Weiner said in a Dec. 6 blog post. […]

  3. […] a Dec. 6 blog post Weiner wrote, “Add in the purchase of Widevine (multiplatform DRM and content optimization […]

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