In early August, to the relief of thousands of eBook readers across the web, a new app called txtr arrived on Apple’s iPad which allowed existing books to be read on the headline-dominating tablet.
The firm’s Andrew Rhomberg spoke to us about how they’re helping eBook retailers take their offerings multi-channel, the future of standalone eReaders, the transient nature of DRM on eBooks and the likely future growth of the format.
Could you tell us a little bit about your company, its aims and ambitions in the eBook sector over the immediate and longer terms?
txtr is a 3-year old company from Berlin, Germany, and employs more than 50 software and hardware specialists. The company is backed by its founders and 3M New Ventures. Since 2009, the company also has had an office in central London.
The goal of txtr is to help consumers own and access any digital reading content in an open, transparent and easy-to-use way and irrespective of the device end-users own or use for access.
To enable such “universal access”, txtr has developed a multi-channel retail platform, called txtr multi, to support a digital reading experience on any suitable device. Examples of suitable devices would be personal computers, laptops, netbooks, tablets, eReaders, iPhones, iPods, iPads, Android and (soon) Symbian-based smart phones. txtr multi will also be extended to other suitable devices and devices that have yet to be launched.
txtr aims not only to enable users to read and buy content (eBooks, electronic newspapers and magazines) on any device, but also to make it very easy to transfer or “share” such content across devices (at least those owned by the same person). Content should not be locked into one particular device or platform, but should be readily transferable.
The central tool that enables easy sharing and access from multiple devices is a cloud based architecture that allocates a personal txtr vault to each user (visualized and accessible within each application through the online “archive” view). The txtr vault acts as a central repository for all eBooks, documents and digital reading material that a user owns.
The txtr vault is personal and the online storage space is unique to each user and holds an exact copy of the user’s literary content. The txtr vault is open to content from any source whether purchased from Waterstones, Barnes & Noble or any other source and – with the user’s permission – content can be transferred to any compatible 3rd party system.
However, txtr is primarily a B2B company and we work closely with our partners worldwide, who offer a version of txtr multi under their own brand and with their own content. Users would not know that they are dealing with txtr, because they use their existing partner login names and passwords, are billed by the partner and see the partner’s brand and content selection. Most of our partners are book retailers, but we also work with retailers who are not book specialists.
We will be launching with several European and non-European book retailers starting from early September onwards and in due course – probably well before Christmas – we will also launch with UK retailers.
The ePub/ADEPT DRM combination is the UK’s de facto standard for eBooks however, as of today, txtr is the only eBook app available to UK iPhone and iPad users which supports this combination and allows them to read existing eBook purchases on their iPad.
How important is it that retailers and other eBook stakeholders support apps such as txtr to avoid the market being dominated by two propriety DRM systems (iBooks and Kindle)?
In February, txtr was the first company in the world to launch an iPhone app with support for Adobe DRM. Version 3 of this app, which was approved by Apple on 3rd August, is the most recent version and adds several new features including the support for iPad.
txtr licenses its technology (including its “iPad app”, known technically as txtr multi module “a”) widely to book retailers and other stakeholders. There is agreement by all our partners that open access and ease of content transfer for end-users are critical features. However, the in-app shop is always exclusively the partners own shop. It is a system that supports both Adobe DRM but also non-DRM content.
It is the goal of txtr and its global partners to make DRM a feature that is un-obtrusive and is handled in the background with a minimum of fuss and interference to the end-user. We endorse and indeed prefer a DRM-free world, but we do not fight the fact that many eBooks are wrapped in DRM.
A number of readers have asked whether they can be confident the txtr app will always be available or whether they’re best to abandon ePub/ADEPT DRM combination while they still only have a small eBook collection and adopt either Kindle or iBooks. What would you say to them?
Adobe DRM is not just a “standard” in the UK. It is a “standard” accepted by publishers and retailers in Europe, the Americas, Africa, Asia and elsewhere. It is a world “standard”.
[Andrew points out that although we use the word standard , in this case it simply reflects common and widespread use rather than a technology standard accepted by an international standard body.]
There is huge range of ebook readers and devices that support only one form of DRM and that is Adobe DRM. Users can transfer content – and txtr makes this particularly easy – from one device to another. Users can also transfer content from a txtr app to a compatible 3rd party app. By contrast, the Kindle ecosystem is an extremely closed architecture. You can check-in, but you can’t check-out.
The Apple ecosystem is a partially closed ecosystem. The iPad supports apps based on Adobe DRM, but ibooks itself supports only DRM-free eBooks or eBooks purchased from Apple (Apple uses the proprietary Fairplay DRM format). An ebook with Adobe DRM can be read on any Apple device, but eBooks bought form iTunes/ibooks can only be read on Apple devices.
VHS beat betamax as the standard for video tapes, because VHS was available to any partner while betamax was only supported on Sony devices. VHS was usurped by the DVD, but the backers of the DVD had learnt from history and made the DVD format widely available to other partners. Similarly the MP3 format prevailed, because it was available to anyone.
With Android powered Tablets expected to hit the stores soon, are you planning to bring your app to other devices and is there greater potential for growth on non-Apple platforms where you won’t be competing against both Apple and Amazon?
txtr launched an Android app last month and our PC reader app will follow soon. We also have apps in development (with support for Adobe DRM) for Symbian and Meego (i.e. Nokia smartphones), Bada (Samsungs’ smartphone platform), Linux and other platforms. Apps for Blackberry and Web OS (the platform HP acquired when it bought Palm) are on the drawing board.
We ask ourselves, one and only one question: will a significant number of users want to read eBooks on a particular platform.
If a significant number of users would want PSP or Xbox support, then we will support PSP and Xbox. At the moment we are unsure about the demand for reading eBooks on TV screens, but the decision lies with end-users.
Is the future for eBook retailers ultimately to be found in offering a multi-platform app, an own-branded eBook reader or a combination of both? Do standalone eBook readers even have a long term future or will we be using more multi-purpose devices to read on?
Stand-alone book readers are like steak-knifes. They have their purpose. ebook readers are to serious readers what steak-knives are to carnivores. There are also Swiss army knives, desert knives, butcher’ knives, small knives and big knives. There are knives made of steel, knives made of silver, even knives made of gold (just visit Buckingham Palace). It all depends on the owner’s needs and wishes.
A mass-market retailer will need to serve the needs of all major customer segments and that means every major ebook channel and ebook capable reading device.
We’ve talked about the various incompatible DRM formats currently complicating buying decisions, can you see a time when publishers will be happy to sell books free of any DRM?
There is currently one and only one DRM method that is widely adopted and that is Adobe DRM. It is not perfect, definitely not, but it is what we have today.
Every publisher I have ever met – and I have met a lot – acknowledges that digital rights management (DRM) for eBooks is something transient. Users do not like restrictions, but the most senior level people at most publishers do not yet have the courage to move away from digital rights restrictions, because their fear of copyright abuses is too great.
Rampant file sharing of music is the monster everybody cites, yet the music industry is also proof that DRM is transient. DRM has been dropped by every record company and almost every stakeholder of importance and numerous tools were offered in the end to turn DRM wrapped files legally into DRM-free files. It took some 7 years or so. That may look like a long-time, but it was really just a blip.
A common complaint is that eBook prices are too expensive compared with paper books – do you think this is a fair criticism and what needs to happen before eBook prices come down?
The savings to publishers, retailers and other stakeholders that result form a digital transition are real, but not as large as consumers think. After all, it can cost as little as 10% of the cover price to print a best-seller. Thus the savings in print cost arising from an ebook might only be 10%. On the other hand eBooks attract 17.5% VAT, while physical books are zero rated for purposes of VAT (at least in the UK).
There are other forces that are driving down the prices of eBooks. It is the market structure and market forces of e-commerce that leads to price erosion. Without range, service, location, speed or other factors to differentiate one retailer form another, price becomes the weapon of choice to acquire market share. [A retailer may sell] many eBooks at a loss but still make a profit if the total “basket” over the lifetime of a customer delivers a profit. It is really that simple.
Finally, what do you think will be the biggest driver to the take-up of eBooks – will it be prices, instant availability through more internet-connected devices or an industry-led campaign?
What has recently happened in the US will happen elsewhere. Where the United States of America leads the rest of the world will follow.
In the last 12 months the market share of eBooks has nearly quadrupled from 2-3% to 8-9% in the USA. That is phenomenal growth. Many pundits – technologist as well as publishers – now predict that by 2015, just 5 short years from, now half of all trade books sold in the US will be digital. In 2008, it was only 1%!
On almost every US flight I boarded this year, the flight attendant would instruct us prior to take-off to switch off all our mobile phones, gadgets and to not forget our ebook readers! It happened to me not once or twice, but on every flight between two US cities.
There were many drivers responsible for this growth in the US, but an industry-led campaign was not one of them.
One of biggest factor was that users were gifted an ebook reader and really liked the experience. People who never thought they would buy an ebook reader now don’t know how to live without one. This in turn fuelled growth of ebook reading on other platforms. Word of mouth, price wars, increased availability of titles, etc. did the rest. It becomes a virtuous cycle.
It will happen in the UK and elsewhere as well. It is not a question of if, but how soon. The only major difference between the UK and US is that in the UK we tax eBooks more heavily than physical books, which is nonsense.
That being said, even in 2015, half of all books bought are likely to still be of the traditional variety. The paper-less office never happened despite the PC and Internet revolutions.
