Kindle and Nook Custom Content Needs a Business Model

Gemalto token used for multi-factor authentication to Amazon Web Services (aka the 'amazon cloud').

The biggest buzz in the publishing industry is around Apple’s iPad and how the new tablet changes how magazines can be displayed on a color screen. Some writers, such as Jeff Jarvis and John Battelle, believe the technology is a dead end. But for me, one reason I may be betting on the iPad is because of my perspective as a member of the custom content marketing industry.

Formerly known as custom publishing, the industry provides custom magazines and digital editions to clients. Often clients in the custom publishing industry don’t charge their members or consumers anything for delivering magazines. The value to the corporate client for providing free editorial content comes from retaining clients, educating members or inspiring partners.

Free Subscription on EReaders

Currently, publishers have to charge for content on such eReader platforms as Amazon.com’s Kindle or Barnes & Noble’s Nook. For media companies with newsstand products, this provides a great opportunity to reach more subscribers and gain additional revenue. But for publishers such as Pace Communications and other members of the Custom Content Council, who provide content to members and customers as a way to sell products and services indirectly and help with retention, this means the eReader business model on the Kindle and Nook is a barrier to providing content.

Apple, with their new iPad, recognized that companies would wish to build content on their product with a business model that works for them, and Apple has given companies a method of paying for member/customer subscribers to download content for free.

Once you get approved by Apple, you can provide the magazine for free. Apple only receives a revenue share if you charge for your content. I suspect one of the reasons for the difference in business-model strategy is that Apple does not pay for the wireless charges, the subscriber does—unlike the Kindle and Nook, where subscribers pay one fee for the device, and the cost of the wireless service is rolled into that price, with single or monthly charges for subscriptions to content. Amazon and Barnes and Noble have to recoup their devices and monthly wireless costs by charging subscribers for content.

I believe Amazon and Barnes & Noble should consider offering custom publishers like Pace and other members of the Custom Content Council an option to pay them directly for the ability to provide a free subscription to members and customers.

EReader Authentication

Authentication is the next issue where the current eReader business model is not working for members of the custom content industry. In the custom content industry, corporations will want to authenticate subscribers so that their premium content goes only to qualified members/customers. There is no option on either the Kindle or the Nook to qualify customers. Now we might authenticate customers and provide the content for free or charge each Kindle customer for subscribing to the content. What’s key is giving publishers and their clients in the custom content industry the option to authenticate subscribers through the Kindle and Nook eReaders.

The way the authentication would work is as follows:

A publisher would give Barnes & Noble a list of the Nook IDs—or e-mail addresses—owned by the customers the publisher wants to give digital subscription access to. A publisher or client would have to create a new field called Nook ID and request the customer fill out the field with their Nook ID/e-mail address, and then the publisher would send an updated file to Barnes & Noble, who would then give access to the publisher’s magazine to Nook customers in their Nook locker.

I’ve contacted both Amazon and Barnes & Noble over the past few months, and my contacts there have worked hard to bring up these issues with their colleagues. But one company cannot make a difference in nudging these two companies in the right direction to support the custom content industry. That’s why I’m asking the rest of the industry and the Custom Content Council to join Pace in encouraging both Amazon and Barnes & Noble to think through their options for providing a solution to the custom content industry for free content and authentication on their eReader platforms. Let me know on this blog if you’d like to join me in the call to Amazon and Barnes and Noble for movement on authentication and free content, or contact me at john.cass@paceco.com.

Photo Credit: Chris Dag

Posted By: John Cass