Author: Laura Hazard Owen

Here’s how things used to work, New York Times media columnist David Carr said in a keynote at SXSW Sunday: People would leave college, get a job, get married, reproduce, go to IKEA and “start to worry what the school system was about.” So they’d subscribe to a newspaper.

Nowadays, things are different: People “may practice the art of reproduction, but they don’t do a great deal of it … they might not get a job. And they might not buy a house and they might not go to IKEA and they might not need to know what’s going on in the school system … the other thing they might not do: Get a paper.”

Carr recalled being at SXSW two years ago when the New York Times debuted its paywall. “I remember some of the things people said,” he said. “The theologists of free — the spiritual belief in the power of free. [These people believe that] you keep things free, and eventually somebody will clack two coconuts together and you’ll get rich.

“We were told that people would never give us money, that we priced it way too expensively … the fact that it was leaky was viewed as silly, the fact that you could do a workaround was viewed as silly. We did that on purpose. If you like it so much that you’re willing to do a hack around a URL just to get a peek under our dress … eventually you’re going to give us some money.”

Carr, who described his job as “writing about people who write about people who do things,” said that metrics inspire “neurosis” in him. “Any time you write about newspapers, it’s click death,” he said. “I decided that, to do my job, I can’t always pay attention to metrics … I don’t want to do an Andrew Sullivan. He’s a brave and wonderful guy and he is totally kicking ass, but I don’t want to be out there all by myself with a tip jar.

“I’d rather be holding hands with Nicholas Kristof and Maureen Dowd … I can remember when we first looked at a paywall in 2005, Times Select. They were going to put only the business columnists and the op-ed columnists behind the paywall. I’d been a business columnist for, like, two months and I was like, Jesus Christ, don’t put me back there. … This time I’m holding hands with the entire wingspan of the New York Times, we’re all holding hands together jumping across the line, and it’s going pretty well.”

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As brands consider their digital marketing strategies, one thing they have to think about is the way they use language online. Proclaiming that “if technology is a pimp, our language is its favorite bitch,” panelists at SXSW on Sunday offered a few communication tips for brands online.

Don’t wait for style guides to catch up

According to Merriam-Webster, “email” should have a hyphen. But that doesn’t mean you should follow the rule. “Even if people don’t quite understand the rule, they’re still going to make a judgment,” said Gail Marie, content editor at ad agency McKinney.

“I don’t think at a digital agency we should be hyphenating ‘email,’ no matter what the dictionary says,” Kristina Eastham, communications manager at digital ad agency Digitaria, said. Similarly, she suggested that using “Web site” instead of “website” can be a marker of uncoolness.

The new sign you’ve made it: You invented a word

“Historically, brands have gained marketing fame by bastardizing English,” Eastham said, mentioning examples like Apple’s “Think different,” the “Got Milk?” campaign and “Nobody doesn’t like Sara Lee.” Now, she said, the biggest sign of success is “if you can work a word into the English language based on your brand or technology” — Googling, friending, liking. “When somebody says ‘Instagram that,’ everybody knows what it means.”

Sean Carton, who teaches about digital communication at the University of Baltimore, noted that Facebook has actually changed the definition of the word “friend.” “Ninety-nine percent of the people you’ve friended are not your friends in the traditional sense,” he said. “They’re just not your enemies.”

Some tech concepts still lack words. “I don’t know what to say when someone writes me an email to introduce me to someone I haven’t met,” Eastham said. “I hate saying, ‘Nice to ‘meet’ you.’ I think it sounds so tacky.”

Carton expressed the desire for a shorter way to say “WWW.” He’s heard someone try “triple dubs,” but perhaps not surprisingly, that hasn’t caught on.

A mistake not to delete…. his first name is Cory. RT @acarvin: Corey Booker on making mistakes on Twitter: never delete your tweets. #sxsw—
Richard Robbins (@rich1) March 10, 2013

What’s next: Text becomes visual

With the rise of visual forms of expression like Tumblr, Instagram, animated GIFs and Vine, brands have to learn to write short and differently (just when you thought you mastered 140 characters…) Fast Company’s Neal Ungerleider said he’s seeing more and more emojis in reader comments on Twitter, and if Google Glass takes off we’ll see text overlaid on real life experiences.

Images sources: Mlkshk, someecards

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WordPress is a content company, CEO Matt Mullenweg stressed in a panel Saturday at SXSW Interactive — and longform content is an area that the company is especially interested in. That could include native ads.

“All the stuff that’s done really well on mobile has been incredibly short form and easily scannable,” Mullenweg told AllThingsD’s Kara Swisher. “I think there’s a space … to sit down and read something longer than a couple of seconds. Rather than the coffee line experience, what’s the sitting-down-in-the-back experience? We’re going to keep experimenting.”

Mullenweg said that the average post on WordPress is 280 words long, and that’s remained “relatively constant” over the past few years. “Certain ideas need to be expressed and they just need more than 140 characters,” he said.

WordPress is taking steps to surface more of its users’ content. “We’ve been working a lot on wordpress.com to create an interesting reading experience,” he said. The site’s “Freshly Pressed” feed surfaces content from across users’ blogs. “You’ll see a lot more longform content and a lot more galleries [on the feed],” Mullenweg said, and traffic to that feed has grown by double digits in the past couple of months.

When Swisher noted that WordPress doesn’t link its users’ blogs together — suggesting what else to read if you liked a certain post, say — Mullenweg answered that “we’re really excited about starting to do that.”

And while Mullenweg criticized many forms of digital advertising — “print ads are still infinitely better” — he suggested that WordPress might look at offering more native advertising options. WordPress would consider a partnership with a company offering native ad units, he said, if it’s “something really compelling that doesn’t make readers block it…Native advertising is the most interesting thing I’ve seen. At the point where advertising becomes as good as the content that surrounds it, I will applaud it.”

Disclosure: Automattic, maker of WordPress.com, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, GigaOm. Om Malik, founder of GigaOm, is also a venture partner at True.

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Apple filed a patent application Thursday to create a marketplace for used digital goods. The description is similar to the idea behind the patent that Amazon won approval for in February. Unlike Amazon’s patent, however, Apple’s possible system outlines the ways in which publishers could profit from the resale of digital goods. (Note: Apple applies for patents on lots of things, and applying for one doesn’t necessarily mean the company will do anything with it.)

Apple’s patent application describes a system that would allow users to transfer access to digital content — “such as an ebook, music, movie, software application” — to others:

“The transferor is prevented from accessing the digital content item after the transfer occurs. The entity that sold the digital content item to the transferor enforces the access rights to the digital content item by storing data that establishes which user currently has access to the digital content item. After the change in access rights, only the transferee is allowed access to the digital content item. As part of the change in access rights, the transferee may pay to obtain access to the digital content item. A portion of the proceeds of the ‘resale’ may be paid to the creator or publisher of the digital content item and/or the entity that originally sold the digital content item to the original owner.”

The application also describes many possible aspects of a marketplace for used digital goods — including how publishers might get paid:

• How users might trace a file’s previous owner history: “A user that purchases a ‘used’ digital biology book may be interested in who previously had access to the digital school book because that previous owner may have helpful information about a class taught by a professor that required that book. As another example, a current owner of a digital movie might be able to see that one or more of her friends also owned that digital movie and, as a result, starts a conversation with them regarding the contents of the digital movie.”
• How buyers and sellers could find each other: The patent describes possibilities like physically meeting on an airplane, using online resources, posting on a social network or physically “bumping” devices against each other: “For example, while device 230 is playing a song and is in a ‘bump’ mode and while device 240 is in a ‘bump’ mode, device 230 touches device 240. This touch or ‘bump’ causes a copy of the song to be accessible to one of Sally’s devices (e.g., device 240) either immediately or later.”
• Payments for publishers: The patent lays out possibilities for how a piece of content’s original publisher could profit from a resale (something that rarely if ever happens with physical goods). In one possible outcome, “the percentages that each party or entity receives from a resale of a digital content item changes (1) based on the passage of time or (2) based on how many times the digital content item has been resold among end-users. For example, publisher 110 receives (a) 50% on each resale of digital content item 202 that occurs within a year of the initial sale from intermediary 120 to Jeff and (b) 20% on each resale that occurs more than a year after the initial sale. As another example, publisher 110 receives 50% on the first resale (i.e., from Jeff to Sally) and 40% on second resale (i.e., from Sally to another user, not shown).”

As we noted last month, users’ rights to resell digital content is a contentious issue under current U.S. copyright law. This year, a court will rule on whether startup ReDigi, which allows users to resell digital music, is legal. Last year, the European Court of Justice ruled that users have the right to resell downloaded software.

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Barnes & Noble announced Thursday that it’s signed partnerships with a number of studios — Lionsgate, MGM, Paramount, Relativity Media, National Geographic, Little Pim and Film Buff — to add new movies and TV shows to Nook Video, the service it launched last fall.

A press release laid out some of the new offerings, including:

“Blockbuster films The Hunger Games, the Twilight movies, Tyler Perry’s Madea Gets a Job, Skyfall, Rocky, Fargo, Flight, Paranormal Activity 4, Act of Valor, Safe Haven, House at the End of the Street; independent films from Film Buff’s catalog including Charles Swan and Exit from the Gift Shop; and TV shows like Mad Men, Border Wars, Great Migrations, Amazing Planet; as well as educational content via Little Pim, the leading foreign language learning program for young children, plus many more.”

The Nook Video store already included content from HBO, Sony Pictures Home Entertainment, Starz, Viacom and Warner Bros, plus some Disney movies. I’ve asked Barnes & Noble for the total number of titles that Nook Video now offers, and will update this post when I have that number.

A number of Nook Video’s offerings are also available for streaming from Netflix and Amazon Prime Instant Video. Unlike those companies, Nook doesn’t offer streaming memberships — content has to be purchased à la carte on a Nook tablet. (Barnes & Noble says the content will be able to be streamed from its website soon.) It’s certainly an option for someone who already owns one of these devices, but it’s unlikely to draw users away from Netflix, Amazon or iTunes. Adding these titles is B&N’s attempt to create a viable media ecosystem for Nook — and the company insists it’s “committed” to these devices, even as Nook sales plunged in the last quarter.

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Hyperion, the book publisher owned by Disney, is reportedly planning to sell off most of its backlist. Going forward, the company will focus on books that tie into ABC-Disney TV shows, according to a report in the Wall Street Journal.

The company, under the direction of publisher Ellen Archer, has been moving in this direction for some time. Last year, it hired former Hollywood talent agent Laura Popper as editorial director of franchise publishing. The goal is for Hyperion to be able to promote its books across multimedia platforms, and it is a lot easier to do that if a book’s author already has his or her own TV show.

The WSJ says that Hyperion will “look for books either linked to ABC television properties or that it believes can be extended to television or other corners of Walt Disney,” citing an unidentified source. Hyperion is already doing this to an extent, publishing books “written by” the main character on the show Castle. It also published cookbooks from the daytime show The Chew and by Jamie Oliver and tie-ins to the soap opera General Hospital.

Hyperion has also had plenty of non-TV-related bestsellers: It publishes Mitch Albom’s books, for example (The Five People You Meet in Heaven), Randy Pausch’s The Last Lecture and J.R. Moehringer’s The Tender Bar, among others. Those big names presumably won’t be sold off, but I’ve asked Hyperion for comment.

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A year after its launch-slash-rebrand, Google Play contains over 5 million ebooks, 18 million songs and 700,000 apps, Google announced in a blog post Wednesday.

Google Play is a rebrand of the Android Market, intended to remind users that Google sells content besides apps. So far, success has been mixed. When it comes to ebooks, for example, Google hasn’t been able to compete with Amazon or even Apple; its share of the ebook market is likely in the single digits, and while 5 million ebooks sounds high, a lot of those are free public domain titles. And as our Erica Ogg wrote recently, while the number of Android apps has grown quickly, developers almost never choose to develop for Android before or instead of iOS.

Google is taking some steps to bring more users to the store. It started offering gift cards and a wishlist feature last year. Today it’s running sales on a bunch of content — $5 ebooks, some 99-cent movie rentals and other promotions.

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Several months after Next Issue Media brought its all-you-can-read digital magazine subscriptions to iPad, the company is expanding to Windows 8 and is working with Microsoft to promote its service. Next Issue’s app will be available not just on Windows 8 tablets like the Surface, but also on desktops, ultrabooks and laptops.

The service offers unlimited access to over 80 magazines on iPad, up from 39 at launch. Users can choose between an “unlimited basic” subscription, which offers access to monthly magazines like Glamour, Wired and Food & Wine for $9.99 per month, and an “unlimited premium” subscription, for $14.99 per month, that also includes weekly titles like People, New York, New Yorker and Sports Illustrated.

Next Issue Media, which started out in 2009 as a joint venture of Condé Nast, Hearst, Time Inc., News Corp and Meredith, was initially only available for Android 3.0 (Honeycomb) tablets before expanding to iPad — and, potentially, a wider audience — last July.

The Windows 8 launch is “the first time we’ve worked closely with a platform partner,” CEO Morgan Guenther told me. The app integrates features like “snap view” and multitasking from Microsoft’s interface; the software giant is also providing marketing and will feature the app in the Windows App store. “We saw the importance of moving beyond the tablet,” Guenther said, and Microsoft was a “motivated partner.”

Next Issue hopes that users will use the platform across devices. A single subscription can be authenticated on up to five devices. “With greater choice as to where, when and how they access their magazines, users can seamlessly switch from their tablet at home, to their Ultrabook on the road, to their company PC,” John Richards, senior director of Windows app marketing for Microsoft, said in a statement.

Less than half of Next Issue’s users pay

Discovery remains “an issue” on iPad, Guenther said, partly because the Next Issue iPad app isn’t available through Apple Newsstand. The company projects that by the end of this quarter, it will have about 120,000 total users — 50,000 of whom are actually paying for a subscription. Of that 50,000, about 60 percent have a premium subscription, Guenther said, and 40 percent have a basic subscription. The remaining 70,000 or so users are “authenticators” — users who already have a print subscription to a magazine and are accessing the print version through next Issue’s app.

In the next quarter, Next Issue plans to add Facebook integration and social sharing, followed by the integration of “clipping” technology that would let users virtually save individual articles or images from magazines. Guenther also says the library will expand to about 100 titles in the next couple of months.

Though Next Issue originally launched on Android, that platform hasn’t been much of a priority, Guenther said — to the extent that there are only 36 magazines available, less than half the number of titles available for iPad and Windows 8. In the next few months the company will “refresh” the experience on Android, Guenther said. It also plans to expand to Android smartphones and iPhones.

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RR Donnelley’s Press+, which helps more than 400 publishers offer metered paywalls and manage digital subscriptions, says its clients are charging more for monthly subscriptions while offering fewer articles for free.

“What we’re seeing is a tide sweeping through the industry of publishers lowering their meters and moving to prices that reflect the true value of their content,” Press+ cofounder Gordon Crovitz said in a statement.

Data from the company’s publishers shows that the average price of a monthly subscription was $9.26 in January 2013 — up five percent from July 2012 and 40 percent from July 2011:

In addition, Press+ says its clients are lowering their meters. On average, they offer 10 free articles per month, down from 11 last September and 13 at the beginning of 2012.

It’s worth noting that Press+ works with a lot of large newspapers. Pricing is likely to vary at smaller organizations and on blogs like Andrew Sullivan’s Dish (which runs its metered paywall through TinyPass), but it will be interesting to watch whether the trend of upward pricing and fewer free articles occurs across sites.

Photo courtesy of Shutterstock / Voronin76 

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The Washington Post on Tuesday launched BrandConnect, a sponsored content platform that “connects marketers with the Washington Post audience in a trusted environment.” The content appears on the Washington Post home page, among regular articles, and is denoted by a blue box that says “Sponsor Generated Content.” With the new platform, the Washington Post appears to be the first national newspaper to open up to this type of content on its website.

“With BrandConnect, marketers become the content creators and get premium placement through our site,” Steve Hills, president and GM of the Post, said in a press release published at Poynter. “We are excited to create a way for marketers to create enhanced visibility, while maintaining our position as a trusted source for content of all kinds.” According to Digiday, which first reported the news, marketers will create the content in some cases but WaPo will “also offer serivces via its advertiser team. Editorial resources will not be used.”

The first client is CTIA – The Wireless Association, whose post is here. The post’s headline is “Revving Up Mobile Economies” and is about an app called Mobile Main Street, developed by West Virginia University. CTIA has been promoting Mobile Main Street since December. According to the release, CTIA “will provide weekly content through blog posts, video case studies, and infographics related to wireless communication.”

Sponsored content — also known as native advertising — has been the subject of a lot of debate recently. BuzzFeed, for example, uses sponsored content as a substitute for traditional advertising, while the well-known blogger Andrew Sullivan has questioned whether it’s ethical (Note: We’ll be discussing this at paidContent Live on April 17 in New York, via a panel called “The Future of Native Advertising: Blurring Ads and Content,” with BuzzFeed president Jon Steinberg and others).

The Atlantic ran into trouble in January when it published a sponsored post about the Church of Scientology on its website. After massive criticism, the Atlantic pulled the post and updated its guidelines for sponsored content.

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U.K. supermarket chain Tesco on Monday announced three new hires to oversee its forthcoming digital entertainment services. Tesco plans to launch an ebookstore called blinkboxbooks and a digital music store called blinkboxmusic later this year, and will roll out Clubcard TV, an ad-supported streaming TV and movie site, soon.

Gavin Sathianathan, who was Facebook’s head of retail for Europe, the Middle East and Africa, will be managing director of blinkboxbooks. Mark Bennett, who was head of digital at U.K. supermarket chain Sainsbury’s, will be managing director of blinkboxmusic. And Scott Deutrom, who was director of advertising at blinkbox, will be managing director of Clubcard TV.

Tesco bought a majority stake in video streaming site blinkbox in 2011 and acquired white-label ebook service Mobcast and streaming music service We7 last year. Those services will be the foundations of the new blinkbox sites.

The Telegraph has more:

“The three Blinkbox retail sites will sit separately from Tesco’s main online store and will only carry subtle Tesco branding. However, the supermarket will advertise the sites heavily in store and use them to ensure that customers in search of specialist online sites for books, music, films and TV box sets continue buying from the Tesco empire instead of falling into the habit of shopping for entertainment products elsewhere. It will target the millions of customers who still haven’t started shopping online in a big way.”

“The development of these new services demonstrates our total commitment to providing the very best entertainment as easily as possible for our customers,” Michael Comish, Tesco’s CEO of digital entertainment, said in a statement. “They allow us to provide even more choice in how customers buy and enjoy their entertainment.”

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The past couple years have seen a flood of e-reading apps and tools, but as far as I know, these ones don’t exist yet. I wish they did. I hope you’ll add your own wishlist in the comments.

Book group iPad app that supports Kindle

A bunch of my girlfriends and I are about to start a virtual book club to read Sheryl Sandberg’s new book Lean In: Women, Work and the Will to Lead. We’ll be reading it on our respective devices and then talking about it together on a private message board.

Most of us will be buying the Kindle version of the book, and I wish there were an iPad app that let us open the Kindle file within it and then create our own private conversation around the book — highlights, notes and so on. There are already plenty of social reading iPad apps — Readmill, Subtext, Copia — but they either don’t support Kindle books and/or don’t let users create a private discussion.

If you’re wondering why it has to be Kindle, by the way: It’s the device/format that all of my friends already use. That’s going to be true for a lot of book groups, and so it seems as if any book club app is going to have to support books bought on Kindle.

Interim solution: We’ll be reading the book on respective devices or in print, and then we’ll talk about it together on a private message board.

E-ink mode for iPad

I like to read ebooks on my iPad before I go to bed, but I worry that the back-lit screen messes with my eyes and sleep patterns. I wish there were an e-ink mode or a filter app that changed the type of light coming from the iPad screen — not just a dimmer but something that actually made it look more similar to an e-ink screen, with no glare. Apple actually has a patent on this type of hybrid display, so it might be a feature we see on an iPad one day.

Interim solution: The app F.lux changes a screen’s brightness and tint based on the time of day.

A Web-based Calibre

Calibre is free ebook management software: You can use it to store your ebook collection, convert ebooks to other formats, send ebooks to e-readers, download content from news sites and turn it into an ebook, and so on. There are also a number of third-party plugins that add new features to the service. For example, there are Calibre plugins that break the DRM on an ebook. That means that, for example, you can buy an ebook from Barnes & Noble, break the DRM on it, convert it to a *.mobi file and read it on your Kindle. (That isn’t what publishers or retailers want you to do, but with Calibre third-party plugins it’s possible.)

Calibre is downloadable software, but I’d love to see a web version that lets readers store all their ebooks in the cloud, convert them directly within a web browser and then email them straight to a device. That way, users could access their files from anywhere.

Interim solution: With a couple hacks, you can sync Calibre with Dropbox. That’ll let you access all your ebooks where you have Dropbox installed, but you won’t be able to convert them to other formats. Also, be warned that it looks as if Dropbox has cracked down on this in at least a few cases.

Photo courtesy of Shutterstock / Borys Shevchuk 

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A new streaming video service called HitBliss, launching in beta Friday after being in development for about five years, aims at users with more time than money: Users who sit through targeted ads receive funds that they can redeem for new streaming movies and TV shows. The company is launching with content from The CW, Universal, Paramount, Starz Media and the Weinstein Company. It will offer access to movies four months after they leave theaters, and access to TV episodes they day after they air.

For now, HitBliss is available only on the web and on desktops, not on mobile devices — though the company plans to expand to other platforms soon. Among the available content at launch are new movies like Argo, Magic Mike and The Bourne Legacy and new episodes of shows like Real Housewives and The Walking Dead.

Users are served a “playlist” of ads that are delivered to them based on information that they include in a profile. When they watch the ads, they earn virtual cash that can eventually be redeemed for content. Users can specify how much information they’re willing to make available to advertisers; the more information they share, the faster they earn.

Other companies have dabbled with virtual currency in exchange for video. Yidio, for instance, gives users points for completing various tasks, and the points can then be redeemed for Amazon Video on Demand credits. HitBliss is different, however, in that both earning and viewing are done through the same platform.

As HitBliss users watch ads — which they can do at any time, not just right before they want to watch a movie or TV show — cash accumulates in their accounts, and they can redeem it when they wish. HitBliss charges $3.99 for a new movie rental, $1.99 for an older movie rental and $1.99 per TV episode. (Movie rentals last 24 hours, while users will own the TV episodes.) In general, about 8 to 10 minutes of ad viewing (roughly four ads) can be redeemed for one new movie.

The system includes a lot of checks to make sure that users are actually watching ads. “Advertisers are only paying when users are paying attention,” HitBliss cofounder and CMO Sharon Peyer told me. If a user plays an ad and then navigates away or mutes the sound, the ad pauses. An “attention assurance meter” — with a patent pending — occasionally requires users to click it to ensure that they’re paying attention; if they are not, “it gets very angry,” Peyer said, referring to a smily-face icon that turns to a frown the longer it is ignored, before ultimately resetting the ad and requiring the user to watch it again. Over time, users earn “trust points” that decrease the frequency of prompts to make sure they’re paying attention.

Peyer said the platform’s store will eventually expand to include other types of digital content, like apps and virtual goods. HitBliss is based in Lexington, Mass., and is backed by Andy Marcuvitz’s Alpond Capital. Peyer and her husband, CEO Andrew Prihodko, founded the company in mid-2008 after selling a video- and picture-sharing site called Pixamo.

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German bookstore chains Thalia, Weltbild and Hugendubel have partnered with Bertelsmann and Deutsche Telekom to release a touchscreen, front-lit e-reader, the Tolino Shine. It costs €99 (USD $128), is available for sale on March 7 and is intended to compete against Amazon’s Kindle and the Kobo in Germany. The Tolino will be sold at the partners’ 1,500 physical stores as well as online.

An ebookstore with about 300,000 German-language titles is accessible from the device. Users can also shop for ebooks from the individual booksellers’ websites. (By contrast, the German Kindle store contains about 150,000 German-language ebooks.) The Shine supports EPUB, PDF and TXT files. The Telekom cloud provides users with unlimited storage of ebooks they purchase from the partners, and 25 GB of storage for ebooks bought from other retailers.  The telecommunications provider also has over 11,000 free Wi-Fi hotspots in Germany.

The German tech industry body BITKOM estimated last fall that 800,000 e-readers were sold in Germany in 2012, and it expects that to rise to 1.4 million units in 2013. Today’s press release announcing the new device also says that about 11 percent of Germans read ebooks on mobile devices.

The companies involved in the deal suggest that, while Amazon is too large a competitor for any one of them to go up against, by banding together they have a better chance. In the press release, Thalia CEO Michael Busch describes such a partnership as “unseen before” and says: “Every company has to consider its strategic approach and interests and choose the partners that will serve these interests best in order to compete with the mighty U.S. online retailer giants.”*

“The aim of the partnership is to create a competitive, single internet platform for digital products, especially for digital reading,” Weltbild’s Carol Haff told German book trade publication Buchreport.

*I relied primarily on Google Translate and also received assistance from a couple of German speakers.

This story was updated several times Friday morning as more information became available.

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In a contentious investor call Thursday morning, analysts questioned Barnes & Noble’s entire strategy following its poor third-quarter earnings report. With Nook revenues down, Barnes & Noble CEO William Lynch sought to assure investors that both Nook and physical B&N bookstores will survive — even as a committee evaluates B&N founder and chairman Len Riggio’s proposal to buy the chain’s 689 retail stores and take them private.

As today’s earnings report revealed, physical stores are doing better than the digital business, with comparable store sales down just 2.2 percent as Nook revenues plunged by 26 percent.

The conversation repeatedly became heated, with one analyst asking why Riggio continues to serve as the company’s chairman even as he tries to buy its stores. The analyst accused Barnes & Noble of ”selling its working business to the chairman while keeping its shareholders beholden to the business that isn’t working.”

When Lynch noted that Riggio also owns shares in Nook Media and said he “isn’t trying to do anything that isn’t in the business of all shareholders,” the analyst pushed back — asking again why Barnes & Noble is “considering selling the business that is doing better to Riggio” while leaving shareholders with Nook Media, which has “no business model.”

At that point, B&N’s retail CEO Mitchell Klipper snapped back, “The loaded question you’re posing really isn’t appropriate for us to discuss on this call.”

Klipper isn’t normally a participant in the company’s earnings calls, but he was trotted out Thursday to assuage concerns about Barnes & Noble closing more physical stores over the next decade. Klipper had recently told the Wall Street Journal that the chain will have “450 to 500 stores” 10 years from now, compared to 689 today.

Klipper described the article as a “mischaracterization.” Ninety-five percent of our stores are profitable and we have no plans to close any of those…let’s make no mistake about it, folks.” He also spoke of “new store formats” and said B&N plans to open three to five new stores in fiscal year 2014.

“We’re not going to continue doing what we’re doing”

Barnes & Noble released two new Nook tablets last September. Lynch described those tablets as reading-focused and said that as the market shifted to multi-function tablets,” customers simply weren’t looking for B&N’s new products. “We did a lot of work with the consumer post-holiday to find out what happened,” he said. “What we’re seeing is, the larger technology brands have more resonance in that multi-function tablet market than we do. We obviously have to adjust and change … we’re not going to continue doing what we’re doing.” He said there are “announcements forthcoming.”

One analyst asked Lynch if there was anything the company would have done differently when it launched its new tablets. “You look at the numbers and there are absolutely things we could have done differently,” Lynch said. “I’m not going to go into what those are.” He said Barnes & Noble leads in “delivering reading experiences,” citing its apps’ high ratings in the iOS, Android and Windows 8 stores. But “as the market goes to more multi-function tablets, we have to look at how we offer functionality differently and that’s what we’re focused on now.”

“You poured a huge amount of money into a display that really seems not to matter a whole heck of a lot,” one analyst said.

More than once, Lynch mentioned Barnes & Noble’s strength in digital content as such sales were up by 6.8 percent for the quarter. When an analyst asked how B&N defines that content, Lynch explained it comes from “hundreds of thousands of publisher relationships. Our ability to resell their copyrighted content.” In other words, it is the ebooks, digital magazines and so on that Barnes & Noble sells, but that other retailers — like Amazon and Apple — sell as well.

“Umm … is that proprietary?” the analyst responded. “Can somebody [else] turn around and put it on iTunes tomorrow?”

“Each one of those contracts has its own nuance,” Lynch responded. “This isn’t flip the switch, get them done. We were the biggest customers for those publishers on the physical side. There is no flip-switching. It is a strategic asset that is valuable and hard to replicate. And expensive.”

This story was corrected 1 pm to say Mitchell Klipper, not Marshall. 

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Barnes & Noble had warned investors that its third-quarter Nook earnings would be disappointing. The earnings report was released before the market opened Thursday morning, and indeed, Nook revenues — consisting of devices and digital content — were down 26 percent, to $316 million, despite the fact that Barnes  & Noble released two new tablets during the year. The company attributed the decline primarily to lower device sales. Digital content sales rose slightly, by 6.8 percent. Nook EBITDA losses were $190 million, compared to $83 million a year ago.

The company’s overall revenues for the third quarter of fiscal year 2013 were $2.2 billion, down 8.8 percent over last year. The company saw losses of $6.1 million, or -$0.18 per share, compared to earnings of $0.71 per share a year ago.

Today’s earnings come a few days after B&N’s founder, chairman and largest stockholder, Leonard Riggio, offered to buy the chain’s 689 retail stores and take them private. So how are those stores doing? Not well, but not as badly as Nook is doing. Over the holidays, Barnes & Noble bookstore chain saw sales down at its physical stores and at BN.com as well as in the Nook segment. For the quarter, retail sales were $1.5 billion, down 10.3 percent over last year, “attributable to a 7.3% decline in comparable store sales, store closures and lower online sales.” Core comparable store sales were down 2.2 percent. The company did not break out sales at BN.com.

In response to the problems at Nook, Barnes & Noble said in the earnings release that Nook “is calibrating its business model and has implemented a cost reduction program that the company projects will significantly reduce Nook’s expenses.” As a reminder, Nook is the segment of the business that’s supposed to be doing well: Barnes & Noble spun it off, along with the college bookstores, into a subsidiary called Nook Media last year, with investments from Microsoft and Pearson. For fiscal year 2013, the company said it expects Nook Media revenues to be $2.5 billion. Previously, it had estimated revenues of $3 billion for the segment.

In a statement, B&N CEO William Lynch said the company has “taken significant actions to begin to right size our cost structure in the Nook segment, while also taking a large markdown on Nook devices in order to enhance our ability to achieve our estimated sales plans in subsequent quarters.” Lynch said Nook “remains committed” to the tablet and e-reader business, likely in response to a New York Times article earlier this week that cited an unidentified source who said Barnes & Noble would “move away” from building devices.

Lynch also said, “Without question, our bookstores have made a significant contribution to Nook’s success over the past three years. And, in turn, our award-winning line of Nook’s products have proven to be a strong driver of traffic to our stores.”

Barnes & Noble is holding an investor call at 10 a.m. ET, and we will be on the call.

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iSpeech, a Newark, N.J.-based startup that specializes in lifelike text-to-speech apps and previously rolled out voice technology for the connected home, is launching a platform for publishers, the company plans to announce Tuesday. The tools are designed to help publishers quickly and inexpensively convert books and articles into audio. iSpeech’s first two publishing clients are Evernote and Pearson.

iSpeech gives publishers three options for creating content. They can convert PDFs to audio files; they can add a widget to a website that essentially adds a “play” button to an article; or they can use more sophisticated developer tools built on iSpeech’s API and add them directly to their web pages. Pearson is using the PDF option for its textbooks. Evernote is using the developer tools to integrate speech technology into its read-it-later platform Evernote Clearly. “The natural evolution of this is to potentially bring this functionality into all of Evernote’s products,” iSpeech COO Yaron Oren told me. “One of the things we hear directly from Evernote customers is they want to be able to listen to their Evernote notes in the car, so it would be great to have this kind of of functionality.”

The publishing platform’s business model is basically pay-per-use, Oren said, and the cost usually ends up totaling “less than a tenth of of the cost of professional narration.” For websites, iSpeech charges by the word, which varies depending on volume but ranges from $0.01 to a fraction of a cent per word. For books, the company charges by the page; there are volume discounts, but Oren said that in general, the maximum cost to convert a 250-page book to audio with iSpeech would cost around $1,000. “We’ve heard from publishers that a book with voice talent tends to cost in the order of $15,000 per book,” he said.

Amazon ran into legal trouble when, in 2009, it automatically added text-to-speech technology to ebooks. The company insisted that text-to-speech features don’t violate copyright, but said at the time, “We strongly believe many rights-holders will be more comfortable with the text-to-speech feature if they are in the driver’s seat,” and decided to let rights-holders “decide on a title by title basis whether they want text-to-speech enabled or disabled for any particular title.” Oren says iSpeech will avoid those issues by leaving the decision to publishers — though it seems as if Evernote Clearly could potentially run into trouble, since it doesn’t hold the copyright to the articles that users save to its platform. (Evernote says it’s “comfortable” with the feature.)

For now, iSpeech’s publisher tools are primarily going to be of interest to nonfiction publishers — not publishers of, say, novels. “It’s a viable alternative to nonfiction, textbooks, or more straightforward news content,” Oren said. “For fiction, or other content where there’s more emotion and differences in reading style, this is not an alternative [yet].” But, he said, “this is about making more content available [as audio]. Professional voice talent is very expensive, and as a result, most books never get made into an audio format. Now there’s an option.”

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Amazon is changing a policy on affiliate links to free Kindle books, and the changes are likely to have a big effect on the way some self-published authors achieve success online.

In the last few years, entire websites aimed at promoting free Kindle books have sprung up. Their business model is primarily referral fees: When a visitor to one of these sites clicks on a link to Amazon to download a free ebook, but then buys other products on Amazon within 24 hours, the original site gets a percentage of those unrelated paid sales.

Amazon is now cracking down on this. The company notes on its website that as of March 1:

“Associates who we determine are promoting primarily free Kindle eBooks and meet both conditions below for a given month will not be eligible for any advertising fees for that month within the Amazon Associates Program. This change will not affect advertising fees earned prior to March 1, 2013.

1. At least 80% of all Kindle eBooks ordered and downloaded during Sessions attributed to your Special Links are free Kindle eBooks

2. 20,000 or more free Kindle eBooks are ordered and downloaded during Sessions attributed to your Special Links.”

The new policy will primarily affect the largest free Kindle book sites — Ereader News Today, BookBub, eReaderIQ, Pixel of Ink and Free Kindle Books and Tips. Some self-published authors fear it will also affect downloads of their titles. Self-published authors who make their books available to the Kindle Owners’ Lending Library are also allowed to run special promotions where they can give their books away for free for a day, to drive sales. And many self-published authors use the free Kindle bestseller lists to gain publicity for their books.

“This is definitely going to make life for Indies [self-published authors] much much tougher,” one author writes on the Kindle Boards. “After all, we depend on these free runs for the ranking and therefore sales boosts. Without the free book sites, how will we reach those people who want to download free books?”

Is Amazon starting to emphasize paid Kindle books?

The self-published author David Gaughran sees a trend in Amazon’s attitude toward free Kindle books. He wrote to me in an email:

In mid-March last year, Amazon began trialling new versions of the algorithms which decide the ranking on Popularity Lists before settling on one iteration in May which no longer counted a free download as a paid sale, but as one tenth of a paid sale. This had the instant effect of greatly reducing the “post-free bounce” which many self-publishers had been witnessing after a KDP Select free run.

On top of that, towards the end of last year, Amazon began experimenting with hiding the Top 100 free behind a tab (they are usually listed beside the Top 100 paid books which gives tremendous visibility). They haven’t decided to make that change permanent yet, but the very fact they are experimenting with it is a possible sign of things to come.

But Gaughran isn’t too worried: The existing free Kindle sites “will need something to feature, and we could see the 99-cent price point become hot again as self-publishers move from free-pulsing to price-pulsing.”

Big free book sites plan to change their policies

Michael Gallagher, who runs the site Free Kindle Books and Tips, writes in a blog post that he expects a lot of free Kindle book sites will have to shut down. While he notes that Amazon’s new 20,000 free Kindle book-per-month threshold sounds like a lot, he estimates that clicks on his site’s affiliate links result in about 50,000 or so free ebook downloads a day.

Gallagher’s not shutting down his own site: He’s changing its name to Kindle Books and Tips and will focus more on tips and bargains on “quality” content and less on free content. He’s also going to start accepting advertising from self-published authors. ”I am lucky in the fact I didn’t quit my day job, but there are many other individuals and companies out there who have built a business around the promotion of free Kindle book offerings,” he writes, and “this move by Amazon will put many of these people out of work starting next week.”

Greg Doublet, who runs the site Ereader News Today, told me in an email that he thinks Amazon’s changes will be good in the long run: “it will get people not to rely on ‘free’ to get their books. It was a matter of time before something like this was bound to happen.” He says he’s been making changes to Ereader News Today in order to comply with Amazon’s new rules, and like Gallagher is emphasizing more bargain books and fewer free books. “Maybe 99-cent books will become the new free,” he said, “and authors will start to earn more money for their efforts.”

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When Andrew Sullivan announced that he was taking his immensely popular blog, The Dish, independent and behind a metered paywall, he raised $333,000 in 24 hours. In the remainder of January, The Dish raised an additional $185,000. Then, on February 21, the site turned on its paywall, and so far this month it’s raised $93,000, Sullivan wrote Monday. That’s a total of $611,000 in a little under two months — about two-thirds of the $900,000 Sullivan believes the site needs to operate in its first year.

The pace of subscriptions is clearly slowing — it took a day to reach the first third of the funding The Dish needs in 2013, and nearly two months to raise the second third. How long will it take to raise that remaining $300,000 or so? Sullivan, who will be speaking about paid content models at the pC Live conference on April 17, 2013, took a look at the number of readers who’ve maxed out their limit of free “read on” stories (seven per month; short posts that are primarily links aren’t counted) and noted that 91 percent of them haven’t yet hit that limit:

The challenge now is for The Dish to get those people who are reading regularly but haven’t yet subscribed to do so. “If you’re reading the Dish, and are part of that 20,000 group who’ve clicked on more than four ‘read-ons’ in three weeks, you’re a real, solid reader of the Dish. You’ve proven it,” Sullivan wrote — so, he said, it’s time for that group to pay up.

How do you convert the next wave of readers?

It’s possible that those 21,000 readers Sullivan is identifying as Dish regulars will simply hit the meter — at seven stories — and subscribe. It’s also possible February could end up being an unusually low subscription month because it’s only 28 days long, and the meter resets every thirty days, so some readers might get in under the wire this month. But if the pace of new subscriptions is a little slower than The Dish would like, here are a couple ideas:

• Nag more. Sullivan writes, “[We] don’t want to nag you or interrupt your reading experience if we can avoid it with those annoying pop-up blocks that every meter needs to have. Of course, nagging is an integral part to pay-meters’ success. They wear you down.” Right now, readers only start seeing a notice nagging them to subscribe after they’ve hit seven read-on stories — which is also the maximum number of stories they can read free. In other words, they don’t get nagged until the eighth story. Nagging earlier, before readers actually hit the limit, might help — at the fifth story, perhaps.
• End the free RSS access. The entire Dish is still free if you’re reading it on RSS. (That’s a possible explanation why, as Sullivan mentions in today’s post, 5,000 subscribers haven’t yet logged into the site — it may be because, like me, they subscribed but are still only reading through RSS.) If it’s true that a lot of Dish subscribers prefer to read it through RSS, The Dish risks annoying them by ending its full RSS feed and forcing them to the site instead. On the other hand, if a lot of those people have already subscribed, they obviously value The Dish already. One other option (but I don’t know if it’s technically possible with RSS): Keep the stuff that’s already free through RSS; abridge only the stories that are metered on the site.
• Set the meter lower. An obvious one, but if a large number of Dish readers are reading four read-on stories a month, maybe the meter should kick in at read-on stories a month.

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Pearson released its 2012 annual report Monday. The company had worldwide revenues of £6.1 billion (USD $9.2 billion). Some digital highlights:

• As previously reported, Financial Times digital subscriptions overtook print subscriptions for the first time in 2012. The FT now has “almost 316,000″ digital subscribers, compared to about 286,000 print subs, and “mobile devices now account for 30% of FT.com traffic and 15% of new subscriptions.” The company said it expects advertising to remain weak, “with profits reflecting further actions to accelerate the shift from print to digital.” Pearson CEO John Fallon denied rumors that the company is selling off the FT.
• The Economist isn’t nearly as far along in the digital transition: Total print and digital circulation was 1.67 million, “of which 150,000 customers bought digital-only copies.”
• At Penguin, ebooks accounted for 17 percent of global book revenues, up from 12 percent in 2011, and “almost 30 percent” in the U.S., compared to 20 percent in 2011. Penguin’s total revenues worldwide were £1.053 billion (USD $1.59 billion), up 1 percent over the previous year. Global app sales were up by 200 percent, but the company didn’t break out app revenues.

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