Should Amazon be worried about iPhone readers like Stanza? In a word, yes

Over the last few years, I’ve been dragged kicking and screaming into the digital age. I listen to music, read news and watch movies and TV shows on my computer and my iPhone. The one area where I’m still holding out is books — as with most bibliophiles, I can go on and on about why physical books will never be replaced. But a startup called Lexcycle, which makes an iPhone ebook reader dubbed Stanza, could make me reconsider.

Stanza is currently the number one ebook app for the iPhone, and chief operating officer Neelan Choksi shared some other impressive stats with me. In its first six weeks, Stanza was downloaded 200,000 times — compare that to Amazon’s Kindle, which is seen as building momentum because it sells 40,000 units per month. Okay, that’s a totally unfair comparison, since Stanza is a free app. But if you can get a free ebook reader for your iPhone, why bother paying for the Kindle, or even a more cutting-edge reader like Plastic Logic’s? (Though of course the Amazon’s and Plastic Logic’s readers offer bigger screens, which is better for long-term reading.) People are actually downloading books, too — Choksi says one of Stanza’s content providers reports 20,000 downloads per day.

Like Stanza itself, all of those downloads are free for now — they’re either older works that have entered the public domain (in other words, no one owns the copyright), or they’re available for free via a Creative Commons license. But I’d be willing to shell out money to download the brand new novels, too, especially if that means I don’t have to lug around a thousand-page book like Neal Stephenson’s latest.

Choksi says Lexcycle is still figuring out its business model. But it will probably involve revenue-sharing retail deals with booksellers or publishers, as well as branded versions of Stanza that book and magazine publishers can offer on their own. I also wonder if Stanza ebooks could be priced more cheaply than a regular book, since I bet most readers would see the iPhone version as a supplement to a hard copy, not a replacement. If I’m at home, I’d rather read the physical copy, but the iPhone version is the one I can take with me on the bus — could the two be bundled together?

So what makes Stanza number one? I don’t think there’s anything particularly groundbreaking about the app, but it’s definitely been well-designed — the text is clean and readable, and you can either scroll through text automatically, at a pace that you set, or you can flip through it horizontally, as if you were looking at the pages of a book.

More than anything else, Stanza’s early success shows that the iPhone, with its big-for-a-mobile-device screen, is an okay environment for reading, and could really pose a threat to companies that make ebook-only devices. Choksi says Lexcycle is also looking at a version for the BlackBerry and other mobile devices.

Lexcycle is based in Portland, Ore. and is self-funded.

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About the Author, Anthony Ha

Anthony Ha writes about enterprise technology, cloud computing, tech policy, and random cool startups. Before joining VentureBeat in January 2008, he worked at the Hollister Free Lance, where he won awards from the California Newspaper Publishers Association for breaking news coverage and writing. Anthony attended Stanford University from 2001 to 2006, and now lives in San Francisco. Reach him at anthony@venturebeat.com.

  • AJ
    Amazon should absolutely be worried about Stanza, but I'm still not sure there's a large enough market here to truly support a business. I think this is a solution without a problem.

    Books are, by in large, already portable. They are essentially a 'long format' and single-threaded medium. You're not going to read 15 chapters from 15 different books during your commute as you might with music. In addition, you're unlikely to read the same book over and over and over. They're also active in nature versus passive. My full argument is on my blog:

    http://usedbooksblog.com/blog/amazon-kindle-sal...

    I'm not saying eBooks don't have a place in the market, but I'm not sure it's large and I'm not sure it's now.
  • Yes, as I note at the beginning of the post, books are the one medium where I'm not sure digital distribution will ever become dominant.
  • Maybe digital distribution of book will never dominate over physical distribution, but I dont think Amazon will be too worried about Stanza.

    Just as you have digital camera specifically for taking pictures, there will (and should be) always be a device specifically for reading book. E-book readers do have a place in the market, and having an e-book reading app on the iPhone wont change that. Its just as having a camera on you phone, its good to have, but it wont ever replace your digital camera.
  • Skip
    It's a solution without a problem, AJ, because almost none of the e-book publishers actually seem to, you know, want to sell e-books. It's very common for an e-book that's DRM'd to hades to sell for $4-5 more than the hardback does on amazon.

    e-book vendors need to understand that by taking something away from me (the ability to loan the book to a friend, the ability to sell the book used, likely the ability to reread it 10 years from now) they've taken away probably half of the value of the book, so the price needs to be half.

    The only publisher that actually seems to want to sell me e-books is Baen. As a result, they've gotten several hundred dollars of my money over the last few years.

    E-books can succeed, I think, under two models. One is 'stop assuming that your customers are thieving scoundrels, because if they are, you can't win'. The other is to stop trying to weasel around the fact that any DRM-encumbered work that I "purchase" is really a rental, because there's no guarantee I can access it in the future. Instead, embrace this fact, and move entirely to the subscription model. Amazon claims that they have 170k works now available. Would I pay, say, $20 a month for access to whatever percentage of those are more than a year old? Given my current purchasing habits, you bet I would. And then DRM isn't a bug, it's a feature, for both sides of the transaction.
  • I have similar, if less well-thought-out-and-articulated, thoughts on DRM.
  • Ah, you newcomer you :-) I've been reading ebooks using Fictionwise (once Palm Digital Media then Motricity) eReader software on the PalmOS, and yes, now on the iPhone for years. It is DRM'd but it is also recent. The price is about the same as the hardbound when it first comes out, and then drops over time to paperback levels. I do still buy the hardbound copies as well - as my latest bookshelving home improvement project attests. Mostly the hardbound books are for the collection. I truly enjoy reading the ebook more: convenience, comfort, dogearing, notes & markup without damaging the original, and sharing (with someone you trust with your credit card passcode). [NB: the iPhone version doesn't yet have the dogearing, notes & markup features as yet]
  • Are you saying you pay full price for a book twice? For the electronic and hardbound copies?
  • Yep ;-)

    Well... not really, or at least not always. I buy the hardbounds or even the leatherbound from Easton Press. I often buy the eBook, from eReader.com with their discounts or bundles or after the price has dropped into the 3 - 5 US$ range. And as I look at my 2000+ books, I do have multiple special editions of some books or series.

    I love books, and have since a neighbor gave me a Tom Swift Jr when I was 5. 'Tis just now, at 52, I truly prefer to read eBooks.
  • Lou
    So, 100,000 downloads of the iPhone SDK in the first 4 days + 70% mobile web browsing market share = a HUGE market lead for Apple. It will be interesting to see what the other manufactures can/will do to try to catch up.

    Lou
    Private Equity Jobs
  • One of the problems on an iPhone or WinMo or Pocket PC device - I've used both Stanza and Microsoft Reader plus even MS Word (Pocket Edition) is that your hand gets tired of scrolling. Nevertheless I have read books - mainly off an old Project Gutenberg CD I bought for an old PC ages ago with classics on it. I did have an app - I think an encyclopedia SD card that had automatic scrolling on Win CE (Pocket PC HP Jornada) and that enhanced reading on a small device considerably. I know many like the clear type on the Kindle, but I am very happy with the small form factor and can read in the dark on my iPhone.
  • Ryan Chapman
    I've experimented with both Stanza and the Fictionwise apps, which both present ideal reading environments in small bursts - I couldn't imagine reading a whole book on there (or the iPhone's battery supporting such reading for extended periods). What about short stories or first chapters? I think that would be a natural fit. Given away for free, of course.
  • Something to keep in mind here is that a success for Stanza is still a win for Amazon. Amazon owns Mobipocket, which sells eBooks in a format that Stanza can read. What's happened here is that Stanza did all the development work for Amazon that allowed them to begin selling eBooks on both the Kindle AND the iPhone. What's funny about the whole thing is that Stanza did it for free and Amazon makes a profit on all the books that are sold.