Ed-tech company Kno has the support of Silicon Valley venture capitalists, but it has struggled to find its niche, until today.

Kno’s CEO Osman Rashid is confident about a product that can turn a boring PDF into an interactive ebook in “minutes.”

This new publishing tool was originally called “Evolve,” but due to a potential patent issue, the company changed the name to “Advance.” Rashid said in an interview that Advance was initially built for internal use, but they started getting requests from the largest book publishers, including McGraw Hill Education and Wayside Publishing.

Publishers can submit a file to Kno, which can be updated with rich multimedia content, including videos, audio, websites, 3D objects, calculators or simulations. Publishers can add a new interactive element at anytime, then instantly push that new element to all the readers of their digital book.

Advance has a competitive edge over competitor, Apple iBooks, as it is available for iPad, Android, Windows 7 and 8. The company also competes with interactive e-book publishing platform Inkling, which recently launched its online ebook store.

Since launching in 2009, the well-funded startup has worked with about 80 publishers to bring more than 200,000 higher education and K-12 digital books across a variety of platforms, including tablet devices and smartphones.

In the early days, the founders had intended to sell mobile hardware to help students learn. But tablets came along, so Kno made the shift to digital textbooks.

Kno has raised about $70 million in funding from firms like Andreessen Horowitz and SV Angel and is under pressure to produce some revenue-generating tech. Rashid said the product will be available to publishers free of charge, so it’s unclear how the company will make money in the long-term.

Image credit: patrisyu // Shutterstock

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

According to a new report, advocates of the printed page are an increasingly rare breed.

Just a few years ago, it seemed implausible that people would embrace a Kindle or Nook and forgo the familiar experience of reading a physical book. It urns out that we like the flexibility and lower prices of an electronic book, and device ownership subsequently skyrocketed to meet the demand.

Sampling 2,252 people, the report from the Pew Internet and American Life Project reveals that ebook reading is up. The number of those who read ebooks jumped from 16 percent of all Americans ages 16 and older to 23 percent in 2012.

The report demonstrates that reading, in general, is still a popular American pastime. The number of book readers has remained relatively steady, dropping slightly from 78 percent in 2011 to 75 percent in 2012. The survey found that book readers consumed an average of 15 books this year on any medium, whether it’s audio, print, or digital. Fourteen percent of the respondents read 21 or more books. Women tend to read more — they get through about 17 books a year, while the average for men is 13 books.

Print publishers and libraries were given cause for optimism this summer, pointing to a protracted dispute between the government, Apple, Amazon and publishers, over the pricing of ebooks. This gave them a bit of breathing room to compete with Amazon, the undisputed leader in the ebook space. Amazon has dominated the market since its release of the Kindle in 2007, which set off the surge in digital reading.

This year, traditional groups grasped that ebooks are not a passing fad, and responded accordingly. Public libraries increasingly stocked their shelves with ebooks, a move which seems to be paying off. About 5 percent of the population rented an e-book from a public library this year (a slight increase from 2011), and a higher percentage of respondents said they were aware their local branch carried ebooks, from 24 percent in 2011 to 31 percent in 2012.

Image credit: patrisyu // Shutterstock

I’m just wondering why it takes six months to report that news.

The 2012 report shows that adult fiction is dominated by e-book sales, outperforming paper and other categories, such as audiobooks. However, somewhat surprisingly in the age of Amazon, Kindle, and Nook, actual brick-and-mortar bookstores remained the primary distribution channel for publishers.

BookStats isn’t releasing more detail publicly, but that number must be decreasing.

Source: Amazon

Kindle Fire

Amazon’s ebook sales outgrew paper sales back in 2011, and the online retailer believes it has the market share lead for digital books.

Just a few months ago, Association of American Publishers data showed that ebook sales doubled from January 2011 to January 2012.

An interesting twist: Publisher revenues from direct-to-consumer sales topped $1 billion for the first time ever. That’s a significant accomplishment — and a direct challenge to Amazon and other online retailers.

Amazon, of course, dominates online bookselling, and sold about five million Kindles this past Christmas season on its way to selling perhaps as many as 20 million in all of 2012.

BookStats is a partnership between the Association of American Publishers and the Book Industry Study Group that launched in 2009. Almost 2,000 publishers contributed data to this year’s report.

With the industry moving so quickly, the organization would do well to release 2012 data early in 2013, if not regularly throughout the year.

VentureBeat contacted BookStats for comments, but has not yet received a response.

Image credit: Rob Stark/ShutterStock

Experts are saying Apple is likely to emerge victorious from a Department of Justice case regarding price fixing on e-books.

Apple was accused of conspiring to fix and raise prices on e-books along with five major publishers. The DOJ has been investigating the issue since last year and officially filed its lawsuit yesterday. The entire filing is included below, and since its filing, sixteen U.S. states have joined the suit.

Last year, Apple switched its pricing structure with publishers to an agency model, allowing those publishers to set their own prices on e-books while giving Apple a standard cut of the revenue. However, the deal also stipulates that e-books sold through the iTunes store cannot be sold at a lower price anywhere else on the Internet.

A cadre of law professors has explained to Cnet reporters that precedents for the DOJ’s case may actually give Apple the upper hand.

In fact, a few of the J.D.s think the DOJ has a better case against the publishers than against Apple. Precedents include a 1982 case pitting the DOJ against IBM (the case was abandoned as being “without merit”) and the DOJ’s 2001 attempt to split up Microsoft à la the disassembling of the Ma Bell conglomerate.

“If the CEOs of the various publishers got together in hotel rooms to discuss prices, they are sunk,” said antitrust author and University of Hartford professor emeritus Dominick Armentano. As far as e-book economics are concerned, the DOJ would have a much easier time proving the publishers’ antitrust behavior and wrongdoing than Apple’s.

However, this doesn’t mean Apple is guaranteed a win in court. “I’m not saying that Apple can smile and walk away from this,” said Notre Dame law prof Joseph Bauer. “It’s just that the government will have to show that Apple had some kind of involvement in the original arrangement.”

Image courtesy of NADIIA IEROKHINA, Shutterstock

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

At last Sunday night’s Academy Awards ceremony, a startup studio that makes animations, apps, and ebooks won the Best Animated Short Oscar for its film “The Fantastic Flying Books of Mr. Morris Lessmore.”  The 14-minute movie was the first from Shreveport, La.-based Moonbot Studios, a multimedia company that is making a splash far from Hollywood, Silicon Valley, and Pixar.

What began with three partners — well-known illustrator and author William Joyce, and industry vets Lampton Enochs and Brandon Oldenburg — has grown into a bustling company with 35 employees. The studio started with minimal funding, and that DIY spirit has infused both its aesthetic and its business practices.

“Everything we’re doing is bootstrapped and frugal, and seat-of-our pants in a MacGyver kind of way,” said Oldenburg, in an interview with VentureBeat the day after being nominated for best animated short.

From the $5 interactive ebook iPad app.

Part of what makes Moonbot unique is its tech savvy and the variety of mediums it embraces. Now, in addition to animated movies, the studio is creating and selling mobile apps, interactive ebooks, games, and old-fashioned paper books.

By starting with a story instead of a set end-product, the studio has more options for ways to package all the resources it creates. “It’s this gift we didn’t know was sitting there,” Oldenburg said of the “Lessmore” assets. “We just took a little effort and re-purposed things.”

The studio even puts on live puppet shows.

“Live audience interaction is great way to develop stories,” explained Oldenburg. The studio has tested stories and characters by building puppets and staging live shows for local audiences in Shreveport. “It’s this whole new revolution of handmade. Etsy and Kickstarters, they’re all underdogs in a way, but they’re also beautiful and pure in a way too. We want to continue down that path for ourselves.”

Naturally, the underdog studio picked an underdog town. Shreveport may seem like an unlikely place for a studio to set-up shop, but Moonbot’s founders were drawn in by great tax incentives offered by the state of Louisiana and the city of Shreveport in an attempt to bolster the local economy. It’s also Joyce’s hometown, and Louisiana is the setting for “Lessmore.” Louisiana is the third-largest state for film production in the U.S., following California and New York. While most of that business is focused in and around New Orleans, some is trickling into Shreveport and other Louisiana cities, where creative companies such as Moonbot are embraced.

“If you’re looking to create a startup, go someplace where you have a whole town to back you up. Here we’re the only fish in the pond,” said Oldenburg.

Moonbot Studios

Working outside of traditional production areas also has its challenges, like staffing; seventy percent of Moonbot’s staff have been relocated to Shreveport from other locations. However, it is working with two local universities on job training programs, and more talent could start moving to the area as the industry grows. Other startups are already popping up in the area, like mobile-app development studio Twin-Engine Labs, which worked with Moonbot on on the interactive “Morris Lessmore” ebook.

Moonbot may have won a huge award for a movie, but its business model isn’t that of a traditional film studio, perhaps because it recognizes movies aren’t where the money is being made. The company (which calls itself “An interplanetary creative expedition of story and art”) is half focused on fostering and developing its own intellectual properties, and half on collaborating with clients on the stories they want to tell.

“We are a story-telling company and we like to innovate in new ways of telling stories,” said Oldenburg. “Short films don’t make any money really, they just become calling cards for who you are and what you’re about.”

An Academy Award for your studio’s first film is quite the calling card.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

After some back-and-forth between Amazon and Wattpad, a third party e-reader app, Kindle Fire owners can now use a different apps to read e-books on their device.

Before now, Amazon had been hiding competitor’s e-reader apps in the Kindle Fire’s Amazon Appstore. The apps still showed up in the web-based Appstore, but weren’t available for download onto the Fire. Hidden e-reader apps included Wattpad, Kobo, and Bluefire, all competitors of the Kindle.

For those who wanted these e-reader apps on their Fire, they could use work-arounds to download them. Customers needed to sideload the app, which is downloading it from a different source, a somewhat confusing process for the average Kindle owner.

“Over the past couple of weeks we’ve spoken with representatives at the Kindle Fire Store, first over email and then eventually with some phone calls up to the higher levels, convincing them that we’re actually a valuable complementary service,” a spokesperson for Wattpad wrote in an email to VentureBeat “Our community is super engaged readers and writers; they are passionate book lovers and eventually Amazon came around to see the value we could bring.”

After some back forth between the two companies, Amazon made the Wattpad app available for download on the Kindle Fire. Kobo and Bluefire apps are still missing from the Fire’s Appstore.

It’s not surprising that Amazon hid these apps; they could cut into Amazon’s profits from e-book sales. And given that Amazon just barely breaks even with its sales of the Kindle Fire, Amazon is counting on e-book sales to make the Fire profitable. With Kobo’s in-app marketplace selling the same books at around the same prices as Amazon’s Kindle store, Kobo could be a big threat to Amazon’s digital content sales. Just because Wattpad made it back onto the Kindle Fire, doesn’t mean will we seen other apps follow suit.

The app includes text inspired by the original Nancy Drew book. But the company calls Shadow Ranch a “game book,” the first in a series that will up the ante for publishers cranking out eBooks by the dozen. If this combination of gaming and storytelling takes off, you can expect to see the genre of game books open up in a big way on smartphones and tablets.

This title takes game play much farther than some of the other electronic books on the market, says Megan Gaiser (pictured), chief executive of Her Interactive, a maker of video games targeted at broad audiences including girls and women.

“By combining a book and a game, we’re trying to create a whole new form of interactive entertainment,” she said in an interview. “You get to play the story.”

The game book is the first in a series of titles dubbed Mobile Mysteries that Her Interactive will make around the Nancy Drew license. The game book runs on the iPad, iPhone, and iPod Touch. Gaiser said the team at Her Interactive has been working on the title for months, refining it meticulously since it is the company’s first foray into the Apple mobile market.

The focus on girls is aimed at creating games that match the audience for the Nancy Drew books, which have been entertaining young readers since 1930. Gaiser hopes that women who grew up with the books (which includes women such as Supreme Court Justice Sonya Sotomayor and Secretary of State Hillary Clinton) will read the game book with their children. Overall, the Nancy Drew books have sold more than 100 million copies.

“It has a lot of nostalgia value,” Gaiser said.

Her Interactive was founded in 1995 and has been working on Nancy Drew computer games since 1997. At first, Gaiser said that no game publishers would publish the company’s games because they were targeted at girls, who were perceived as non-gamers. The company launched its games on Amazon.com, bypassing the traditional publishers. Then the New York Times wrote a story about the company, calling its Nancy Drew game the “un-Barbie of video games.” Then the publishers all came back.

Her Interactive focuses on high quality games with humor, stories, and a modern interpretation of Nancy Drew as a character. Since Her Interactive launched its first Nancy Drew computer game, the company has sold more than 8.7 million units. That’s a better record for a game series on the PC than Myst or Lord of the Rings, Gaiser said. The series has won 23 Parent’s Choice gold medal awards.

About 40 percent of video game players today are women, according to the Entertainment Software Association. But relatively few titles are targeted at women and girls.

The game book has a bunch of rich graphics that you can tap on the iPad’s touchscreen. On the first page, you can tap on a picture of a truck and hear its horn honk. As you turn the pages, an animation shows the page turning as if it were a real book. The book is filled with lots of hidden object games, where you find the eggs hidden in a forest or collect things that you’ll need later on in the adventure. There’s a part where you have to solve word puzzles in order to help Nancy win a horse race. And there’s a part where you have to navigate your way through underground caves.

Altogether, there are 20 hidden object games and a bunch of other mini games across eight chapters. There are 49 collectibles, 49 word challenges, 65 images, 60 sounds, 10 animations and five graphical choices and a couple more mini games. The game is not the same as the Nancy Drew: The Secret of Shadow Ranch game that Her Interactive published on the PC in 2004. The story is different and so is the game play.

The competition is plentiful on the App Store, between the 57,455 books and 51,450 games available. But game books are relatively rare. Oceanhouse Media makes a lot of books based on the Dr. Seuss and other children’s book brands. And many of its titles are also interactive, although they’re aimed at teaching kids how to read. The Nancy Drew app is $9.99 on the iPad and $2.99 on the iPhone and iPod Touch.

Gaiser says the game book is targeted at girls ages 9 to 14. My 7-year-old girl tried it out and loved it. My 14-year-old girl also picked it up and read the book for three hours straight. When she gave the iPad back to me, she said the book was “boring.” But she just didn’t want to admit that she liked a Nancy Drew game book, since she acts like she’s too old for it. Overall, I’d say the game book is very well done and is worthy of being labeled a pioneering work.

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