Behind IREX's Partnership With Barnes & Noble: IREX's Kevin Hamilton on how the bookseller is helping his company go head-to-head with Amazon in the e-reader market.
With a partnership with Barnes & Noble anchoring the late-2009 debut of its eReader, Netherlands-based IREX Technologies hopes to propel its new e-reading device to the top of the marketplace, according to North American CEO Kevin Hamilton. In addition to the more than 750,000 e-book titles eReader users may purchase through Barnes & Noble's eBookstore—many of which are priced at $9.99—IREX's new device also will allow users to download outside content, such as from Google—a feature that distinguishes it from Amazon's Kindle.
Hamilton recently spoke with Book Business Extra about IREX's partnership with Barnes & Noble and how his company's new device will stand out in the rapidly growing e-reader market.
Book Business Extra: How did IREX's partnership with Barnes & Noble come about? What are the benefits of that partnership?
Kevin Hamilton: ... We've been historically manufacturing devices for the business market and primarily in Western Europe. With the advent of the Amazon Kindle, and the consumer acceptance of that device and other [e-reading] devices, it became clear to us that we needed to be in the North American market with a leisure-reading device rather than a business device. ... We saw the strength of Amazon and the competitive pricing. It's been an extremely aggressive price point that they set, and we concluded that we needed a partner that had the scale and the natural strength to be able to compete at that level and in that way. ... Barnes & Noble was one of the few out there that could go head-to-head with Amazon and say, "We're going to get our share of the market, and we're going to do it in a very aggressive and competitive fashion."
... Amazon chose a strategy, which was to use a proprietary file format and proprietary digital rights management (DRM), and also to require that Kindle owners purchase content from Amazon, and that only Amazon content, for all intents and purposes, can be read on a Kindle. ... We took the exact opposite approach. We said, "Let's make it an open platform. We'll support all formats." ... We also said, "Let's let customers buy content wherever they want to buy content. Let's let them use anything that they want to bring to the device on the device."
So on our platform, with the wireless connection, we've set up several content providers and several content sellers. Barnes & Noble is one of them. But there are others as well that we'll be announcing shortly. The consumers can buy content wirelessly over the 3G network from those [providers]. Or, they could download content—free content, or paid content, or library content, for that matter—to their PC. And then, with a tethered cable, they can just drag it onto the device and read content that way, as well. ...
Extra: What will distinguish the IREX eReader from other readers?
Hamilton: On the device side, there's a couple of benchmarks on readers. One is screen size, and the other is connectivity. The Amazon Kindle is a 6-inch screen, and the IREX DR800 is an 8.1-inch screen. ... We're [increasing] the viewing area with about the same footprint. ... It still fits in your purse. ... We figure 60 percent of the buying population of these devices are women. ... The other differentiator ... is the connectivity. This is connected via a 3G network. ... Our device allows you to read anywhere, anytime, [and] buy content wirelessly. ...
Extra: What role does IREX expect to fill in the e-reader market with this device?
Hamilton: We've got a number of publishing partners at launch that we're going to be very happy to be with. … We'll have a number of newspapers, magazines—lots of periodical content. ... We envision that this is going to become a major consumer electronics category—that there won't be just a product, but that there will be many people with reading devices, and we hope to be one of the top two or three in the marketplace. ...
Extra: How will the e-book market change in the near future? In the long-term?
Hamilton: That's the crystal-ball question, isn't it? I think in the near future, we're clearly seeing a move toward a publishing format standard. It appears to be the .epub format. And just in the last six months, we've seen [many] publishers announce that they're going to just publish their digital content in .epub format, which has some advantages for formatting, layouts, reflowing text and things like that. So that's a good thing. [Previously], it was all over the map. Everybody had their own standard and their own format, and there was no one, clear industry standard. …
We'd like to think that ultimately, printed material will go the same way that music went and, for the most part, get rid of DRM. Make it DRM-free. And that's a big issue right now. All of the content that we sell, basically, except for the free stuff, or the daily newspapers, has DRM on it. So you can't share it, you can't copy it, you can't do anything with it. And that's how the music business started, too. But I think everything on iTunes now is DRM-free, and most of the distributors have gone to non-DRM music. We hope to see the publishing world go that way, too.