EPIC 2020: A Bleak Future for Higher Ed

William Sams, recently appointed interim associate provost for information technology and chief information officer at Ohio University, has a rather dark view of the future of higher education.

In his world, campuses will be reserved for the ultra-wealthy or athletically gifted because most college degrees will have been replaced by badges earned through free online courses. In addition, Apple will buy Amazon to become a learning resource giant, Google will deliver free online classes called Evolving Personal Information Construct (EPIC) where students can earn those badges, and all of it will happen by 2020. Sams presented his observations in a web video called EPIC 2020 (embedded below).

“It’s not my sole objective to be right or wrong here, but to get people talking about things that need to be discussed,” Sams told eCampus News. “All of us are trapped in the paradigm of how things have been, the system we’ve existed in all our lives. A lot of [educators] have a worldview that makes it impossible for them to even see solutions to problems that exist today.”

In the video, Sams predicts Congress will eliminate Pell Grants next year, students will demand colleges only charge for learning assessment, and new funding will go to free online learning platforms to fill the void left by the disruption of traditional higher education. In addition, Apple buys Amazon to create the world’s largest content-distribution site, called Applezon.

“I see some of those things happening,” Martin Van Der Werf, a blogger for The College of 2020 ed-tech site, told eCampus News. “They won’t replace higher ed altogether, but serve some pockets of higher ed. The video is almost a work of science fiction, and the value in sci-fi is that it helps you image worlds that don’t exist yet. Sci-fi stories draw plausible scenarios that make you think of what is possible, and that’s why this video might be valuable.”

One of Sams’ projections is already starting to come to fruition. On July 10, Google launched its first free online class, called Power Searching with Google. Students will use Google+ groups to discuss class materials and will earn a certificate when they finish the course.

Is Amazon Working on Same-Day Delivery?

Bricks-and-mortar retailers have battled long and hard over the sales-tax advantage that online vendors have, particularly Amazon. Customers are supposed to pay sales tax on all purchased items, but few actually do, providing a significant price advantage for online services.

Merchants say if Amazon had to pay local sales taxes like they do, consumers would see online prices more on par with their own physical-store prices. Amazon appears to now agree as it is dropping its tooth-and-nail fight against every sales tax initiative in favor of negotiating agreements to build warehouses in large metropolitan areas.

It’s a change in strategy that could help Amazon accomplish what some believe is its new goal: providing same-day delivery for many of the products it sells. That may be a necessary change considering a Citigroup survey found 52% of Amazon shoppers would be less likely to buy goods on the site if they had to pay sales tax.

Whatever the reason, Amazon is putting a lot of money behind the project. The company will reportedly spend more that $1.2 billion on distribution facilities in California, Indiana, New Jersey, Tennessee, Texas, and Virginia, with $500 million for as many as 10 locations in California alone. That should be enough centers to provide next-day service for nearly all of the continental United States.

Along with new facilities, Amazon has been working on ways to improve shipping times at the facilities it already has. It acquired Kiva Systems, which developed a robotic warehouse system, and set up automated lockers in drugstores and convenience stores in Seattle, New York, and the United Kingdom. It also works with local couriers capable of same-day delivery when the product is available that quickly.

“Amazon is investing billions to make next-day delivery standard, and same-day delivery an option for a lot of customers,” technology writer Farhad Manjoo said in this Slate article. “If it can pull that off, the company will permanently alter who we shop. To put it more bluntly: Physical retailers will be hosed.”

Can Kindle Ad Sales Lower E-Book Prices?

Amazon has turned selling items at a loss into an art form, particularly when it comes to books. But selling in-book advertisements on its Kindle devices just might put the company in an even stronger position with its competitors, according to a blogposted by Joe Wikert.

The retail giant has shown it is more than happy to lose money on the price of bestsellers. However, Kindle advertising could provide Amazon with the additional revenue to take e-book prices even lower.

“Make no mistake about the fact that Amazon would love to see e-book pricing approaching zero,” Wikert wrote, adding that the Kindle Owner’s Lending Library program is already approaching free e-books.

Amazon is already selling advertising on some of the Kindle models, offering those models at very attractive prices to consumers. There are even rumors that Amazon plans to sell ad space on its Kindle Fire’s welcome screen. Wikert adds there’s nothing stopping Amazon from using in-book advertising, while offering ad-free editions at higher prices.

Amazon will keep 100% of the ad revenue it sells on both device and in-book advertising, padding its bottom line and giving the company even more leverage when it comes to negotiating wholesale list price with publishers. Wikert says he believes other e-book retailers will not be able to sustain the losses to effectively compete.

“Why wouldn’t Amazon follow this strategy, especially since it helps eliminate competitors, leads to market dominance, and fixes the loss-leader problem they currently have with many e-book sales?” he asks.

Amazon Turns its Sights on High Fashion

Chances are this is the first, and last, time high fashion will be discussed on this blog. But it’s a story that bears watching since Amazon is using its “go big and spare no expense” philosophy on the fashion industry.

“It has the latitude to set prices and charge whatever it wants,” Sucharita Mulpuru, an analyst for Forrester Research, said of Amazon in The New York Times. “That is a huge threat for brands.”

Sound familiar?

Amazon’s investment of millions into high-end fashion has the potential for much higher gross profit dollars per unit than books or CDs. The company is hiring photographers to produce 3,000 images a day for shoppers to browse. It’s also offering free shipping and returns on apparel to attract online customers to its online storefront. Amazon is working to recruit high-end fashion firms, such as Michael Kors, and was even a sponsor for the Costume Institute Benefit at the Metropolitan Museum of Art.

Many in the industry worry they will not be able to compete with Amazon’s purchasing power and its willingness to undercut traditional retail markups. Amazon CEO Jeff Bezo has said his firm will not take the low-price approach it’s used to disrupt other industries on its high-fashion project, but most are unconvinced.

“A manufacturer does not want to kill a business, and the best way to kill a business is to have the same product selling for less on Amazon,” said Ron Friedman, a retail accountant at Marcum LLP.

More on Amazon...

Following up from the last post -- there are some great posts around on Amazon's latest "marketing" campaign targeting independent retailers.  First is the open letter from the American Bookseller's Association -- an instant classic in both its satire and its seriousness. 

A lot can be said about Amazon's business practices.  Most of it probably not very nice.  By most accounts, Amazon does little for local communities or economies.  Like many things these days, consumers go for the quick savings without considering or perhaps understanding the longer term costs or broader implications.  Amazon looks great up front, but there are costs -- and those costs are born by local communities and small businesses.

Take, for example, the college store -- most college stores are non-profit small businesses whose net profits go back to the institution to support educational affordability -- financial aid, student services, or sometimes capital budgets.  Most college stores are working on reducing the cost of course materials in many creative ways -- while still making returns and contributions to their local campus communities, and in many cases their states too, since college stores collect sales tax in most states. 

The latest Amazon campaign may look like a simple marketing gimmick.  Maybe it is.  But at what point do their business practices go too far and the costs to our communities become too high? 

Amazon's latest marketing effort

Amazon is offering $5 off on items if you take a picture of that same item at any brick and mortar store and you purchase through their online store.  You are permitted to three items on Saturday December 10^th.

Here is a not so happy indie bookstore owner, who writes in PW,  

“To encourage people to snoop at other stores and report back  . . .  so they can keep their prices competitive is pathetic.  Here’s what I do: I pay sales tax, I donate thousands of dollars to local schools, charities, Little Leagues, church pie suppers, school trips, Geobee prizes, etc.  I support my community and that means going to local stores and buying things there. Price is not the only factor for me”

In response to this promotion some indie owners have started an Occupy Amazon movement on the same day.

Amazon Tablet Announced

In the most recent iteration of the device wars, today Amazon CEO Jeff Bezos announced the release of Amazon Kindle Fire.  The Android-based tablet weighs 14.6 ounces and features a 7-inch screen and will retail for $199.  The new Kindle Fire will be ready to ship on November 15.

Kindle Fire uses Amazon’s proprietary cloud-based and syncing technologies that would allow all content to be backed up on Amazon’s cloud storage.  Additionally, Kindle Fire uses Whipersync technology that allows for automatic, wireless syncing that does not require any plug-ins to computers.  Mobile browsing is capable using Amazon’s own Silk browser that will allow for faster page loading and supports Adobe® Flash® Player.  Perhaps the only surprise is that Amazon moved off at least one proprietary element by using the Android operating system.

In at least some of the early press, the Amazon Tablet was viewed as "No iPad Killer."  Instead some industry analysts believe it is going to be a “poor” technology and will only be a "stopgap" in order to get a tablet out the door for the 2011 holiday season.  The opinion is attributed to the fact that the tablet uses a slower processor and using a failed Playbook hardware platform.

Regardless, it will be interesting to see what features Amazon builds into the tablet, particularly given the comnpany's conitinuing interest in the digital textbook market. 

Learning from Amazon

BNet had an interesting piece a couple months ago on 6 ecommerce strategies Amazon uses that other retailers should adopt. Most of these effect discoverability of the store's products within search engines -- part of SEO or search engine optimization strategies. (Yes, yet another type of technology-based strategy with real business implications for you to think about). No surprises in the list from the article, but something for stores to think about as they evaluate their own e-commerce tools:

1. Let your customers help keep your website fresh
2. Get more control over your listings in Google
3. Win on long-tail key phrases
4. Make it easy to find things
5. Personalize the experience
6. Anticipate customers' questions

All good topics and strategies to improve customer engagement (#1), improve visibility to customers (#2-4), and improve the customer experience (#4-6).

Kindle Adding Page Numbers, Note-Sharing

Kindles may soon be sporting some new features that address short-comings raised by the higher education market. According to Amazon's recent posting on the Kindle Daily Post blog, software updates for the Kindle and Kindle 3G will enable e-books to display page numbers that correspond to the same pages in the print edition of the book.

That may seem like a relatively minor improvement to some, but higher-ed researchers need to be able to provide publication pages when they cite sources for a paper or book. Right now they can’t do that with an e-book.

Even more importantly, the page numbering feature may make the Kindle more attractive for classroom use. Some college bookstores have reported their professors asked them not to make e-books available for their textbook adoptions because the lack of page numbers creates problems in making sure the class is literally on the same page. With the updated Kindle, students could use either print or e-book versions and remain in sync, page-wise.

As another new feature, the Kindle upgrade will also allow users to share their book annotations and highlights with other Kindle users.

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Additional commentary:

I once read that page numbers did not emerge as a concept in printed books until about 40 years after the printing press had become commercially viable. At the time, it was the scholarly community who identified the need. While Amazon's page numbering development has already been accomplished by others in the space, the development does signal two things. First, that we will continue to adapt current and new technologies to past ways of doing things. Perhaps there is a better way to cite a reference than the print-page equivalent. Second, it seems that Amazon is working to address short-comings in the Kindle identified by the higher ed market, and so they may still have plans in the work for a new reader or other technology that will support textbook users in the future.

Apple Keeps Grip on App Store Purchases

The New York Times’ report that Apple declined to approve the Sony Reader e-book app because in-app sales wouldn’t go through Apple sparked much hand-wringing in tech circles. Many felt Apple’s move would encompass not only the Sony Reader app, but also Kindle and Nook apps for the iPad, iPhone, and the iPod touch.

Then, blogger John Paczkowski of the Wall Street Journal reported an official statement from Apple claiming no change has been made to its guidelines for developers, but that it will now require apps to offer customers the ability to purchase items both outside the app and within the app.

The change is already in place for customers who buy through iTunes, allowing Apple to earn a cut for facilitating the purchase without forcing all content to be bought through iTunes. This means Amazon, for instance, can still sell content through its web site or Kindle device, but iOS Kindle app users will have to sync purchases to their iPhone, iPod touch, or iPad and Apple will get a cut of the proceeds.

The question now is how will Amazon, Barnes & Noble, and Sony respond? It’d be hard for a company such as Amazon to back away from the iOS platform now, particularly with its “Buy Once, Read Everywhere” promotional campaign. It would also be difficult to build a new sales site that allows customers to buy both from Apple and Amazon, or from Apple alone.

Sony posted a note on its web site saying it’s trying to find other ways to work with Apple, including avoiding the App Store commission altogether.

Whither Print Communication?

The following article appeared in the January 2011 MACS Newsletter -- page 10. It is short and worth sharing. Reprinted here with permission from the newsletter and author. Also, Peter suggested that as a postscript, I note the recent news published in many locations that ebook sales have now surpassed paperback book sales. Amazon sold 115 ebooks last year for every 100 paperback books, and 3 times as many ebooks as hardbacks. That is total for the year, not just Q4.


WHITHER PRINT COMMUNICATION?


By Dr. Peter Mires
Manager, Delaware Tech, Georgetown Campus


We‘ve been hearing for some time now about the decline and demise of the printed word. Newspaper circulations are dropping to unsustainable levels, e-book sales at Amazon have eclipsed their hardcover list, and even some school libraries, such as Cushing Academy, a private prep school in the Boston area, have gone digital.


Digital delivery makes sense for many reasons, not the least of which is cost. After all, who buys print reference ma-terials such as encyclopedias, atlases, and almanacs anymore? This information is available online. Aside from arguments that Internet sites have issues of ques-tionable authenticity and ―inappropriate‖ sites abound, educators know that excel-lent databases (e.g., Tennessee Elec-tronic Library, EBSCOhost) are out there.


Those of us in the college store industry are aware of this trend. You‘ve proba-bly seen scenarios like online access codes, which used to be considered an-cillary, replace textbooks, or instructors put more material on e-learning plat-forms like Blackboard. Doubtless these and other changes have you wondering about the future of your store and how to adapt.


Allow me to relate a personal experi-ence. I recently published a print-on-demand book (entitled Bayou Built: The Legacy of Louisiana’s Historic Architecture), which is available in both print and digi-tal formats. The digital version is 37 percent less expensive and my royalty is 40 percent greater. The reason is sim-ple: there are no associated printing, shipping, and handling costs.


I confess that I don‘t own an e-reader, like Amazon‘s Kindle or Barnes & No-ble‘s Nook, preferring instead to hold an actual book. Call me old school, Lud-dite, or what have you, but I‘m able to separate trend from tradition. Like it or not, the printed page is for the most part obsolete; it will eventually go the way of my Olympia manual typewriter. I have fond memories of pulling ―all-nighters‖ in college hammering out papers on that durable device, but the writing, so to speak, was on the wall in the early 1980s when personal computers became widely available.


Textbooks, the traditional bread-and-butter of the college bookstore, are go-ing digital. Everyone seems to agree that our bi-annual book rushes will no longer be synonymous with trucks ap-pearing at our loading docks with pallets of boxes. The college bookstore of the foreseeable future is increasingly partici-patory in e-commerce.


It is not without a tinge of sadness or nostalgia that I witness this transition. But, who among us would type when the rest of the world is keyboarding?

Kindle Singles

One of the highlights in last week's digital news was the announcement of Amazon's new "Kindle Singles." The idea is a short work limited to at most 30k words, but well-researched. One of the more interesting aspects is one of the first ever books published by TED -- the site and conference which has the inspiring and thought provoking videos and content.

The concept is an interesting one -- and moves Amazon into a unique content-production business that could be viewed as a first step into new forms of competition for publishers, and begins to change the author-publisher dynamic for certain types of work. I will admit, it is the first real content or development that has made me consider downloading the Kindle app to one of my devices.

To be fair, the concept is not entirely new, though. I see similarities to the "Nooners" and "Spicy Briefs" concepts pioneered more by publishers like Harlequin a couple years ago. That is -- recognizing that there is a niche for short works on a topic or by a favorite author, that can be delivered digitally on demand, and which might be used to drive demand for additional short works, or additional longer works by the same author. It will be interesting to watch where these pieces will go in the future.

Google eBooks launches

Today Google launched its online bookstore called Google eBooks. Up until this point, the program has been referred to as Google Editions. According to an article from Wired, the e-book store will have about 2.8 million books that are no longer under copyright and were scanned through the Google Books project. The store will have another 200,000 books that have been licensed from publishers. Users will be able to read the books on Apple devices, Barnes & Noble Nooks, Sony E-readers, and computers. The books will not be accessible on the Amazon Kindle because of compatibility issues.

In addition, Google has partnered with some independent bookstores to allow them to sell e-books on their websites and share the revenue. Google also plans to add social networking features and says it has the infrastructure in place to let consumers purchase digital and paper copies in a bundle.

James Crawford, an engineer for Google eBooks, noted, “The idea is that you buy where you are and read on devices you already own. We are committed to open structure, and building up a wider and wider retailer network.”

The Google ebookstore can be found here.

e-readers expected to be a top seller this holiday season

E-readers are expected to be a popular gift this holiday season and many e-reader companies have expanded the distribution of their devices to stores like Target, Best Buy, and Walmart. In addition, Amazon, Borders, and Barnes & Noble, have come up with new ways to promote their devices on the web or in the stores.

In an article from The New York Times, Peter Hildick-Smith, president of the Codex Group, says, “This is the tipping-point season for e-readers, there’s no question. A lot more books are going to be sold in e-book format. It also means that a lot fewer people are going to be shopping in bookstores.”

Forrester Research predicts that about nine million e-readers are currently in circulation in the United States and this could increase to 10.3 million after the holidays.

As mentioned previously, according to a survey by the Consumer Electronics Association, e-readers rank fifth on the holiday wish lists of adults.

Digital Happenings

While the blog highlights many of the digital happenings affecting our industry, there is often more going on than we have a chance to cover. Here are some links to interesting articles from the past few days.

• Apple sold 4.19 million iPads last quarter bringing its total sales to almost 7.5 million since April. Interestingly, the iPad sales last quarter were greater than the sales for the entire line of Macintosh computers which also hit a record high at nearly 3.9 million units. Some analysts are now predicting that Apple will sell up to 40 million iPads next year.
• According to an article from Adage, Apple has also expanded distribution for the iPad to retailers such as Target, Walmart, Sam’s Club, and Best Buy. Previously, the iPad was available at 300 Apple stores and now it will be available at 8,000 stores across the country.
• A recent survey of students by the Associated Press and mtvU found that 57 percent of students said that life without computers and cell phones would be stressful but 25 percent said it would be a relief.
• An article from The New York Times says that Sharp is scaling back its laptop operations to focus on tablets. Sharp plans to launch 5.5-inch and 10-inch screen Android tablets in December. In addition, Sharp will launch an e-book store that will give users access to 30,000 e-books, newspapers, and magazines. A second article from MacWorld provides more information about the tablets.
• According to a TechCrunch article, Amazon says that it continues to sell more Kindle books than print books. Amazon says that it has sold more than three times as many Kindle books from January to September of this year than it did for the same nine months of 2009. Amazon also says that sales for its latest Kindle device have already surpassed total Kindle device sales from the holiday season last year (October through December 2009).
• A recent article from Publishers Weekly discusses the challenges associated with formatting e-books.

Amazon announces a lending program for Kindle e-books

According to an announcement on Amazon’s website, later this year it will introduce an e-book lending program for Kindle users. Users will be able to loan an e-book to a friend that uses a Kindle device or the Kindle app. The loan period will be for 14 days and the lender will not be able to read the book during that time. The announcement notes that publishers and rights holders will determine whether or not their titles are available for lending. Barnes & Noble has a similar lending program in place for its Nook device.

Amazon also announced that it will make Kindle newspapers and magazines available for reading on the Kindle apps. This functionality will be available for Apple devices initially and for Android devices or other apps in the future. This functionality may encourage users to stay within the Kindle app for all of their reading on various devices.