Does the e-reader need saving? If Amazon, Barnes & Noble and the like have sold plenty of units, the category is still facing some tough competition and it lacks a compelling reason to exist. Apple has fired the first shots in the consumer tablet war, but I think e-reader devices can easily survive if they avoid that fight altogether.
First, let me define what an E-Reader is, because it's actually quite simple. An e-reader is – usually – a device that uses E Ink. E Ink is actually a brand name from the E Ink Corporation, the company that invented the technology. E Ink is unlike regular TFT LCD or OLED displays. It uses a film of tiny balls that are white on one site, black on the other. When a proper charge is applied, the balls flip. It sounds simple at first, but the benefits are complex.
E Ink screens can display text and black and white images at a remarkably high contrast. When you look at an E Ink screen, it looks more like printed text on a page than a computer screen. Because the E Ink screen doesn't use lit pixels, you need to read it with some light, but that also means it looks great outdoors in bright sunlight. It also consumes less power, since the screen doesn't need a constant charge to hold its image. Once the tiny balls are flipped, they stay in place until the image needs to change. That means you can even read an E Ink screen once the power has been turned off. It also means that the screens refresh rather slowly, which makes them fine for a book where you turn pages slowly, but not suited for any sort of video or moving image.
Most of this isn't very important, except for the fact that E Ink looks like printed text. It is much easier to read an E Ink screen than a traditional computer screen. Text looks sharper and the lack of a bright backlight means your eyes won't strain as quickly.
So far, E Ink and all of the manufacturers who sell E Ink devices have done a horrible job telling this story. They brag about the wireless networking capabilities, or the Web browsing, or even the wide selection of books. But these things won't sell e-readers. There are plenty of wireless connected devices on the market that do a much better job than e-readers. An e-reader should use its wireless only to download and synchronize books, leave the Web browsing to a proper screen with a fast refresh rate. Even the book selection is not an impressive selling point. After all, I've never been at a loss for places to buy a new book, so bragging that my e-reader can download from thousands of titles is not a good selling point.
Tablets like the iPad do not make reading easier, they make it more difficult. Sure, they look cool for multimedia tasks, but if you want to sit down and read a long novel, the iPad is a horrible tool. It's big and heavy, it's difficult to hold in one hand and the screen is not well suited for books. At least, it doesn't match the quality of print on a page. It doesn't even come close. E-readers are a much more natural transition. This should be the top selling point.
Amazon is doing more harm to the e-reader market than good, and ultimately this will hurt all book sales. To compete with Apple, Amazon and Barnes & Noble are offering Kindle and Nook apps on iOS devices. Sure, this broadens their reach and helps sell more titles, but this also dilutes the value of the e-reader. This also means that the booksellers have to compete on the same device as Apple's own iBook store. Compete in terms of price and features, as well as brand recognition on a platform Apple tightly controls.
There is a better way. Through the iTunes store, Apple sells audiobooks from Audible.com, an audiobook distributor now owned by Amazon. However, through the Audible site, you can subscribe to an AudibleListener plan that gives you two Audible book credits a month for $23 (or one credit for $15). Many audio books cost more than the monthly fee for two credits from Audible, so for new releases, you can get two audiobooks from Audible for less than one book from iTunes.
E-readers need a subscription service that offers regular readers a serious value versus the current, a la carte model. Offer two books a month for $10 or so, and you'll hook crowds of avid readers. I think it's only a matter of time before some company starts offering this deal, and Amazon and Barnes & Noble, with their ongoing relationships with mainstream and independent publishers, are in the best position to make this happen.
Many electronic books are more expensive than their paper counterparts. This makes no sense to the consumer. Clearly, you're getting less from an e-book, and even saving the publisher money in production and distribution costs. As long as publishers stubbornly charge more for electronic versions, electronic reading will never take off.
While we're talking about subscription models, its also time to subsidize the e-reader. Barnes & Noble recently dropped the price of their e-reader to $150 for a Wi-Fi only version. It's time to make that device free with a contract agreement. Offer a two-year contract at $10 per month for 2 books, or a 1-year deal at $15 for 2 books. The real money is not in the hardware, it's in the lifetime customers for the content.
Right now, the biggest problem e-reader manufacturers have is telling a compelling story for their product; ironic since they are selling books, after all. The E Ink screen is difficult to understand, unless you actually see one in person and can experience the difference first hand. The books are far too expensive. It's offensive that electronic books cost more than their paper counterparts. We all know this is a scam to buttress the print publishing industry, which has been on its last legs for two decades now. Offering a less expensive subscription model that rewards frequent readers, instead of punishing them, would sell more books overall. Tying that subscription to a subsidy would no only lock in these buyers, it would bring more consumers to the table. Americans love getting a free device up front, even if it means paying a monthly fee for a couple years. Ask the cell phone companies.
If book companies can't figure out that reading should feel easy and almost free, they have ceded the game to Apple and the computer tablet makers. Then we'll be reading expensive e-books on tablets, as soon as we're finished typing an e-mail and playing a game.