Are-Books Business Model Presentation

1. ARE-Books
Fusing Augmented Reality with E-Books
Acton H. Gorton
Fei Ji
Kinyetta Nance

2. Augmented Reality (AR) is a variation of Virtual Environments
(VE), or Virtual Reality as it is more commonly called.
While immersed in VE, the user cannot see the real world.
AR allows the user to see the real world with virtual
objects superimposed upon or composited with the real world.
AR supplements reality, rather than completely replacing it.
Virtual and real objects coexist in the same space, similar
to the effects achieved in the film "Who Framed Roger Rabbit?"
What is Augmented Reality?

4. Some Past Challenges
Registration: Objects in the real and virtual worlds must be
properly aligned with respect to each other, or the illusion that
the two worlds coexist will be compromised.
Sensing: Accurate registration and positioning of virtual
objects in the real environment requires accurate sensors.

5. What Are E-Books?

6. Where to get E-Books

7. Where is E-Book
innovation taking us?

9. What are we doing different?
● Fusing AR technology with E-Book technology to
create a new innovation called "ARE-Books"
● Enrich traditional means of storytelling methods with
new ways of drawing the reader into the story.
● Turn the space around you into elements from the
story.
● Scan your face to become the hero - or the villain - of
the story.

10. Lemme see!

11. Scan your face into Harry
Potter's character and get
dressed up in Hogwart's
finest!
Lots of different designs, blend
text with pictures, embed live
camera feeds, scan imagery
and create your own story!

12. Great idea, but what
challenges lie ahead?
● Technology is coming to fruition, new opportunities for innovation
● Competition is currently on a level playing field
● Lots of E-Book and AR ideas, but no real dominant design
● Our advantage is in strategy, not opreational
● Which strategy to use? Why? What are the advantages/disadvantages?
● How can we block from competition following behind us?
● What need are we filling? What sets us apart?
● How do we understand the value of our product?
● How do we encourage rapid iteration to stay ahead?

13. First mover advantage puts us out front
Dominant Design
The field is currently wide open.
There are various platforms as each software engineer remakes
AR to suit their vision, each with pros and cons, but none appear
to be truly adoptable into the mainstream.
The dominant design will be the first version to meet
expectations.
Balancing several technologies into a well packaged innovation.

14. What will the Dominant
Design look like?
We don't know yet.
But, we have some ideas on
how to encourage it.

15. Control Distribution Channels
Obtain Exclusive Content
Creating Alliances
Discourage Competition
Create high barriers of entry and force a high stakes
environment
Align with groups such as Amazon and Apple for distribution
Align with content publishers to obtain culturally popular material

16. Strategic Advantages
● Control quality by exclusive deals with popular icons
● Control licensing to ensure the creation of high quality
and original content
● Have an integrated store to buy and download fresh
content
● Require license agreement - this has a tertiary effect of
increasing our profitability.
● Alignments help keep the relationship close to our
suppliers, building a network of trust and support.

17. Two birds with one stone...
Rapid Innovation
● Allow users to experiment and create their own stories
● Share their stories with others in a separate section of
our store.
● This provides us with organically generated feedback
from our users to see where their interests exist.
● Use their content to implement the best of new features.

18. Consumer Adoption
● Appeal to children through entertainment by choosing
popular icons.
o Create the modern Cabbage Patch Kid, Nintendo, Tickle Me Elmo
Visual and interactive stories are appealing to young audiences
with varying levels of reading proficiency and an all
encompassing interest in shiny things.
o Educational opportunities?
● Younger populations tend to be more willing to try new
things and are less afraid of learning how to use new
innovations when they are fun.
o Another entry point for tapping a growth market, creating visionaries
and early adopters to entice older generations.

19. Network Effects
● We can build hybrid models by using text recognition tools.
● For existing ebooks to create visual mash ups, which can in
turn be edited by our users to enrich the story.
● We can alleviate many IP and copyright concerns using
alignments with popular content publishers,, but we will
need a plan for user created content.
● Product experience benefits from wide adoption, but does
not depend on wide adoption for a better experience.

20. Disruptive Innovation?
Sustaining Innovation?
AR-ebook is disruptive in terms of its:
● Immaturity but with new benefit
● Lack of attraction to mainstream customers
initially
● Different value proposition

21. Crossing the chasm
● Identifying the early adopter and early
majority
● Cross the chasm
a. Target a specific customer segment
a. Make a whole product

22. Strategy Formulation
Porter's Five Forces Model
● Threat of new entrants
● Industry Rivalry
● Bargaining Power of Customers
● Bargaining Power of Suppliers
● Threat of substitute products or services

23. Value Proposition
"There is no such thing as an interactive book.
Any attempt to digitally enhance a book makes
it not a book. It makes it a video or a game."
-Atomic Antelope
● Interactive Educational Experience for Children
● Video Game Experience
● Low Price Point Ebook

24. New Spin on an Old Concept

25. Target Market
● Large Discretionary Income
● Influence Over Parental Purchasing
o They shape buying patterns of family: food, car,
vacations, etc.
● Huge Buying Power
o 4-12 yr olds spent over $30 billion in 2002
o 12-17 yr olds spent over 112.5 billion in 2003

26. Lead Users
● Techies
● Bloggers
● Journalists
● Children Librarians
● Educational Gaming Researchers
With the use of social media: blogs, discussion forums, social networking sites,
video sharing, social bookmarking, social Q&A, social search, niche communities,
etc. it will be relatively easy to find lead users for this technology.
Lead Users Generate:
● Critique
● Opportunities for Innovation
● Need for the product

27. Value Chain
● Operations
o Creating a superior product
● Outbound Logistics
o Amazon Kindle Store
o Barnes and Noble Nook Store
o Apple Store
● Marketing & Sales
o Advertising on Online Games
o Television Ads on Child Networks
o Branded ARE-Books Characters
● Support Activities
o R&D
 Lead User Innovation

28. Revenue Generation
● Free App
● Ebook Sales
o Between $2.99-$8.99
● ARE-Store Licensing Agreements
o Through dominant design encourage users to
develop their own books and sale them in the ARE-
Store
o Encourage developers to create ebook titles for the
store
o Sale of complementary goods
 Physical Books
 Dvds

29. Value Network
Competitors
● Ebook Retailers: Amazon, Barnes and
Noble, Apple
● Publishers of popular kid books, cartoons,
comics, etc.
● Companies already using AR technology
o Google Glasses
Complementors
● Ebook Retailers
o Distribution
● Publishers
o Gutenberg Project

30. Competitive Strategy
● First Mover Advantage
o Not a lot of people doing AR for ebooks
● Establishment of a Dominant Design
o Superior Product
● Lock in Complementary Assets
o Distribution
o Publishing
 Licensing agreements for popular kid
brands
● Dora the Explorer
● Sid the Science Kid
● Backyardigans
o Public Domain Books
 Derivative Works
● ARE-Books branded characters