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The new generation of e-book reading gadgets will transform the troubled book, magazine, and newspaper industries. But it's uncertain what that transformation will look like.
For serious readers, products like Amazon's Kindle 2, Barnes and Noble's Nook, and Sony's Daily Edition are a godsend. It's not just that these electronic reading devices are handy portals to hundreds of thousands of trade books, textbooks, public-domain works, and best-sellers, all of which can be wirelessly downloaded at a moment's notice, and to scores of magazines and newspapers, which show up on subscribers' devices automatically. They're also giving adventurous authors and publishers new ways to organize and market their creations. A California startup called Vook, for example, has begun to package cookbooks, workout manuals, and even novels with illustrative video clips, and it's selling these hybrids of video and text to iPhone, iPad, and iPod Touch owners through Apple's iTunes Store.
Unfortunately, you can't get away with charging hardcover prices for an e-book, which makes it hard to see how traditional publishers will profit in a future that's largely digital. As a result, book publishers are facing a painful and tumultuous time as they attempt to adapt to the emerging e-book technologies. The Kindle, the iPad, and their ilk will force upon print-centric publishers what the Internet, file sharing, and the iPod forced upon the CD-centric music conglomerates starting around 1999--namely, waves of cost cutting and a search for new business models.
Publishers are lucky in one way: the reckoning could have come much sooner. From 1999 to 2001, I worked for NuvoMedia, a Silicon Valley startup that developed a device called the Rocket eBook. The Rocket and its main rival at the time, the Softbook Reader from Softbook Press, prefigured the current generation of e-book devices. Owners could shop for books from major publishers online, download the publications to their PCs, and then transfer them to the portable devices, which had monochrome LCD screens that showed one page of text at a time.
But three factors conspired to kill these first-generation e-readers. First, book publishers, fearing that digital sales would cannibalize print sales, offered only a limited catalogue of books in electronic form and charged nearly as much for Rocket and Softbook editions as they did for hardcovers. Not surprisingly, consumers demurred, which in turn discouraged publishers from offering more titles digitally. Second, the technology wasn't quite ready for mass adoption. The devices weren't small or thin enough to be truly portable, and the book-buying process was convoluted. Third, NuvoMedia and Softbook Press were acquired and then combined by a larger company, Gemstar, that was distracted by other issues and let its new e-book division languish, eventually closing it down.
Business conditions are very different today. For one thing, there are more big players with an interest in seeing the e-book business blossom, including Sony, Amazon, Barnes and Noble, and now Apple. Using their pull with publishers, these companies have assembled huge catalogues of e-books--Amazon has nearly half a million commercial titles--and they've kept prices lower, in the $10-to-$15 range for new trade books.
Just as important, mobile computing technology has improved drastically. Cheap 3G data access is the biggest advance. Now that readers can browse, purchase, and download e-books and periodicals directly on their devices, they can access new material almost instantaneously, without having to be near a desktop or laptop computer with an Internet connection. Having owned a Kindle 2 since May 2009, I can testify to the allure of this feature: I've bought a couple of dozen more e-books for my Kindle than I would ever have ordered from Amazon in print form in the same period.
Today's wireless e-reading devices fall into two groups, each with its strong points. The "electronic ink" devices all use black-and-white electrophoretic displays manufactured by Prime View International. (The Taiwanese display maker acquired the company that developed the technology, MIT spinoff E Ink, in 2009.) The $259 Kindle 2 is the best-known of these products, but Barnes and Noble's identically priced Nook and the $400 Sony Reader Daily Edition offer similar functions. The Kindle DX ($489) and the forthcoming Plastic Logic Que proReader (expected this summer, starting at $649) have larger screens and are intended mainly for reading textbooks and business documents. The Prime View screens on these devices depend on reflected ambient light, which gives them two advantages: they're easier on the eyes than backlit LCD screens, and they use far less power. Their batteries can last for days, and sometimes weeks, between charges.
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Overall readership will decline, but the real readers will be more valuable customers.
I don't know about others, but if I really want to read a book, I don't fret over whether it costs $10 or $20. Such price difference is irrelevant for those who want to get a book.
The real benefit of e-readers is that they pack many books. So, you don't have to log around a stash of physical books.
My 2 cents about readership is that the overall numbers will decline.
In the old days, people had to read simply because there were no other channels of communication.
But in the age of ubiquitous video, people can stay relatively informed without reading.
On the other hand, the remaining readers will be more valuable customers. Advertising costs will go down, and revenues (per customer) will go up, because publishers will "preach to the choir".
bloggers have proclaimed that instant printing, internet publishing, etc will drastically reduce the cost of books.
The problem with that is that the printing industry has long taken advantage of outsourced printing for the lowest possible cost.
Much of the cost of many books is the work by the people involved, collaboration, groups of people to check facts, artwork, animations, etc.
This real hard work can't be easily replaced with a Poof puff of greasy orange smoke by the 'blogging cr*p fairy'.
There was a very informative article comparing the relative costs of tradational vs. electronic publishing in the NY Times a few weeks ago. It had a table of costs that I can't insert here, but you can find the orginal article at http://tinyurl.com/yyg2hfb
Math of Publishing Meets the E-Book
By MOTOKO RICH
Published: February 28, 2010
"In the emerging world of e-books, many consumers assume it is only logical that publishers are saving vast amounts by not having to print or distribute paper books, leaving room to pass along those savings to their customers."
I read that NYTimes article when it first ran and just now re-read it on your recommendation. I sincerely mean no offense, but I think the article was taken from stuff written 10 or 15 years ago by recording industry executives -- and the math in the article is what I call "funny." For example, it may take "the publisher . . . about 50 cents to convert the text [of a book] to a digital file, typeset it in digital form and copy-edit it." What the article does not say about this is that process happens only once, for the first book in an edition, not for every single book. And I also mistrust that number because any particular book was already in digital format when the publisher got it! I just can't trust the funny math guys. The Times should have had David Pogue review that piece.
Regardless, I think the Amazon $9.99 price, if maintained, just might suppress wide scale piracy of e-books for a time -- and I think publishers would make money on volume at that price -- if they change their business model rather than attempt to maintain the status quo as the recording industry did.
Doesn't anybody in publishing "get" what happened to the recording industry? Digital books are the same as CDs! This sounds like some trite "B" movie, but change is coming and "resistance is futile."
Ha Ha! 'books are like the music industry'. Maybe the authors can make up for lost revenue they don't get by 'going on tour' like concerts. (I've never seen a books signing where they charge $50 a ticket for admission)
The main difference is that any serious book (not fiction) that you can't just get a few people together and 'jam' for a few hours and have a book.
Collaboration and research can take months, years of many people working together. So if e-books are going to be stolen, then publishers will resist putting them in digital format. Since the printing cost of the book is not the main cost on this type of book, they DON'T have alot of loose flab to cut. They don't get the excess money per hour that let rock stars blow their profits up their nose.
Probably the only way they will allow this is under controlled conditions like netlibrary, which lets me read advanced technical texts on many topics via the web. (and the ebooks CAN be downloaded and checked out). or books24x7.com for computer and finance books which allows download to an ereader.
Digital Ink tools should be embraced by ISO 14000 as a means to reduce CO2 by taking into account that forests are planted for pulp materials, processed (and recycled) just so we can read our daily papers and books. The tree's - if allowed to grow, will suck up more carbon dioxide.
Digital readers can use content delivered by the web, read PDF's delvered by for schools and college) and the fact you don't need a driver to deliver it to you saves fuel too.
the film "2001" depicted a remarkable predecessor to the iPad except the astronauts used it to watch BBC broadcasts. The culture depicted was consonant with McClune's "cool" media of television,which mirrored Kubrick's view of a banal and cool future. Reading a book on the iPad is reinventing a cool medium, which would make more sense as a seminetwork television cultural medium than as an excitable techgeek web-iPod user one. In the end TV and Ipad will merge and become the medium of slow talkers and relaxed minds, leaving twitter and iPod to the hyperactive.
Learning from the music business
If the music business is worthwhile as a guide for books, then I foresee a proliferation of authors and genres, with each one gaining a smaller market share. That's what has happened in music over the last 30 years. Musicians (and producers, and recording companies) are still making lots of money. But they are all making it in smaller chunks, and often increasing their profit by taking on multiple roles (made possible by new technologies). For example, many musicians nowadays are their own producers. Some of them also market themselves, and sell their own stuff, over the web. I'm already seeing some authors do this. As the stigma of self-publishing disappears, we will see just how talented our population truly is. However, one big difference from music is that songs can be enjoyed or hated in only 5 minutes. Most people won't want to take many hours to read a novel that doesn't have the imprimatur of some authority, giving them some assurance of quality. I predict publishing houses will remain strong institutions, but will transform into "trusted distributors," sort of like scientific journals. The pre-screening will all be done by semi-volunteer reviewers, and the editors will only work with books that get good initial reviews. The reviewers will be compensated in three ways: 1) reading books for free before anyone else, 2) acknowledgement in books they recommend for publication, and 3) "reward points" good for ebook purchases. Actually, come to think of it, I've already done that myself, with a technical book publisher, so the business model is already being implemented in "geeksville" for normal hard-copy books. Ebooks will drive this business model into the mainstream of publishing. For a glimpse of the future, see the volunteer reviews at Amazon and Barnes & Noble, and also notice how they tell you about new titles that are "similar" to what you've bought before.
Although short, this is one of the more insightful articles on this subject I have read.
In reading the comments, and particularly the references to the NYT article, I believe the attached graphic says it all.
For this re-hash I am rounding to nearest quarter.
Hardcover – publisher profit before overhead = $4
E-book price $13 – publisher profit before overhead = $4.50 to $5.50
E-book price $10 – publisher profit before overhead = $3.50 to $4.25
So, compared to the hardcover model, the publishers are making more with the $13 price, and very close to or more than the hardcover model with the $10 price.
And this is only considering the hardcover model. Now, what is the price going to be when the book would have hit trade paperback? Are we going to see a reduction to $5? I suspect that this aspect of the publishing will be conveniently left behind
We should remember the publisher is not our enemy, quite the contrary they have people that know the field that books are going into, can provide guidance, sources, professional graphics.
While we dont like paying for anything these days i feel people would do better to reduce the tax they pay everyday because (e.g) the transport industry has to spend its budget or get a lower one the following year.
How many people have woken up to find another round-about or lights , or a round-about with lights on a road just for the hell of it. If people cant drive on the road, or merge into other traffic it is them that needs to be removed. Driving is a dangerous business and people have a choice to not drive...to try and baby proof every road is frankly an insane idea thought of by ministers.
So we pay higher taxes every year.... Processes like this is where people should be putting there brain-power. Firstly you can write to them and say your a bunch of Americanized idiots.
Secondly you can refuse to pay taxes like some people do, frankly id say you are helping them..You have to be cruel to be kind.
Publishers as a species are extint
There is no place for publishers in the future for print and other media. I envision markets like the Google Market where anybody can post their book or articles. Then the market based on a system of stars and reviews provide information about the work and that in turns grows or reduces the authors success.
And just like the Google market, the content will be divided into public domain, free content and paid content.
Now the people that will make the money, as we have learned from eBay and PayPal in the past, is the people that create and maintain that market. So, Amazon, Google, and Apple presumably will be the future publishers. I don't see a roll for the current publishers in the future, they will wind down as the new generation of content creators move directly into a market instead of looking for the third person in the middle
From personal experience, I think these eReaders are very useful to working scientists, scholars, lawyers and many other people who have to work with multiple articles.
By that I mean, I am reading several papers at the moment and need to refer to different ones among this set from time to time. Currently, I have printed these physics articles and carry them around with me in a manila folder.
It would be nice to be able to have these papers (and many others and many more) within a light-weight eReader so that I could carry them around more conveniently.
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mwilson1962
35 Comments
You would think the publishing industry would have realized something like the Kindle would come along. Industry after industry has been caught flat-footed by digital evolution.
I agree that newspapers and magazines could have a new life in digital and make money by offering beautiful design and professional writing and editing.
I think books may be different. It is much easier to self-publish today than ever before, and that ability will only improve. But, book publishers still offer professional editing, art departments, and marketing, and I'm not sure how a self-published author would obtain those services and make money on a book. Some interesting opportunities...
Do you think publishers will really lose money at $9.99? I don't know what percentage of a book's price is due to materials, printing and shipping, but I assume it is significant. If those factors are reduced or eliminated through digital publishing, how do the publishers lose money?
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rttedrow
63 Comments
Re: Going Out of Print
I think you're absolutely right, mwilson1962, but only IF publishers evolve their business model, gradually deemphasizing hard copies, reducing costs and moving toward e-publishing at lower costs, i.e., the Amazon $9.99 goal. Then, as you and I do, more books will be purchased and volumes as well as profits will rise.
Now, however, publishers, led by the large house MacMillan, are forcing Amazon to depart from it's $9.99 Kindle book pricing goal and charge substantially higher e-book prices -- prices that are only lightly less than the discounted hard bound copy prices of major retailers. In other words [in my view, anyway] these publishers are rushing blindly [don't they read??] down the same path as did the recording industry, battling to maintain an outmoded business model. The result -- piracy -- will be devastating to agents, publishers and, worse, authors.
To test this theory I used a couple of lesser-known search engines to scan for the names of a few prominent writers of popular fiction. The result? I found hundreds of digital texts from each of these authors in various formats, including Amazon's proprietary Kindle format. In this digital internet age some of this is to be expected. But, as with CD's, stubbornly attempting to maintain an outmoded, high-priced product/business model for a digital product will turn what is now a rivulet of e-books into a vast torrent.
As for whether there is room to fairly compensate authors in, for example, Amazon's $9.99 Kindle pricing goal, I believe that answer is yes. I have read that John Grisham receives something on the order of $4.50 for every new hardbound book sold. Without loading up a digital book price with hardbound production and distribution costs, there's plenty of room for $4.50 in the Amazon $9.99 Kindle price.
I know, I know, Mr. Publisher, I just don't understand......but whether or not I do does not matter.
A final thought: When Amazon brought the Kindle to market and I finally was able to get one, the experience led me to think that Amazon was, in fact, going to be entering the publishing business. I didn't realize at the time that they would have so much help from publishers.
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