The Future of e-Books
Last updated: October 25, 2011
I’m using a different format with this section than the other “chapters” on this site. I focus below on topics, and provide links to key external data sources for each topic. (This section is a work in progress.)
Market Numbers
Assessing e-book sales is a challenge primarily because Amazon, the largest U.S. reseller, doesn’t provide data (beyond sweepingly broad statements). Amazon doesn’t have to, so it doesn’t. As a result there’s a great deal of guessing and a smidgen of surmising regarding the actual success of e-books in the U.S. market (which, with the possible exception of South Korea, leads the world for e-book sales as a % of unit sales volume).
Compounding the problem is the multivariate nature of book publishing. Outsiders see just one big book publishing industry, but book publishing is a conglomerate of discrete though overlapping sectors, including children’s books, religious, educational and STM: scientific, technical and medical. Different groups define the sectors differently, with differing degrees of granularity. Education, for example, is usually broken into two sub-sectors, K-12 (kindergarten to grade 12) and Higher Education (both college and university, including technical colleges).
The most visible sector is consumer publishing, known in the business as “trade publishing.” This category includes everything from popular fiction to diet books.
Textbooks comprise a large publishing sector, yet the data suggests that e-books have had their least penetration here. The books that we keep hearing about as success stories in the e-book market, romances, mysteries, thrillers, and science fiction, between them amount to something less than 5% of the annual sales of the traditional print book market. So while these categories are indeed taking off they really are not representative of the book industry as a whole. Still they may be harbingers of a broader trend. We just can’t be certain at this point.
Stats
The International Digital Publishing Forum (IDPF) used to collect quarterly U.S. trade retail e-book sales in conjunction with the Association of American Publishers (AAP). This stopped in fall, 2010.
- The Last Data from IDPF Reveals an Unmistakable Trend
The Association of American Publishers (AAP) continued to announce e-book sales until July 2011. Then it announced, jointly with BISG, the Book Industry Study Group, the $1,795 Bookstats report ($395 for association members), published in early autumn.
Forrester offers a nifty free analysis of e-book trends in its US e-Book Forecast, 2010 to 2015.
- Forrester Sees Es in Our Future
e-Readers & Tablets
The success of e-books can be tied directly to Jeff Bezos’s fearless plan to introduce the Kindle e-reader into the market in late 2007. Anyone could have told you that it would be a flop (as I did at the time). Dedicated e-readers, a range of them, had failed before, and the first Kindle was offered at a retail price of $399. But Amazon, or rather Bezos, had a vision of where the market could go. He relentlessly pushed his vision and made it happen. Hats off to him.
Barnes & Noble is the largest U.S. competitor to Amazon for dedicated e-readers. Kobo has been a solid international player, and now with strong alliances in France and the U.K. is set to stay in the big leagues. Sony, the earliest of the current round of vendors, has fallen substantially behind its competitors. Google is an e-book vendor without dedicated hardware.
Smartphones are often discussed as significant e-reading platforms, although none of the vendors places much emphasis on these devices. Similarly personal computers are a major e-reading platform, and the key e-tailers offer dedicated reading software for the PC and the Macintosh.
Apple’s iPad has changed our perspective on the e-reader – the iPad remains one of the most remarkable product launches in the history of personal computing. Amazon is set to compete, keeping one foot solidly in e-readers and another in tablets.
While the iPad is an excellent reading device, Apple has dropped the ball in the iBookstore. Where it’s succeeding is with apps.
Apps
While apps have moved beyond the Apple iOS, and Android is providing good run for its money, when it comes to book and magazine apps the iPad is the only game in town.
At the same time the market for reading apps remains spotty. There are a few high-profile apps such as X and Y, but no evidence has been shared to suggest that anyone has made any real money from these.
HTML 5 provides much of the robust programmability that is available to IOS Developers and I feel that the wind is out of the dedicated reader apps sales. On the other hand the explosion in the reading has tapped a vast well of creativity and remains to be seen in the first quote killer unquote the reader app is launched.
Publishers
The easiest way to understand the challenges for the large traditional book publishing companies is to think about the recent history of the large traditional music companies. The story is the same. The traditional book publishers were caught off guard by the explosion in e-books and have been fighting a rear guard action for several years now.
There is no blame. In retrospect the success of e-books appears inevitable. That’s not at all how it appeared from the ground at the time. We knew it was coming. We just didn’t reckon on how far or how fast.
Like music publishers the digitization of physical books is proving mightily disruptive to the large publishers’ business model. The sales volume does not support the current infrastructure.
The Association of American Publishers in the major trade group representing “America’s premier publishers of high-quality entertainment, education, scientific and professional content – dedicating the creative, intellectual and financial investments to bring great ideas to life.” It has 300 members – the largest publisher serving trade, K-12 school, higher education as well as a Professional/Scholarly Publishing division (PSP).
Next up is the Independent Book Publishers Association serving some four thousand smaller book publishers.
In Canada, the Canadian Publishers’ Council represents the 18 largest publishers, mostly foreign owned, that “collectively account for nearly three-quarters of all domestic sales of English-language books.” The Association of Canadian Publishers is “the national collective voice
of English-language Canadian-owned book publishers”, representing 135 Canadian-owned and controlled book publishers from across the country. The Literary Press Group of Canada represents about 60 “Canadian literary book publishers”.
Christian publishers have several associations, as do other specialized publishers.
Children’s e-books
The most successful e-books are text only e-books. There best suited to today’s devices which accentuate recalling text on monochrome screens and are not well-suited to the display of beautiful color illustrations in just a few words. The iPad is an ideal children’s book device from a content perspective. It’s not the ideal device, at nearly $750, to hand to a five-year-old child.
A lot of children’s books have now been offered a simple conversion into any reader format. They don’t look very good, and they’re not selling very well. Several projects have been created specifically to take advantage of the devices.
e-Textbooks
e-Textbooks are largely a no-show despite the many titles now available. However the uptake in adoption in college and university students has been slow. On the one hand it would appear that this group of largely young and tech savvy individuals would be prime for digital textbooks. It hasn’t been the case. Here are some articles and links that examine aspects of the challenge.
Enhanced ebooks
When we talk about enhanced e-books we’re reacting more to the possibilities of the hardware than to the demands of authors and their work. Most e-books derive from already printed books; books were not written to be able to take advantage of the kind of fancy features suggested by an “enhanced e-book”. Creating enhanced e-books is going to demand a lot of creativity, which in turn demands money and development cycles. The market isn’t there yet to support the business model. Nonetheless there are some interesting explorations under way.
Formatting
I’ve considered the challenges of e-book formatting in a couple of recent blog entries and will refer you to those rather than repeating myself here.
International
The international market for e-books remains well behind the US market. There are several reasons, including slower introduction of devices and software and differing laws and customs surrounding book publishing in Europe and Asia.
O’Reilly has just released a very comprehensive report on international markets free books and I link to that below.
Self-Published ebooks
The happiest part of the e-book saga has been the success now being enjoyed by self published authors. It’s not just the big indie bestsellers, although they are certainly awe-inspiring in themselves. E-books have removed the stigma from self-publishing. Long tarnished with the label “vanity publishing”, there was hardly a bookstore in the country that would stock these titles and get behind them. The power of bookstores has waned now that files are digital and Amazon is the 800-pound gorilla. Authors can go direct. The Internet opens an array of mechanisms for self-published authors to reach out to readers directly and to offer them their books, easily and inexpensively produced, for just a few dollars.
It’s early days still, but this is the great happy making story of the e-book revolution and the possibilities at this point appear limitless.
Pricing
DVDs of films, music CDs, and printed books share a common trait. They are all physical embodiments of creative expression. Unlike a sandwich that you eat or a car that you drive, these artifacts are waystations between the creative “artist” and the interested consumer. They are experienced through sound and vision, but mostly through the interpretations of the sights and sounds, and, in the case of books, in seeing letter shapes, recognizing those as forming words, and interacting to the ideas and feeling those words engender in the reader.
Why then does xxx critical acclaimed xxx cost $x.xx while his xxx costs $xxx? Because the first is xx pages and the second is xxx pages. It was less expensive to manufacture xxx.
Pricing for creative products follows a calamitous bunch of non-rules, traditions and general mayhem. Novelty weights in for music and film more than for books: you can expect to pay extra for a newly-released film or hit CD for the first couple of months (books usually don’t hit the remainder table for a year or more after release. But then DVDs and CDs eventually do also).
Movies in theaters cost the same regardless of quality or length, until they move on to reparatory theaters. Live music concerts are priced according to what the market will bear. Most book readings are free, designed to sell books. Selling a new CD release is the main reason a band tours, but you still have to pay, and the CD will probably cost more than in the store if you buy it right after the show. Of course almost all the music stores are out of business now, because online undercut them on price and selection. And then Steve Jobs decided that a song should be 99 cents. And everyone was outrage, even though the band can make even more per song that it ever did through a record company.
E-book pricing comes from a wacky analog tradition, so, thus far it’s wacky.
There are several additional aspects to the pricing story.
1. The e-books saga demonstrates that from a consumer perspective either existing print books have been overpriced, or that that there was an enormous untapped market for reading from people who are willing to pay two or three dollars for a book around happy paying eight, 10 or more.
Most e-books offer a substantial price reduction from the corresponding hardcover or paper edition. What’s been surprising to me has been the vehemence of consumers that this should be so. Pricing is perception. There’s no point in explaining to people that the printed cost of the book was generally only 10% of cover price and that removing that does not in fact make the whole publishing process inexpensive. From their point of view what they were buying was the physical object, the artefact, and once the artefact becomes pixels, it’s not worth much more than a song, as Steve Jobs taught us that songs cost a buck.
2. E-books have also introduced into the marketplace the concept of variable pricing for the same book. Publishers are just beginning to learn the possibilities. In one scenario a book is launched at a very low price in order to get a large number of readers engaged with the book. Once engaged the publisher can raise the price as word-of-mouth reaches people who are willing to spend a few extra dollars to buy a book that they now have heard from friends is a good read.
At the same time online resellers like Amazon and Barnes & Noble are experimenting with price promotions and finding that they can create a lot of momentum behind featured titles.
3. There’s a big problem afoot in trying to hold pricing between various online resellers of e-books. If you look at just about any title you’ll find significant disparities between Amazon, Apple, and Barnes & Noble. Whether this is very important to consumers is unproven though we do have lots of proof that they are very price sensitive generally speaking. Amazon tried to force the price of the books down too far too fast, and the publishers fought back what was called the agency model whereby they are able to set a retail price that Amazon can move from. Amazon fought back against this by restricting publisher’s access to this pricing model to only the six largest publishers in New York, this story is still unfolding.
Metadata
Metadata is the canary in the coal mine when it comes to e-book marketing. It’s tacky, poorly documented and poorly implemented and publishers just aren’t getting it. Nor are online he tailors being helpful. The publishing industry gathered together some time ago to enable a robust standard, called ONIX, that can provide remarkably rich data about each e-book but the industry and resellers has not gotten fully behind the standard. I’ll be covering this issue separately in a series of blogs in the weeks and months ahead.
Software Vendors
When I refer to software vendors I’m talking about the vendors that provide the software that can be used to convert or create e-books. E-books today are very ugly, I call it simple, and the software used to create these ugly files is quite ugly in turn. I think the industry sprang up so quickly that software developers have not had a chance to respond. The same time there are not awful lot more readers than there are publishers and so the software opportunity is no arch.
There are two main types of situations that lead to the creation of an e-book. One is where an author self publishes a book, working from a Word file, or similar and trying, what with very sparse technical skills, to just get the darn thing out there. The far more common situation, certainly in terms of the number of titles, and in terms of the “important” titles, is where a file that had been created print a book is then converted, dumb down, into an e-book format.
There’s a huge disparity in the skill level of civilian authors versus the highly trained and relatively well-paid production staff of the large book publishing companies and their suppliers. So at the high-end are the traditional book pagination programs such as Adobe in design and QuarkXPress. At the low end are open source tools and a bunch of kludges. These links offer you additional information.
Service Vendors
Most book publishers no longer do their own typesetting and design in-house. They have farmed it out for some time now. Mostly it was sent to mom-and-pop shops around the US, while the very large publishers have begun to switch portion of their composition to offshore vendors in India. These Indian vendors are very skilled in publishing automation and data tagging approaches to page automation and so are ideally suited to the conversion of the book files. It’s safe to say that without these suppliers able to provide very high volumes at very good prices with the consistent level of quality the book market would not be as advanced as it is today.
History of eBooks
Some detail follows….
Old Stuff (subject to further revision)
Interestingly, the Association of American Publishers (AAP) released an entirely different set of figures. The AAP, it should be remembered, while referring to itself as “the principal trade association of the U.S. book publishing industry” represents roughly 300 of the 70,000 publishers in the U.S., although certainly the majority of the larger publishers. In a press release dated April 7, 2008, the AAP reported that (“according to preliminary estimates…e-book sales jumped 23.6%, to a still very modest $67.2 million” (while audiobook sales climbed nearly 20% to roughly $220 million). Confusingly, in a June 11, 2008 press release, the same association stated that “e-book sales…posted an increase of 35.7 percent for the year,” without releasing a sales total (other than that March 2008 sales were $4.4 million). Interestingly the same release claims that rather than a 20% increase, audiobooks suffered a 17.2% decrease.” All of this was revised again in a June 23rd release, with ebooks now posting “an increase of 36.1 percent for the year,” and audiobook sales down 13%. Do they mean year-to-date? It’s unclear. This association may be in need of a new statistician.
Lots of folks from the school of “how dare they say that print will die” became adherents of the sub-class of “they dared to say that print will die, but look what happened to eBooks!” I heard it said many (too many) times. The theory wasn’t very complex or profound. Basically it said only that as eBooks were clearly a part of the electronic publishing revolution (which, by some mystical connection has been associated with the concept of “print is dead”) and as eBooks had (thus far) failed commercially, then the (purported) purveyors of the “print is dead” theorem were way off base.
I never looked at it that way. In the first place, I’d never been a fan of eBooks, not of the broad concept, and certainly not of the dedicated eBook devices. Most of them were priced in the $300-$500 range, while offering very little functionality beyond the average notebook computer. So they made even less sense when notebook computers themselves could be bought as cheaply as a less than a thousand dollars, and notebooks weren’t all that heavier or more ungainly than the eBook readers. But most of all, it was clear that the paperback book had been, and continued to be, a very fine invention, the best to date for pouring over hundreds of pages of mostly pure (non-illustrated) text.
Nonetheless, back in the millennial year 2000 I purchased my first Compaq iPaq. Although the color screen measured only 2.25 by 3.00 inches, it was a revelation in its ability to display text and graphics. I found that it was perfect for reading plain text newsletters, and that year sat on a train across France and Germany catching up on my office reading.
But these devices, particularly in the years since 2000, can now display a wide variety of media, even movies, which is why I prefer to think of the category as eContent. While markets and usage for books (and other verbally-oriented content) differ widely than the market specifics for old TV shows on iPods, the portability of the content is perhaps its most salient feature.
As always in the current technology revolution we stumble a little when some piece of hardware appears to be inextricably linked to a certain piece of software functionality. Should we focus on the hardware, the software, or both?
eContent can be defined simply: the presentation of text and images, in two or more dimensions. The devices used are an important consideration, but do not overtake the basic idea of eContent, or its conceptual functionality.
So what about ePaper? It’s hardware medium (although usually not very hard). And it can display a broad range of media. But I think that in the case of ePaper, the medium is at least as important as the content. There are many things that can only done on the specific “hardware” medium of ePaper that cannot practically or economically be performed on other electronic media. For this reason I’m resisting the temptation to toss ePaper into eContent. I address it in a separate section.
In the meantime, eContent is a nascent yet terrifically important part of the electronic publishing revolution.
eBooks Return (again)
The Sony eBook Reader
In an October 27, 2008 entry on Dave Mainwaring’s Publishers’ SIG at http://www.printplanet.com/, someone named Chet Ensign wrote: “I have just read the press release at http://www.adobe.com/aboutadobe/pressroom/pressreleases/200610/102406DigitalEditions.html for Adobe’s beta release of Digital Editions. It is an eBook reader that uses PDF, XHTML, and Flash and includes digital rights management support, subscriptions, ads, etc.
He continues: “I have not seen anything like a groundswell of excitement in publishing around eBooks so I don’t see this as a major development. In a review on ZDNet, Ryan Stewart wrote: “Users have been slow to take to eReader solutions, but I think technologies like the New York Times reader and Digital Editions are going to change that.” I don’t agree. I think people are not adopting ereaders because they add nothing new; they still just move print to the screen – where I personally just turn around and reprint so that I can read it in print.
“What do others think? Is there more excitement around eBooks than I have been seeing?”
I wonder the same thing…
Somehow I think iPod when I read in Adobe PR of the new software:
“With native support for Adobe Portable Document Format (PDF) as well as an XHTML-based reflow-centric publication format, Digital Editions delivers an engaging way to acquire, read, and manage content, including eBooks, digital magazines, digital newspapers and other digital publications. Initially available as a free public beta for Windows, Digital Editions will support Macintosh systems as a universal binary application, Linux platforms, as well as mobile phones and other embedded devices in future versions.”
(Check out Adobe Digital Editions, [now in a 1.5 version].You’ll also find a link to a dozen or so free samples.)
Somehow I also think about pending competition between Adobe and Microsoft on file formats, the long rumored battle of the PDF versus the XPS (although Wikipedia informs us: “XPS is viewed as a potential competitor to Adobe’s portable document format (PDF). XPS, however, is a static document format that does not include dynamic capabilities similar to those of PDF.”)
When I was first looking into this a few month’s back I wrote: “Microsoft doesn’t seem too hot on eBooks right now. Microsoft Reader was last updated in November, 2002 (the Tablet edition), although I was surprised to find today on the Microsoft website: “Microsoft Reader Catalog of eBooks: search over 30000 free and retail ebooks, with direct links to downloading free content and samples: www.mslit.com/default.asp?mjr=FRE.” However, looking more closely at the site, one finds that most of the eBooks are for sale, not free at all.
Now I see that Microsoft has been quietly updating its Reader program. Perhaps it’s just a site update. The version of Reader I installed a few month’s ago is 2.1.1.3143, dated © 2000. I install the version available today and find it’s exactly the same one, © 2000, although the download page claims “Updated: May 19, 2005.” Nope, I guess that Microsoft is not too hot on eBooks right now.
The Electronic Text Center at the University of Virginia Library does offer 2100 free eBooks (old titles, out of copyright – http://etext.lib.virginia.edu/ebooks/)
Still, it turns out I hadn’t bothered installing Reader on my current 6-month-old computer – I’m doing it now – to find out if I get any more pleasure out of reading Dickens’ Tale of Two Cities on a computer now than I did (not) four years ago (http://etext.lib.virginia.edu/ebooks/lit/DicTale.lit).
As my friend Crad Kilodney once wrote in a short story, sadly now out of print: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way – in short, it was a Monday.”
References
1. Of course there are some good eBook websites and blogs, in this case:
Teleread: Bring the E-Books Home: News & views on e-books, libraries, publishing and related topics. An active and up-to-date blog and reference site.
MobileRead: A comprehensive site with some very active forums
eBookGuru.org: The Digital Magazine Devoted to eBooks. Looks new to me, but trying to be very comprehensive.
And a little more specifically: iReaderReview.com “which covers Kindle 2, Kindle 3, Kindle DX and the forthcoming Apple iReader and Plastic Logic eReader.” (First I’d heard of the “Apple iReader” other than rumors.)
2. An interesting sidelight (more pertinent to book publishing in general) is found at “A Long Bet: The Arena for Accountable Predictions.” Famed editor, Jason Epstein, now one of the founders of On Demand Books, which markets the Espresso Book Machine, has bet $2,000 against Vint Cerf, famous for his work on making the Internet what it is today. The bet: “By 2010, more than 50 percent of books sold worldwide will be printed on demand at the point of sale in the form of library-quality paperbacks.” Predictably, Epstein, who has a personal stake in the proposition, states that “nothing is as inexpensive, easy to carry around, and indestructible as a physical book.” Cerf, perhaps equally predictably, argues that “carrying around a bunch of paper is unnecessary and despite the argument that a book doesn’t need a battery or a re-charge, I believe that it will be very common for people to read for work and for pleasure with the same device(s) they use daily to do their work.”
3. Wikipedia offers a list of eBook readers, those currently available, and also those demised. The list provides links to additional data on most of the readers mentioned.
4. Easily eclipsing Sony’s $279 Portable Reader System, the “hot” eBook reader today is Amazon’s Kindle, priced at $399. Amazon has generated an enormous amount of publicity surrounding this device (including a cover story in Newsweek, ostentatiously titled, “The Future of Reading”). While never revealing actual sales figures, Amazon was able to claim that the device sold out within a week or two of its first release last fall. Many are skeptical of Amazon’s Kindle hype. An April 4th blog on CNET by Don Reisinger, titled “Why e-book readers don’t stand a chance,” notes, among other issues, Amazon’s failure to reveal sales numbers. “…no one is willing to say how strong sales are and so far, the tiny e-book market is still extremely small,” he notes. My April 29th blog entry, “No Snacking Between Books Please!” discusses the Kindle “controversy” in more detail.
5. I finally found an article that takes a stab at estimating how many Kindles flew out of Amazon’s warehouse in 5½ hours: 4,000! I didn’t expect the figure to be any higher. A May 15, 2008 blog by Henry Blodget reviews the recent claims of Kindle’s “born-again” champion amongst industry analysts: CitiGroup’s Mark Mahaney. Blodget reports Mahaney’s claim of current sales of 10,000-30,000, while referencing Richard McRoskey’s May 7, 2008 blog on Silicon Valley Insider, where he calculates, somewhat circuitously that “by our count…we’re looking at least 660,000 Kindles by end of 2008. Not shabby for a $399 gadget not made by Apple.” Mahaney keep working the math, finally to announce that Kindle could add $750 million to Amazon’s top line by 2010. This prompts John Paczkowski on AllThingsDigital to label Mahaney as “an honor student at (the) Strained Credibility Academy.”
6. The reactions of reviewers and users do tend toward evangelical fervour, and modest disdain. A Globe & Mail review of the Sony Reader PRS-505 by Jack Kapica is typical of the tepid views of many reviewers. While expressing some enthusiasm for the design, small size and so on, he writes, “but it still doesn’t supersede or even match the experience of reading a traditional book. In fact, it can be argued that technologically, the PRS 505 and all digital readers are still far behind the technology that has been stuffed into books made from paper since Gutenberg turned the crank on his press in 1454. Although Gutenberg never used semiconductors, an awful lot of very real technology has been poured into books during the half-millennium before the digital revolution.”
7. Project Gutenberg
Whatever else I may think about eBooks I feel proud of the hardworking volunteers at Project Gutenberg. Michael Hart, founder of Project Gutenberg, is said to have invented eBooks in 1971 (ASCII text only). Today the Project features over 25,000 free books, with 3 million eBooks downloaded each month. Despite all of my skepticism of eBooks, there’s at least an audience for free ones. You can explore the project more fully here.
8. A recent publication (in book form!) called “Print is Dead: Books in Our Digital Age,” by Jeff Gomez, has a few chapters online, including one which covers eBooks. We seem to see eye-to-eye on the subject. Among his interesting observations:
“In the 1979 film Apocalypse Now, when Martin Sheen’s character is watching his fellow soldiers enjoying a Texas-style barbeque in the middle of a jungle in Vietnam, he thinks to himself, ‘The more they tried to make it just like home, the more they made everybody miss it.’ The same might apply to all of the eBook devices and formats that try to simply mimic the appearance and functionality of a printed book; the more they aim to resemble print, the more people will compare it to a book. And when eBooks contain no searches or hyperlinks, as Blake Wilson points out on Slate, ‘ironically, it’s significantly easier to find information in a paper book than in its digital equivalent.’”