Saturday, February 6, 2010

State of the eBook

It's been a tumultuous month for the ebook and it's only the sixth of February.  The fracas between Amazon and Macmillan is settling while the Googlebooks lawsuits are heating back up with the Author's Guild finally getting out there and trying to explain why they settled in they first place.  (Essentially they were trying to not become the RIAA.
The ripples of this thing continue to spread and the book industry is just trying to surf the wave... but really, why do we care?

Warning: If you've an aversion to statistics, you might want to find another post to read.
They get 90% of the press and actually represent just one or two percent of the actual sales. e-Books are the Prius of the publishing industry.  Nevertheless, the 2009 Consumer Electronics Show was the debutante of more and yet more e-Book Readers.  The Plastic Logic Que, the HP Tablet and the Blio (among many others) were all rushed to the podium to get out there ahead of the much anticipated advent of the Apple iPad.

If you think about it, this was probably the first time since Gutenberg started printing his Bibles that book technologies were discussed on this scale.  Certainly no futurists of the 1950's would have predicted that a new way of delivering books to readers would trump coverage of the introduction of 3D Television!
So, are we really seeing publishing turn a new page in the long journey that began with Cuneiform stamped into terra cotta tablets?  Will electronic readers like the Kindle do to paper books what Gutenberg's press did to the medieval scriptorium or more recently what CD's did to LP's?
It's impossible to say without doing a little bit of math.  

In spite of the hype, adoption of e-Books has been slow.  In 2008, e-Books accounted for an estimated 0.46% of total book sales, up 68% from the previous year (APP statistics).  Exact 2009 statistics aren't available yet, but the publishers are generally agreeing that it's risen to 1% of total sales.  While that's impressive growth in an industry that only grew on the whole by about 2.5%.  The long and the short of it is that unless something groundbreaking happens and all hell breaks loose, at the current rate of growth, we're probably looking at about 2016 before they equal the current sales of audio books.
That's not a tsunami, that's just the tide coming in.  e-Books certainly aren't going away, but without some sort of unforeseen intervention in the market to drive more readers into the arms of the e-Readers, the physical book will be with us for some time to come.  So don't go tearing out those pretty bookshelves in your living room just yet.

I see three main challenges to the e-Reader market before it can truly come into its own...
  • Standardization: At present, there is no standard format that can be effortlessly transported from one reader to the next.  Even ePub, which is quickly rising in favor, has problem jumping from one reader that uses it to another due to some of the DRM problems.
  • DRM: More authors have been helped than have ever been harmed by the secondary market in used books.  Trading, loaning, and sharing literature is ingrained into literary culture and readers have been significantly less inclined to accept that they won't own their books and be able to give them to friends or resell them.  The Barnes & Noble "Nook's" loan feature is a step in the right direction, but not a solution.
  • Pricing/Valuation: The Macmillan/Amazon battle is just the tip of the iceberg. The publishing industry is only this past week finally taking steps to preserve the valuation of books.  It's a simple fact that printing and distribution of a physical book only accounts for (at most) 20% of the cover price.  Establishing the idea that a standard price of $9.99 or less for e-Books in no way reflects the reality of production.  The inclination of people to view digital content as essentially free will take a long time to reverse.
As I've said before, we have to get away from the idea that what we see now is necessarily any indication of what will be reality in ten years.  I don't think you could have looked at the early output of Gutenberg's presses (Bibles, indulgences and religious tracts) and seen an accurate view of what would be happening once writers stopped playing with the new toy and really started to create.
I'm reading a book by literary agent Donald Maas called Writing the Breakout Novel (which I will be reviewing here in the next week or so as past of the Backlist Book Review series).  In the first chapters he gives a sort of a summary of the "State of the Industry circa 2000" (when he wrote the book).  It's interesting and I'd like to see it updated, but there is a lot there that we need to remember.  Maas has the reputation of being the agent's agent and much of what he's saying came to pass and much is still in the works.   He's especially skeptical of the predictions that were being bandied about back then of the impending ebook revolution and that "in five years print books will be finished".  It's 2010 and we're still waiting.
He is especially skeptical of the writer's fantasy that the electronic book will somehow make the publishers disappear or that such an event is even desirable.  I refer you back to  John Scalzi's play for why I think that operating without a publisher is not the panacea that many want you to believe it would be.    Check it out at Scalzi's blog "Whatever".

Verso Advertising recently compiled data gathered from 110 million internet users across 5,100 websites to compile a broad-spectrum look at the book market as it was in 2009.  There's a definite marketing slant to this information insomuch as the data is used to underline the need for publishers to advertise in order to sell books.  

The e-Book data is a mixed-bag, mostly anticipating several proposed e-Book strategies such as pricing adjustments above the $10 benchmark that Kindle used to adhere to (back in the old days) and whether they would pay a premium for a hard copy if it came 'bundled' with an electronic version.  Most interesting to me was that 29% of e-Reader afficionados admitted to downloading pirate e-Books with 8% unsure.  (Which in this case I think translates to "I don't really want to answer this question because I have enough of a conscience to feel guilty about it").  45.9% of males age 18-34 admitted to slapping the skull & crossbones sticker onto their e-Readers!

Overall, Verso concludes that a 10-12% market portion for e-Books is theoretically achievable in two years, but no promises as there is no visible tipping-point event on the horizon.  With echoes of presidential elections ringing in our ears, we are forced to conclude that the revolution still isn't here and once again the undecideds hold all the cards.

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Pages to Type is a blog about books, writing and literary culture (with the occasional digression into coffee and the care and feeding of giant robots).