Monday, November 1st, 2010

Feedback loops in eBook success

“How big will ebooks get?” A lot hangs on that question. Right now ebooks represent perhaps 7% of the total book market. A world where they rise to 20% or 25% and stop rising differs substantially from one where they rise to 50%, 70% or 90%.

Without arguing the point, I see a 20% market as one in which bookstores continue to survive in significant numbers, publishers continue to have an important role in the book world, and public libraries mostly carry on as usual. At some higher level I see most bookstores vanish, non-academic publishers largely disintermediated away, and public libraries in crisis. (For libraries see my posts on ebooks in libraries.)

Feedback loops. My contention is that ebooks rise far above 20%, becoming the dominant book format, because the logic of ebook success has built-in feedback loops. You can call it “success breeds success” or “vicious cycles” as you like. Same idea.

I’ve never seen someone lay out ebook feedback loops in detail, and I’ve recently run many people who seem to think ebooks will “stall out,” so here’s my attempt at articulating the logic as I see it:

  1. Ebooks win on convenience above all; you can download something and start reading it immediately. Bookstores win on browsing and socializing. As ebooks cannibalize print sales, booksellers will go out of business, making paper books increasingly hard to find, and therefore less convenient, harder to browse and less socially rewarding (see also 7). Ebooks kill bookstores and dead bookstores drive ebooks–a classic feedback loop.
     
  2. Paper books depend upon economies of scale. As you print and distribute more books the cost per book goes down rapidly. The physical-book industry depends upon these economies. But when scale shrinks, everything runs in reverse. As ebooks take off paper-book costs will rise, making them relatively more expensive (3), and others will become unprofitable, eliminating the choice altogether (4).
     
  3. Ebooks are already cheaper than printed books, and bound to get cheaper still. If popular print books are cheap because the marginal costs are low, digital books have no marginal costs. They’re not free to produce; even apart from money to the author and publisher there is a substantial cost associated with preparing the digital file. That cost is “baked into” the ebook price. But it’s a fixed price, divided over the total number of copies sold. As volume increases that price will be spread out further.
     
  4. As books drop out of print, ereaders become a necessity. Ereaders today are a choice. Some prefer them, but nobody needs one. As books drop out of paper, ereaders will become necessary for people who don’t want to be constrained in their purchases. This will drive device adoption and therefore ebook purchases (5).
     
  5. As ereaders proliferate, ereading does too. eBooks suffer from a relatively high initial cost, but ebooks are generally cheaper. Once a consumer gets over that cost and has an ereader all subsequent book-buying decisions are influenced by that sunk cost.
     
  6. Ereaders become more powerful as you buy more books. First, on a personal level, there is a big difference between a device that has a few books you bought since Christmas and a device that has everything you’ve read since high-school–all in in one place and searchable. Right now most ebook people people have the former. Soon they will have the latter.
     
  7. Second, we will soon discover that ereaders are a networked good, like the telephone or the internet. As more people use them, they become better. Ebook “sharing” features are intentionally crippled, but they gain in value as more of your friends and family have the devices. The same applies to the possibilities for “social reading.” We have only begun to explore this, but, as LibraryThing and its immitators have shown, social reading shows great promise. It will be even more valuable when fully integrated into the book.
     
  8. As ebooks take off, we will figure out what they’re good for. Five hundred years of development have shown us what paper books are good for, but we’re still learning about ebooks. As ebooks become a larger share of the book market ebook-only advances will become worth pursuing. “Enhanced Ebooks,” like The Elements, will be part of the answer. But I suspect the real gain will come in genres that didn’t work as well in print. Nothing about short stories or poems requires they be bound together into anthologies or sold in tiny and expensive editions. The economics of print did that. Ebooks will change the market logic, and then change expectations. I don’t see someone accustomed to buying short stories on their Kindle reverting to the print-book model of buying anthologies.
     
  9. Right now–and I believe for a long time–ebook success accrues to a small number of companies, with Amazon in the lead. Concentrated power of this sort is bad news for publishers struggling to retain high ebook prices. Last year, MacMillan could afford to lose all Amazon sales for a time in order to put presure on Amazon’s pricing model. As eBooks rise, Amazon’s share of the book market will only increase. This would be true of ebooks even if the death of physical bookstores didn’t give Amazon a larger and larger share of physical book sales. A rising share is not going to make it easy for publishers to keep pricing power, and thus delay ebook adoption.
     

Any I’ve missed?

Labels: ebooks

88 Comments:

  1. Fran Toolan says:

    Tim, I agree with the thesis here, that at some point (soon?) the whole transition to ebooks will accelerate even faster than its going now. What is your prediction for a timeframe?

  2. Tim says:

    I wish I knew, but I don’t. It seems likely to me they’ll be the dominant media in ten years, but that’s about all I’d guess at.

  3. jenny says:

    regarding ebook popularity closing down libraries: I think quite the oppposite. I have an ereader but I’ve never purchased a book for it–I get them all from the library. If the library wasn’t a physical place with physical books it would be way cheaper to maintain.

  4. Eoin Purcell says:

    Tim,

    You’re spot on.
    I see the tipping point for books dropping from print to digital around the 20% mark as well, especially at the edges of publishing withs mall companies who print small runs!

    Eoin

  5. Tim says:

    Jenny. The logic is in the links. Basically, publishers are not willing to go along with the scenario you envision. They do it now to a limited extent. But publishers are not going to be willing to create an ebook lending model that works just like ebook purchase, but costs a fraction of the latter.

  6. Russ says:

    Hi Tim,

    One other possible loop… rise of tablet computers. Tablets are a form factor that lends itself to e-reading, where as notebooks never really did. More tablets, more ereaders/ereading, more bad news for printed books.

    One question, is the 20% market share pulled from the music industry experience? And, any idea where digital music market share is at now vs. cd’s?

    Btw, great article. My contention for a while has been. Record stores = gone, video stores = almost gone, bookstores = about to fall off the cliff.

    Cheers,

    Russ

  7. Zoë says:

    You’ve ignored all the limitations, though.

    1. In many respects, ebooks are not more convenient than paper books. For one, my Kobo doesn’t even have a way to jump to page x; you can only go to the beginning of a chapter and then have to page through individually. This is not convenient, and while I’m sure it will be fixed eventually (for all I know, there’s an upgrade already that I just haven’t downloaded), it’s the kind of thing that you don’t even have to think about with a book. With a paper book, you can easily flip back and forth between several pages.

    Also, the publishers have just resolved to make ebook borrowing less convenient. For library users, this is a big deal. If I have to go into the library anyway, why would I bother checking out an ebook that will automatically disappear after one loan period, when I could instead check out a real book that can be renewed several times and that, in a worst-case scenario, can be kept a few days extra for a minor fee?

    Then you compare ebooks to brick-and-mortar bookshops, as if that’s the relevant competition. What they’re competing with is the two-day Amazon shipping, which is increasingly becoming available for free. Yes, there’s a difference between “now” and “in two days”. But there’s no feedback loop; the situation is fixed. Maybe there are people who read only on a whim, but in general I suspect that a two-day wait is acceptable for 80% of book purchases.

    2. Canada still manages to have a publishing industry with only 10% of the population of the United States. Also, a lot the costs of publishing are going to be incurred regardless of whether the final product is paper or electronic: editing, etc. I seem to recall you yourself saying that production costs aren’t actually a huge factor, when it fit with your argument at the time.

    3. Again, you know better than this, when it suits your argument. Look at the current prices of ebooks. The lower production costs don’t seem to be making much difference, because the market charges what people will pay.

    4. Owning an ereader is not the same as making ebook purchases. I’ve owned an ereader for four or five months now and have still never purchased an ebook; the vast majority of my reading is still done on paper.

    5. Again, owning an ereader has not made ebook “purchases” much more attractive to me. Other factors are more important.

    Out of time for now. In short, I can easily imagine a world where 95% of people have e-readers but the majority of books read are still paper.

  8. I agree with the majority of this, but that 4th point is the scary part: “ereaders become a necessity.” That’s a world where the digital divide gets even wider and the cultural, educational, and political ramifications are worrisome.

  9. Tim says:

    To Zoe:

    First, I have ignored both what’s good about ebooks and what’s bad. The blog post wasn’t about them, but about what *changes* as ebooks succeed–that success breeds success. Apart from the fact that ereaders will get better, I don’t address the inherent attractiveness of the device.

    Now, it may be that ebooks are bad products and that this puts a limit on how many people want them. The Zune also had network effects on its side–the more people that had Zunes, the better your Zune experience was. But nobody wanted a Zune, so the effects never really took off. Fair enough, but I don’t think ebooks are Zunes.

    To your points.

    1. True. I think of ereaders now as mostly “novel-reading machines.” They’re great for passive reading of fiction. Meanwhile, they’re crap for the kind of reading I engage in–lots of page-flipping and annotating. Unfortunately, most reading out there is novel reading, not my kind. It’s also worth noting that ebooks will get better at this. Only time will tell how much better, but I don’t dismiss the possibility that future readers will be satisfied by the ways of navigating, which include full-text searching, which paper books simply can’t do.

    2. I don’t think library non-participating will significantly slow ebook uptake. Libraries buy something like 3-4% of books now. They won’t affect the market much either way.

    On Amazon, I agree. Amazon’s books-by-mail service is going to benefit vastly from the demise of the paper bookstore. But Amazon has been around a while and while growing, it is not exploding. Bookstores can live with it. Lots of people are not that sensitive to book prices. And they like going into bookstores. Amazon customers buy from real bookstores and visa versa. Ereaders take people out of the paper-book-buying experience (not you, but most ereader buyers significantly cut down on paper buys). That’s going to hurt bookstores in a new way.

    3. Canada subsidizes its publishing industry, and I suspect that unique titles/capita is lower. But Canada is not really a different market. Most book deals today are for “North American rights” anyway.

    For small markets, look at poetry. Commercial poetry publishing is virtually non-existant today. It continues largely as a side-project of academic publishing, in which the value is primarily non-monetary.

    4. On ebook prices, prices are lower. I agree that ebooks are priced according to what people will pay. It’s worth noting, however, that virtually all fiction was under $10 until Amazon lost the pricing battle with MacMillan. I don’t think Amazon will win the next round.

    On ereaders and buying see the recent Bowker/BISG report. 49% of ebook buyers now say they plan to buy mostly or exclusively ebooks. The definition of “ebook buyer” was very broad–including someone who’d bought a single PDF book and didn’t even have a reader. These are very frightning numbers for people who sell paper books.

  10. Tim says:

    On 20%, it’s just a number. 20% sounds like a recession to me. Recessions close bookstores–they’ve done a number on my town!–but they don’t end bookselling. Ditto publishing, etc. I don’t see the same for a 50% decline. How many bookstores could survive a 50% decline in sales? How many have enough OTHER bookstores around them that could close and force purchasing shifts to make up for that decline?

  11. Eoin Purcell says:

    Actually I have a slight quibble with 9. It’s pedantic but valid. I suspect Amazon’s share of the market will actually shrink because other players will take share. For instance it’s clear that B&N and Apple have gained share, you’d expect Google and Blio to do so as well.

    I’d not think his will change the fact that publishers will face pressures on pricing, just that it won’t be necessarily be all from Amazon whose power in the market will be somewhat diluted!

    Eoin

  12. Liz says:

    It’s all true if sad. I made a similar point at a workshop last week about archiving university library monographs. There will come a point when the economics of publishing — especially scholarly publishing — will tip inevitably to ebooks only. At that point, academic library print collections may become repositories frozen in time as of that publication year. People said “oh no, people will always want print books, small presses won’t be able to go digital…” It won’t matter. There won’t be anyone left to print and distribute print books (except perhaps at an artisan level). It might be 20 years, it might be 10 years, but it’s coming. Follow the money.

  13. Justin Hoenke says:

    I was walking around town today listening to Pandora on my Android. It was nice to have the convenience of having everything digital and out of my hands. However I realized at some point during my walk that the convenience really wasn’t worth it. I was getting piss poor quality music streamed to me.

    I feel like eBooks are gonna hit a certain wall like this. It’s much too early in the game for this to happen (2-5 years IMHO) right now. Once we hit that wall, I think eBooks will still dominate the market but we’ll see a resurgence in physical stuff (same with music). Maybe I’m just too optimistic but I think things like this change how we look at things overall but in the end there’s always some balanced achieved.

  14. Melinda says:

    What you don’t address is obsolescence.

    If I buy a book today for an e-reader today, but don’t get around to reading it for a few years (heaven knows I’ve done that for paper books, I’d likely do it for e-books too), will the old e-reader be able to read a new e-book? Or a new e-reader be able to read the old e-book?

    Will books become objects with expiration dates based on the technology required to read them? I don’t think that has been answered yet, but it is a real concern.

    Melinda

  15. Marc Gartler says:

    Great post! I’d include two more feedback loops–

    1) Education. Distance ed continues to expand rapidly in both K-12 and higher ed, and etextbooks accompany such growth. (e.g. Via course access that includes etextbook access.) This will result in a long-term loop, as students habituated to e-reading will not only be more likely to continue e-reading (because they prefer its benefits, or already have readers, etc.), but will produce the stuff themselves.
    Note: The K-12 etextbook landscape was recently profiled at http://www.huffingtonpost.com/lisa-guernsey/breaking-down-barriers-to_b_762880.html )

    2. Piracy, or whatever you like to call massive copying of books, not necessarily in the form of DRM-breaking on ebooks, but rather from analog books getting ripped into (un-DRMed) digital form by increasingly affordable scanning equipment (envision a $99 home book scanner). (Will publishers invariably refer to this as large scale “book burning” that threatens literary culture as we know it?) We’re not there quite yet, but when we do see that large scale ripping occur it will drive down reader prices further, open up cross-platform use, and encourage publishers to sell everything digitally in the first place.

  16. Zoë says:

    Thanks for that statistic about ebook buyers–more convincing than anything you’d said before! I’ll be curious to see whether that number holds up with time.

    Just one quick point for now: On libraries, I think there’s an important distinction between reading and buying. Sure, libraries may not account for a lot of *sales*, but they still account for a lot of *reads*. And as long as libraries are providing paper books and people keep up the habit of reading them, the obsolescence of physical book reading is going to be slowed.

  17. Tim says:

    No, that’s a good point. I hope that libraries can continue to do that. A lot of librarians I know are hell-bent on a world without paper books. Despite all the arguments, they want to get there, and get there fast. I don’t think they’ll like it when they get there.

  18. Shrew says:

    I was just reading articles about paper (paper making, paper conservation) last night on my computer. I felt like a very very bad person.

  19. Tim says:

    To Eoin,

    You are probably right about ebook share, but even if Amazon loses ebook share, ebooks as a portion of the TOTAL book market will grow and with it Amazon’s share of the total book market and thus market power

    For example, leaving aside Amazon’s paper share, If Amazon has 5/6 now of 7% now, and later this falls to 3/6 of 25%, its share of the book market has grown from 5.8% to 12.5%.

  20. Russ says:

    Tim,

    There is another possibility, though I am not sure how much it changes the overall scenario. It is quite possible that the works produced by artists in a world of tablets/e-readers will evolve into a separate genre altogether. The parallel would be with the types of entertainment that have evolved in the radio-movie-television artistic area. None of those killed books–though they certainly changed the type of reading and the level of consumption–nor did they end up killing off each other. Instead, different forms of artistic expression have evolved that are better suited to the technologies. I could envision the same thing happening in the ebook space.

    Of course, such a scenario may not be good news for booksellers or for many current publishers. Still, it may not doom the very successful technology we call “books.”

  21. Kirsten says:

    I think that the statistic about e-reader owners who intend to exclusively purchase e-books from now on is a direct result of the initial purchase price of the device, as you mentioned in point #5. At $10 or more a pop for current (read as: not public domain) titles, I’m loathe to drop $120+ on an e-reader when my physical copies and my hands work just fine.
    I know I was spoiled by the number of independent book stores in SF; I won’t purchase a used book for more than $3 now. I also limit myself to one newly published title per month, and I purchase these from a single indie store to do my part to keep them in business. Are there comparable opportunities with e-books? The quality remains the same no matter how many times a title has been downloaded, and I’m perfectly content with a slightly battered copy of a book if it means I can own it, forever, for a dollar – and loan it to whomever I like.
    I’m not against e-readers, and will likely own one at some point, but I’m holding out for a time when the device is free, or at least *far* less expensive, if you subscribe to a purchase plan (x number of books per year at $x average per book). If I’m going to take a chance on a product I may or may not use regularly, I’d sooner make the investment over time, given how many paper books I own and have yet to read.
    I also found Melinda’s comment worth some attention – if Nook can delete content because you haven’t upgraded your device, what other limitations will be imposed upon digital media? My books may still be in boxes four months after my cross-country move, but I know they’ll still be there when I get my shelves mounted, whether that’s next week or (God forbid) next year.

  22. Ari Meil says:

    I think it’s possible that e-books will mirror what’s happened with the other print industries. Some book categories will die like newspapers are going to die because a digital format is superior and some of the categories will thrive on paper as many magazines are thriving. Books are a very diverse array of things. Some will be perfect for electronic consumption, grow and be better on an e-reader, and some will continue to be printed on paper because it is not improved by what e-readers have to offer. Many websites could be categorized as free, fully searchable constantly updated magazines and still magazine subscription rates are at an all time high right now. It just turns out that people who read magazines are looking for something more than convenient connected content.

    on economy of scale – print technology is moving perhaps even faster than e-readers and you can print a book now for a fairly low cost. if you can get to 100 copies of a book you can create a product that is commercially viable. That number will continue to shrink.

    feedback loop:
    1. Instant coffe is considerably more convenient then whole bean coffee. The increase in use of instant coffee makes bean coffee harder to find and grinders and coffee machines become more expensive, making bean coffee less convenient. (not perfect, but you do get the point).

    Great post – thanks for writing it!

  23. Kryzde says:

    I think a good thing for publishers to do would be to include a code for a free ebook version when you buy a book. I still want to physically own all the books I read but on the other hand having a device that I can carry all my books with me is way more convenient when I drive to see my family, or at appointments and such when i am almost done with a book, or even when I take the kids to the park. I think having an ebook version included with a physical copy would help level the field some what.

  24. prosfilaes says:

    I don’t believe that buying short stories is going to take off like you predict. I think it’s going to exist along side anthologies indefinitely. The Hugo Award Winner anthologies may go up in price or disappear, since those stories can sell on their own. But other anthologies are because I don’t know where to find the good stuff. I was very pleased with [[The Mammoth Book of Vintage Science Fiction: Short Novels of the 1950s]], and there’s no way I could have dug those works out myself. [[Weird Tales: 32 Unearthed Terrors]] is pulled from tens of thousands of pages, and there’s no way I could have selected a representative sample of the history of Weird Tales myself. I was less impressed with [[Witch High]], but still, only an anthologist could have brought 14 authors together to produce a work that was more than the sum of parts. (Or, should have been.) One last example is [[Draco Tavern]]; yes, in the future it may be trivial to go to the Draco Tavern series on LT and buy each short story online. But you can still buy MP3s by album on Amazon, and for the same reasons, I think I will still be able to buy the book; the publisher wants me buying everything, not picking out the good bits, so they’ll offer a 10-20% discount buying it that way, and it’s easier for me to buy it as one chunk.

    I think there’s going to be more impact on academics then you think. For one, in the US, every mass-produced edition of every work prior to 1923 is back in print. The need for fancy yet crappy facsimile reprints of material has largely disappeared except for very obscure works, and even those will disappear in the days to come. Who needs a facsimile of Beowulf when you can check out full color photos of the original online? I suspect the need for variant editions will drops some when everyone gets used to looking directly at the First Folio or Johnson’s edition if they want to know how it was written there. More importantly, libraries are already going to JSTOR and hiding their paper copies; why are academics use to reading everything on iPads going to want to work with paper journals at all? I’d love to be able to have my college textbooks on hand without lugging a shelf full of heavy books around.

  25. reading_fox says:

    One counter-loop is that Bookshops are still much nicer places to buy books in than online. If I could buy ebooks there, with a paper copy to brouse through on a shelf, and with the ambience of being surrounded by books – and in some respects the limited choice is a good thing! – but the option to take away an ebook on my reader, I’d spend a LOT more money in them than I do at the moment.

  26. Blue Tyson says:

    Guy,

    Not necessarily, because you can get a mobile phone here cheaper than most books. Basic models might be the price of a hamburger in not too long with rise of Android, etc. Throw in a recharge card that you could download heaps of books with – for the cost of one book. (And I remember seeing $9000 mobile phones).

    A lot of people with mobile phones in countries with no bookshops or libraries, too.

    You have paper and transport getting more expensive while technology of that sort and bandwidth getting cheaper and more plentiful currently.

  27. @Melinda: You can almost always count with the hacker subculture to deal with obsolescence for you. If the ebook device you own is or has been relatively know, with a sizable market share, you can bet that at some point, usually earlier than later, a tool appears allowing you to break the DRM from your purchased ebooks, if it doesn’t already exist. So, once you’ve un-DRMed your files, it’s just a matter of adding them to an e-library manager such as Calibre ( http://www.calibre-ebook.com/ ), which takes care of auto-converting your titles to the format preferred by your current device(s).

    In fact, I believe at some point Calibre, or some other similar tool, will get plugin functionality allowing easy integration of 3rd-party DRM breakers. Once that happens you won’t even have to do the intermediate un-DRMing step yourself. It’ll be a simple matter of installing the tools and letting them do all the work for you.

    Nowadays DRM, locked down formats and obsolescence are really non-problems. The solution, illegal as it may be in some countries, is nevertheless at most a few Google searches away.

  28. Don Smith says:

    Tim,
    I’ve been reading ebooks since I bought a Palm Pilot over ten years ago. I’m finding that I purchase more print and ebooks. With the advent of websites like archive.org, I find it easy to access original sources. Just do a search of whaling or Thoreau on archive and see all the books that you could never find in a hundred used bookstores. I just purchased a used copy of The Spirit of Golf by Ray Ellis – it cost me $5.93 including shipping. If I had purchased a new copy of this art book I would have paid $60. So the electronic age brings me not only lots of ebooks I can download at whim, but traditional paper I would never have found at little cost delivered to my front door in less than a day or two. By the way, sent from my iPad – donsmith on Librarything

  29. Melissa and Guy both raise valid concerns, centered around the reading device.
    Books and, worse, the information they contain, could become difficult to access or lost completely as devices and software evolve, it has happened to video (http://en.wikipedia.org/wiki/Betamax).

    It isn’t in our best interest as a society to make reading, literacy and information expensive to obtain.

    Tim, thanks for a great post!

  30. Adam Bradley says:

    A few random notes on this post and the comments so far:

    In regards to first point, Amazon is trying hard to replicate both the browsing and social aspects. I find it a lot easier to find a specific book, or a book on a specific subject, on Amazon than at Books on the Square or my local Borders, and I’m a lot more confident with Amazon (due to the online reviews) that I’m getting the book I want. They still fail when it comes to accidentally stumbling across a book I had no idea I’d be interested in, but that’s a problem (if they recognize it as such) that should be solvable. And while I find Amazon’s forums annoying, they do seem to get a lot of traffic, which means a lot of their customers do appreciate the social aspect of shopping at Amazon.

    And regarding anthologies vs. individual poems or stories, I see this as analogous to albums vs. individual songs and wonder if they’ll end up being treated the same way–”You can buy ‘Trespasses’ for $.99, or save $13.45 by purchasing the Kindle anthology Runaway.” (I’ll note that I buy most of my music in MP3 format yet still mostly buy albums, but I haven’t seen any statistics showing whether I’m normal for music download customers.)

    I think of ereaders now as mostly “novel-reading machines.”

    A year ago I was fairly confident that ereaders would eventually develop into better tools for careful, scholarly reading, with options for highlighting and annotating passages. I’m less so now—it was a lot easier to mark up an ebook on my old Palm OS-based devices than it is on an iPod Touch or my Android-based smartphone–the stylus makes a big difference there, and the current trend is to dispense with it. I think Microsoft’s Ink technology would give them a huge advantage here, but they don’t seem interested in the tablet market anymore.

    If I buy a book today for an e-reader today, but don’t get around to reading it for a few years (heaven knows I’ve done that for paper books, I’d likely do it for e-books too), will the old e-reader be able to read a new e-book? Or a new e-reader be able to read the old e-book?

    I can still read 5-6 year old eReader books on my modern PC, smartphone, etc. I’m really not worried about Nook or Kindle ebooks becoming obsolete.

    @reading_fox: Doesn’t B&N provide this, if you own a Nook? That seems to be one area where they have their competitors in the ebook market beat. We’ll see if it’s an advantage, long-term (I suspect Amazon’s wider selection is a bigger advantage).

  31. What a good post! And such interesting comments, too!

    An important point for publishers is that if they can move to a workflow that puts manuscripts straight into XML or a similar format, it is then much easier to be able to output whatever the ebook format of the month is, AND print formats, too.

    Also, for the commenter who mentioned jumping to page numbers, that’s important only as long as page numbers are important. Being able to search the text and go to a specific phrase will, I think, be more valuable in the long run. eBook “bookmarks” are already better than print; they don’t fall out of the book.

  32. Stephen Abram says:

    Hi Tim:

    A few things that are underdiscussed in this e-book evolution / marketshare stuff:

    1. The inevitability of personalized ads ‘inside’ our book reading experience(s). It could be as benign as a magazine ad or as annoying as a pop-up. It could be text, links, graphics, animations or video.
    2. The prospect of your reading habits potentially being acquired by an e-reader vendor and being used to drive recommendations (a la Pandora or Amazon) or ads and influencing messages such as political ads. There’s an opportunity here to sell more than just books, or merchandise but also ideas.
    3. Sharing of your reading habits in some ways – such as Amazon’s acquisition and aggregation of all of their downloads of the highlighting people do on their Kindles.
    4. The scary prospect of censorship (even if it’s well meaning) such as we see with the iPad/iPhone/iStore rules where content is disallowed. The skirmishes with Apple banning Sports Illustrated swimsuit issue, Pulitzer Prize winning books since they ‘criticize’ and political apps. All skirmishes resulted in backing down but few policy changes. And Job is famous for saying that if we want p#rn we should buy a droid. Either way, it’s an awful lot of power in one company. Of course, others could do the same eventually. The public is benignly uninformed and docile as long as their search is ‘free’ (as in cost not freedom).
    5. The other scary prospect for books to be deleted from the corpus (such as was done by Amazon in the case of 1984) on everyone’s devices. We have promises that it won’t happen again but it’s still perfectly legal to take back content surreptitiously. If all content is ‘e’ then who protects the record?
    6. Lastly I worry that a single dominant e-reader power could control access to knowledge in subtle and not so subtle ways. Should Jobs or Bezos have that power? Are laws required to place limits on such power consolidation or can the ‘market’ decide. If libraries do end up being sidelined (by DRM, budgets, or whatever), for whom would we speak?
    All my comments above are more questions about what are the components of Tim’s scenario. I agree that we have passed the ‘e’ tipping point. We’ll soon see what that means and how it plays out in case law (Tasini, Google, etc.), statutes (Copyright, DRM, etc.) and treaties (ACTA). I also expect that there will be differential movement to ‘e’ formats for different genres, fiction vs. non-fiction and for some domains of knowledge. Some content has quietly gone mostly ‘e’ already from print (caselaw/statutes, encyclopedia, directories, some IT content, etc.) and some persists better in print.
    Tim, thank you for the good post and comment discussion.
    Stephen

  33. Harringdon Smythe says:

    “Bookstores win on browsing”

    They do if they have what you _want_. They almost never have what I want. The more specialised your tastes, the less likely they are to be relevant. It’s rare I can’t find even the most obscure book on Amazon, and usually at a cheap used price too.

    “and socializing.”

    Youth and prettiness probably plays a part here. If you’re in the mating-market you might just meet someone cute in the graphic novels section. On the other hand the old buffer with the dandruff could be a great poet, but no-one’s going to be chatting with him as he browses the aisles. As the baby boomer gen gets older they want the big text size and “read-to-me” features that the Kindle offers.

    “paper books increasingly hard to find”

    Amazon used, addall.com? But seriously. I think Amazon will crack the Kindle to print-on-demand with a CSS-like on-the-fly reformatting of ebooks for elegant templated POD copies.

    “, and therefore … harder to browse”

    Ever used Google Books?

    Personally I see the future of publishing for all but technical tomes and picture-books as a potent combination of print-on-demand, Kindles, and Google Books.

  34. FlossieT says:

    reading_fox’s comment was exactly what I was thinking of today: given there are no inventory issues, it must be in a bricks-and-mortar bookseller’s best interests to provide a kiosk (or app?) for instore ebook purchases – it’s a hell of a lot easier to flick through a paper copy to assess buying suitability than it is to download a free sample. I don’t think anyone in the UK is doing this at the moment – Waterstone’s are now the only bookseller with major presence, and although I had a vague idea that they offered the ability to buy ebooks in store alongside selling new Sony Readers, I can’t now find any mention of that. Presumably, though, the distribution arrangements are just as awkward as, it seems, are those for getting a reasonable range of titles into electronic formats in the first place.

    As for ebooks being cheaper than print: every title I’ve searched for today has been more expensive electronically than on paper. This may be something to do with the sudden, enthusiastic embrace of agency pricing over here. Are publishers deliberately trying to stall the ebooks market while they figure out what to do? Surely a strategy that’s going to guarantee a massive upturn in piracy…

  35. FlossieT says:

    Correction/Addendum: WH Smiths also have national presence (I tend to forget them as a bookseller as they spent so long diversifying into toys, games, music, videos etc etc… oops) and sell ebooks. Blackwell’s also nationwide and selling ebooks, but have far fewer “real” stores than either of those.

  36. Lee Horowitz says:

    The first ebook readers (eg the Kindel) were too expensive for me by far. Prices have come down a bit, and if history is any guide, can be expected to come down even more over time. Right now, ebook readers are still too pricey for me.

    Each individual ebook costs about what a physical book costs. That’s totally unacceptable. Talk to me when ebooks are under $5.00 a pop in today’s money.

    Ebooks come in (mostly) proprietary formats. Talk to me about ebooks when there is a single universal open standard.

    Ebook reader’s haven’t been invented…they mostly don’t do color, they don’t turn the pages quickly, they have no ability to annotate what we’re reading, nor do they have multiple book marks or universal “grep” ability.

    The publishers claims of intellectual property rights which restrict my ability to lend and borrow books is also totally outrageus.

    Fix all that and I’ll be a happy ebook camper.

  37. Alex Grigg says:

    I think the feedback loops you’re suggesting are right on. So that means that ebook dominance is coming, like it or not. Is there any chance that libraries can survive this change without major cutbacks and decreases in service? Maybe, but almost nobody’s concentrating on the problem yet.

    The library world has already dealt with a very similar issue in journal publishing and fared poorly. Academic journals are almost entirely online now. Most universities have switched print journal collections to the ejournal subscriptions that students and researchers tend to prefer anyway. This means most ejournals at libraries are part of some package of subscriptions that are purchased together and under some sort of license agreement that specifies how the content can be used. This also gave publishers a vice grip on the pricing. Journal prices always increased faster than inflation, but once publishers had you for a couple of years of online access they knew you couldn’t cancel or go back to print without losing those years of content. So prices started to increase faster and it is much harder for libraries to put on the brakes.

    I actually feel a little better about the ebook market, particularly in fiction. In the fiction market the public is going to get the first shot at setting prices and the public is much more capable of saying no to content that they can’t afford or that they think is priced unreasonably, than a library, whose chief function is delivering that content, is. There are going to be baseline prices set that the libraries have no control over, and that’s not necessarily bad.

    The problems, of course, are the license agreements and the DRM that libraries will have to deal with. Having never purchased online music until DRM-free avenues were available, I do hold some vague hopes that the market will solve this problem. Seeing as how Amazon is one of the primary providers of DRM-free music and has made no move to do the same with Kindle content makes that seem less likely, though. This is also one of the reasons why libraries didn’t rush to sign up for iTunes instead of continuing to purchase CDs for their patrons. There are also almost no large online retailers that provide ebooks that are still under copyright and do so without having you sign a license agreement/user agreement of some sort. That is the real sticking point for libraries. They need content that can be redistributed under the first sale doctrine, or they need license agreements and pricing schemes that allow them to distribute a similar amount of books without paying more than they do now. Publishers are going to be very resistant to letting that kind of scheme go forward.

    One of the few ways in which I’ve seen ebook distributors approach a usable pricing system might be on par with what libraries currently pay for hard copy books, is the pay per use systems. Some publishers give you access to a body of works and only charge you for the content that is actually accessed. This has the advantage over physical books, that you don’t buy things that nobody ever picks up. I have not seen any data on how that actually plays out in the real world so I don’t know if the cost reduction is enough to make up for the lack of permanent copies. Most other pricing schemes are so clearly in favor of the publisher that I can’t imagine libraries totally switching to them without major cuts in other areas or major reductions in the size of their collections.

  38. LibraryChristi says:

    Tim, you said “A lot of librarians I know are hell-bent on a world without paper books.”

    Well, here’s one librarian who’s *not* hell-bent on leaving paper books in the dust. From a library perspective, e-readers still have a long way to go when it comes to borrowing books. And borrowing is still a necessity/desire for many, many people (I, for one, don’t want to have to buy every single book I ever need/want to read and many of my patrons can’t afford to buy readers and books.)

    While I agree that e-reader popularity will continue to increase over the next few years I believe that paper books will still have the lion’s share of the market for at least a few decades. Between DRM, proprietary file types, cost of readers and differing software there are a lot of limitations on e-books when it comes to community borrowing. Paper books don’t have as many restrictions. Aside from that big issue of literacy, paper books are equal-opportunity devices.

    Then there are all those books that e-readers just can’t do justice, either because of current image quality or due to the inability to flip pages…picture books, photography books, cookbooks and my childhood favorite, choose-your-own-adventure ;)

  39. Zoë says:

    I don’t think electronic substitutes for books are as far along as it may seem. An anecdote from yesterday: a group of academics working together in a room with internet access. We need to check something in a particular Greek text. The Teubner edition is conveniently available on archive.org. And it’s so awkward to use that we end up delaying the question until after the break, when someone has a chance to grab the physical books from his office.

    The codex won’t be disappearing anytime soon.

  40. elenchus says:

    Great discussion, thanks for jump starting it, Tim and to the LT community for such thoughtful commentary.

    I’m curious about some of the negative feedback loops, such as Melinda and Guy touch on. I’d add to the obsolescence question: what do the group see happening with OOP books? There is some cost to scanning (at minimum) or digital typesetting these books to make them available, whereas any physical copies extant are available for the life of the artifact. So much of what I read is out of print, I’m very interested to know what people anticipate.

    I’m also curious as to estimates re: the ratio of in print versus OOP works. My knee-jerk reaction is that there are more OOP works by several factors … but that’s a complete guess. Once I read the comparable ratio between people now living versus anyone who ever lived but now dead, and was startled to learn it was not what I’d assumed.

  41. JJ Kress says:

    Finally came around reading your post and it’s one of the best on this subject matter. One addition to point 4 (ereader becoming necessity):

    Ereaders will become a necessity, as more and more authors will try self publishing e-only. We already see this happening with some technical books, as those are often bound to higher prices due to their limited audience. It will be the logic development from the whole book-on-demand scene.

    As tools become easier (remember, Apple’s Pages already can export to epub), I guess more authors will try it, either because they expect a limited audience, or they find no publisher to print it (or maybe just out of curiosity, as happened with openly licensed books). Then the same thing will happen as with technical books: instead of not publishing a book with limited audience, either an open-minded publisher will release a digital-only version or the author will go ahead and release it herself.

    As soon as we have one or two bestseller (candidates) in the e-only arena, things will shift at an accelerated pace and it will be interesting to see, how publishers will react.

  42. Lisa says:

    I certainly hope that ebooks do not take over actual physical books. I will probably be the last one to own an ereader, and only if all book publishing ceases. I mean, come on, half the fun of reading is the rituals (selecting your book from your shelf, holding it, turning the pages, etc…)

  43. I saw a reference to this site just today and I think it is so interesting to see where this has led in less than a year. You are, of course, totally right but your time frame was a bit conservative. I love the library part. Libraries are lending e-books and the devices. Publishers are trying to limit the amount of ‘lends’ per book, but they can’t win that battle.

    I just bought a 1920 edition of The Mill on the Floss for $39 that I have coveted for years. Beautiful paper. One thing doesn’t seem to have anything to do with the other anymore. I would publish Kindle, probably will.

  44. Tim says:

    I didn’t actually give a time-frame, did I?

    Why can’t publishers win that battle, exactly? I see no reason at all. Besides the logic of the situation–libraries can only lend electronically exactly what they are allowed to lend–there’s the simple evidence that such restrictions are already in place. Librarian opposition has been brushed aside.

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