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Oct 7, 2010

Frankfurt 2010 and Ebooks

Ebooks are a big topic at Frankfurt 2010. The questions are about how soon will ebooks take over? and who will dominate the market? Emphasis mine:

In a 2008 survey, some 40% of 1,000 industry professionals surveyed said digital content will overtake traditional printed book sales by 2018. Now, it looks like "it may be sooner than that," Mike Shatzkin [said]...

But the first session of the afternoon, on e-books, really captured the pace of change now hitting the publishing industry. Speakers included Brian Murray, CEO, HarperCollins; Evan Schnittman, managing director, Bloomsbury; Andrew Savikas, v-p, O’Reilly Media; and Rick Joyce, CMO, Perseus; and the panel was moderated by Google's Tom Turvey. All of the panelists noted explosive growth in e-book revenues. Murray said e-books made up about 9% of HarperCollins' total revenue, but when that number was adjusted to filter out things like children’s books or other materials not easily consumed digitally, closer to 20% of trade title revenue was now derived from e-books. The panelists agreed the growth was explosive, and that e-book revenues were now a significant revenue stream. In fact, with print revenues flat, nearly all of the industry’s growth can be attributed to e-books, another indicator of e-books' crucial role.

As to whether e-books were adding incremental growth or cannibalizing print sales, the panelists said it was hard to tell. Schnittman, however, said you can't measure that kind of thing on a title by title basis, but on a customer by customer basis. Once a reader makes a decision to read on a device, he notes, that customer is basically lost to print. There were thorny questions as well, with Turvey asking the panel if the industry standard 25% of net receipts royalty would change. Murray said no, defending the rate as a fair cut, adding that he saw nothing on the horizon that would change his mind on the subject.

A couple of points.

I would like to see the rest of the survey. If 40% think ebooks will overtake print by 2018, does that mean the rest think ebooks won't overtake print, or will do so sooner, later?

I find it really weird that they assume once a customer buys a reader "that customer is lost to print." I've had a reader for a year, and I still buy print. In fact, I often use my reader to "test" whether I want to buy a book in print, which is one reason it annoys me when the ebook is priced the same as a hardback or even a paperback. Admittedly, maybe I just do this because I grew up on print, and still enjoy seeing a hard copy on my shelf. It also has to do with my deep distrust for content that someone else might be able to take away from me after I've bought it... I expect ereaders to keep changing and I don't know if the Kindle books I buy today will be upgradable to tomorrow's device. I like to keep printed copies of my own wips for the same reason.

I actually see the revolution as two-fold. Ebooks are the biggie, yes, but I think POD is going to play an important transitional role. POD is going to keep treebooks circulating long after offset print runs are no longer profitable. Remember when everyone said email would mean a "paperless office"? Yeah, that happened.... oh, no, actually what happened was more paperwork than ever. (Trees, I apologize on behalf of my species.)

Final point: after all that, Murray thinks there is no reason to change his mind about the royalty rate?

Google Editions also made a splash.

This year, however, publishers seem eager for Google Editions, and most say they are happy to have Google enter the rapidly growing e-book market. At a CEO panel on the fair's opening day, Simon & Schuster president Carolyn Reidy praised the program for offering a way for small bookstores to sell e-books. "This is important," Reidy said. "We feel in the coming years a store that cannot hold on to their customers both physically and digitally will cease to exist." Other publishers, who asked not to be named because they are still in discussions, praised Google's flexibility in working with publishers and authors on sale terms, and its cloud-based program that allows books to be read on any device with a browser.

...A Google spokesperson said more than 35,000 publisher partners are now enrolled in Google's partner program, with more than two million books digitized through the partner program. Some 15 million books in total have been digitized by Google Books, in 100 languages.

So what's changed between this year and last for Google at Frankfurt? The short answer: time. Perhaps the e-book market surge over the last 12 months has pushed things to a tipping point, with real money now at stake for publishers, new tablet devices for consumers like the iPad, smartphones everywhere, and lower prices for the Kindle and other devices. Google's Santiago de la Mora (who was on the panel with Reuss last year) agreed, telling PW that as people's understanding of the e-book business and its importance does seem to have evolved, and as it has, the anticipation over Google Editions has grown.

It's very funny. But is this not actually an ad for ereaders that offer the best of both worlds?


Tere Kirkland said...

I have a nook, but I still buy print books about as often as I used to before I had an e-reader.

I do buy way more e-books because of convenience, though. It's been far too easy to just click "buy", than spend an afternoon in the bookstore. There's nothing that beats the feeling of going to the bookstore, though, no matter how convenient a nook or kindle is.

I'd love to hear more about this, too. It's the future, right? I just hope e-royalties change to favor the author a little more.

C. N. Nevets said...

I'm not on the eReader bandwagon yet, but I still say I prefer CD's to digital and I haven't bought a retail CD in something like five years or longer. So I see it on my horizon, regardless of industry trends.

But since I don't have one, I know little about rights management on eBooks. Do all major eBook formats function under a pretty uniform DRM, or does it vary between (say) Amazon and B&N?

Do you own the copy or do you rent it -- not in terms of cost, but in terms of how long you have it and at whose discretion it can be modified or removed?

By terms of use, can I lend my copy to my mom because I think she'll really like the book? By terms of use, can both my wife and I read the same copy, or do we need to each own separate copies?

It just seems that there are so many crazy nuances with DRM law, and that's one reason I haven't touched this stuff yet.

Tara Maya said...

@ Tere. The convenience is a biggie for me too. I do love wandering around a bookstore, but I don't have time. And if I really, really want a book at 2 am when it's raining... which happens more often than one might think.... well, nothing beats immediate gratification.

@ Nevets. Not all books have to have DRM. When I publish mine, it won't. (I will also have a POD version available for those who prefer print. Or both.) I'm not sure if you can lend it or what. My husband reads books from my Kindle on his iPhone, so I know it can be shared that way at least.

Derek J. Canyon said...

If the industry won't increase the meager 25% royalty to authors for ebooks, I foresee most authors saying goodbye to them.
For ebooks, publishers provide editing, covers, and marketing.
I can spend less than $1500 on editing and cover for a novel. I can earn that back by selling 750copies.
Unless the publisher guarantees a certain amount of advertising, what's the point of using them?
why not skip the publishers entirely, and hire my own editor, artist, and publicist at a flat rate? Then, I get all the 70% Amazon royalty and only have to pay those expenses.
Not all writers can do this, because instead of a $5000 advance you have to pay out a couple grand. But, for those with the resources, there isn't any reason to use a publisher for ebooks.
So, don't go selling your ebook rights!

Michelle D. Argyle said...

Great post! You always gather the best info. :)

I don't get the "lost to print" thing either. I'm enjoying my Kindle a lot, but I'm still buying print books. Of course, I am a writer. That might make a difference, I don't know.

Yolanda Barker said...

I'm tempted to buy a nook, predominantly because I'm sick of accumulating "stuff". But from what I can see, the e-book makes reading more expensive, plus it takes away one of the nicest things about it - being able to share what you've read with a friend.

Really enjoyed looking through your blog so far! If you feel like browsing around blogs, do check out mine. I'm a documentary film maker and it's about the things I find interesting, thought-provoking, inspiring.

And one of film reviews I do:



Tara Maya said...
This comment has been removed by the author.
Tara Maya said...

@ Derek. Yeah. I agree.

@ Michelle. The "lost to print" mentality is a strangely apocalyptic way of looking at it.

@Yolanda. I haven't found a reader makes reading more expensive, just the opposite. Thanks for stopping by, and I will check out your site! :)