Monday, October 19, 2009

Cover Story > Are We On The Verge Of An E-book Explosion?

Thorin McGee / Book Business / October 2009 

"The market for digital books … has been roughly doubling every 18 months,” says Andrew Savikas, O’Reilly Media’s vice president of digital initiatives. “Follow that line out, and in less than a decade it’s 64 times the size it is now.”

Savikas has reason to be optimistic. Consumers are adopting reading on screen like never before:

• 15 percent of U.S. adults have read at least one e-book, according to Simba Information’s recent “Trade E-Book Publishing: 2009 Market Report.”

• Trade wholesale electronic-book revenue was more than $37 million in the second quarter of 2009, compared to just $11.6 million in Q2 2008, according to the International Digital Publishing Forum (IDPF).

More than 12 million e-books have been downloaded by the Stanza e-reader iPhone app, which turned one-year old in July.

The number of e-readers on the market has surged. [See Book Business’ list of 30 current e-readers]

Digital Surpassing Print Sales?

O’Reilly Media released the e-book of “iPhone: The Missing Manual” as a standalone iPhone app in December 2008. The app outsold its best-selling print counterpart.

The company followed that success with a multiplatform digital publishing strategy. Consumers who buy an O’Reilly e-book get three digital rights management (DRM)-free formats of it: ePub, PDF and the Kindle-compatible Mobipocket. Or, customers can purchase the books as standalone mobile apps for the iPhone and Android smartphone.


HarperCollins also is capitalizing on e-book momentum. Ninety-five percent of the publisher’s titles are released in digital format, and same-month e-book sales have increased as much as 400 percent (June 2009 vs. June 2008).

“We see [e-books] as a very effective vehicle to attract additional readers to our authors, and that’s our primary goal,” says HarperMedia Vice President and Publisher Ana Maria Allessi [snip]

Still, e-books comprise just a few percentage points of total sales (1 percent to 2 percent seems to be the norm) for many publishers. [snip]


An E-ducation

The expansion of digital learning tools in higher education is opening another significant market. Princeton, Pace, Arizona State and other institutions recently joined an Amazon pilot program to give students Kindle DX e-readers for select courses. As part of the program, Amazon added more than 100 McGraw-Hill Education textbooks to the Kindle store. However, McGraw-Hill’s digital learning materials go far beyond e-readers.

“What’s really terrific about e-books,” says Rik Kranenburg, president of McGraw-Hill’s Higher Education, Professional and International Group, “is that the technology lends itself to all kinds of new applications and learning formats—new ways that students learn, and instructors can use and integrate the technology to instruct.”

McGraw-Hill offers many of its e-textbooks in the context of a wider, digital learning suite called Connect that includes multimedia and interactive learning experiences, such as searchable lecture capture and personal learning diagnostics.


E-books could drastically change the business model for college textbooks, which have long been a rising cost of higher education. According to Kranenburg, most McGraw-Hill e-textbooks sell for about 60 percent of the cost of their print versions, ... .


The E-reader Upsurge

The growth of e-books is mirrored by the proliferation of e-reading devices. The two most well-known are Sony’s Reader and Amazon’s Kindle (which was the first to find truly mainstream legitimacy when Oprah Winfrey embraced it as a “life-changing” gadget). The two devices have battled for market share since. [snip]

While the Kindle is tied to Amazon’s store, new devices from Sony and other manufacturers can access everything from Barnes & Nobles’s catalog to hundreds of thousands of free e-books through Google, Project Gutenberg and other digital archives. Plus, smartphone apps, such as iPhone’s Stanza, allow millions of smartphone users to access e-books. Plus, an e-book can be released as a stand-alone app, as O’Reilly Media has done.

Smartphones: Smarter E-readers?

This raises an obvious question: How important are e-readers to the overall success of e-books[snip]

“Smartphones and 3G data networks are the main driver [behind digital sales] …,” says O’Reilly’s Savikas.

Neelan Choksi, CEO of Lexcycle, agrees. “My impression is that the ease of use being introduced with wireless and over-the-air access has had a huge effect on adoption. It’s probably the primary reason for the growth in content sales.”

The Chicken or the Egg?

It’s also clear that e-reader adoption is lagging far behind overall e-book adoption. According to Norris, most e-books are read on personal computers. He points out that, although Amazon will likely sell 500,000 Kindles by the end of the year, an estimated 110 million U.S. adults buy at least one book a year.


What’s Important?

Ultimately, many publishers agree that it’s about giving readers the chance to buy what they want where and when they want it.

McGraw-Hill is already designing text for digital distribution first, and other publishers have begun doing the same. It’s less important to publish on one specific device than it is to produce books that can be accessed through whatever channel readers use to buy books.



!!! Thanks To / Garrett Eastman / Librarian / Rowland Institute at Harvard / For The HeadsUp !!!

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