Friday, October 16, 2009

How eBooks will change the publishing industry

It would appear that, after a very long gestation period, the e-book reader is finally catching on.

Not only has Amazon enjoyed very healthy sales of its Kindle but a number of other vendors have announced the launch (or imminent launch) of competing products.

Of course this won't spell the end of ink-stained paper any time soon, but it will force some major adjustment by publishers and distributors alike -- an adjustment some may be reluctant to embrace.

The book publishing industry is rapidly facing the same situation that was faced by the recording and movie industries a decade or so ago and it will be very interesting to see if they've learned anything by watching the fiasco that resulted there.

Until now, book publishers have been protected from the effects of the digital age, simply because their wares were not readily available in digital form -- and that meant one very important thing:

The cost of copying exceeded the cost of buying a genuine edition.

This was also the case for music and movies right up until the arrival of CD/DVD burners and the internet. Sure, you could borrow a friends LP or CD and copy it to cassette tape but that was a slow process and the second-generation copy was always inferior to the original. It was only when the original material was provided in digital format and true bit-for-bit copying was affordable that any real threat was posed to the (then) existing business models.

Well now we have the emergence of truly practical e-book readers and Google is well on the way to digitising all existing paper-based publications, the book publishers will soon be in exactly the same boat.

If publishers don't adjust and revise their pricing to reflect the much lower cost that illegal copying represents to their digital volumes, they will lose enormous amounts of money to piracy.

Right now, copying a best-seller would involve hours of photocopying or scanning -- something that's just not worth it for a $20 book. Once that book is already available in digital format, copying will be as simple as firing up suitable software to circumvent the DRM and then write the resulting "ripped" file to disk. Once "freed", it would only be a matter of minutes before such books became available for "free" download on various P2P networks -- as much music and video content already is.

So how can publishers compete?

Well they could simply refuse to release works in digital format -- but that would be like the music industry sticking with cassette tapes and the movie industry sticking with 16mm film. It simply would not work because people demand the many benfits that digital media provides.

The reality is that if book publishing is to survive as an industry, they have to significantly drop their prices -- to the point that it remains more attractive to buy than to steal.

Given that "going digital" will save the publishers a huge amount of money by eliminating printing and transport costs, while also allowing them to sell directly to the customer, I would expect to see the price of a digital-edition to be a tiny fraction the paper-edition commands.

I also suspect we'll see a shift away from the "buy this book" model towards commercially operated libraries where, for a fixed monthly or annual fee, you can borrow digital editions of any book you want.

Providing the price is low enough and the process is simple enough, this model may be the single greatest hope the industry has for its continued survival.

People value their time and if they can simply log into their e-library then search, using friendly software, for the title they want and download onto their e-book reader all for a fixed flat-rate fee then few will bother with the hassles of P2P and the legal, logistical and security risks such systems pose.

e-Book readers with wireless connectivity would then be the fantastic equivalent of a doorway to the world's largest library of book titles.

It now becomes very simple to see where Google is headed with its service doesn't it?

Clever, very clever!

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