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E-books are coming

24.08.07 Liz Bury

Are publishers fatally unprepared for a digital market? Online games designer Adrian Hon thinks so, and blogged to that effect on his www.mssv.net website a few weeks back.

Hon, producer of Perplex City, a multi-player adventure game that mixes online play with real-world elements (or "blurs the boundaries between fiction and reality", as the blurb goes) was encouraged to blog about books on acquiring a Sony Reader. He picked it up for $100, through friends in America, when a batch of 1,000 was released for sale on mobileread.com.

As an early adopter, Hon uses Project Gutenberg for his out-of-copy-right classics. It carries free, downloadable versions of Austen, Brontë, Dickens, Doyle, Shakespeare et al (www.gutenberg.org); for example, it takes a second or two to download the full text of The Merchant of Venice.

Hon also notes a "small but growing number of ‘ripped' books floating around the web" (mostly scanned versions of in-copyright print editions). These works may be downloaded for free from several websites, perhaps the most famous of which is The Pirate Bay, which made available Harry Potter and the Deathly Hallows, even before its official publication date.

Hon believes that some publishers are chronically behind in preparing for a digital market, and that a surge in demand for e-books (especially once reading devices proliferate) will see piracy decimate publishers' margins if they are unable to offer - e-books at a reasonable price with ease of access."It's surprising how fast things can change. Once five million e-readers are out there on the market . . . And if you look at people growing up now, they will say, ‘why would I want a book when I can have an e-book?' They're not going to be bothered about pirating books." He thinks that, like some music labels, some book publishers will go bust in the new economy.

But isn't this apocalyptic view a tad, well, hysterical?

"Apocalyptic views have always had a grain of truth in them," Mark Thwaite, The Book Depository managing editor, says. "Some publishers rubbed their hands with glee when the internet bubble burst. It has made them slow on the uptake the second time around."

Alive and kicking

Most publishers, however, don't see themselves in this way. Michael Bhaskar, who recently joined Pan Macmillan as head of digital publishing, disagrees that a tipping point will come. "It won't be the death of the publisher, just a slight change. It's foolish to underestimate how brilliant a piece of technology a book is. Within five years digital content will not be more than 5% of revenue for trade publishers," he predicts. "After that, there will be a new generation of e-readers and mobile reading. But it won't be a big bang like iPods or a sea change like newspapers. A book has a sanctity in the way an e-book doesn't."

At Continuum Publishing, whose list spans academic, religious and trade, Ken Rhodes, sales and marketing director, also thinks Hon misses the mark. "He's wrong," Rhodes says. "The intellectual property that the author and publisher hold has a value that's not going to disappear just because the medium has changed. Of course there are huge risks in how you develop, sell and license it in ways which don't ruin your business model. But we have this opportunity to sort out how you get the appropriate value for it."

Continuum is currently deciding how to digitise its books (it has an active backlist of more than 6,000 titles and produces about 500 new ones a year). The project is out to tender with a range of potential suppliers, ranging from those that will transform the company's workflows to focus on electronic output rather than being built around the print product, to those that offer various conversion, storage and distribution services.

Children's publisher Egmont is in a similar phase. "We're not currently selling any e-books but we've got a team looking at other media," Peter Blunt, digital process manager, says. He is more ready to accept that some publishers are playing catch-up. "Publishers are probably a bit behind. It's partly a question of resources. We don't necessarily have the resources to look into it; although Egmont has now established a team to do this."

Egmont will first digitise its fiction (but not picture books—yet), and is grappling with technical issues: these include what format to convert into and how far to transform workflows. "We are looking at ways we can multi-purpose the content. One solution might be to have a content management system where we can pull out content for e-books, print-on-demand and large print editions. The process is moving slowly. The technology is there, but the demand is not yet."

But Hon believes this slow and steady approach could prove fatal. "These are technical rather than business problems. It you make a book available in plain text format, it's fairly trivial for someone to build a programme that would be able to export it to any format." He continues: "Publishers are right that at the moment there's nothing to read them on. But you can't pretend it's not going to happen, that nothing can be better than the book. A lot of publishers don't think there's going to be a problem with piracy!"

Behind the scenes

However, the majority of publishing conglomerates are much further advanced than it might appear.

Holtzbrinck, parent company of Macmillan Publishers is, through Holtzbrinck Ventures, its venture capital subsidiary, backing a range of new media businesses. Among them is BookStore (a product of MPS Technologies, a Holtzbrinck company), a digital content delivery platform that is designed to help publishers manage, market and sell e-books. The BookStore-backed website, www.macmillannewwritingbookstore.com, for example, offers Jason Webb's The Ghost of Che Guevara, for £4.29 for a year's online access; or a license for a downloadable
e-book for Adobe Reader, Microsoft Reader or Mobipocket is £6.49.

David Sommer, MPS Technologies, commercial director, says: "There is a spectrum of publishers. Some are sleepy and not sure what to do." BookStore is designed in such a way that publishers can test the market to see what works at low cost, Sommer says, by offering a range of consumer deals such as the whole e-book for ever; the e-book for a limited period of time; part of the e-book for ever; and so on.

HarperCollins USA sells ebooks off its website, and also recently launched a pilot project with iPhone (www.mobile.harpercollins.com), which enables readers to browse e-books, for example The Burnt House by Faye Kellerman, through the Safari browser on their iPhone. HarperCollins UK is meanwhile continuing to digitise its backlist and frontlist.

Penguin UK's sparkling new website offers a smattering of e-books for sale, for example The New Penguin Dictionary of Modern Quotations for Adobe Reader at £5.95, and Nigel Slater's Real Fast Puddings in Microsoft Reader for £6.40.

Random House Group continues to build its digital archive, including producing all frontlist in e-book formats, with a view to making them available "through all the different possible platforms," Fionnuala Duggan, digital director, says. "First we want to make e-book content discoverable, by facilitating the likes of Amazon and Google, and then move to selling e-books in whole or in part." And a new generation of online e-booksellers is gathering strength, certainly in America.  Www.ebooks.com "the digital bookstore", enables consumers to download, for instance, Philippa Gregory's The Boleyn Inheritance for Adobe, Microsoft or Mobipocket readers for $9.99. Fictionwise.com also offers a range of fiction and non-fiction e-books in multi-format; most are priced at around the same as their paper editions.

Tipping point

Sommer suggests that one tipping point may be the moment when a "dominant, open or almost open standard" for e-books emerges. "Everybody is waiting for a common standard. No one wants to convert 3,000 titles into a propriety standard that might not be around in three years." Bhaskar agrees: "Publishers should not be looking for the iPod or the iTunes of e-books, but rather the MP3. Once we have that—a standard format—everything else will happen in time."

Adobe has taken an early lead in this with its Adobe Digital Editions 1.0, now free to download and use (www.adobe.com/products/digitaleditions), it is designed as a "lightweight" solution for consumers who wish to read e-books or e-magazines on their desktop. Adobe also offers a library of sample chapters free to download.

Duggan is not so sure that a format will kick start the market. "The role of the publisher is to make books available in all formats," she says. "Although it is potentially confusing for consumers if there is seen to be a format war." A good reading device is more likely to drive demand, she believes. "The e-books market in the UK is very small. To break through there needs to be a concerted push by a device manufacturer, supported by publishers."

Amongst all the hesitation and early experimentation, one thing everybody agrees on is the opportunity ahead for publishers: more direct dialogue with customers; faster, cheaper, more imaginative distribution models; and even new forms of writing.

Duggan says: "Next year is going to be a very interesting time for e-books, with the development of e-readers, mobiles, broadband and wider availability of material."

Hon suggests people will pay for e-books "as long as they are cheap enough and really, really, really easy—easier than piracy". But his prognosis for publishers is still not that promising. "Maybe there are things going on behind the scenes, but judging from the outside some publishers are fatally unaware of what's going on online. With movies and music, there were people who went out of business because they couldn't catch up fast enough."

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