The digitization of the music industry vs. the book world: the ultimate overview (part II)

The digitization of the music industry vs. the book world: the ultimate overview (part II)

Previously in this series: how the digitization of the music industry went. Today: the world of books, tomorrow the similarities and the day after tomorrow the differences between these two worlds. Together they form a four-part series written by Timo Boezeman and Niels Aalberts, with important additions and nuances by Erwin Blom, Eric Rigters and Jelte Nieuwenhuis. All work(ed) in book world and/or music industry

Books: from paper to e-book
The book world is often referred to as an ancient industry. And that is true. Where exactly it started is unclear, but early signs point to a Chinese in the 11th century that printed Chinese characters. Between the 17th and 19th century, however, print developed itself into what we still know nowadays.

The digitization of the book itself goes back to 1971, the year when Michael S. Heart started Project Gutenberg, and thus launched the e-book. This makes the e-book already forty years old. However, it took until 2007 before the e-book would break through on a large scale. Sony introduced its portable reader with eInk technology, which resulted in a rapid increase in adoption of this technology. At the end of that same year, the U.S. webshop Amazon introduced its own e-reader, the Kindle. From that moment on digital reading in the U.S. gradually became common and created the real big breakthrough for digital reading. In the Netherlands the introduction of digital reading lasted until the summer of 2009, when the Dutch webshop Bol.com started selling e-books with, again, the Sony Reader.

Books: growth of the digital format
It is often said that the sales of e-books in The Netherlands are three years behind on the U.S. And if you look at the sales figures of both countries, this seems quite the case. The trend that is currently visible in The Netherlands, is the same as in the U.S. a few years ago. With this knowledge in mind, it's not hard to predict where it will go in with the digitization of the book. The market share of the e-book in the U.S. is currently at an average of 17.6% (for some major publishers this percentage is even higher) and has increased by more than 1,000% over the last three years. Amazon also has a number of milestones, which show that the e-book has become a serious product. In July 2010 they sold more e-books than hardcovers, a half year later, they sold more e-books than paperbacks and in May 2011 more e-books than all paper books combined. In the Netherlands the share of e-books is currently between 1% and 1.5% of the total revenues, which can be compared to the percentage the U.S. had in 2008. Therefore, a 15% share in 2014 is more of a conservative prediction than an optimistic one. In short, the digitization is gaining more and more speed.

Books and music: dealing with that change
When an industry digitalizes, all sorts of problems come across your path. Should you protect your product (DRM), how do you convert all your content to digital, what price can you ask for the digital version, how do you deal with piracy and what do you do with declining revenues due to the shift from physical to digital? The initial response is: ‘try to preserve what you have.’ Protect your legacy, protect your revenue and prosecute those who ‘mess’ with your product. That was what happened with music, that is what is happening with books. And this is where the comparison between these two worlds starts. For years the music industry has tried to preserve what they had, and how they perished, is obvious by now.

If the book world could learn just one thing from the music industry, it is that you cannot stop the digitization. You can only come to the conclusion that people want to consume (increasingly) digitally. And a digital product, in an increasingly globalizing world, has different requirements than its physical counterpart. And it is this mindset, that is so important to keep your head above the water and your business running.

To show that both worlds have many similarities, but also differences, and that a change of mindset is needed to survive, we have put them all in a summary. More on that tomorrow and the next day.