This fascinating article appeared in my email a few days ago, and I thought it was worth sharing with readers and publishers alike. Enjoy. --tps
As a fellow independent book publisher, I can’t help but wonder why I haven’t been affected one way or another by the current e-book revolution that so many of the articles I’ve read assure me is underway. After considering all the hype I’ve read about, I realized that all the parameters for these e-book discussions are being set by those who have financial interests in servicing those indies who wish to jump into the world of digital book downloads. I’m certain that e-book evolution will become an important factor one day; but to my way of thinking, it isn’t today. Because of this, I wrote a column on the topic that was in this month’s issue of Book Business magazine. For those of you who would like to see a less biased take on the topic, I invite you to read my article below.
THE 500 POUND E-BOOK, by Rudy Shur
In many industries, there is a moment that changes everything. For the horse-drawn carriage manufacturers, it was the invention of the automobile. For the telegraph company, it was the telephone. For the music industry, it was mp3 downloads. And for book publishers, it appears to be the e-book—or is it? If I were an outsider looking in at our business, it would seem to me that the e-gorilla has indeed entered the room. All you have to do is read the continuing stream of news stories that deal with the “spectacular” growth of the e-book market—that herald the latest of the Kindle or the introduction of Apple’s iPad—and it would seem that the industry is being turned upside-down. Pity the poor publishers who get left behind clinging to their old-fashioned paper books, because their days are numbered. Or at least that’s what some prognosticators would have you believe.
As someone who has spent more than thirty years in this business, I have a rather different take on the subject. Now granted, if I had been building buggies, I might have considered manufacturing a few of those new-fangled horseless carriages, and if I had owned shares in Western Union, I would have hedged my investment by picking up some AT&T stock. But book publishing is a very different animal, and because of that, I don’t think that our future is as uncertain as many now claim it to be.
Let’s look at the facts. At this time, approximately 3% ($200 million) of total book market revenue ($80 billion) comes from e-book sales. Experts estimate that this number could double over the next two years. Let’s say that in five years, the number triples. This would mean that 18% ($1.2 billion) of market revenue would come from e-book sales, and 82% ($78.8 billion) would still come from books on paper. That certainly would impact our sales, but it would hardly spell the end of the book world as we know it.
To better evaluate the impact of e-books on our industry, it’s important to understand the types of books that are being purchased in electronic form. Strangely, few studies have detailed exactly what books are popular as e-titles. General estimates indicate that e-textbooks represent about 15% of the overall e-market attributing the balance of sales coming from trade titles. But what kinds of trade books are favored by e-book readers? After conducting my own very informal interviews of people who own e-readers, I discovered that almost without exception, e-book readers buy bestsellers. I could not find one person who routinely buys reference or scholarly titles in electronic form. So how does that answer impact the independents?
For argument’s sake, let’s be kind and say that 80% of all trade books sold are bestsellers. The fact is that only twelve publishing companies represent the bulk of all best-selling titles. That leaves a paltry 20% of sales to be divided among the remaining tens of thousands of mid-sized, small, mini, and self-publishers out there. In dollars and sense, that’s not really enough income to sustain a mid-sized house. What that does indicate is the necessity for a major shift in economic strategies for those twelve trade houses. For the rest of us, at least, the pressure is not that great to shift gears immediately. And exactly what do I mean when I refer to shifting gears? I’m talking about independents stampeding to get their electronic book files turned into e-books.
What irks me the most are the dozens of new technology companies and websites that have sprung up to help us poor indies deal with the coming demand for e-books. These folks apparently are the “experts” in the field. After all, they give forums, workshops, and seminars. And they all repeat the same mantra. Convert your books now, before it’s too late. What, you don’t have an e-book program? And you call yourself a publisher? Shame on you, but don’t worry. For a few hundred dollars or a big percentage of your book’s revenue, we will gladly bring you into the Twenty-First century. For me, at least, the answer is, “Thank you, but no thank you.”
Currently, a variety of different electronic platforms are being used by competing e-book readers. This is akin to the video wars that once raged among producers of Betamax, VHS tapes, and laser disk formats. Electronic book technology is moving so rapidly that it’s impossible to know where the dust will settle. And based upon my meager e-book income as described above, I see no major gain to jumping into what appears to be a Wild West show. Personally, I’m also not too keen on giving up 50% of my revenue to have my titles converted into e-books for free. To my way of thinking, that would cheat my authors and hurt my company’s bottom line. For independents, the existing e-business environment clearly gives preference to the converters and e-book distributors. I believe that it is just a matter of time that numerous publishing partners and services will emerge to shift the balance more in our favor. When it does come to pass—and it will—there will be better options to choose from and time enough to make informed decisions.
As I see it, independent publishers are spending too much time worrying about the future impact of e-books, and are spending too much money partnering up with companies that are more hype than substance. We all know that change is coming. By 2025, technology will be providing us with new gadgets to run our businesses and sell our books, and e-books will be a significant part of the book trade pie. But right now, we independents need not worry about missing out on the imaginary wealth that awaits us in the e-book market. What we need to do is keep our eye on producing titles for the 97% that comprises the traditional markets. When the time is right to make the move it e-books, we’ll know it.
So, is there an e-gorilla in the room? Sure, there is. But it’s a lot smaller than you think.