E-books Report

A new survey from Nielsen suggests that ebooks continue to make gains in book markets.  The bad news is that some of that seems to be coming from online sales.

The digital formats (ebooks, audiobooks) increased their share of book sales revenues, while traditional print markets saw their share decline to 70%.  The biggest decline was in trade paperbacks, which fell from a third of the market in 2013 to just above a quarter in 2014.  In terms of units sold, ebooks increased their share slightly, to 21% of the market for new books.

 Online retailers (for both print and ebooks) remained the dominant sales channel, although it's share of sales fell slightly, to 35%.  Brick and mortar outlets (bookstore chains, independent bookstores, and other outlets) mostly retained their market shares.  The only big decrease in market share was for bookstore chains.

Diffusion of ebook readers continued apace, with smartphone ownership around 75% of adults, and tablet ownership over 40%.  The graph to the right reports shows the percentage of ebook readers who indicated that they owned a particular device.  Two things are clear from the numbers -- first, that many ebook readers have multiple devices, and second, that market share is variable, and influenced by devices entering and leaving the field.  Last year, for example, saw large increases for Android OS devices (smartphones and tablets). Apple's mobile devices remain the most widely owned, while Amazon's various Kindle devices were the other big branded device.

Source -  E-books Gained, Online Retailers Slipped in 2014, Publishers Weekly

E-book reading gains sparked by increase in device ownership

The Pew Internet & American Life Project has release a report on "E-Reading."  The report notes that readership remains strong among American adults, with about three-quarters indicating that they had read at least one book in the last year - levels that have remained fairly consistent across Pew's studies from 2011 to 2014.  On the other hand, those reporting they have read an e-book have increased significantly, from 17% in 2011 to 28% in 2014.

One of the factors for the increased e-book readership is the rapid diffusion of handheld readers - in the form of dedicated readers like the Kindle, and/or in the form of tablets.  The study reports that, currently, half of Americans own tablets and/or e-readers.   In fact, e-book readers are almost as likely (55%) to use tablets for reading as they use e-readers (57%).

Tablet ownership growth and diffusion now outpaces that for e-readers.  In May, 2010, only 3% of American adults reported owning a table, growing to 42% by early January, 2014.  E-reader ownership was at 4% in May, 2010, rising to 32% in the latest survey.  As you'd expect, there are demographic differences in device ownership, those reporting reading at least one book (or ebook) a year, and in the number of books read annually.  However, only a few differences were sizable -

• Older Americans, those with less than a high school education, and lower income, were all less likely to own handheld devices for reading.
• In a bit of a surprise, younger adults (18-29) were also much less likely to have e-readers than tablets.
• Hispanics were much less likely to report having read a book in the last year, both in print and e-book formats.
• Age mattered in reporting having read an e-book (the older the less likely), but not in reading print books.
• More women reported reading a book than men (74% v 64% for printed books; 33% v 23% for e-books)
• E-book readers haven't abandoned print - 87% of those reading an e-book also report reading a printed book.

When asked about how many books they've read, the mean for all adults was 12, while the median was 5.  In other words, half read at least 5 books a year, and some portion read much more (for the mean to be that much higher requires that there be a lot of people who read a great deal more than that).  I can support that anecdotally - I read 30-50 books a year, and when I managed a used book store I had customers who read 10-20 books a week.

The study shows that women are not only more likely than men to have read a book, they also tend to read more books in a year.  Again, the other noticeable drop-off is for those self-identifying as Hispanic.  While there is likely some interaction effects with other demographic factors, I wonder if language (and the relative scarcity of Spanish-language books in the U.S.) might also be a contributing factor.

As an avid e-reader, I've noticed that I'm running across more and more non-English language books in the Kindle and iBook stores - but still nowhere near the number and variety of English-language books.  So relative scarcity and lack of diversity of Spanish-language books may be a contributing factor in the lower readership levels among Hispanics.

Source -  E-Reading Rises as Device Ownership Jumps,  Pew Internet & American Life Project report.

Reading in the Digital Age

A recent presentation posted by the Pew Internet & American Life Project has some interesting slides on ways that ebooks and readers are having on book reading.  E-reader capabilities have dramatically improved in the last few years, as prices have fallen, and the e-book market once dominated  by Amazon is facing increased competition from Apple's iBooks and Google Play.  And major publishers have expanded their ebook offerings.  Ebook adoption exploded in each of the last two holiday seasons through gift-giving and purchasing, and seems poised for another big jump this year.

One of the interesting aspects of ebooks is that adoption and use hasn't been dominated by young males.  Ebook reading in the U.S., at least, is fairly widespread, with a small peak in the 30-49 age group.  Where age does matter is with regard to which devices are used for reading ebooks. Those under 30 are much heavier users of smartphones, laptops, and desktops for reading (mobile phones 41% v. 25%; PCs 55% v. 38%), while those 30 or older are heavier users of Ereaders (46% v. 23%) and tablets (26% v. 16%).

As we're also starting to see with online video usage across devices, people are starting to develop preferred practices.  People overwhelmingly prefer reading print books when sharing (81% feel printed books are best when reading to a child),  Ebook advantages seem to be tied to practicality: 83% prefer ebooks for getting books quickly; 73% prefer ebooks for reading while traveling; and 53% note the wide selection available.  (I'll personally attest to the advantage of ereaders and ebooks when engaged in lengthy travels and semesters abroad).
Previous studies have also shown that ebook adoption and use is highest among heavy readers, and particularly among genre-fiction readers.  (I ran a used paperback store for a while, and our best customers would show up weekly with a grocery bag of genre fiction, and leave with another (romance, mystery, science fiction were top genres).

Another Pew study found that leading-edge librarians report that the rise of ebooks has induced a major shift in book searching and borrowing at their libraries.  Avid readers are using branch libraries less, shifting their borrowing to downloads from the main library website.  Browsing and searching for titles has similarly shifted from catalogs to websites.  Many of the librarians report that they're excited about the role ebooks are playing for their patrons, and for the future of reading and libraries.  On the other hand, ebooks have joined other media in competing for limited acquisition funds.  They're also finding that librarians find themselves providing "tech support" more than traditional reference services.

The Book Industry Research Group has released findings from its recent study of the impact of ebooks.  The key result is the conclusion that ebooks are now considered a normal means of consuming written content, accounting for roughly 30% of the market.  Some of the results suggest continuing industry transformations, however.

  The study found that readers don't differentiate between traditional big publishing houses and self-publishing alternatives when purchasing books. Content, author reputation, and user reviews on ebook sales sites is replacing the gatekeeping and brand functions that book publishers have relied on.  This could create problems for traditional publishers who can't adapt to a shifting market.  A number of small publishers have gone under as their authors discover that self-publishing can be much more rewarding to authors than traditional contract splits.  Others, such as HarperCollins, are experimenting with direct sales models for prominent authors' lists (and saving themselves the retailers' cut).
  The BISG study also found considerable and continuing interest in print books as well.  Almost a third of their sample indicated that they purchase print and ebooks interchangeably.  Consumers also expressed strong interest in bundling print and digital versions of books, and almost half indicated a willingness to pay a bit more for the bundle.  (Amazon's starting an experimental program offering access to ebook versions of books purchased through their site).  They also found that more than half of their sample expressed a willingness to pay more for ebooks with traditional print attributes of being able to resell or give away the digital versions.

All told, it seems that like digital audio and digital video, digital books have become a permanent part of the market for content.  The distinctive attributes of digital are transforming how consumers access, purchase, and use content.  The fact that digital distribution offers significant cost reductions, and opens up new ways of marketing content, are having their impact on traditional content industries as well.  The good news for traditional formats is that consumers see the advantage in all of the various form factors, and if traditional outlets can adapt their traditional models to become competitive with the new, they're likely to find ways to survive and possibly even thrive.

Sources -  Reading, writing, and research in the digital age,  research presentation, Pew Internet & American Life Project.
Libraries, patrons, and e-books,  Pew Internet & American Life Project research report
Study: E-books Settle In,  Publishers Weekly
Ebooks and discounts drive 98 publishers out of business,  The Guardian

UK sees boom in digital reading - Infographic

The 2012 National Readership Survey showed significant growth in the use of digital devices for reading newspaper and magazine content with use of tablets and other e-readers doubling, for both magazine and newspaper content.  While they report ownership of those devices was fairly low at the time of the survey, the results indicated that such devices are widely used by their owners for reading newspaper content (44%) and magazine content (27%).  And diffusion of tablets and e-readers continues to expand, suggesting that the importance of digital reading will continue to grow, becoming a significant means of reaching readers.

Source -  National Readership Survey infographic illustrates rise in digital magazine and newspaper reading,  journalism.co.uk

The (Absurdly) High Cost of Textbooks

This morning I explained why I wasn't requiring a textbook (much to their relief) - it's absurd price ($160 in paperback on Amazon, more for the Kindle version). Then I see a link to a good graphic on price increases over time that accompanies a short piece on The Atlantic website.

There's a lot of reasons given for high textbook prices - higher than normal production costs, limited demand, the need for sturdier versions (i.e. hardcover vs. paper) to bear up under studying and note-making.  But most don't hold up in a digital media marketplace.  What does is the forced demand generated from us professors requiring our students to buy them.

Enter the open educational resources (i.e. textbooks & related materials) initiative, as discussed in a recent Slate/Future Tense piece.  The piece discusses the efforts of academic publishers to sue a online open-access "publisher" out of the market.  Not for plagiarism or copyright violation, but for ordering topics/chapters similar to how they're presented in their textbooks. Absurd, right?
(I did a post on the Free Text Movement and some of our efforts here at UTK several weeks ago)

The Slate piece suggests that academic publishers are likely to follow the path of the printed encyclopedia (and the wooly mammoth).  There's  a good chance of that if they follow the strategy of trying to litigate their competition out of the market.  But that's not the only strategy available - several (MIT Press and Oxford University Press most notably) are putting out reasonably priced trade versions for some specialized textbooks, and smaller university presses are testing open-access online publishing.
I'm going to try to write a text for my class, and offer it though our Tennessee Journalism series.  It's more work, but gives us authors the ability to add multimedia and online features, and the advantage of rapid updating, and gives our students cheap alternatives.  (And as a full professor, I'm not as concerned about it qualifying as peer-reviewed research).

Traditional academic publishers could try embracing the opportunities of online and on-demand publishing, rather than trying to retain the old monopolistic business model.  They still have significant value as gatekeepers and guarantors of peer-reviewed quality - and may be able to make up in reduced costs and increased demand most of revenues now based on high per-unit profit margins in shrinking markets.  Just like most traditional media have had to do in recent years.  There's a lot of downside for business models based on litigation, and not much of a long-term future.


Sources -   Why Are College Textbooks So Absurdly Expensive?, The Atlantic
Never Pay Sticker Price for a Textbook Again, Slate/ Future Tense
The college textbook bubble and how the "open educational resources" movement is going up against the textbook cartel,  AEIdeas blog (source for graphic)

The (Free) E-Textbook Movement

Prices for textbooks in the U.S. are, for the most part, outrageous.  Particularly within higher education. The annual costs for books and supplies for college students averages $1200.  The old reasons for high cost given to the public - low press runs and higher print-setting costs (due to use of wider range of symbols and languages) - don't apply in today's publishing world.  Yet even as costs decline, textbook prices have skyrocketed.  Which leaves one primary explanation for continued price increases well above inflation rates - a captive market.  Instructors assign required texts, and students have to buy them - whatever the cost.  So textbook publishers feel they can easily raise prices.  And when the market for used texts boomed, their response was to push up the frequency of revisions to restrict that market challenge.
  The rapid increase in prices for textbooks has had some consequences - a number of universities and colleges (mine included) have adopted policies asking instructors to consider textbook prices when assigning them.  Others (again, mine included) have encouraged development of reading packs and texts for classes, and subsidized their production to keep costs low, and/or have established online book imprints for low-cost or free distribution - a California law will require the development of free online textsbooks for the 50 most popular courses in state colleges and universities.  And I'll note that two major academic publishers, Oxford University Press and MIT Press, have undertaken to make many of their texts available in more affordable trade versions. While all of these approaches have been helpful, textbook prices continue to rise.
  (I recently looked around for a text for a new course I'll be teaching - and the most appropriate text was $160, and the other viable alternative was also over $100.  I'm ancient enough to recall that in college, $100 was usually enough to get the books needed for 4-5 courses per semester.  In grad school it rose to $150; maybe $200 if I also bought the recommended texts.  And I typically spent more at used book stores, building up my library.  But today, I can't justify (at least to myself) asking my students to fork over $160 for a text.)
  The rise of eBooks, including the rapid diffusion of eReaders (and now tablets), has opened the door for digital textbooks.  eBooks have several advantages that textbooks could exploit - they're cheaper to produce and market, the publication process is significantly faster (and allows for near-realtime updating), and can easily include multimedia and links to online resources. Mainstream textbook publishers have slowly tested the market, but tend to keep prices absurdly high (to minimize impact on print markets).  Prices for e-Texts, however, don't need to be high - they are relatively cheap to create (mostly authors' time and effort) and very cheap to distribute.  Apple's pushing to keep textbook costs under $10).  And some of the major eBook retailers (Apple, Amazon), along with the FCC and U.S Dept. of Education, are encouraging the development of affordable online texts.  (We've just started the Tennessee Journalism Series here at UT - four short texts now, with many more in development).

  And now there's the booming OpenSource textbook movement.  Some of the boom is in the form of open-source publishers like Boundless Learning, which uses open-source materials to assemble their own versions of popular textbooks.  Boundless is currently being sued by a group of large academic publishers for allegedly engaging in a "business model of theft."  Some are the results of state and foundation supported efforts, like the California Open Source Textbook Project, CK-12, Merlot, and OpenStax.  Others build from University-sponsored efforts to promote free online access to their courses, like MIT's OpenCourseWare project and the University of Illinois' Open Source Textbook Initiative. At the heart of these efforts is the notion of pulling together and building on existing educational materials, and facilitating their online publication and distribution.
  And then there's people like me and my colleagues at the Tennessee Journalism Series - senior professors who have textbooks in our heads but have dreaded the time and effort involved in getting a book contract from an academic publisher, and then going through the full publication process (and more important, the relatively low rewards for that effort in terms of getting tenure or annual reviews at research universities).  Apple, Amazon, and open-source textbook initiatives have vastly simplified the process - so it's time to open the floodgates.  Besides, for most of it, the reward is in getting our work recognized and used - and high prices in academic publishing (both books and journals) get in the way.  Going open-source can facilitate wider access and use, and thus increased recognition.
  As more and more of us go to open-source, the greater the competition for mainstream texts.  That should at least slow down price inflation, if not create a force for price moderation.  I'll looking forward to the transition.  Now only if I could get those dang books out of my head.

Source  -  Free Textbooks Spell Disruption for College Publishers,  MIT Technology Review

EU on E-book Price-Fixing

Apple made news a few years ago by conspiring with major publishing houses to fix prices for all E-book sales.  Last spring, most of those involves settled a U.S. antitrust case by agreeing not to set minimum prices for the sales of E-books.  Antitrust regulators in the EU have now reached a similar deal.
  Apple and major E-book publishers have agreed to allow retailers to set their own prices, and allow them to offer discounts - at least for the next couple of years.

While this is a good first step, there's a caveat.  In both settlements, their promise to not conspire to price-fix is temporary.  US and EU regulators are likely to have to restart their anti-trust probes and lawsuits in a few years.

Source -  Amazon Trumps Apple In E-book Battle, OnlineMediaDaily

US Justice Dept. Looks at Price-Fixing in eBooks

Lawyers in the Antitrust Division of the US Department of Justice are threatening to bring a price-fixing lawsuit against Apple and top book publishers.  At issue is the deal between top publishers and Apple for access to their content for the iBooks market.  The Apple deal was different from previous book marketing and distribution arrangements, including previous deals with Amazon, in that it gave publishers not only the right to set suggested retail prices, but also to dictate (and limit) the retailer's ability to discount books.  In discussing the deal, Steve Jobs reportedly told his biographer that "Yes, the customer pays a little more, but that's what you want anyway."  Jobs also reportedly said that the publishers got together and approached Amazon with a "sign the same deal or we'll pull access to all our books" offer.
  The Justice Dept. lawyers contend that this shows collusion among book publishers, and Apple, to fix prices at a level above market value. 
  If Justice proceeds, there's a pretty good chance that they'd be successful against the book publishers, as there looks to be clear collusion among publishers to approach both Apple and Amazon with a uniform position, with what seems to be a clear intent to manipulate prices above market levels and to usurp the traditional ability of retailers to move from the suggested retail pricing in response to shifting market conditions and demand.  The case against Apple might be a bit weaker, as their position was essentially the same position it took with the music industry and other online content producers.  It'll be interesting to see how this proceeds,
  In addition, the position taken by the big publishers may backfire, with their determination to keep prices high driving readers to less expensive options from smaller publishers and self-publishing.  The eBook model already provides smaller publishers with expanded access to eBook markets, and exaggerating price differentials for close substitutes, economic theory suggests, will shift demand to the lower price goods.  By insisting on high-prices, and the high-demand authors that might justify such prices, they seem to be on track to making themselves niche players rather that big, general-interest publishers.

Source -  Steve Jobs, Price Fixer,  Wall Street Journal Information Age blog

Opensource for Textbooks

Non-profit publisher OpenStax College is working with Rice University to develop online textbooks for introductory college classes.  The eTexts will be available for use anywhere and OpenStax thinks that their program could save students as much as $90 million over the next five years, and could capture more than ten percent of the intro text market in the U.S.
  One big difference between this program and other open texts is that OpenStax is following the traditional textbook publishing process of peer-review and heavy editing for accuracy and validity.  OpenStax, primarily funded through grants, is using the grant to hire experts to develop each textbook (rather than paying royalties for actual sales), and going through several layers of peer review in the creation of the texts.  They are also willing to incorporate materials from for-profit publishing partners when appropriate, although the costs for those materials will need to be passed on to students.  Within the next few months, introductory texts for sociology and physics classes, with biology, anatomy, and physiology texts available next fall

Students and professors will be able to download PDF versions on their computers or access the information on a mobile device. Paper editions will be sold for the cost of printing. The 600-page, full-color sociology book is expected to sell for $30 for those who want a print version -- those content with digital will pay nothing. Leading introductory sociology texts routinely cost between $60 and $120 new.

As open-source materials, textbooks can be modified by instructors, giving professors the capability to add content, shift sequence, or delete sections.  They also share the Ebook advantages of being instantly updatable, whether correcting typos, expanding chapters, or adding new chapters or supplemental materials.  These are all valuable features for users, but could be a problem for educational publishers who have exploited the captive market of required texts, and regular new editions, to keep prices high.

Taken in connection with Apple's IBooks-textbooks initiative focused on K-12 education, this could signal the start of a major shift in educational publishing industry and the markets for textbooks.

Sources - Rice University announces open-source textbooks,  Inside Higher Ed 
OpenStax College website
iBooks textbooks, Apple in Education 

edit track:  added links for OpenStax College and Apple initiative

Apple's Push for iTextbooks

Apple made several big announcements in connection with the recent CES, aimed at developing a low-cost digital textbook market in support of its iBooks marketplace and its iPad and laptop hardware.

• the free iBooks 2 application is updated to integrate interactive textbooks, which can include video, audio, pictures, and motion graphics designed to take advantage of the iPad's touch interface.  There is also the potential to highlight or take notes on the interactive text (which automatically convert to study cards), and to work through included problems and examples.
• Apple's working with large textbook publishers to offer titles through the iBooks store, with most priced under $15.  This could make them more affordable, and more portable, alternative to traditional printed textbooks.  So far, the available texts suggest a focus on K-12 texts for now.
• Apple introduced iBooks Author, a self-publishing tool for Mac users, aimed at non-commercial and educational uses (the license agreement makes commercial applications more complex and messy).  iBooks Author uses a "drag and drop" (or cut-and-paste for us older folks) approach, offering several templates and widgets to help develop more of a interactive feel.

During the announcement, Apple also mentioned it's current iTunes U app, with its substantial library of educational materials and apps.
  The mix of materials and applications may provide Apple with a bit of a competitive advantage over Amazon's Kindle and its offerings.  Amazon, though, handles both physical and eBook textbooks, and offers both new and used versions, as well as rentals.  Until the Kindle Fire, though, interactivity was limited.  Amazon also offers authoring software, although theirs is not optimized for educational and noncommercial uses.  Also, the Kindle textbook offerings seem targeted towards college and graduate school offerings, where even at a 30-60% discount, textbooks remain pricey.
  What will be interesting is to see to what extent the potential of eBooks can enter the academic mindset, allowing scholars to make their work (in terms of both texts and research results) more widely available to the global market.

Source - Apple tackles textbooks with iBooks 2 for iPad,  FierceMobileContent

Barnes & Noble Enters Tablet Fray

Post contributed by Betsey Poore -


The new Nook Tablet, which was originally planned to be released on November 18, will now be released on Wednesday November 16. This applies to both customers who have pre-ordered the Barnes & Noble’s Nook Tablet for in-store pick-up and for those who chose to have it shipped to them. 
  The Nook Tablet is priced at $249 which is significantly less than Apple’s iPad, but still not as inexpensive as Amazon’s Kindle Fire. Barnes & Noble’s Nook Tablet plans on making money the same way that Amazon plans on making money through the Kindle Fire—an online store.
  The Kindle Fire, which was expected to be shipped out on November 15, was actually shipped out a day early, on November 14. Amazon officials said that the Kindle Fire was shipped out early to keep up with the high demand.
  “We’re thrilled to be able to ship Kindle Fire to our customers earlier than we expected,” Dave Linp, Vice President for Kindle at Amazon.
  It is clear that the release of both the Barnes & Noble Nook Tablet and Amazon’s Kindle Fire anticipate big sale numbers this holiday season.  This raises the question of who will compete. Is the Kindle Fire going to try and compete with the much more expensive iPad, or will its biggest competitor be the Nook Tablet?

Sources -  Nook Tablet shipped early,  Mashable.com:

Kindle Fire shipped early,   Mashable.com

Amazon Establishes Digital Publishing House

  After coming to dominate traditional book sales, Amazon has been a key driver in the growth of eBooks, initially working with publishers to consider digital sales, then producing the Kindle eReader, which undercut the limited competition at the time with a reader that offered better performance and a cheaper price.  Amazon has continued with innovative marketing, creating free eReader apps for most platforms, and making arrangements to offer Project Gutenberg's growing collection of public domain works (including many great works of literature) for free.  All these factors have combined to drive eBook sales to the point where Amazon now sells more eBooks that printed books.

  Amazon hasn't stopped there, however.  Instead of limiting its offerings to works from traditional publishers, Amazon created a system for self-publishing - authors could post their work on the Kindle marketplace, bypassing the traditional middlemen of agents and publishers (and their cuts).  This has caused some disruption, with some very successful authors deciding to publish themselves (see this post).
  Amazon's now taken the next step, and established it's own publishing house, announcing that it will publish more than one hundred titles this fall, in both print and digital versions.  It's already had one success with The Hangman's Daughter.  Originally published in German, Amazon bought the rights, had it translated, and has now sold 250,000 digital copies.  Traditional publishers claim that Amazon is actively recruiting top authors, and offering the full range of services and support that agents, publishers, and critics provide.  As such, Amazon is competing directly with the traditional publishing industry.
  While most publishers approached for a story in the NY Times refused to comment on the record, Dennis Loy Johnson of  independent publisher Melville House quipped “Publishers are terrified and don’t know what to do."  Agent and e-publisher Richard Curtis elaborated - “Everyone’s afraid of Amazon.  If you’re a bookstore, Amazon has been in competition with you for some time. If you’re a publisher, one day you wake up and Amazon is competing with you too. And if you’re an agent, Amazon may be stealing your lunch because it is offering authors the opportunity to publish directly and cut you out."
    Amazon's impact on publishing may not be over, either.  There was talk, surrounding Amazon's launch of it's Kindle Fire tablet, that Amazon was trying to establish what would amount to a book subscription service offering Kindle readers access to a wide range of titles for an annual fee (or as part of Amazon Prime).  If realized, such a service could have significant impacts on reading habits and book purchasing.
  Amazon executive Russell Grandinetti responded this way - “The only really necessary people in the publishing process now are the writer and reader... Everyone who stands between those two has both risk and opportunity..”
  The risk is faced by the traditional gatekeepers (publishers, distributors) who used their position to dictate terms, particularly with non-established authors, and grab a larger share of value.  They've lost their control over access to book publishing and the traditional business model that was based on it.  The opportunity is for anyone who can find a way to add value to the author's work.  And there is a lot of opportunity for that, for Amazon, for publishers, and other entrepreneurs as well.

PS - Amazon launched its science fiction, fantasy, and horror imprint, 47 North, last week.  Among scheduled releases are works (and series) from a number of top genre writers, including Dave Duncan, B V Larson, Greg Bear, Neal Stephenson, and Stephen Leather.  The 47 North imprint will join Amazon Publishing's other imprints - AmazonEncore, AmazonCrossing, Powered by Amazon, Montlake Romance, and Thomas & Mercer..

Sources - Amazon Signs Up Authors, Writing Publishers Out of Deal,  NYTimes, posted at CNBC
Amazon's Announcement of 47 North Sci Fi Imprint, e-reads blog
Amazon Publishing website

Edited to include postscript and added sources (19 Oct. 2011)

Those with e-Readers read more

A new Harris Interactive poll suggests that the rise of eBooks and readers may actually prove a boon for the book industry.  Respondents who use an e-Reader report reading more books a year than people who don't.

Books Read In A Year (All adults; % of Respondents by Group)
			e-Reader		Generation
Read	Total 2010	Total 2011	Use	Does not use	Echo Boomers (18-34)	Gen. X (35-65)	Baby Boomers (47-65)	Matures (66+)
0	9%	15%	8%	18%	13%	19%	17%	12%
1-2	14	14	7	15	9	15	18	11
3-5	20	20	14	21	23	17	20	17
6-10	16	15	18	15	17	14	14	16
11-20	21	16	32	13	20	14	14	15
21+	19	20	27	19	19	20	17	29
Source: Harris Interactive, September 2011 (Percentages may not add up to 100% due to rounding)

 Those using e-Readers also report buying more books in the last year (59% buy 6 or more), compared to non-eReader users (71% buy 5 or fewer, and 36% report not buying any).
  Now this doesn't necessarily mean that getting an e-Reader causes increases in reading and book-buying - in fact the causality is more likely in the opposite direction.  That is, people who read a lot and buy books are more likely to be owners of e-Readers - they likely perceive greater value in what are still fairly expensive devices.
  To address this question, and another criticism that with the ease of downloading books, some people may buy more but still read the same number of books, the Harris survey asked a series of question about reading habits.  (As an aside, the same argument about buying more books than you could read can also be applied to printed books, as witnessed by the stacks of unread books in my home and office).
  The survey found that about half of the sample reported reading about the same amount as they did six months ago, a result that was fairly consistent over time and when looking at e-Reader use.  However, of the half who reported a change in reading habits, e-Reader users split heavily towards reading more (36% more, 8% less), while those not using e-Readers split in favor of reading less (24% less, 16% more).  Another question asked whether respondents purchased more, but did not read them as much as before; 4% of eReader users said yes, while 3% of non-users agreed.  However, I have to say that's a really poorly worded question - it may be designed to specifically test that specific criticism - but it's a confusing compound question that really doesn't add much.
  The survey also reported e-Reader use at 15%, with another 15% anticipating that they will be getting one in the next six months.  They provide some breakdowns in terms of types of books (genres) read, but the responses are broken down by generation (age ranges) and gender, not e-Reader usage.

The Harris results are generally supportive of the developing trends in e-Reader use and eBook sales, although the phrasing of the questions and breakdowns aren't all that insightful.  Use and consumption of digital books continues to increase, with greatest adoption by heavy readers, and a suggestion that e-Reader users end up reading more and buying more books..  See the previous blog post on the Kindle Fire for more discussion on the implications for the book industry, and the implications of cheaper e-Readers.

Sources - EReaders Read More, Research Brief from the Center for Media Research
One in Six Americans Now Use E-Reader with One in Six Likely to Purchase in Next Six Months, Harris Interactive press release

Amazon's Kindle Revamp & the Future of Digital Media

As predicted, Amazon announced it's first entry into the tablet market on Wednesday, the Kindle Fire. On the technology front, it's not going to directly challenge Apple's iPad.  The Fire has a color touchscreen, but it's only 7 inches (slightly larger than the Kindle reader at 6") compared to the iPad's stunning 10 inch display.  The Fire has no camera or microphone, does not have the capacity to hook up to a 3G network (it does have WiFi), and is limited to 8 GB of internal storage (the iPad comes with up to 64 Gb).  It's stated battery life of 8 hours is several hours less that the iPad 2's expected  time on a charge.  Running on an Android OS, the Fire pulls from the Android app base that still has a way to go to match the range of apps available for the Apple iOS system (approaching half a million).

On the other hand, the Fire isn't being marketed as an iPad-killer high end tablet.  It seems to be envisioned more as an extension of the Kindle branding approach - a device for accessing and using digital media content - only this time accommodating audio and video content (especially content acquired through Amazon).  As the lead feature on the Amazon Kindle Fire product page states, "Movies, apps, games, music, reading and more," with "18 million movies, TV shows, songs, magazines, and books" available through Amazon.  Screen size and battery life is sufficient for regular personal use, and the Fire offers stereo speakers (for stereo on iPads you need to use headphones), and the limited onboard storage is offset by the included free Cloud-based storage for all content acquired through Amazon.  Further, the Fire comes with a one-month trial of its Prime membership, and Prime members get free streaming access to more than 10,000 movies and TV shows.  Amazon's MP3 store regularly offers free songs and samplers, and Kindle bookstore continually offers free promotional titles, access to hundreds of thousands of older public domain titles, and connection with a growing network of public libraries offering eBook loan services.  The Fire is aimed at heavy media consumers rather than Internet and computer users.  But it's not limited to just media.  The Fire includes a customized web browser, and the Android OS means it can run games and other Android apps.  And its priced at $199, while the iPad 2 starts at $499.

John Gruber, blogging at Daring Fireball, gives a good summary of the contrast between Apple and Amazon in the tablet market -

"The iPad takes it on from the high end. It's the best possible device in that price range from the world's best maker of devices. The Kindle Fire takes it on from the low end. The iPad is a credible laptop replacement for many people—and with iCloud and another year or two of hardware improvements that's going to be true for more and more people. The Kindle Fire is a laptop replacement for almost no one. It's a peripheral, not a second computer—and it's priced accordingly."

Analysts expect Amazon to sell 2.5 million Kindle Fires in the first two months (expected to start shipping Nov. 15), and 13-15 million in 2012 (in the U.S. only, for now).  On the other hand, projections are for Apple to sell more than 50 million iPads worldwide in 2012.

While most of the hype has been centered on the Fire as Amazon's first tablet, Wednesday's product launch went well beyond that - introducing a range of new models and price cuts.  Analysts were anticipating a $249 tablet offering, and perhaps the first sub-$100 basic Kindle.  Amazon's biggest surprise was not only pricing the tablet at $199, but three different models breaking the hundred dollar price point, if you're willing to go with the "Special Offers" service, which lets Amazon put ads or offers as the device's screen saver (without is $30-$40 higher).  There's a basic reader at $79, a touchscreen e-Ink version at $99, and a version with Amazon's traditional keypad feature also at $99.  Both the Touch ($149) and Keyboard ($139) models also have 3G models that allow free downloads outside of WiFi areas.  The larger screen DX model remains available as well.

The new price points could well prompt another huge extension of the eBook market this Holiday season - rapidly expanding the ownership base.  A Pew Internet report in June indicated that eBook ownership doubled between November 2010 and May 2011, rising from 6% to 12% of U.S. adults.  A Harris Interactive report released last month suggests ownership and usage will double again in the next six months, and that was prior to Amazon's new models and price points.  With the new prices and models, I anticipate greater adoption and use among younger readers and media consumers, expanding the eBook market.  If Amazon can also follow up with a subscription model for ebooks, this could well push up interest in reading and demand for books. 
In a similar vein, the Fire price point is also likely to significantly expand adoption of tablets and their use for media content.  This should further hasten the shift to digital media and on-demand usage.  It will be interesting to watch the coming transformation.

Sources - Amazon Kindle Fire No True iPad Rival: Munster,  eWeek.com
E-reader ownership doubles in six months, Pew Internet  (full report available at this site)
One in Ten Americans Use an eReader; One in Ten Likely to Get One in Next Six Months, harrisinteractive

Amazon works on adding eBook subscription to Prime

According to stories on SlashGear and the Wall Street Journal, Amazon is in the process of negotiating with major publishers for the right to offer a subscription-based ebook service, possibly as part of their current Prime membership benefits.  Similar to the free streaming access to a subset of their digital movies and TV show store that Amazon extended to Prime members, the planned service would give members the right to download and read (or perhaps access and read through the Kindle Cloud app) selections from a selected library of content.  The move from Amazon can be seen as both a way of adding value to its Kindle brand, and competing with emerging "loaner" programs being launched by public libraries and Barnes & Noble (whose plan allows full streaming access to its digital offerings, but only from its stores WiFi feeds.

Reactions from publishers has reportedly been mixed.  Publishers fear that blanket access to titles might limit the value of books.  The huge boom in eReader and eBook sales this year already seems to have the publishing industry in panic mode, and now concerns about libraries loaning newly published ebooks and the potential addition of an Amazon "loaning" pool is fanning the flames.  On the other hand, unlike the library loan programs, Amazon seems willing to pay what's quoted as "substantial" fees for their planned service, and that's something publishers should consider.  Along with the promotional potential, as readers may develop interests in authors or series that could create added demand for related titles.

The stories also suggest that Amazon hopes to have some kind of Prime access plan in place for the coming launch of a Kindle tablet.  The new tablet is expected to run the Android OS, optimized to allow users to benefit from the added value of Amazon's digital content offerings (video, music, text), all obtained through Amazon and stored on the Amazon Cloud service for access anywhere, anytime.

Sources - Amazon Prime ebook subscription in talks for Kindle tablet,  SlashGear
Amazon in Talks to Launch Digital-Book Library, Wall Street Journal - Technology
See the ebooks tag for other posts in this area

New Sony eReader touts Library links

Post suggested by and largely excerpted from submission by Betsy Poore -

Sony was one of the early innovators in, and suppliers of, eReaders, but sales of early models were handicapped by Sony's reliance on a proprietary eBook standard, need to link to a PC to load books, and relatively high price compared to Amazon's Kindle.  Sony seems to have learned from its plethora of DRM and proprietary standard problems, and is not focused on enhancing usability rather than controlling content use.

Sony's new eReader is promoted as the lightest eReader yet, and will include WiFi, and is equipped with the capacity to link to an emerging public library eBook system.  Member libraries offer not only WiFi connectivity to patrons, but allow those with valid library cards to "borrow" eBooks from their growing collections.  The idea of library eBook access is fairly well tested, with several smaller national libraries in other countries permitting their citizens access to digital copies of books and materials in the public domain, or where licensing permits.  The partnership with US and Canadian public libraries should prove a boon to both libraries and readers.
The new eReader also takes advantage of Sony's scale, coming with a coupon to visit the new Pottermore website and download the first Harry Potter eBook.  Sony is a sponsor of the Pottermore site, and the exclusive retailer of the Harry Potter eBooks.

This new trend in eReaders - collaboration with authors, libraries and newspapers will  impact the way people read.  The interactive aspect of eBooks - the ability to highlight, bookmark and write notes in the margins - has already started to be popular and is only going to become more popular. 

Sources - Sony Wi-Fi (PRS-T1) revealed, Harry Potter Involved,  SlashGear

Pottermore website: http://www.pottermore.com/

 

Sarah Hoyt on Authors, Agents, and Publishing

Award-winning fiction author Sarah Hoyt recently wrote a post on some of the changes she's seeing in the publishing business.  It's interesting from several perspectives, not the least of which is offering an author's perspective.  And well worth a read in full, including the comments (where she gives added thoughts and advice on getting published).
The post is motivated by her decision to drop her agent, and go without one, at the end of her current contract.  Praising her current agent, her decision is based on changes she's seeing on the agency and publisher side of the book business. First, she noticed that the responses by publishers to work submitted by her agent were "slow and often rude, not just to me but to my agent." As she continues,

"Now publishers don’t seem to care. Mostly they’re publishing bestsellers. It’s the only way they think they can survive the next two or three years."

While bestsellers are good, the foundation for both publishers and agencies are the "midlisters" - established authors with steady sales (often in genre fiction).  They aren't always the most profitable, but their sales tend to be steady, there are a lot more of them, and in aggregate, they generate most of the income for most publishers and agencies.  Letting that segment slip away, whether intentionally or through shifting shrinking resources to other areas, isn't likely to be a good long-term strategy.  Given their perception that the big publishers aren't interested in midlist authors' work, several agencies (including the one she currently works for) are responding by developing their own digital publishing arm.
Its a logical move in digital publishing, Hoyt suggests; agents and agencies already act as first-stage gatekeepers, sifting through submissions from their authors and from those seeking an agent.  They also handle initial editing and much of the promotion for writers and books.  And in digital publishing they can bypass the other major services that traditional print book publishers provide (printing and distribution) as well as avoiding a major risk factor (predicting demand).  Having agents linked to specific publishers, regardless of whether it's in-house or exclusive deals with an external publisher, does have one drawback - without competition, they may not be able to get the best deals for authors.
The problem Hoyt has is that her agency isn't making a straightforward transition to digital publisher - they want to remain agents as well, which will allow them to get two cuts of the revenue stream, first as agent, then as publisher.  In addition, Hoyt argues that her agency is pushing up-front costs.  In her case, it doesn't make a lot of sense.  Especially since the current digital book sales models out there allow authors to make more money self-publishing or through using a micro-press than for going through a traditional publisher. For digital versions anyway, and for those best-selling authors and midlist writers who have built a following and don't really need a lot of marketing.
Until on-demand printing system costs fall to competitive levels, there will be a role for traditional publishers. However, as has happened previously in magazines and television, the dominance of big, general interest, publishers is likely to be replaced by more narrowly targeted and focused imprints that can build a brand and a loyal community of readers.  And if they're smart, those focused imprints will offer established authors digital publishing terms close to those they can get themselves, and save the upfront charges for marketing et al. for the less-established writers that still need to build their brands and fan base.

Sources: "The (Publishing) Times They Are Achanging", madgeniusclub blog
"The (Publishing) Times They Are Achanging", Pajamas Media  (a shorter version cutting details of her dealings with agents).

eReader & Tablet owners also heavy magazine & newspaper readers

A leading magazine audience research group (GfK MRI) has released some results (from their large-scale survey on media use by US adults) that suggests that people who own eReaders or tablets are also heavy readers of print media and are more likely to be heavy Internet users.  Individuals who own eReaders are 23% more likely to be heavy readers of magazines, and 63% more likely to be heavy users of newspapers, than the average adult in the U.S.  They are slightly less likely (4%) to be heavy radio listeners, but significantly less likely (35%) to be classified as a heavy TV viewer.  The numbers are similar for the smaller proportion of American adults who own a tablet device - 66% more likely to be heavy magazine readers, 54% more likely to be heavy newspaper readers, slightly less likely to be radio users (8%) and 37% less likely to be heavy TV users.
As one might suspect, those who own eReaders primarily use them to read books, although some have also used their device to read digital versions of magazines (15%) and newspapers (14%) within the last 6 months.  Tablet owners also used their devices for reading books (57% used their tablet to read a book in the last 6 months) - however tablet owners were much more likely to also use their device to read magazines (39%) and newspapers (41%).

My interpretation is that the newspaper and magazine industry should not fear the rapid adoption of eReaders and Tablets - they seem to be encouraging a growth in reading that is likely to carry through to print media.  There also appears to be a much stronger market for Tablet-oriented digital versions of newspapers and magazines than for versions designed for eReaders.  The real bad news in these results is for the TV industry, and the idea that those with eReaders or Tablets are significantly less likely to be heavy TV users.  While these statistics don't directly show a decline in viewing, I think that these digital devices offer convenient alternatives for the entertainment or escape gratifications that TV has come to dominate.  In addition, Tablets allow delivery of video content on demand, and in that sense can directly compete with traditional TV for viewers.

Source: "Owners of eReaders and Tablets Are Heavy Readers of Printed Versions of Magazines and Newspapers,"  press release, GfK MRI
The research firm has provided a short video explaining these results.  It's available here.

Pottermore - one future for publishing

A couple of weeks ago, J. K. Rowling announced the Fall debut of Pottermore, a free website based on the further development, and exploitation, of the Harry Potter books.  For now, fans are limited to registering their interest, but come fall, the site will be the sole source for the ebook releases of the book series.  Controlling her own ebook publication will allow Rowling to avoid the fees collected by other online book sellers, and controlling how the ebooks are used.  Rowling's indicated that she'll release the e-book versions in multiple formats, and DRM-Free.  (DRM, or Digital Rights Management, is a system that lets copyright owners place limits on use of content).  Instead, ebook copies will use a digital watermarking system that will identify both authorship and ownership of copies.  This could be the start of an important shift in digital publishing.  Much like how Amazon's shift to DRM-Free digital copies of music has prompted other digital music sellers to follow suit, the success in offering such a potentially valuable franchise without DRM could encourage other publishers to follow suit.  (In Amazon's negotiations with major publishers for it's Kindle bookstore, the publishers insisted on integration of a DRM system, with publisher control over limiting use). 
There's promise of the site also making available background information, and shorter stories and tales set in the Potter Universe. The goal is to create an immersive and potentially interactive experience.  Rowling indicated that one motivation for the site was the idea that: "We can guarantee that people everywhere are getting the same experience at the same time."  Rowling indicated that each chapter in the e-book versions will contain interactive "moments" that integrate new illustrations with elements of game play.
There are hints of social media aspects as well, with the potential of Pottermore serving as a central site for the hundreds of fan groups and thousands of fan-generated content set in the virtual world of Harry Potter.

Pottermore also seems set to exploit the potential for multiple revenue streams.  The site already has a corporate sponsor in Sony, and major revenue potential in selling the digital versions of the seven Harry Potter books.  But publishing revenue need not be limited to the existing volumes.  Even if the various stories and tales are offered free on the website, Rowling can always repackage them as new volumes for sale, potentially in both digital and print versions.  Pottermore will help in establishing and maintaining the Potter brand, and the Sony sponsorship is only the tip of the potential advertising iceberg.  Then consider the potential for merchandizing the brand, both directly by creating new products, and indirectly by recommendation links to outside stores and products.
Admittedly, Rowling is starting with one of the most valuable publishing brands.  Still, it's an interesting model, and one that could well set some precedents for the future of digital publishing.

Sources: "Is Pottermore The Future of Publishing?" Online Spin
"What Publishers Should Learn from J.K. Rowling's Pottermore," Forbes

For details and speculation about Pottermore, check:
"JK Rowling's 'Pottermore' details revealed: Harry Potter e-books and more," Wired.co.uk
"Pottermore: What's in Store for Harry Potter Fans?" Wired

E-Reader ownership doubled since Christmas

There are very few innovations where the point that critical mass was achieved can be pinpointed as clearly as it can for eBooks.  Critical mass refers to the point where there are sufficient devices to encourage production of content, and their is sufficient content available to encourage acquiring the eReader devices to access the content.  For eBooks, last fall saw a significant expansion in the range and variety of eReaders available, along with the reduction in costs and prices to open up demand.  Sales of eReaders boomed during the Christmas season, and has continued to grow.  One report had global eReader sales in the last quarter of 2010 topping 5 million, almost double that of the previous quarter.  A new report from the Pew Internet & American Life Project found ownership of eReaders in the U.S. grew from 6% in November 2010, to 12% in May 2011. Between the growth in eReader availability and Amazon's leadership in offering free eReader apps for a range of computers, smartphones, and tablets, critical mass in display devices was clearly reached at some point during last Fall's Christmas season.  

Critical mass for content was also likely reached around the last quarter of 2010, with Amazon doubling the number of eBook titles offered (with over 800,000 titles available in December, 2010, and the entry of other large eBook stores (Apple's iBook (selling 100 million books in its first year), and Barnes & Noble).  The final indicator of critical mass is the explosion in eBook sales.  As of last February, eBook sales in the US had tripled from the previous year, becoming the number one format among those recognized by the Association of American Publishers. The value of eBook sales in the US was being forecast to grow from around $300 million in 2009 to $2.7 billion in 2013. eBook sales are on a pace to surpass $1 billion this year.

 

 So it looks like eBooks will be quite a successful innovation, expanding and competing with the traditional book markets.  Other recent research suggests that eBooks aren't displacing print books as much as supplementing and expanding traditional book markets.

Updated: To fix formatting issue with second graphic

Sources: "e-Reader ownership doubles in six months." Pew Internet & American Life report.
Also check out the eBooks tag in this blog's Labels cloud.