Adrian Buys an eBook Reader
A couple of weeks ago, I idly visited mobileread.com and discovered something incredible – Tiger Direct in the US were selling Sony eReaders for $100, a discount of $250. Thanks to the rampaging power of the British pound, that’s less than £50. I’d always been interested in getting an eBook reader, so this was a brilliant opportunity to try one on the cheap.
A few frantic instant messages to US friends, and it was ordered. A lot of people at Mobileread were worried the price was a mistake, but we later discovered that it was an experiment by Sony, presumably to see how fast 1000 units would sell. Answer: less than half a day, and that’s only because it began when the US was asleep (amusingly, many of the units consequently went to Europeans).
eBooks and the Future of Book Publishing
The impending arrival of my eReader has had me thinking, once again, about the future of the book publishing industry. Like most of the other early adopters, I intend to load my eBook up with a few hundred out-of-copyright classics from Project Gutenberg; all of Dickens, Austen, Bronte, Conan Doyle, Shakespeare and others would be a fine start (and there goes the classics market!).
What about more recent books that are still under copyright? Well, you can buy novels and short stories from places like the Sony Connect Store and smaller operations like Fictionwise. Unsurprisingly, these books have DRM (like most songs from the iTunes Store) and this can pose a problem for early adopters with eBook readers that aren’t compatible. Also, the prices of the eBooks are startlingly uncompetitive with traditional retailers: it’s almost always possible to buy physical copies cheaper from Amazon or its Marketplace sellers.
All of this means that eBook readers are left with only one advantage over physical books – the ability to carry hundreds of books in the space of an average hardback. That’s still pretty good, but it’s not worth $350.
But what if you could get copyrighted books for free? Now that would change things. Already, there’s a small but growing number of ‘ripped’ books floating around the web and on torrent sites. They’re mostly expensive textbooks or bestsellers; all of the Harry Potter novels are online, of course (that’s where I read the first two) and it’s well known that the final novel was ripped before it went on sale. Since people tend to read pirated books on their computers, which is uncomfortable, it’s not surprised that there’s relatively limited number of ripped books so far. This will quickly change with the advent of good and affordable eBook readers.
Ripping Books and Swapping Them
Ripping a physical book is not as easy as ripping a TV show or CD. Ripping a CD into MP3s is a one-click operation, and recording a TV show is not much more difficult for those who are experienced. Physical books, however, either require transcription by hand, which is tedious (but an interestingly parallelisable task) or a scanner with autofeed (you slice off the spine, then run the pages through a scanner and OCR them). The results aren’t as good as music or videos, since errors creep in and you can lose the formatting, but it’s usually good enough.
So, for the moment, ripping books isn’t quite the industrial, casual operation that ripping music or video is – but it’s getting easier every day. I imagine enterprising rippers will buy Ebooks online, take screenshots of all the pages and then OCR them – or simply crack the encryption. These rippers need not even be breaking the law by doing this – last year, Australia made it legal for people to carry out ‘format shifting’, in recognition of the fact that everyone was ripping their CDs into MP3s anyway. The law doesn’t just let you shift music between different formats – it’s also for photographs, videos, magazines – and books. In other words, if someone in Australia buys a book, they are perfectly entitled to rip it and create an unencrypted copy. Should that copy somehow find its way onto the Internet, well…
It could reach everyone in the world. It only has to be done once.
Ripped books do have one huge advantage over MP3s and videos; they are tiny. An uncompressed novel takes up about 100kb in plain text; even with formatting, you could compress it down to around 50kb. That means that a hundred novels would be 5MB – a wholly unremarkable size that could be emailed between friends easily. Ten thousand novels – say, the last 20 years of books worth reading – would take up 500MB. That’s about the same size as a ripped TV show that millions of people around the world routinely download every week.
The point is that text is trivially easy to send around the internet. We do it every day when we surf the web. When you couple that reality with affordable eBook readers, you have a serious problem for publishers.
The problem will unfold much as it has done with music publishers, with stagnating and then slowing sales of physical products. After a few years of unsuccessfully battling both the piraters and the manufacturers of eBook readers, the publishers will eventually start selling books online at a slightly lower price than in retail. Authors will begin to drift away from publishers – young ones to start with, then a few more famous ones who have nothing to lose and 50% to gain.
Unlike pirated music though, it will be even easier to swap whole libraries of books. A kid reads an Arthur C. Clarke book, think, ‘Hey, this is good’ and then emails all her friends with a zipped file containing every single one of his books. An entire generation of people will grow up used to reading pirated eBooks on their Apple iBooks, and only buy physical books as presents or souvenirs. Older generations will continue to buy physical books, of course, but a shrinking market doesn’t do wonders for your share price.
So, what to do?
There are opportunities out there, for publishers who can make it more attractive to buy books than it is to pirate them. This will require a price that fairly reflects the reduction in printing and distribution costs, and a very good online store with useful features such as recommendation engines; Amazon is the clear front-runner here (they already have an Amazon eBook reader in the wings) followed by Google and Apple, who are of course able to do anything. Smaller stores and publishers like Fictionwise may do well.
Major publishers, particularly those in the UK such as Macmillan, Penguin and Gollancz are, from what I can tell, completely unprepared. Their online efforts extend only to marketing or selling physical books. There are no credible attempts to do anything interesting with the sale of books.
By interesting, I mean thinking of new ways to package and price content, and new types of content to sell. The one remarkable thing that I learned from Perplex City and from discussions with massively multiplayer online game developers like Habbo and Three Rings is that the internet gives you unlimited ways of selling content. That means that you can capture everyone from those who just want to spend $1 a year to those who want to spend $100 a month.
Games like Habbo Hotel and Puzzle Pirates give away an awful lot of content for free; you might get the first month for free, or you can explore a limited area of the world. The equivalent for books would be giving away the first couple of chapters of every book for free. And why not? You’ll reach far more people, and if they like it, they’ll buy it. If not, they won’t. Yes, this will cause problems for rubbish books that people only buy because they like the cover, but it’ll merely shift sales to something better.
Then they have items for sale for $1 or $2; powerups or clothes for your avatar, say. It’s a small enough amount that it feels like nothing. Again, the equivalent would be buying the next half of the book – or perhaps all of it.
Other business models include subscription. Why not have the ability to subscribe to an author’s work (not just novels, but short stories and exclusive columns) at a discount – or more realistically, a bundle of authors? There’s also an opportunity to make more money than ever from book lovers. Sell exclusive, limited-run physical books, or online masterclasses for hundreds of dollars. There are plenty of people who’ll pay that amount for authors they love.
There’s a parallel in the music industry: Prince now makes far more money from touring than sales of CDs – recall that he gave his latest album away for free with the Mail on Sunday. Other artists are cottoning on to the fact that you might as well give away music and make your money from touring or other merchandise, much to the displeasure of record labels, who are now seeking to tie touring rights into contracts. When people start pirating books in earnest, don’t be surprised if some big name authors decide that it’s best to give their books away for free and make money in other ways. Stephen King tried this, with mixed results, but I’m convinced that with better eBook readers and a market more receptive to buying things online, he’d have much more sucess.
The Websites of the Walking Dead
What surprises me about publishers, and authors to a lesser extent, is their complete lack of comprehension that they could host, run and profit from online communities. Even though the book industry is dwarfed by every other entertainment industry out there, its cultural influence is still massive and the books that people enjoy and read still define their attitudes and relationships with others. There are literally tens of thousands of online book discussion groups, with hundreds of thousands of members. Why aren’t they offered discounts or exclusives, or given help evangelising the books to others? If you’ve read a good book, you want your friends to read it. Let evangelists gift books to friends at a discount! And give them tools and space to do that – the more they talk about books, the more they’ll buy.
I had a quick look around some publisher websites. Bloomsbury, home of JK Rowling, has a website that looks like it’s come straight from the 90s. It has a bookshop, which I suspect no-one uses, a few extracts from books hidden away, and the worst-designed Authors page I have ever seen. Say I was interested in Tim Pears, and wanted to find out more about him. I visit his page, and get, what? Hi-res images of the book covers, some reviews and marketing bumpf, an extract and a link to his books in the bookstore. If I wanted to talk to people about the books in a forum, no dice. If I wanted to find similar authors, no dice. If I wanted to buy a bundle of all his books, no dice. The website can’t seem to decide whether to publish extracts as plain text or as secure text accessible through a clunky Flash browser. It’s a disaster.
Penguin is slightly better. It, too, has a bookstore. I don’t understand why publishers bother having bookstores when they’re so inferior compared to Amazon – prices are higher, selection is sorely limited, shipping costs more. Anyway, Penguin does in fact sell some eBooks (they have a grand total of three SF eBooks) that are selling for less than the paperback price, but more than Amazon Marketplace prices.
Its author directory is, amazingly, worse than Bloomsbury’s. Sure, it looks better, but going to Naomi Alderman’s page gives me a grand total of three sentences. No links, no reviews, no extracts, nothing. There isn’t even a link to buy her books. GW Dahlquist’s page is similarly bereft of any links – despite the fact that Penguin designed a pretty nice minisite for his latest book.
Penguin does have a Readers Group site. This got me very worried when I saw the link, because I thought it was going to destroy my argument, but it turns out that it’s a wholly static site that simply displays information for and about book clubs. User-generated content does not exist here, and the reader’s group directory is an enormous, barely-sorted listed of messages from people advertising their book groups and other people looking for them. If anyone ever made it to the page, they would find it extremely hard to use.
US publisher are slightly savvier. Simon and Schuster’s website is better organised and designed, with videos of authors, plenty of plain text excerpts, and in a very progressive move, links to other online stores if it doesn’t have a particular book itself. They also have a set of simple forums for fans of their more popular authors like Stephen King – it has 24000 users and almost 2 million posts. Not bad going – although even that doesn’t scratch the surface of what’s possible; and it’s still just marketing.
Which is exactly the point. Putting more content on the sites, making them stickier, doing better marketing – that’s all useful. Most of these sites are so awful that there’s plenty of room for easy improvement, providing that someone else smarter doesn’t step in and capture all the traffic first. Maybe that someone will be Amazon with Shelfari, or some unknown web 2.0 upstart. But at this rate, it most certainly won’t be traditional publishers. And whoever captures the traffic can capture the sales.
Ultimately though, not even the fanciest website will stop people from pirating books unless readers are given an attractive alternative. Given that the current business model doesn’t offer any alternatives, publishers will to make a choice…
Change Drastically, or Become Irrelevant (and get fired)
Penguin are pretty good at marketing. They do some nice stunts, like printing the first chapter of a new chick-lit book, Amy’s Honeymoon, in the London Paper freesheet (the chapter, however, is nowhere to be seen online, despite the fact that they already gave it away). But like every other publisher out there, they are bafflingly blind to the fact that their business model will begin imploding in ten years time – at the outside.
Book publishers have had a longer grace period than the other entertainment industries. Computers and iPods had an easy time besting DVDs and CDs, but it’s been difficult to make something that can compete with a book. It may be strange to hear, but a book is a fantastic piece of technology. It’s portable, it doesn’t need batteries, it’s cheap to print and easy to read. This has led many publishers to complacency, thinking there’s something special about books that will spare them from the digital revolution. They’ve seen so many poor or substandard eBook readers that they think it’ll never be done properly.
They’re wrong. eBook readers are about to get very good, very quickly. A full colour wireless eBook reader with a battery life of over a week, a storage capacity of a thousand books, and a flexible display will be yours for $150 in ten years time. If this sounds unbelievable, consider this – the first iPod was released only six years ago and cost $400. Imagine what an iPod will look like in four years time.
Just like the iPod, it’ll be heaven for readers, and hell for publishers.
Physical books are about to be superseded by more advanced technology that will allow for the mass and trivial pirating of every single book ever published. The choice between free and not free is a pretty easy one for many people to make.
That doesn’t have to be the end of the story. There’s a tremendous opportunity here to open up entire new markets; imagine what you could do if you could deliver content to millions of people around the world instantly. No more production delays, no more distribution costs, no more lead-times. Books could be served up in any way imaginable and contain graphics, animation, links. You could sell them by the chapter, and let people share more for free if they’ve bought it themselves. Serialised and ultra-topical fiction could make a return. Give readers loyalty points for buying books and recommending them to others. Give readers respect, and a fair price, and an easy to use store, and they won’t pirate books.
I find it hard to feel any sympathy for publishers. They should see this coming. They should be experimenting like hell while the going is still good, working with eBook manufacturers at the highest levels, and beginning to roll out stores with new types of content and pricing models, wrapped in sticky online communities. But they don’t see it.
It’s not as if this hasn’t happened before – twice.