Digital rights management (DRM) continues to present an obstacle, agreed the panelists. “DRM has to go away,” said Joe Wikert, general manager of the O’Reilly Technology Exchange division of O’Reilly Media Inc. He added that the industry needs to stop thinking of digital content as print books in digital form. “As long as we’re focused on bringing print to a digital format,” he says, “[that will be] an artificial ceiling we’re always going to be dealing with.” Instead, publishers should focus on the “great opportunities in video, linkage, etc.”
To better adapt to digital technology, publishers need to use the technology, said Wikert—get the Kindle, an iPhone, and get to know these devices and the opportunities they present. “Publishers have to find different ways to provide value to their customers,” he said.
The latest estimates, according to the panelists, suggest that: Amazon has sold about a half-million Kindles; there have been more than 1 million downloads of the Stanza application for the iPhone; and Sony has reported that it has sold more than 300,000 of its Readers.
“It’s moving very rapidly,” said Wilcox. “Within the next 12 to 18 months, 2 [percent] to 3 percent of American households will own a dedicated e-reader.” He projected that in 4 to 5 years, the market will “see … certainly double-digit market penetration.”
Wilcox anticipates that in the next 18 months or so, e-book sales will comprise 6 percent to 8 percent of book sales.
Also, e-readers will quickly begin to drop in price, he suggested: “In China, you will see e-book devices for $199 or less within the next 12 months.”
With print production and distribution costs continually escalating and major flaws in some of publishing’s core business processes, publishers have to continue to seek better ways of doing things—whether by reducing or eliminating returns (check out “The Point of No Returns” feature on page 24); developing better inventory management processes; streamlining trading-partner communication (see Michael Healy’s special “Guest Columnist” column on page 28); or tapping the growing market for digital content.
“At the end of the day, there’s tens of millions of dollars wasted [by] moving paper around,” said Wilcox.
Whether you agree or not, covering your eyes at this point would be a mistake. The e-book market is growing, and it’s worth taking a good, hard look at it to see the opportunity it presents.
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