Guest Column: The 300-Pound E-Gorilla
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?
It would seem that the e-gorilla indeed has 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—or, that herald a new version of the Kindle or the debut of Apple's iPad—and it would seem that the industry is being turned upside-down. Pity the poor publishers that 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 30 years in this business, I have a different take. Granted, if I had been building buggies, I might have considered manufacturing a few of those newfangled horseless carriages. 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.
Recent figures suggest that approximately three percent ($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 to six percent. Let's say that in five years, that six-percent figure then triples. This would mean that 18 percent ($1.2 billion) of market revenue would come from e-book sales, and 82 percent ($78.8 billion) still would 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 this. General estimates indicate that e-textbooks represent about 15 percent of the overall e-market, attributing the balance of sales to trade titles.
But what kinds of trade e-books are favored? After conducting my own informal interviews of people who own e-readers, I discovered that almost without exception, e-book readers buy print best-sellers. So how does that impact the independents? (Editor's Note: According to Simba Information, and a comparison of print versus e-book best-seller lists provided by various retailers, e-book best-sellers closely mirror print best-sellers.)
For argument's sake, let's say that 80 percent of all trade e-books sold are e-book versions of print best-sellers. Only 12 publishing companies represent the bulk of all best-selling titles. That leaves a paltry 20 percent of sales to be divided among the remaining tens of thousands of mid-size, small and self-publishers. In dollars and sense, that's not enough income to sustain a mid-size house. That does indicate a necessary shift in economic strategies for those 12 trade houses. For the rest of us, the pressure is not that great to stampede to get our book files turned into e-books.
What irks me the most are the dozens of new technology companies that have sprung up to help us poor indies deal with the demand for e-books. They all repeat the same mantra: "You don't have an e-book program? 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 21st century." For me, the answer is, "Thanks, but no thanks."
Currently, a variety of electronic platforms are being used by competing e-readers. E-book technology is moving so rapidly that it's impossible to know where the dust will settle. And based on my meager e-book income, I see no major gain to jumping into what appears to be a Wild West show. I'm also not too keen on giving up 50 percent of my revenue to have my titles converted into e-books. (Many e-book distributors and services offer independent publishers a 50-50 revenue split for converting their books to e-book formats.) 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 before numerous publishing partners and services 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.
Independent publishers are spending too much time worrying about the future impact of e-books and 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 need to keep our eye on producing titles for the 97 percent that comprises the traditional markets. When the time is right to make the move to 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 might think.
Rudy Shur is founder and publisher of Long Island, N.Y.-based Square One Publishers.