Are the E-book ‘Barbarians at the Gate’?
E-books may still be only a small part of the total publishing market, but e-book sales are growing, and many expect big things for the format in the near future.
EBooks Corporation Ltd., which provides more than 70,000 e-book titles to consumers at eBooks.com, estimates that the e-book market hit $130 million in 2006, and expects it to reach $220 million this year. “Five years out, the total e-book market will be between $3 billion and $5 billion,” projects Stephen Cole, managing director of eBooks, which has partnerships with 327 publishers worldwide, including Random House, Simon & Schuster, Zondervan, Dell, Warner Books and Oxford University Press.
Cole says this projection is based on several factors, including eBooks’ performance, its knowledge of its competitors’ business, and its own industry analysis.
“As e-book adoption accelerates, it will be interesting to see what happens to existing high-street retail booksellers, and especially the multibillion-dollar wholesalers,” Cole says. “The major operators in the traditional channels are asleep at the wheel. The barbarians are at the gates, having prepared themselves for years for this moment.”
Other market reports’ figures are lower than eBooks’ estimates. An Association of American Publishers’ (AAP) report places U.S. gross e-book sales for 2006, as of October, at $22 million, showing a 26.2 percent increase over the $17.4 million reported at the same point in 2005.
While trade and standards association International Digital Publishing Forum (IDPF) doesn’t have 2006 figures available yet, its figures for 2005 indicate sales of 1.6 million e-book units, totaling $11.8 million.
These e-book sales figures compare to the industry’s overall book sales of $25.1 billion, according to AAP.
Nick Bogaty, IDPF executive director, says the e-book market is hard to estimate because it is in its early stages. He expects significant growth in trade, education and library sales. “The market should at least double in 2007,” Bogaty says.
Regardless what statistics say, many in the industry have been curious how Sony’s Reader, which was released at the tail end of September 2006, has been fairing. Some believe that is a better indication of how quickly consumers will “take” to e-books.
“It certainly met or exceeded our expectations for sales last quarter,” says Ron Hawkins, Sony’s vice president, Portable Reader Systems. “Everything we’ve produced, we’ve shipped.”
Looking down the road, Hawkins says, “In terms of the three- to five-year time frame, our interest is in seeing this grow into a mass market, and certainly Sony’s not going to do that alone. We expect, as a result of our success … to see … other people entering all aspects of the e-book market, from publishing to other hardware devices to applications.”
Shaping the Market
To continue to advance the e-book market, Bogaty says more industry standards are needed. “With a standard file format …, customer confusion and the cost of producing digital books will both be reduced,” he says.
“I think this will be the year for the digital textbook and digital library,” he adds. “With the improvement in reading devices and software, the opportunity for consumers to comfortably and conveniently read digitally is quite impressive.”
However, Susan Spilka, director of communications at John Wiley & Sons Inc., Hoboken, N.J., says, “Digital rights management technology is still not seamless enough to deliver an acceptable user experience in many cases.”
Despite this, e-book sales at Wiley are growing. While Wiley does not provide sales data, Spilka expects “significant growth” in 2007. “For a nonfiction publisher like ourselves, business and technology titles consistently sell best,” she says.
Spilka believes initiatives like Mobipocket—a subsidiary of Amazon.com—will boost e-book sales growth. She also anticipates mobile phone content will start to gain traction.
Hawkins says Sony’s release of its Reader, which addresses consumers’ key usability requirements for e-book readers—portability, and having a paper-like display and long battery life—“is an indicator that the technology has come along to the point where it can meet consumers’ expectations for this type of product.”
Cole says, “There are some important … initiatives in the pipeline from our own company and others.” Recent initiatives by Sony and iRex Technologies have raised the profile of e-books; the Sony Reader’s and iRex’s iLiad’s displays are “almost paper-like,” says Cole.
EBooks also is launching eb20, a browser-based, online book reader, and it currently offers more than 25,000 titles in formats suitable for mobile phones and other handheld devices.
Jeff Steele, director in Amazon’s digital group, says, “Digital … represents a growing part of our overall business.”
Since May 2006, Amazon also has offered the Amazon Upgrade program, allowing customers to buy a digital version of a book once they have purchased the print copy. According to Amazon, tens of thousands of books and more than 30 publishers are part of the program.
Amazon also would not release specific sales data, but Steele says he expects strong e-book-sales growth for Amazon in 2007.
“This market is expanding rapidly in response to consumer demand: they want to be able to consume what they want, how they want, when they want,” Steele says. “Offering consumers the broadest variety of … access scenarios is key to unlocking the potential growth in this space.” BB
Brian R. Hook is a St. Louis-based journalist. He has written for numerous publishers, including Dow Jones, McGraw-Hill, and U.S. News & World Report, among others.