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Thursday, March 18, 2010

eBooks: Bringing Down the House?

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I'm probably in the minority, but I truly believe that digital publishing will, for all intents and purposes, replace print publishing. Here's how I think it will happen:

1) Over the next 15 years, Amazon Kindle, Sony Reader, B&N Nook, The iPad, etc. will be joined by a dozen other eReaders, and the price of those devices will come down markedly. Some shrewd companies will offer to "give" their eReaders away with a paid yearly contract, say, you'll purchase 20-30 eBooks a year. Much like cell phones now. You can get a BOSS COOL phone, IF you sign up for a plan, right?

2. Print Publishers will continue to operate, but they will need to change the way of doing business or they will perish. Here's how they will need to change:

A) Forced to compete with ePublishers who offer much better royalty percentages to authors, print publishers will offer dual royalties, raising the percentage of print royalty money and including a very high percentage of eBook money.

B) Over time, print publishers will have smaller and smaller print runs of all but the biggest name authors. Smaller quantities will be shipped to brick-n-Mortar stores and be available to the consumer in what will be a "collector's only" market.

C) Print Publishers will modernize their operations to become "Print on Demand" publishers. With smaller print runs and smaller numbers of books in-store, publishers will find a way to take "demand" orders, print, and send books as fast or faster than Amazon currently ships. It may be that brick and mortar stores will open up their own printing presses, kind of like Kinkos, and will be able to print your book "while you wait."

3) Authors will wake up and realize that they are strong. For decades, the creative artist has been exploited by the music industry, publishers, radio, tv, film, etc. In publishing for instance, it's very common for an author to make just 10-12% of what a book actually sells for, in many cases, that's off the publisher's sell price to the brick and mortar chains. That means 88-90% of the book money is going somewhere else besides the artist. Obviously, there are a lot of people who currently play a part in getting a book to the shelf, and all these people need to get paid too, right? But shouldn't the artist get a larger percentage? Look at it this way: Can you imagine if Pro Football players only received 10-12% of their contracted millions, and the rest went to the people who coach, train, design uniforms, etc? It's not a perfect analogy, I admit. But if it worked like that, how long would the NFL survive?

With the advent of ePublishing, authors who are being exploited will begin to break away from their traditional print publisher shackles. They will become their own publishing companies, publishing eBooks exclusively or forming partnerships with print-on-demand companies.

4. We'll also begin to see a massive drop in price for eBooks. Right now, publishers are going to the mattress with Amazon over eBook prices. Traditional publishers want their "eBooks" priced at 60-80% of what the hardcover paper book would cost. Makes sense for the publisher who would make a MASSIVE windfall of profit since they can chop 70% of their production budget on every eBook. After all, no charge for paper, no charge for binding, no charge for shipping, warehousing, etc. Amazon wants the price low. Why? Increased profits. They know that pricing eBooks too high will cut WAY down on who buys. It is digital info, after all. Intellectual value? Yes. Material value? No. And that leads to the next reason that the price will go low: High price leads to digital piracy.

We live in a broken world where people redefine right/wrong all the time. Guaranteed as soon as you price The Door Within Part 7 at $16.99, there are going to be those who pirate it. What about DRM protection? Sure, they'll try. But someone will find a way around it. Let's take a look at some hypothetical numbers.

eBook A priced at $12.99 sells 4,600 copies in a year. If the publisher makes 50% profit on that book, then, the publisher takes in $29,877 profit on that book.

eBook B priced at $2.99 sells 50,000 copies. If the publisher takes in even 30% of that pie, the publisher makes $44,850. That's a substantial upgrade.

5. The Public Will Decide. In the past, publishers have used their various formulae and observations to determine what they believe they can sell. Then, they judge the quality of potential manuscripts and make the call about what will sell. Hopefully, they get it right, and good books get published. Poor quality books, don't.

That may continue in some capacity as Amazon and other online publishers may adopt some quality standards for what they will publish. But largely, the public will decide. People will go hunting for new books, trying to discover the "next big thing." Word of mouth will travel--at light speed online. And goodstuff will rise out of the murky not-so-good-stuff.

Maybe Amazon will adopt a "sell so many copies or get booted off the site" policy. Not sure. But more than ever before, the public will determine what they like. And that sounds good to me.

But, you might argue, you mean ANYONE can get published? Then there will be tons of terrible material out there to wade through. Yes and no. There might be a quality control standard in place, kind of watchdogs for the digital marketplace. Or, there may not. But either way, the reality is that most people want to have a book published. But most people don't want to do the work required to get a book published. Writing a book is hard work. It requires discipline, passion, and sacrifice. Butt-in-chair means it's not on the golf course or at Don Pablos sipping a cherry Pepsi.

So will there be a little extra chaff to sift through? Yes. But look at it this way. Isn't there already a ton of chaff out there being published? I've read a few books in my time that made me want to say, "Now there's six hours of my life I won't get back."

In conclusion: I love paper books. I may never buy an eBook myself. I like rooms full of books. I like holding books. I take books to the beach and up into my bed. But I was born with paper books. I might feel very differently if I was born with an iPad in my hand. And, unless I'm way off here, the publishing world is about to be hit by a digital temblor...because this generation is the digital generation.

17 comments:

Christopher Hopper said...

Wow. This could quite possibly be THE definitive stand on the subject. Well said! ch:

Seth said...

I'm still reading the post, but I was just reading Mr Hopper's comments on his blog and when I saw the size of yours I thought to myself "This is long enough to make it a blog post, I wonder why he didn't?" so I checked and Wa-llah! you posted it.

Wayne Leeke said...

I love both my paper books and my Sony Reader. Great post!

Aidan Romero said...

I prefer regular paperback and hardback books, they have a character of their own.

Squeaks said...

Haha...maybe digital publishing will become the new fad. Personally, I don't think things get much better than holding a book in your hand and manually flipping the pages. It just makes things so much more exciting. Reading on screens is tough for the eyes.

Shelly said...

I'm with you; I love paper books and just don't see myself reading a book off a screen. Isn't the same as holding a book in your hand and turning pages....I hope that paper books don't go the way of VHS and cassette tapes. There is such a thing as too digitalized in my opinion.

Beorn said...

I hope I'm dead before this happens..... Main lesson from this post: before this happens, stock up on as many paper books as possible. Make your house a library that will preoccupy you for a lifetime---or ten.

Squeaks said...

Talking about libraries...I've started my own! The Door Within series is part of mine, except I'm thinking in investing in a new batch of books because my brother has read them so many times they're starting to fall apart (one of the disadvantages of not digitalizing things)!! A couple of my favourite paperback authors include Mr. Batson, Bryan Davis, and Donita K. Paul. Gotta love it.

Madeline said...

I agree wholeheartedly with Beorn. A book is something you can't desecrate to the level of a computer - it's not the same - and if this ever happens, I, for one, will be running around buying every book I can get my hands on.

CMR said...

The idea of companies giving away a digital reader with a required number of book purchases is a cool idea! I'd never thought of that.

Kat Heckenbach said...

I originally read your post in the comments on Christopher Hopper's blog. I've read it several times since. Really, if you think about this, it's going to benefit everyone. Big publishers will have to get rid of old-fashioned publishing technology. They'll still be able to print paper books, but more efficiently. And the pricing structure you laid out gives more profit to everyone.

Online bookstores will most likely go completely digital, though--don't you think? Why have warehouse space filled up with books, pay shipping, etc., if the majority of their sales are ebooks.

This could theoretically revive brick and mortar bookstores, as those who really want print books will need someplace to buy them if the online places go all digital.

As for the kiosk book printing in store--I've heard that hypothesized before. I can see that working in a big bookstore like B&N. You go in, print your book in paperback. The mom and pop places can then specialize in hardbacks and lesser-known authors.

Hmmm....it's going to be interesting to see how this all plays out. I was against ebooks initially, but if the price for them (and ereaders) goes down, I'm so on the bandwagon. I have Kindle for PC downloaded on my netbook, and I can really see just from that the benefit of ebooks and ereaders for books I don't necessarily want to read again or have taking up shelf space. But I want print books of my favorites, absolutely!

Cloe said...

I agree with Beorn,
I don't want to live to see the day when that happens.
Great post!

Jake said...

I really liked this post. I'm a firm believer in the power of the Amazon Kindle's eInk, and I liked the way you put out your predictions. But for my favorite books, I prefer to buy a paper edition (by the way, I'm planning on buying a paper edition of Venom and Song). :)

The ironic thing is, I'm actually posting this comment from an Amazon Kindle. :)

mermaidgirl45 said...

I'm afraid you're totally right, Mr. Batson. I, personally, will never get over the feeling of a physical book that you can turn the pages of. Also, as very weird as it is, I love the smell of books. Science fiction smells different from mysteries, and romances smell different from biographies. Plus, you won't get cross-eyed from the screen.

But, it IS more convenient, and it does make sense. eBooks are going to totally rock the book community, and, though I've never even see one, I kinda like them. I'm going to miss the old books though...

The real question? Is the next generation going to have trouble with their eyesight from all the television, computer, phone, and eBook screens?

everlastingscribe said...

But. . .but. . but with digital books, there would be no book signings. ;)


If this happens, I don't see it happening in my life time.

Why?

The book industry is HUGE and unless the powers that be want to move to digital, it won't happen.

Also, it's better for the Gospel if it doesn't go totally digital. There are still ENORMOUS areas on the planet where you can not get digital signal at all.

;) Most of Africa, South America, and several large pockets in Asia.

You know :-D AREAS WE NEED TO TAKE THE GOOD NEWS. Areas pastors and missionaries need to have books to explain things to the burgeoning disciples of Christ.

Also :-D peoples, I'm more concerned about the falling literacy rates globally than I am about books disappearing. I mean, digital or paper, if people can't read


THEN WE ARE ALL IN BIG TROUBLE.


Love your books, serve the Lord, and while you do that, I'll finish outlining this idea I had about steam punk paper books and digital books and truth. ..hmm. . .

WayneThomasBatson said...

Hi, Scribe! Thanks for commenting. Given your experience and position within the book world, I respect your thoughts.

However, I believe you will see the transition happen in your lifetime. Think about how long it took CDs to replace records, DvD to replace VHS. Not very long.

And sure, the book industry IS huge, however, it is not immune to industrial forces like Pricing Theory and Supply and Demand. In a capitalistic society, industry must follow demand, and demand will be for low-priced, digital material.

Remember, I didn't say that print publishers will go away entirely. It's only those who refuse to change that will go the way of the Horse & Buggy.

You make a good point about less developed areas needing the printed word. I think you're right. And they'll still have print publishers to fill that need.

Question about the global literacy rates? What's your source? I'd be interested to read about that. I suspected, naively, that the digital revolution would improve literacy. Hmmm...

Gabe said...

excellent post. the "print on demand" idea is a really good one, and i wonder why publishers don't do that. i actually prefer print books to my kindle, and that's probably why i like the print on demand idea so much. great post.