Palm Pilot

One could say (and I would) that the ereading revolution is coming up to its 4th anniversary since it was late November 2007 when Amazon first released the Kindle. There had been dedicated ereading devices before then, including the Sony Reader — in the market when Kindle arrived and still here, if not wildly successful — and the already-defunct Rocket Book and Softbook devices that had debuted and disappeared some years before. And in the early 1990s we had the Sony Bookman, which showed only a few lines of text at one time and disappeared with barely a trace. The biggest-selling ebook format, before Kindle, put content on the Palm Pilot and the total ebook market was so far beneath a rounding error that any investment by a publisher in digitization was being made on faith, not on commercial evidence.

And many people in publishing believed that reading on a screen would take many years to take hold, if it ever would.

Now, less than four years later, we are living in a changed world, although not yet a transformed one. But transformed might be coming very soon.

As ebook sales in the US now appear to have reached the 20% of revenue threshhold at some publishers already (so it is there or will be for everybody very soon), there are some things we can say we know about the shape of the future, but some very important other things that we don’t know yet.

We know that most people will adjust pretty readily to reading straight text narrative books on a screen rather than paper.

We know that parents will hand their iPad, iPhone, or Nook Color device to a kid so that they can enjoy children’s books on the device.

We don’t know whether adult illustrated book content will be equally well accepted by book consumers on devices, even though there are more and more devices capable of displaying pretty much what publishers deliver on a printed page.

We don’t know what parents will pay for a brief illustrated children’s book delivered for a device, but it appears it might be much less than they’re willing to pay for paper.

We know that consumers will pay paperback prices and more for plain vanilla ebooks, or “verbatim” ebooks.

We don’t know whether consumers will accept paying higher prices for video, audio, or software enhancements to the verbatim ebooks.

In fact, we don’t know if consumers would pay paperback prices for ebooks if the paperback were not ubiquitously on sale as a benchmark for pricing.

We know that ebook uptake, as measured in sales or their percentage of publishers’ revenues, has doubled or more than doubled every year since 2007.

We know that rate of growth is mathematically prevented from continuing for even three more years (because it would put ebooks at 160% of publishers’ revenues if it did!)

We know from announcements about new devices and a recent Harris poll predicting increased device purchasing that there are no expectations for a slowdown in ebook adoption anytime soon.

We don’t know if we’re going to find a barrier of resistance, or perhaps we should call it the barrier of “paper-insistence”, at some sales level over the next two years (at the end of which ebooks would be 80% of publishers’ revenues at the growth rates we’ve seen over the past four years).

We know there’s a big and developing market for English language ebooks globally, as the ebook infrastructure builds out in markets around the world.

We don’t know how quickly those markets will develop or how big they can ultimately become.

We know that the number of bookstores suffered a sharp reduction in 2011 because of the Borders bankruptcy.

We don’t know if the remaining brick retail network, the bookstores led by B&N and including the independents as well as the shelf space devoted to books by the mass merchants, will get a second wind from the disappearance of the Borders competition, buying publishers some temporary stability in their store network, or if the erosion of shelf space will continue (or even accelerate).

We don’t know what the loss of brick store merchandising will mean to the ability of publishers and authors to introduce new talent to readers, or even just to introduce a new work by established talent.

We don’t know if improved book discovery and merchandising is amenable to the application of “scale” by publishers outside of vertical niches, be they topics or genres.

We know that agents and authors will accept an ebook royalty of 25% of net receipts in today’s environment, where 70% or more of the sales are still made in print.

We don’t know if the threat of the alternative publishing options will force that royalty rate up if sales fall below 50% print or 30% print.

We don’t know if sales falling below 50% print or 30% print is several years away or much less.

We know that the Epub 3 standard and HTML5 enable app-like features to be delivered as ebooks.

We don’t know if those features will make any commercial difference for the straight text content which is the only commercially-proven ebook type.

We know that content-creating brands that are not book publishers are using the relative ease of publication of ebooks to deliver their own content to the ebook marketplace.

We don’t know if book publishers will develop an ebook publishing expertise that will make them able to persuade those brands in time to go through them, the way they have in the print book world, rather than disintermediating them.

Since I have been expressing my concerns about the impact of the ebook revolution on general trade publishing, which I have been doing with dramatic intent since six months before the Kindle at the BEA in 2007, I have been saying the general trade houses have to get audience-centric (which means choosing content to fit vertical niches).

Today I will add another urgent suggestion to general trade publishers: reconsider your commitments to publish illustrated books in any time frame more extended than a year or two and think about sticking to straight text, unless you have paths to the customers for those books that do not go through bookstores. If we do end up in an 80% ebook world anytime soon, and we very well might, you’ll want to own the content you know works (for the consumer) in that format, not what you don’t know works any way other than in print.

For children’s books, the key is brand. There will be demand for Eloise and Madeline and Alice in Wonderland for years to come, but the product and pricing equations could be totally up for grabs.

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One very lucky thing for those of us who are in the habit of predicting the future is that very few people keep score on us. We mostly keep score on ourselves. When I want to remind readers of something I said previously, I link back to it and call it forward it again.

But there is one belief I had and stated repeatedly early in the ebook era that was wildly wrong, hopelessly wrong, and then proven clearly to be wrong. I bring it up now because it belongs in this post identifying a more current error, one which hasn’t been proven yet but about which I’ve learned enough to want to walk back.

When I started reading ebooks in about 1999, there were a couple of dedicated ereaders just becoming available: the Rocket Book and the Softbook. Neither of them interested me or very many other people either. Both failed pretty quickly.

Just about simultaneously, ebooks were first being delivered to hand-held devices. I discovered the magic of putting books on my Palm Pilot, a device I had in my pocket all the time. I had started carrying a personal digital assistant in 1986; that was a Psion Organiser with a 2-, then a 4-line screen, which would not have worked for ebooks. But the Palm, which could carry a chunk not so different in extent from what I see now on my iPhone, worked fine.

The original dedicated devices came and went without much notice from anybody. Meanwhile, I continued to read on my Palm and its successors. The shopping experience at Palm Digital was terrible, the choice of titles was extremely limited, and the ebooks cost just about as much as the print books. But I shifted over, as much as I could, because I was hooked both on the utter convenience of always having books in my pocket and because I genuinely found it preferable to read on something so small and light and have book reading, for the first time, totally manageable with one hand.

When the Sony Reader arrived and didn’t do much, I wasn’t surprised. Sometime before it debuted, I wrote or said somewhere that if you carried a personal digital assistant, nobody should have to explain the value of ebooks to you. And if you didn’t carry a personal digital assistant, they might not actually have any value for you. At that point, most ebooks purchased were read on laptop and desktop computers.

That’s why I was pretty sure the Kindle wouldn’t work. Who wanted another device to carry around just to read books, I figured? What’s the advantage in that?

I neglected to think through that people do things for lots of different reasons. And I really underestimated the degree to which the book-sized page is a requirement for a lot of people, even though it might be a transitional one. Anyhow, I was really, really, really wrong. And even though I switched back from Kindle to iPhone reading the minute the vast selection available through Kindle (and now through Nook, Kobo, Google, and Apple) was available to me on the device I was always carrying, I fully accept that most people are willing to carry something around to do their reading on a regular-sized page. Lesson learned.

It is now clear to me that another concept that was an important part of my future view is in pretty desperate need of reassessment. It also appears to be being proved wrong.

It was evident pretty early that the Net facilitated the formation of communities around interests. Putting that together with my thinking about the distinction between the unit of sale and the unit of appreciation (shortcut to understanding: the former is the album and the latter is the song; the former is the cookbook and the latter is the recipe) made me think that the big online aggregation of content for sale would also ultimately be challenged. If you went to a web community to get advice about how to build a deck or plant a vegetable garden, I figured, you’d just pick up whatever were your content purchases — books or whatever else, physical or virtual — from that same site. You wouldn’t need a separate site to go buy content from.

In other words, I expected one of the ways to monetize a community would be that you could sell it stuff, particularly content.

Although I know that O’Reilly operates in a special marketplace, I saw the success they have had selling directly to their community — both their own publications and their subscription aggregation Safari — as a sign of what we could expect to develop in other verticals.

I don’t think so anymore.

The first rude awakening for me was when OpenSky changed its business model. OpenSky began with the proposition that they would facilitate just about any web site to sell just about anything. As I understood it, if you had a blog about cooking, you could arrange to sell your favorite pots and pans right off your own site. OpenSky would source the product and operate the back end. You’d just have to pick out what you wanted and decide how much margin you could demand.

Well, apparently that business model just didn’t work. They’ve switched OpenSky from a commerce platform for bloggers to a “social network for shopping” with celebrity, expert, and author curators. I’m not much of a shopper, online or offline, so I’m not one to judge how appealing it might be compared to competition. There is some evidence that the new model works and OpenSky feels like they are now taking off. But it isn’t any longer the perfect match for the vision that I had when I first saw it, and it probably didn’t work because my vision was wrong.

By extension, I had been figuring that publishers needed to sell direct as well. Big publishers had good reasons to resist that idea which I understood, but which in themselves make me question the idea. Big trade houses are highly dependent on the goodwill of Amazon and Barnes & Noble as well as other retailers, and going into competition with your key channels is risky and problematical. And my vision of the future wasn’t really built around general publishers, anyway.

This month, J.K. Rowling opened her Pottermore site, which is intended to be the exclusive vendor of Harry Potter ebooks. Now, there’s a vertical. It appears you won’t be able to get them at Amazon, B&N, or Google (although Google checkout is “the preferred third party payment platform”); if you want them, you’ll buy them from the Pottermore site (or, as some would point out, get them from a pirate source if that’s easier.) In a ‘d’uh” moment, I read this piece making it clear that this kind of fragmentation didn’t work for musicians and ultimately wouldn’t work for authors. (The book business isn’t the music business, but some lessons do carry over.)

So mark me much less bullish on publishers selling direct than I used to be. It can add value and margin to a vertical site if the costs of running the store can be tightly managed, but it is not likely to produce much in sales very quickly.

In fact, I’m quite sure that fewer Harry Potter ebooks will be sold by the Pottermore strategy than if they were just made available through the standing ebook retail network. The margins might be higher with no retailer to pay, assuming that advantage isn’t completely swallowed up by their own costs of infrastructure (and it probably won’t be.) But not everybody who buys a Harry Potter book from Amazon or B&N (or a Nora Roberts book or a Janet Evanovich book or a James Patterson book) is a devoted fan. Some of them are just choosing their next read and if Roberts or Evanovich or Patterson wasn’t shown to them, they would have bought something else on offer.

There is evidence out there to contravene this post and confirm my original thesis. Our friends at F+W Media, with whom we deliver the annual Digital Book World conference, report success building their retailing business through their communities. A senior executive there tells me they are selling “tens of millions” in content, product, and services through 25 stores attached to the community sites they have developed over the past few years. They achieve an average order value of $40 — not too shabby — and credit a combination of true community focus which builds them large and powerful databases of names, unique curation that includes offering things that aren’t available elsewhere, selling content in multiple forms (book-like, video, webcasts), delivery of “online learning”, and special bundled packages for their success.

F+W is not unique. A smaller company that is their competitor in some spaces, Interweave, also has a community focus and sells direct. Both companies have the content to build a number of different verticals to amortize the cost of a common merchandising and retailing platform.I don’t doubt F+W when they say they’re making it work, and apparently Interweave is too, but that still leaves the question of whether they, like O’Reilly, are sufficiently unusual cases that it would be very hard for other publishers to follow their lead.

I still have my fingers crossed that the Google ebooks program could spawn some unique shopping experiences that will make a difference to the ecosystem in the long run. (This is taking powerful faith at the moment because Google has only barely detectable sales in their first half-year of operation.) By offering the opportunity for curation with personality to be done by a large number of different entities (about 300 bookstores have already started with the program in the US), the Google initiative still offers the possibility of a wide variety of curation choices, or bookstore front ends.

Of course, none of these individual Google ebook stores will have the resources of the big retail players to apply technology to their merchandising. But perhaps they can provide selection and positioning that will create its own following. Whether they apply what they know and their own unique intellectual resource base (because every bookstore has one) to highly local subjects or other verticals with global appeal, they have the opportunity to create online stores that at least some people will prefer to shop. Thousands of such entrepreneurs around the globe might produce hundreds — or dozens — of survivors with large enough customer bases to create the kind of diversity in the ebook retail network that would offer publishers the kind of opportunity they need to add value for a long time. And to do it the way they always have, by managing intermediary opportunities, not by selling direct.

This is not to suggest that publishers don’t need to be building direct contact with as many consumers as they can. Just as authors should do. But forget the idea of a huge number of vertical purchase points for ebooks all over the net. I will.

Google also announced an affiliate program for Google ebooks. That will enable any web site to sell their ebooks and get paid, extending a concept that both Amazon and Barnes & Noble have employed successfully for print books. It looks to us like Google pays more. An affiliate can earn 6-10% from Google, 6% from B&N, and 4-8.5% from Amazon.

This isn’t the original OpenSky vision, however, because that was about all kinds of products, not particularly (or even necessarily including) books or ebooks. Of course sourcing could always have been done through Amazon, but there were differences in the merchandising and pricing opportunities in the original OpenSky model.

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At the conclusion of another Frankfurt Book Fair — my thirty-somethingth — here is something I actually knew before but have taken on board in a whole new way: there is an enormous gap between the US and everyplace else in the Western world (at least) in consumer ebook takeup and acceptance.

Here is what I think: it can’t stay that way forever.

Here is what I deduce: the rest of the world is in for what will be, for many, a vertigo-inducing ride while they catch up.

It seems pretty obvious why the US is so far ahead: 300 million people in a single developed economy with a single currency and a single language. Those same factors also largely explain why the US is also so far ahead in Internet print book purchasing. (There is another big cause at play there: the service infrastructure provided by our national wholesalers, Ingram and Baker & Taylor, without which it would have taken a multiple of the initial investment to get Amazon.com off the ground 15 years ago.)

One thing leads to another. Because Amazon had, by the end of 2007 when it introduced the Kindle, built a loyal customer base of tens of millions of book buyers, they had the pillars in place to roll out an ereading device. That really required two things nobody else in any other country has even today: a big enough customer base to reach a critical mass of consumers without any assistance or partnerships and enough leverage with the publishers to get them to put their books into the ecosystem that supported their device.

One thing leads to another. Amazon’s Kindle, with a much larger selection of titles and a smoother path from file server to device than had previously been offered by other ereading platforms (which were, before Kindle, the Sony Reader device for some and reading on PCs or handhelds such as Palm Pilots for others, with me in the handhelds group), gained pretty rapid uptake. That led Barnes & Noble, which also had leverage with the publishers to get titles into their store and access to and brand credibility with millions of book readers, to follow on with their Kindle-like device, the Nook, almost exactly two years after the Kindle. As most of us know, the iPad followed the Nook shortly thereafter, coming onto the US market in April 2010.

All of this has resulted in getting the US to the point as of Frankfurt 2010 where a US publisher launching a book of straight text can expect ebook sales to be a mid-teens percentage of the book’s total sale, with occasional reports that are even more dramatic (such as the anecdote that the first wave of Jonathan Franzen’s “Freedom” was one-third ebooks!)

One thing leads to another. As has been written on this blog many times, all these Internet-based sales put enormous pressure on brick-and-mortar stores. We see shelf space diminishing and there are those among us who believe that over the next ten years it could pretty much disappear.

The Kindle hasn’t had nearly as dramatic an impact abroad as it has in the US for a host of reasons. Amazon doesn’t have the same audience share. They don’t have the same huge number of titles available as they do in the US. And they haven’t had two other big and influential companies (B&N and Apple) pushing the device-reading experience into the public consciousness. It seems Nook and iPad’s arrival have only served as catalysts for Amazon to sell even more Kindles and for the ebook uptake in the whole US market to accelerate further.

So we find ourselves today with this massive gap between the penetration of ebooks in the American market and the penetration in any other country’s market outside of Asia (I didn’t talk to any Asian publishers at the Fair, and I don’t know the situation there.) Certainly (assumption alert: a priori argument not based on any data) this is a situation that cannot last forever. In five or ten or fifteen years the percentage of book sales that are digital and the percentage of print book sales that are transacted online will be pretty much the same in all developed countries.

If that assumption is right, then other countries — starting with the English-speaking ones and then moving on from there — are going to experience the changes we’ve felt in America in a much more compressed period of time.

There are legal and institutional barriers to change which have already been “effective.” The world’s largest natural moat has protected the Australian book market, keeping print book prices high and the retail book trade healthy. It was evident from conversations I had with some Australian booksellers at last May’s BookExpo that they are feeling the winds of change beginning to blow a gale, fanned by the arrival of Kobo ebooks in the market. (Kobo is a sleeper from the US perspective: a small almost-an-afterthought ebook platform in our country but painstakingly building a presence around the globe and some impressive OEM relationships everywhere, including in the US.) Ingram’s POD setup in Australia will surely introduce a lot more titles into the print marketplace. That’s important because POD drives consumers to online purchasing by offering more titles than any bookstore could ever stock.

All of this is frightening to any sentient Australian bookseller.

Retail price maintenance, territorial and language rights restrictions, and variable rules about applying VAT (sales tax to us Americans) to books seriously complicate the development of the ebook marketplaces in Europe.

But the biggest complication of all, in the short run, will be the paucity of titles available in the epub format in languages other than English. Epub enables reflowing of text, which is essential to deliver a reader-friendly ebook experience to a multiplicity of screen sizes. We have hundreds of thousands of titles in epub in English; no other Western language is close. This is a subject that first surfaced for me in Brazil when I was there in August.

One thing leads to another. The epub gap spawns another serious issue for the European book trade as it catches up with the US. Most educated people in most European countries are comfortable reading English. A publisher in tiny Slovenia (formerly part of Yugoslavia) told me that one-sixth of the books sold through the largest chain of bookstores and the largest online bookseller are already in English. Somebody else told me that 25% of the books sold in Denmark are in English. In Holland, I was told, there has been recent legislation requiring “windowing” of English ebooks on titles that have a Dutch edition, holding back the English edition until the Dutch edition has had a minimum time of availability.

The biggest adjustments even for the players in the US book trade are still ahead of them. As far as I can tell, big publishers have not really taken on board that bookstores are pretty much going away in the next ten years and, one thing leading to another, taking the big publishers’ major value proposition with them. There is almost no visible acknowledgment of the shift from IP to eyeballs that I believe is coming. But the change we’ve had and the change we’re facing in the US publishing world is dwarfed by what will be seen and felt by our friends and trading partners in Europe and elsewhere in the next decade.

Some of what this post is about had already been anticipated as we prepared the program for the Digital Book World conference taking place January 25-26. We had already planned a panel on how territorial and language rights trading will be affected as ebook uptake spreads. Now I think I’ve found somebody who can lay out the European landscape as US publishers and agents should be thinking about it. I’m working with her to prepare what I think will be a significant addition to our program covering a topic that is, as it should be, increasingly important to American rightsholders.

Another topic for another day is that the world is getting smaller and publishers in every country will need to understand what’s going on in their foreign markets better. We’ll be delivering just one compressed seminar and a panel or two at Digital Book World because that’s what bandwidth we think conference attendees this January will be comfortable investing in the topic, relative to a lot of other things that need to be discussed. By a year from January, I think understanding how the ebook markets work in countries around the world will be a top-of-mind concern for every publisher and agent in America.

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In three prior posts, we’ve explored the initial conversation that surrounded the announcement that Sourcebooks would delay the ebook release of Bran Hambric; sketched out what we think are the four stages of ebook adoption; and looked at how publishers see the early “establishment” stage, which is where we are now.

This post is about the other stakeholders: authors, retailers, distributors, and, of course, readers.

In the “vision” stage of ebook adoption, which ended with the launch of the Kindle in November 2007, authors were virtually powerless. With ebook sales even for established books struggling to make triple digits, publishers were gunshy about accepting digitization costs for books other than the biggest sellers and it hardly made sense for authors to make the investment on their own. With the exception of genre fiction, particularly romance and sci-fi, where vertical audiences were able to cluster early, the ebook world was inhospitable to the author working on her (or his) own.

That has changed dramatically. Today Amazon Kindle as well as web services Scribd and Smashwords make it easy for an author to upload a pdf or doc file and publish an ebook. While Amazon appears to be paying authors only about 35% of the selling price to access its army of device users, Scribd (80%) and Smashwords (85%) pay much more. Barnes & Noble’s ebook announcement yesterday didn’t mention author-generated ebook content, but with their goal being clearly to offer as many titles as they can, one must assume they’ll figure out a way to get at it too. So there is a clear path to the public developing for anybody with ebookable content; the challenge will be driving audiences to the content.

At each end of the bell curve, the publisher doesn’t contribute much to that equation. Small books and unknown authors often get little or no support from a publisher; big books and big authors often don’t need help to alert the public to their content. So after several years of publishers driving down ebook royalties to the current Major League standards of 15% of retail or 25% of net, we can expect to see the pendulum swing back to the author. Big authors will negotiate far higher ebook royalty rates; small authors will turn down small advances in favor of self-publishing as the ebook market grows (and the physical books, remember, can be delivered through a variety of POD self-publishing options.)

The biggest book retailers basically stayed out of the ebook game during the vision stage. Both Barnes & Noble and Amazon made a pass at the ebook business, but gave up on it pretty quickly (although Amazon first bought the Mobipocket format, which became the foundation for the Kindle software.) That made sense; there was too small a market early in this decade to occupy the attention of corporations doing billions in sales on printed books.

There were other complications which ultimately left ebook retailing to the smaller players. Early in the vision stage, the two big formats for handhelds were Palm, which displayed on Palm Pilots, and Microsoft’s dot lit, which displayed on handhelds that used the Windows operating system. Adobe Reader software, which was installed on PCs, began back then and has been used continuously to this day. Early in the decade, Palm’s model was to keep control of the sale of Palm ebooks, first through “Peanut Press” and then through the “Palm Digital” store. That meant no other ebook retailer could sell Palm books. When Palm became, by far, the preferred format for handheld ebook reading, they left the general ebook retailers, including B&N, without access to the heaviest users of ebooks on devices.

Mobipocket was created as a cross-platform ebook reader that would work on both Windows and Palm software. The first indication that Amazon would look for a path to ebook hegemony was when they bought Mobipocket in 2005 (they bought BookSurge, the print-on-demand capability, at about the same time.) But even though Mobi ebooks would play on multiple platforms, the market was apparently too small to interest Amazon.

The Palm Digital store became Ereader in 2007 and the Ereader platform, just bought by Barnes & Noble, will work on almost all devices (except Kindle and Sony Reader) now. In the final years of the vision stage, before Kindle, ebooks were sold by independent bookstores (Powells being the most successful) and dedicated ebooksellers like Diesel ebooks. Discounts off publishers’ established prices were only offered in targeted and time-limited promotions and seldom offered even as much as 10% reductions. The stores were “powered” primarily by Ingram Digital, which replicates its print-world role as a digital wholesaler. Competing with Ingram was an upstart company in Cleveland called OverDrive, whose wholesaling operation is called Content Reserve. Content Reserve became the primary supplier of ebooks to libraries.

When Sony Reader came on the scene in September 2006, publishers had four formats to convert their ebooks to: Palm, Microsoft dot lit, Adobe, and Sony. Adobe, which played on PCs, was at that time by far the market leader in titles available and sales. But publishers, still seeing very little market, would not necessarily convert each ebook into all formats. At a time when Adobe had over 100,000 titles available, there were perhaps 40,000 on Palm and fewer than that on Microsoft or Sony.

Amazon’s arrival with the Kindle changed everything: title availability jumped, prices were slashed, delivery was vastly simplified, and the biggest online book-buying audience in the world was constantly pushed to think about ebook reading. That signaled the shift from the vision stage to the establishment stage.

Another critical development that enabled the movement from the vision stage to establishment was the development of the epub format by the International Digital Publishing Forum, the ebook trade association, facilitating use of ebook content across platforms.

Now in the establishment stage, the big book retailers — Amazon, Barnes & Noble, and Canada’s Indigo — are in, competing in every possible way: price, selection, and merchandising. B&N and Indigo are trying to appeal to ebook readers regardless of the device they want to use. Amazon has suggested they’ll go that way, but so far are only pushing the Kindle format for Kindle or iPhone. Prices at Amazon and at B&N are clearly being subsidized in pursuit of a larger customer base. That is going to make things very difficult for the independents or any new entrants to make a go of ebook retailing.

As we proceed in the establishment stage, we can expect publishers to start selling digital downloads and we can expect most web sites to offer vertically-curated offerings. The big horizontal aggregators will thrive for the next few years as the market grows, but the verticalization of consumer attention will eventually chip away at their sales.

The distributors are, or have been, Ingram and Content Reserve. (I say “have been” because Barnes & Noble’s just-announced deal to power the Plastic Logic content offering  positions them as a competitor to Ingram as a digital wholesaler, although there is no suggestion as to how far they want to go and, as of now, several days after the announcement, nobody else to my knowledge has raised this point.) CR has recently done a deal to provide service through Ingram’s print-world competitor, Baker & Taylor. The subsidized discounting taking place at Amazon and B&N is going to make it very difficult for the distributors’ horizontal customers. Ingram may recognize this problem as being similar to what they faced when they tried to launch ebook wholesaling the first time in the late 1990s and Amazon responded with deep discounting.

The distributors have to find new opportunities through web sites that don’t think of themselves as content-centric or content-sellers now (they’re communities.) The trick will be to curate the set of offerings in a very granular way, but there is a marketplace that will develop there that will be served by aggregators.

For ebook readers, it is definitely the best of times, so far. Because of the epub standard developed by the IDPF, most ebooks can be offered for use on multiple devices without high conversion costs (which, in any case, are easier to bear now that there are real sales.) More and more titles are available and, despite the Sourcebooks experiment that triggered this series of posts, we are moving to a standard of ebook release when the book first comes out. I believe we’ll start to see ebook releases ahead of the book before long. The competitors have prices of the content to the consumer plunging. The choice of devices is proliferating and, of course, that means the devices will cost less in the future too. The deployment of smartphones that can also be used as book readers continues to increase. The pieces are in place for evolution to turn to revolution and, when it has, a few years from now, we will move from the establishment stage to “transition”. That’s when the printed-book world as we have known it for about the last century will change into something completely different.

Due to a little programming change we did, I haven’t been alerted to comments and I haven’t been answering them for a little while. I will clean this up on Friday (and then this message will disappear…)

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