Economy Tanks, Print Sales Sink, E-Books Soar

October 2008 e-book sales at $5,200,000 showed an increase of 73% over the same month in 2007, according to the Association of American Publishers and the International Digital Publishing Forum. Calendar Year to Date Revenue is up 57.7%.

The true numbers may be even better than the charts indicate. The IDPF reminds us that:

* This data represents United States revenues only
* This data represents only trade eBook sales via wholesale channels. Retail numbers may be as much as double the above figures due to industry wholesale discounts.
* This data represents only data submitted from approx. 12 to 15 trade publishers
* This data does not include library, educational or professional electronic sales
* The numbers reflect the wholesale revenues of publishers
* The definition used for reporting electronic book sales is "All books delivered electronically over the Internet OR to hand-held reading devices"
* The IDPF and AAP began collecting data together starting in Q1 2006

While e-books were going through the roof, print books were going through the floor. The AAP confirmed that October's sales fell more than 20% and overall sales for the first 10 months of 2008 were down 3.4% compared to the same period last year. Anecdotal reports for November are inexpressibly depressing.

RC

BN.Com Climbing Back on the Digital Books Horse?

Publishers Lunch, the book industry's leading online trade report, speculates that Barnes & Noble may be contemplating a move back into digibooks. No smoking gun to speak of, but transfer of B&N's Mike Ferrari from one executive position to "director, digital content" was enough to send some tongues wagging about a second assault on the ramparts of the e-book industry.

B&N jumped into e-books with both feet at the turn of the new century, but both feet got cold by 2003 and the company abruptly discontinued its involvement. It can be argued (by me at any rate) that their abandonment of e-books set the industry's progress back by a couple of years. In any event, Lunch's ruminations sent me back down memory lane to the genesis of the e-book industry early in the new century, and I found an article on PC World which I've excerpted below:

Electronic books are about to get a serious boost from Barnes & Noble.com.

The company has launched a new electronic publishing division, aimed at encouraging writers to write eBooks and at encouraging readers to buy them. Barnes & Noble Digital will offer writers editorial support, online sales monitoring, and publicity while linking them with readers.

The company will develop original eBook titles from well-known authors, such as best-selling novelist Koontz. He has been tapped as the first author to create an original eBook, The Book of Counted Sorrows, for Barnes & Noble Digital. The first eBook titles are expected out in the first half of this year...

Using eBook devices, readers can take notes while reading, bookmark a page, highlight text, search for particular words and phrases, create drawings, and use a dictionary to look up meanings of words as they read. They also have the option of downloading eBooks onto portable devices. Barnes & Noble Digital hopes to create eBooks that include images and audio, as well as links to other sites...

Barnes & Noble Digital will also give authors a larger share of income from their work, and sell eBooks at lower retail prices. Authors will receive a 35 percent royalty of the retail price of books sold either directly through Barnes & Noble.com's eBookStore or any one of its affiliate network of more than 400,000 Web sites...

EBooks will be available in all existing formats, including Microsoft Reader, the RCA REB 1100 portable device, and Glassbook Reader from Glassbook.

The Glassbook Reader - that's the answer to an e-book trivia question. Give up? Click here.

RC

Will Steve Jobs Eat His Words with Ketchup, Mustard or Mayo?

Perhaps Apple boss Steven Jobs' declaration that "People don't read anymore" does not rank with Neville Chamberlain's "Peace for our time" speech in 1938, just before Germany invaded Czechoslovakia. But it is not out of line to mention both in the same breath to exemplify how colossally wrong smart people can be.

Jobs made his scornful comment in response to a question about the Kindle. “It doesn’t matter how good or bad the product is; the fact is that people don’t read anymore,” he said. “Forty percent of the people in the U.S. read one book or less last year.” Aside from offending every literate person in the United States, including those who read one book or less every year, Jobs appalled everybody in the e-book business. They had looked to him to do for reading books what he had done for listening to music. By implying he was not entertaining a book-reading platform for the iPhone, he slapped the collective face of the e-book business. Thwarted by his hostility to an iPhone reader, customers turned to the Kindle to fill the e-book vacuum. Jobs could not have boosted the Kindle any more effectively if he had bought a controlling share of Amazon.com.

Fortunately, a number of determined and enterprising programmers took it upon themselves to spec - or hack - a reader application for the iPhone. And even more fortunately, Jobs did not discourage them. One hopes he realized he had spoken recklessly.

Which brings us to the Stanza, Lexcycle's free e-book reader now in use on the iPhone and iPod Touch. Charlie Sorrel writes in Wired, "Stanza has been downloaded almost 600,000 times, and users are in turn downloading 50-60,000 books a day." The key to this breakthrough is a partnership between Lexcycle and the online e-book seller Fictionwise.

Aside from the satisfaction of seeing Steve Jobs proven wrong, it's also inspiring to see Fictionwise taking this initiative. We at E-Reads are big fans of Fictionwise. It is our principal e-book distributor and a major reason why this industry is beginning to thrive.

To paraphrase Neville Chamberlain, "There will be e-books for our time." No thanks to Steve Jobs.

RC

For His Next Stunt, Super Mario Will Read The Mill on The Floss

The moment I held a Nintendo in my hand (at least, as soon as I could wrest it out of my son's), I flashed the future of publishing: cartridges carrying books would be loaded into a Nintendoid device and the Golden Age of E-Books would commence.

I'm glad I didn't invest.

It wasn't long before the Internet swept away the notion of cartridges as a text delivery system, and that's pretty much where things have rested until I came across this item in Publisher's Lunch, the online publishing industry newsletter: "Some of us have wondered for the better part of a decade when Nintendo would take its huge platform of game-devices and use them as electronic readers." Frankly, I had not given it a thought in about fifteen years. Those of you who had done so will now have the satisfaction of reading The Last of the Mohicans, Robinson Crusoe, Martin Chuzzlewit and 97 other titles on your Nintendo DS Lite.

You use the DS Lite like an e-book and, like a Palm Pilot, you tap your stylus to turn pages. There's a search function and you can bookmark and change font size. The package will go on sale, at least in the UK, on December 26th. That's the day after our Christmas, but it's their Boxing Day, the day Brits give each other presents. The price is 19.99 pounds, or a bit under 30 bucks at today's exchange rate.

Allow me to voice a note or two of skepticism here. We're being asked to shell out thirty dollars to purchase 100 titles that are in the public domain, available to us free of charge on the Project Gutenberg or dozens of other websites. And then there's the question of screen size: "Will you really read a whole book on the DS Lite’s teensy screens?" asks Publishers Lunch.

RC

Just How Free Does Information Want to Be?

I sometimes wonder if I singlehandedly delayed the progress of the e-book industry by about five years.

The attendees of the first e-book conference, held in Washington DC in 1998 were almost all from the technological sector. I was one of the few from traditional publishing. The atmosphere was evangelical to say the least. A lot of young geeks, who had grown up under the banner "Information Wants to Be Free," stood up and proclaimed, "Oh wow, now we'll be able to upload all our favorite books as fast as we can scan them!"

After listening to a half hour of wild-eyed witness-bearing, I stood up and said, "I don't mean to rain on your parade, but...has anybody here ever heard of copyright?" A lot of heads whipped around to identify the ghost at the banquet.

A year later the conference began to focus on the pesky question, Does information actually want to be owned? Out of the ensuing debate came the term "Digital Rights Management" and since then, the e-book business has been as much about DRM as it has been about information wanting to be free. Sorry, everybody. It was a nasty question but someone had to ask it.

The debate has never been resolved, and, after almost a decade of copyright protectionism the issue is hotter than ever and this time it has moved from the fringe to center stage.

All this by way of preface to the provocative interview with Seth Godin featured on the web page of HarperStudio, the new and forward-looking publishing imprint created by Bob Miller. The biggest takeaway? Godin reminds publishers that they are in the business of disseminating ideas. You mean it's not about selling books?

And, citing the example of Napster, Godin asserts, "I'm a pessimist that the book industry will learn from music."

Read the interview in full at Seth Godin discusses free content and the publishing industry.

Richard Curtis

Recession? E-Book Biz Doesn't Know the Meaning of the Word

E-Book sales reported another huge leap in the latest stats released by the American Association of American Publishers and International Digital Publishing Forum. Trade eBook sales were $5,100,000 for September 2008, a 77.8% increase over the same month last year. And calendar year to date is up over 55% over 2007. "Q3 of 2008 is the first quarter to top $12,000,000 and final number was in fact $13,900,000," IDPF's bulletin reports.

The numbers may actually be higher, as the above figures are culled from only 13 participating trade publishers. Also, Michael Smith, IDPF's Executive Director reminds us,

* This data represents United States revenues only
* This data represents only trade eBook sales via wholesale channels. Retail numbers may be as much as double the above figures due to industry wholesale discounts.
* This data does not include library, educational or professional electronic sales
* The numbers reflect the wholesale revenues of publishers
* The definition used for reporting electronic book sales is "All books delivered electronically over the Internet OR to hand-held reading devices"
* The IDPF and AAP began collecting data together starting in Q1 2006

RC

Norton Goes Straight to E-Galleys for Nobel Prizewinner's Rush-Rush Book

Lynn Andriani in Publishers Weekly reports that W.W Norton & Company, a traditional publisher, is making available "e-galleys" this week for an important book it will publish early in December, Nobel Prizewinning economist Paul Krugman's The Return of Depression Economics and the Crisis of 2008. Owing to the publisher's rush to get the book out while America's economic crisis is still boiling, there was no time to produce traditional proofs, which are used to solicit reviews. To keep the public from accessing the text without paying for it, Norton created a special media-only link on its website for viewing the work.

This is the second time in a few weeks that a conventional publisher has ventured e-wards with a traditional book. We recently reported that St. Martins issued a book originally in e-format.

RC

While You Wait for the 6:10, Browse a Book on an eKiosk?

Eric Pfanner in the New York Times describes an experiment to display ads on big, sometimes huge, digital screens in a British shopping center. Traditional billboards have been banished and replaced by electronic billboard and streamlined kiosks. "The screens allow advertisers to display still images, as with posters," writes Pfanner, "but also let them show television-style video ads." Many of the ads are pitched at luxury buyers. Tiffany has signed up, for instance.

Hints of this new approach to advertising can be seen everywhere; London's Underground carry Dunhill and Dolce & Gabbana ads on some 2000 digital display screens, Pfanner points out, "including some that project the images across the tracks onto the walls of the tunnels." New Yorkers waiting for buses can gaze at rolling displays of still ads on the panels of bus shelters.

It doesn't take a big leap of imagination to foresee e-Kiosks in airports, bus and train stations displaying the opening pages of a romance or thriller. Just enough to make you wonder what will happen after the hero takes the heroine in his arms and murmurs... Oops, they just announced your train. Do you have time to duck into the bookshop?

RC

Will That Be ePaper or ePlastic? Another E-Book Candidate Plans Launch in Spring '09

Plastic Logic, founded in 2000 by researchers out of the Cambridge University Cavendish Laboratory, was cited by the Plastic Electronics Foundation as ‘Best Technology Developer 2008’ for the most innovative development in organic electronics.

The award, presented at the 4th Global Plastic Electronics Conference and Showcase held in Berlin, was for the company's new electronic reading device, which will hit the market in spring of 2009.

The slim Plastic Logic Reader display is the size of a standard 8.5 x 11-inch piece of paper and employs high-resolution transistor arrays on flexible plastic substrates. Leading international technology firms and investors have funded Plastic Logic for more than $200 million.

To view a video visit Plastic Logic's website.

RC

Rekindling Love of Reading With the Kindle

Virginia Hefferman writes a paean to her Kindle in today's New York Times Sunday Magazine Section, describing the epiphany she had when she used Amazon's e-reading device on an airplane. It certainly wasn't the Kindle's technical features that won her over - indeed, she writes, "As an electronic device, it should be said, the Kindle is a complete bust." She cites such design issues as, "...the bumpable buttons that constantly flip your pages and lose your place, the pointy and cruel keyboard that is stiff and ineffective, the lily-white casing that is ugly when new and dingy and gross when used."

What was it, then, that made her fall in love with her Kindle? True book lovers will immediately identify with her experience. Read here.

RC

An LCD Challenger to ePaper?

Slashgear reports a different approach to ePaper, this one produced by Sharp. It's an eight-color liquid crystal display that can freezes static images after the juice is switched off. Sharp foresees a variety of markets for it such as grocery displays: by hooking the screen up to a Wi-Fi, store managers can readily adjust prices displayed to customers. It could also be competitive with emerging e-book applications once the cost comes down and some other issues, such as temperature distortion and power consumption, are resolved. The technology doesn't sound competitive yet with eInk but given Sharp minds, that could change fast. Read about it.

RC

A Screen So Thin It Flaps

And speaking of screen technology, check out Samsung's flat panel display; at 0.05 mm, it's so thin it actually flaps!

As reported by Gearlog, "The OLED display was made by using polysilicon TFTs and low-molecular organic EL materials. The panel is then sealed using a technology that employs sputtering method and doesn't use glass substrate. Samsung's flapping OLED display has a 480 × 272 pixels resolution, 200cd/m2 luminance and 100,000:1 contrast ratio. Just imagine watching movies on paper-thin displays in the future!"

Translation: A screen so thin it flaps!

RC

Military Developing Ultralight E-Ink Flex Displays

It's been said that the first applications of every scientific innovation are invariably sex and warfare. This one is about warfare.

The US Army is investing tens of millions of dollars developing light, electrically charged plastic display screens that can be carried in a soldier's pocket, replacing bulky, heavy and unreliable systems that compromise mobility, communications and rapid response.

"These flexible displays have been the dream of science fiction authors, wearable-computing enthusiasts and the display industry for nearly a decade," blogs Priya Ginapati in Wired. "LG Philips, Fujitsu and Sony have shown off prototypes of flexible-display systems, while startups such as Plastic Logic and E-Ink have talked about the possibility of putting their digital ink displays onto bendable backings. But so far the idea has remained more in the realm of Minority Report than the real world."

"For instance," continues Ginapati, "a soldier in the field could get information about the surroundings, the position of enemies or the blueprint of a building he or she may be planning to enter. Other applications could include the use of the flexible displays as maps."

E-Ink was developed by MIT scientists for use in e-books, and we're hopeful that it will prevail as much in peace as in war.

RC

Random House Changes E-Book Royalty Policy

In a letter circulated among literary agents, signed by David J. Sanford, Director Publishing Contracts, and Katherine J. Trager, Senior Vice President, Secretary and General Counsel, Random House announced a shift in e-book royalties from one based on the list price to one based on the actual net moneys received by the publisher. "With the widespread use by consumers of electronic devices such as the iPod, the Amazon Kindle, and the Sony Reader, a significant market for ebooks and digitally delivered audio content is finally ready to emerge," the letter stated. "In response, Random House is making major investments in our digital infrastructure and is creating digital files of active titles so that they are available for sales as ebooks, as downloadable audio, and for Internet search and discovery."

Commencing December 1, 2008, the new royalty rate for sales of ebooks will be 25% of the amount received for all sales, Random's letter goes on to state. What does Random House actually receive? Most e-book retailers take a discount of approximately 50% of an e-book's list price. Therefore, the amount received by Random House -- the amount on which the new royalty will be based -- is about half of the list.

How does that play out in real dollars?

A recent Random House contract states that on all copies of a work sold as an electronic book, the royalty will be 25% of the US suggested retail price until the book's advance has earned out, and 15% of the list price thereafter. Under the current (pre-change) royalty structure, on a book retailing for, say, $10.00, the e-book royalty would be $2.50 per download at 25%, then $1.50 per download when the royalty rate shifts to 15%.

By contrast, the new royalty of 25% of the net receipts comes to something like $1.25 per sale on a $10.00 book (25% of 50%). So, Random House's change is definitely a reduction of e-book income for authors.

Random's justification for the change is "1) The new rates are very much in line with the e-book and digital audio rates being offered today by our major competitors... 2) The way the market is developing, the publisher's list price will soon no longer be a relevant basis for calculating royalties in the digital environment... 3) The electronic formats are not as inexpensive to produce and publish as many believe [...] We have made substantial investments, and we will continue to invest, in related digital infrastructure, such as the creation and maintenance of a digital archive, and in the development of the market for electronic formats... 4) The new ebook rate continues to compare favorably to the rates we pay for other formats in which books are made available."

By way of comparison, and as a matter of full disclosure, E-Reads pays a royalty of 50% of net receipts for e-book sales, and has done so since its founding in 2000. On a $10.00 book, that means a royalty of $2.50. At no point is the royalty rate ever reduced.

- Richard Curtis

E-Book Reader App for Your iPhone, At Last

Mac Life reports a promising new e-book reader designed to interface with your iPhone. Check out Ryu's Classics Collection Application. For now the demo books are all public domain classics, but if the app flies it could lead to an iPhone store for copyrighted e-books as well.

This latest development brings us closer to the day when Apple CEO Steve Jobs eats his words knocking the future of reading.

RC

Oprah's Kindle: "Absolutely my new favorite thing in the world."

Telling viewers that a gift of a Kindle changed her life this past summer, Oprah Winfrey gave a huge endorsement to Amazon's e-reading device in front of God and everybody. Well, maybe not God, but Jeff Bezos, who appeared with her on the program.

For viewers intimidated by the Kindle's list price, her website is offering a promotion knocking $50.00 off the purchase price through Friday, October 31st. That happens to be Halloween, but this is all treat and no trick.

Check it out.

RC

Can Your Book Publisher Become Your E-Book Publisher?

Yesterday I commented on a news item about a publisher, St. Martin's Press, that had released a book as an original e-book. I said,

It raises a provocative question for authors and agents (and publishing lawyers): is there anything in a conventional book contract that prevents your publisher from releasing your book originally as an e-book? Or, for that matter, exclusively as an e-book as opposed to print on paper? I would guess that the author of the St. Martin's Press book explicitly waived his right to have his book published first in a hardcover or paperback volume. But what about us garden variety authors? Could a publisher elect to go straight into e-book without our express permission?

After I wrote this I realized these questions only give rise to more questions.

Suppose that the St. Martin's book were not merely a one-time exception to the traditional practice of publishing books originally in print format. Suppose instead that it was the first step in a major shift among conventional book publishers - the Random Houses, Simon & Schusters, the HarperCollins, as well as the St. Martinses -- from launching books in hard copy to launching them in e-book format - indeed, to launching them only in e-book format.

This is not a fanciful question. Given the inefficient economies of print publication, and the efficiencies of digital publication, it is entirely possible that we could experience the same kind of shift that we are seeing in the newspaper and magazine business as the paper-reading generation gives way to a digitally-oriented one. (I am writing this on the day that the New York Times reported a 51% drop in earnings.)

If original e-book publication becomes not merely an occasional or optional event but a primary format - well, what does that say for the identities of the Random Houses, Simon & Schusters, HarperCollins, and St. Martinses? What does it say for the publishing industry? For editors? For authors? For -- omigod -- agents?

Just asking!

- Richard Curtis

Original E-Book Publication - A Loophole in Your Publishing Contract?

Publishers Weekly recent carried the news item that St. Martin's Press was launching its first exclusive e-book title, The 100 Day Action Plan to Save the Planet by William Becker. Obviously it's a book about the environment and, as the news item pointed out, "releasing the title as an e-book would be the most environmentally-friendly approach." It sounds like a book everyone should read, and we applaud St. Martin's initiative for going straight to e-book.

It does however raise a provocative question for authors and agents (and publishing lawyers): is there anything in a conventional book contract that prevents your publisher from releasing your book originally as an e-book? Or, for that matter, exclusively as an e-book as opposed to print on paper? I would guess that the author of the St. Martin's Press book explicitly waived his right to have his book published first in a hardcover or paperback volume. But what about us garden variety authors? Could a publisher elect to go straight into e-book without our express permission?

Just asking!

I raised the question in a column years ago and raise it again now. It might be worthwhile for author and agent organizations to examine publisher boilerplate and, if I'm right, push to sew up this loophole.

- Richard Curtis

E-Books Coming on Buckypaper?

Scientists are exploring a multitude of applications for "buckypaper," a tissue-thin and steel-strong fabric made up of carbon nanotubes. Because of its strength and vast surface area - a gram of it could theoretically blanket about 3000 square yards - it may one day provide the vehicle for the e-ink that is the basis for electronic newspapers, magazines, and books.

For a fascinating article and video on buckypaper, click here.

- RC