E-BOOKS: Reading the future

What is an e-book?

• An e-book can be any of the following:

* Electronic texts downloaded to a PC or laptop hard drive;
* Electronic texts downloaded to a PDA;
* Electronic texts downloaded to a bespoke e-book reader.

• Whilst it may still be possible for the end user to print off a copy of the text locally, the end product will only be an e-book if the user holds the material in an electronic format.

• E-books promise to deliver to end-users a range of new values. Downloaded to a mobile device such as a dedicated e-book reader or a PDA, the e-book is a portable and lightweight way to carry content. The e-book format also gives customers useful ways to interact with their texts, through searching, click-through dictionary access, annotation, electronic bookmarks and adjustable font sizes.


• In combination with new DRM technology, e-books will also allow end-users to create customised packages of content and buy smaller content components (e.g. single chapter purchases) - this will be particularly important in business and educational markets. E-books give customers immediate satisfaction as they are never out of print or need to be ordered. They are also likely to be cheaper than print equivalents (where these exist).

• Market estimates focus on the US market where e-books have just begun to make an impact. Andersen Consulting forecasts suggest that the US consumer e-book market will be worth $2.3 billion by 2005 and will account for 10% of the country?s total consumer book market. The impact of e-books in business and professional markets is likely to be even more significant. Price Waterhouse Coopers predicts that e-books will represent around 20% of total US non-consumer book revenues by 2004 and will account for more than 50% of total e-book sales.


• Whilst experience warns us not to overestimate the speed of take-up of new publishing formats (e-book sales today are very small), there is no doubt that the e-book does represent a publishing opportunity. It will open up new markets for authors, publishers and distributors and create new revenue streams, giving a much needed boost to an industry eager for fresh growth in the face of plateauing book sales.

Who wants to play in the new e-book market?

• The debate as to who will benefit most from this new opportunity is likely to rage on for four to five years as the structures and economics of the e-book business are contested. The key players who are staking a claim are:

* Authors: authors will have a new intellectual property ?right? to sell. They also have the option of self-publishing as a possible route to market, freeing them from the publishing middle-men. Key players currently include: Stephen King and Frederick Forsyth;
* Publishers: publishers will benefit from production efficiencies and opportunities to migrate down the value chain to cut out printers and retailers and increase margins. Key players currently include Random House (AtRandom) and Time Warner Books (iPublish);
* Retailers: retailers will take on publishing functions such as printing (-on-demand), customisation of e-books and selling their own electronic editions. Key players currently include BarnesandNoble.com and Amazon;
* Technology companies: e-books create new opportunities for technology players to provide the software to create e-books (e.g. Microsoft Reader, Mobipocket, Adobe), to sell hardware to read e-books (e.g. Gemstar, Franklin) and to support the publishing process with digital rights management software and other services (e.g. Lightening Source, ContentGuard, Reciprocal).

• We will also see the emergence of new intermediaries such as electronic libraries (e.g. NetLibrary), who will evolve models for lending and selling e-book collections to institutional and corporate markets.