The Second Coming of Ebooks

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With online sales surging ahead this US holiday season, there’s an unmistakable buzz in the air about the coming of age of eReaders and eBooks. Last year, Amazon, the world’s largest online retailer, had failed to cash in on an Oprah Winfrey-inspired surge in the sales of its Kindle eReader when the devices got sold out ahead of the peak shopping season.

This year, it’s pulling all stops to harvest the hunger for its blockbuster product, already its top seller across all categories. First, the company slashed the device price. Second, it untethered itself from the predominantly American CDMA platform by unveiling an international version aligned to AT&T’s GSM 3G network. Third, after painfully stitching together regional alliances with myriad publishers, it then unleashed the device for sales in over 100 countries, including India. Fourth, it cut the prices of the global version further and abandoned the US-only model. And finally, it released its big screen, larger storage Kindle DX version too globally.

Others are not far behind. Sony, the No.2 vendor at an estimated 525,000 units sold till October against Amazon’s 945,000, is targeting the holiday season with the new ‘Daily Edition’. Plastic Logic, a promising start-up, has just released its high-end device, the ‘Que proReader’ at the Consumer Electronics Show in Las Vegas last week. IRex Digital, a spin-off from Philips, released the 3G-enabled ‘DR 800SG’ in September. Barnes and Noble, the largest US book retailer, recently released its ‘Nook’ to rave reviews, though supply woes have forced it to hang a ‘sold-out’ notice for holiday shoppers. Dozens of other niche and bigger players are jostling for a slice of the pie, estimated at one million devices this season for the US alone. And although in the US, newspapers are in the recession trough and printed book sales are plummeting, eBook sales have skyrocketed an astonishing 177% to $97 million for the January-August 2009 period. No wonder an entire industry is holding its breath for the arrival later this month of the Apple iSlate (as rumour mills would have it), nursing fond hopes that the tablet from the famed tech bellwether could emerge as a game changer.

Not another false dawn

To be sure, eReaders and eBooks have had several false dawns before. The space is littered with the abandoned carcasses of ‘game changing’ devices like Rocket eBook Reader, EveryBook, SoftBook and Librius Millennium Reader. It’s déjà vu for Barnes and Noble and Amazon too, both having launched eBook stores in 2000, before shutting them down a few years later. Content quality is the main reason cited for these previous efforts floundering. For one, conventional publishers put outlandish price tags on their eBooks as they feared they would eat into paper sales. Publishers also were loath to give digital rights to their best content, often demanding large sums upfront. Horror stories abound of eBook sellers struggling with typos, even as they were contractually barred from making corrections. To top it all, the royalty charged was often 50% of the list price, enough to squeeze out whatever juice remained.

Powering the second coming of the eBook revolution are quite a few qualitative changes. The huge corpus of free, public domain books made available online in recent years has resulted in even niche eBook sellers enjoying the advantage of economies of scale. Instead of displaying empty shelves while waiting for fresh content, they can now fill them up with classics, embellish them with attractive cover art, order and list them across categories, and provide powerful search tools as well as downloads in the format of choice. Even established book sellers tap into public domain books. Of the one million eBooks available for sale in Barnes and Noble’s store, fully 500,000 are public domain books scanned by Google. With the shelves full, fresh content inevitably follows for even start-ups in the eBook seller space. Many new authors now do not mind offering free or low-priced books as a marketing ploy, so long as it helps in building a loyal fan base. The eBook sellers then add value with filters like rankings and recommendations, making it a real Long Tail business.

The E Ink edge

Another game changer for eReaders has been the widespread adoption of E Ink technology, which traces its origins to research done in the MIT Labs in the 1990s. Unlike liquid-crystal display (LCD), E Ink Corporation’s electronic paper display (EPD) does not need a backlight, displays even when power is down, and looks brighter in strong light. It also draws little power from the device’s battery, with one charge good for 7,500 page turns. The reading experience is pleasant and mimics print.

The gradual embrace of a common format in ePub, promoted by the International Digital Publishing Forum (IDPF), has also helped. All the new crop of eReaders mentioned above, save for the Kindle, support ePub. Free 3G wireless connection and its convenience of direct eBook purchase in seconds, pioneered by Amazon, is now a standard feature. Traditional publishers too are careful not to repeat past mistakes. They have ensured that more books, especially best-sellers, are available. And finally, the US newspaper industry, smarting from declining sales, rising costs and the earlier blunder of deciding to give away content for free online, is eyeing the new crop of eReaders with fresh hope. Indian players take note.

Share at your peril

Second coming or not, the management of content rights still remains a bugbear element. With the Kindle, for instance, books purchased can be downloaded to only six devices associated with one Amazon account. And periodical subscriptions are not shareable at all, overturning traditional ownership notions. The Nook does allow book sharing with friends, but only for a fortnight and a given title can be lent out only once. So there! Amazon has gone to great lengths to monitor geographical sale restrictions on books and the device by enlisting the help of the location tracking service Quova. You can buy a Kindle in Congo, but not in China, considered a hub of software piracy. And in a chilling episode for which it later apologized, Amazon remotely deleted copies of George Orwell’s novel Animal Farm from the Kindle devices of readers who had bought them, saying its digital publication was discovered as a rights violation. No permission was sought from customers, although they were provided with a refund. Truly Orwellian!

All these may paradoxically reassure traditional publishers, but they remain extremely wary of digitization doing a Napster on the book industry. For the moment, however, they are willing to bet on eBooks and their promise of redemption.

Georgy S Thomas
The author is a Bangalore-based tech entrepreneur
Email: [email protected]

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