E-books face slow road to adoption, but e-textbooks may not be far

DSN Retailing Today, Feb 5, 2001 by Jennifer Libbin

Book industry analysts are challenging whether or not consumers will take to electronic books or remain true to good old hard copy. And by the look of things, the consensus so far is that e-book sales are nowhere close to expected--suggesting early adopters are few and far between.

According to Forrester Research senior analyst Daniel O'Brien, "Publishers are expecting trade e-book sales that won't materialize," due to the fact that reading books on screen will discourage all but the most avid readers. A report produced by Forrester forecasts slow growth for both e-book and e-book reader devices. However, strong projected sales of custom-printed trade books and digitized textbooks will force publishers to restructure processes and technologies.

Analysts are divided about the viability of e-books. In a recent BBC report, analysts stated that digital book sales could reach over $3 billion a year. Publishers of technical and scientific titles say e-books are catching on in their fields, but e-book sales aren't expected to hit 10% of total sales until 2005 in consumer publishing, according to Accenture (formerly Andersen Consulting). Researchers with Jupiter Media Metrix predict that only 1.9 million U.S. readers will utilize the new technology by then.

With Barnesandnoble.com's creation of Barnes & Noble Digital, an electronic publishing trademark, authors will receive a greater share of the income from their works and lower retail prices for the publications in an effort to build the e-book market. A spokeswoman from Barnesandnoble.com stated that "in addition to the e-books already offered, Barnes & Noble Digital now offers print-on-demand capabilities, as well as digital textbook offerings."

The major incentive for consumers is price. Most e-books will be priced from $5.95 to $7.95, considerably less expensive than the corresponding print editions. Barnes & Noble Digital is enticing authors with incentives such as royalty rates of 35% of the retail sale price. In addition, it also announced that authors will receive 50% of the net revenues received by the company from sales through third parties.

Michael Fragnito, vp of the Digital Book Group at Barnesand noble.com, said, "We are in a unique position to make the most direct connection between writers and readers, and we will eventually broaden this reach to include stores, as well as support new technologies as they are developed."

The company will focus on publishing digital versions of books currently in print in areas such as fiction, science fiction, business, history, technology and self-help.

Many companies are continuing to tap into the e-book market, though some early e-book start-ups have already folded. As a result, analysts predict that deep-pocketed publishers are likely to play important roles in developing the e-book market.

Random House has entered into the e-book arena with the recent launch of the company's e-book imprint, AtRandom, publishing a complete editorial list of original fiction and nonfiction. Random House has turned to niche e-book sales. According to Andres Sadler, a partner at Accenture's media and entertainment strategy practice, "Publishing niche books or books catering to a niche audience can be an attractive proposition. In an electronic store front, it's easier to find books that closely match the interest of the reader than if you have niche-oriented books in a bookstore."

Authors, publishers and booksellers continue attempts to get their feet in the door of the new digital arena, but analysts say the experiments have yet to create any best sellers.

Though approximately 400,000 copies of Stephen King's on-line novella, "Riding the Bullet," were downloaded, consumers still haven't embraced the idea of e-books. This lack of participation on the part of the consumer leaves some smaller companies catering toward digital or audio book audiences rather than e-books, in order to steer clear of becoming yet another dot.com casualty.

As Forrester predicted, digital textbooks are already taking center stage, and analysts are debating whether this is the best-selling sector of the digital category.

In a survey performed by Versaware, an Internet and electronic publisher, over 62% of students said they would choose an electronic textbook over a new print textbook, given that the e-textbook had certain features. Students like the idea of the hyperlinks and video capabilities.

"Students can search multiple sources beyond the text itself, highlight key passages and save their research with the e-textbook," said Harry Fox, ceo of Versaware. Students can also make notes within the book, view videos, speeches and interactive charts. The texts can even be downloaded to the hard drives for viewing off line.

On-line textbooks are becoming increasingly popular and are offered at more than a handful of sites.

NetLibrary e-books are available 24 hours a day for consumers to search, preview, check out and read at terminals in library branches or from any Internet connected computer. E-books benefit libraries by adding significantly to their resources without requiring new physical facilities. NetLibrary's e-book infrastructure also helps librarians acquire, organize and manage their e-book collections.