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E-books

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The e-books market

Overview

E-books are gradually gaining a footing in the publishing market. According to Steve Haber, president of Sony’s digital reading business division, e-book sales will overtake print sales within five years (Richmond, 2010),

Moreover, Amazon recently announced that in the US its Kindle e-book sales are now higher than its paperback book sales (they were already higher than hardcover books) (McCarthy, 2011).

The professional services firm, PricewaterhouseCoopers (PwC) published a report on e-books, based on an online survey of 1,000 consumers in the UK, USA, Germany and The Netherlands, and interviews with 40 representatives of the sector (Ballhaus et al., 2011). They reported that the US e-book market was further advanced than that in Europe because publishers there had a greater understanding of pricing structure, accepting that e-books had lower costs and therefore greater margins. In the European market, they found that there is still a lot of hesitation, with publishers acting slowly for fear of losing print sales.

Another reason is that the industry leaders – Amazon, Barnes & Noble, and Apple – allow clients to read their books on a variety of devices. In Europe, on the other hand, formats are generally tied to a particular device.

The consumer market has been stimulated by the availability of fairly inexpensive e-readers, while reading habits were already changing due to the Internet and people being open to new technological trends.

What is striking is the prediction of growth, in both the UK and the USA. By 2015, it is expected that e-books will constitute 14.2 per cent of the UK market, and be worth $534 million. In the USA, the e-book market is expected to grow to $5.6 billion, or 22.5 per cent of the overall market (Ballhaus et al., 2011).

One of the biggest worries of the publishing industry is digital piracy, as happened in the music industry. To avoid that, the PwC report suggests, publishers need to become content providers, not just suppliers of physical books, and consider partnering with software companies to provide new applications such as audio, video and games. They also need to consider new approaches to pricing strategy, the formats in which they produce books, and the supply chain.

The academic and professional sector

E-books are well established in the specialist and academic sector, which in Britain alone generated about €130 million in 2010 in electronic content (Ballhaus et al., 2011) and all the major academic publishers have significant e-book collections, many across the entire disciplinary spectrum.

As with mass market books, the e-textbook market is more mature in the USA, probably because of greater uniformity (and prescriptiveness) in what is studied across institutions. Another reason is greater collaboration between textbook providers and higher education institutions.

One example of this is CourseSmart, an e-textbook aggregator which distributes textbooks on behalf of major textbook providers. It offers the advantages of a large selection of resources (90 per cent of the e-textbooks in North America), all available from a single provider.

For more information about Course Smart, see http://www.coursesmart.com/overview.

Other large deals include Northwest Missouri State University's deal with McGraw-Hill to gain digital access to its resources (Redden, 2009).

Springer, one of the main providers of e-books, believes that there are a number of different segments of the academic and professional market, depicted diagrammatically in Figure 1 below. Core users are researchers, who are authors as well as readers, but there is a large secondary market of undergraduate students, and the core user group is larger for e-books than for journals (van der Velde and Ernst, 2009).

Image: Figure 1. Pyramid of user groups for academic information.

Figure 1. Pyramid of user groups for academic information

E-books can be purchased separately, but they often come as part of collections from a particular publisher or aggregator. There are several subject-specific collections, such as Knovel (engineering), Safari Books Online, a collection of technical books, and PORTIAAL, an e-book bundle of around 200 French scientific and technical e-books related to the food and agricultural industry.

The advantage of such book bundles is that they provide a large selection of resources on the same subject on one platform, and hence the convenience of browsing and searching. Henri Stiller, chief executive officer of the information provider Histen Riller, maintains that such collections offer a better search environment: because the topic is contained, the relevance of results and accuracy of keywords is increased (Stiller, 2008).

Most publishers use aggregators for their e-titles – intermediaries who act both as distributors, getting the product to market, and hosts, offering a platform for e-content. Examples include dawsonera, Ebook Library, ebrary, MyiLibrary and NetLibrary. Aggregators also offer functionality to the end user, for example search, bookmarking, copying and pasting, as well as multi-user access and MARC records.

Geographical variations

The USA, as reported above, clearly leads the market for e-books, and attitudes and behaviour differ widely in different countries.

The German respondents in the PwC survey reported that they preferred reading to using the Internet, and, along with the Dutch respondents, were concerned with the "look and feel" of the book as a physical object (Bellhaus et al., 2011).

Vasileiou et al. (2009) report that while the English language dominates the e-books market, there has been significant growth of e-books in Asia, with the Chinese market capacity estimated as being US$28.6 million, and the Xinhua News Agency reporting that China had 660,000 e-books in 2007.

In Japan, the mobile telephone has become a popular reading device, with novels actually being written for that medium. Books are also read on mobile devices in India, but the world's third largest book market still retains a fondness for the printed book.