Do I Believe in Ebooks?:
Part Two

Evan’s post last week, Do I Believe in Ebooks?: Part One, stimulated some interesting conversation in the blogosphere and I hope that Part Two, his bold recommendation, will encourage all of us to reconsider the potential of ebooks. I will be at the Tools of Change conference today and I hope some of my fellow attendees will share their opinions with me both in person and in the comments section below.

By Evan Schnittman

In my last posting I promised to delve into my vision of the evolution of ebooks and in doing so offer a dramatic proposal to make them more mainstream and more widely used. I propose that an ebook license be granted as part of the purchase price to anyone who buys a new print book. Yes, you read correctly; the ebook is free with a new print book purchase.

I have come to this somewhat radical idea, not because I am one of the folks who believe all digital content should be free for the benefit of mankind. Nor did I come to this conclusion because I don’t believe there will ever be a place for ebooks. I came to this conclusion after becoming a fairly heavy user of ebooks and learning first hand what is best and worst about ebooks.

My thinking was somewhat influenced by the events of the last couple of weeks. First Steve Jobs is quoted about the Kindle saying “Forty percent of the people in the U.S. read one book or less last year. The whole conception is flawed at the top because people don’t read anymore.” One week later, Don Katz sold Audible, his digital audio platform and online retail store that was to spoken word recording what iTunes is to digital music, to Amazon for $300mm. Audible licenses its platform to Apple for use on the iPod/iTunes.

In my mind a connection was made between these events as I started to wonder if Jobs, smarting over the loss of Audible’s platform, was lashing out at Amazon. Then I wondered if this was a classic Jobs line – deflecting any interest in something and then a year later releasing that very thing. However, this idle speculation ebbed and a more interesting connection took its place – a link established in my mind between ebooks and audiobooks.

I have had many theories over the years about the potential of ebooks. Mostly, I argued that ebook success was predicated on the network effect of a killer device matched to an equally killer aggregation of content. With Kindle and its Whispernet (EVDO cellular) connected store accessible anywhere in the US right on the device, I thought we had found the tipping point for ebook success. While I am still bullish about the chances that ebooks will now thrive, I have evolved my thinking to see that a “thriving” ebook market will look much more like the audio book market than the print book market. (I should mention that I see the parallel only in size, scope, and type of audience, not in market factors, content delivery, cost of production, or experiential preference. Audio books are not about reading – ebooks are all about reading.)

If one looks closely at how people like me use ebooks, you will see that convenience and portability is what drives use. While ebooks have been around for nearly 10 years in fairly usable forms, the devices to read them have been terrible – until now with the recent generation of e-ink readers such as the Kindle. (Yes, there are plenty of people who are perfectly happy reading on their PDA, iphone, laptop, etc – but let’s be honest; they are a tiny and low revenue producing audience.)

The growth I see in ebooks mimics the audio book phenomenon– by connecting readers who commute or travel with the content they crave. Audiobooks have made a marketplace out of people getting book content when they cannot read and has taught people to enjoy being read to again. Similarly, Ebooks are a brilliant option when you can bring everything you are reading with you and an even better option when you can buy instantly wherever you happen to be – just as digital audio downloads onto an iPod have done for the folks who don’t want to schlep around CD’s or cassettes.

The reality is that even if the current audience of ebook users were to grow by magnitudes over the next few years, the total market would only reach 3 to 4% of print. Therefore we must admit to ourselves as an industry that ebooks will always be a small niche player as a standalone platform and make them free with new book purchases.

As noted in the last piece, the problem with ebooks is that they are currently sold only as ebooks – which means they lack permanence and physicality. The permanence issue has more to do with the cult of books than anything. I, like many people I know are can be called “snobbish” about books – like to keep them as artifacts and display them. Furthermore, while the portability of ebooks is amazing, I cannot imagine curling up with a device and reading by the fire… or in bed, or even in my favorite chair. When portability isn’t a factor, ebooks pale in comparison to print books. Ebooks are solely a product of convenience.

So, if ebooks are in fact very much like audiobooks, why should they be free with print when audiobooks are often more expensive than print? Audiobooks are a non-reading experience and therefore carry an additional set of production and talent costs, and have a ubiquity of preferred devices for replay. Therefore audiobooks garner their own unique pricing. Ebooks have nearly none of the factors to warrant their own pricing beyond that of a niche market.

Making ebooks free with new print books will be an operational puzzle that most will scoff at. While there certainly are huge issues to overcome, there are already many initiatives and ventures in place that make such a notion feasible. For starters, publishers and their production companies have for years been outputting ebooks as part of standard production processes. More and more are now moving to the IDPF’s epub XML ebook standard, which means there will be little issue with getting smartly formatted ebooks from publishers. Also with all the competition and noise surrounding repository services by publishers, distributors, and retailers, there will be many options ahead for cost effective storage and distribution of ebooks.

Offering ebooks with print could create significant value-added marketing and merchandizing programs. Publishers, retailers, even wholesalers could dramatically benefit from such a plan as consumers could be asked to join affinity and membership programs, enroll in online ebook clubs, and register with publishers in order to download their books. Want your free ebook? Join our readers club and you can download it. Just a bit of info required – by the way, mind if we email you when a new title arrives?

Big retail and publishing operations would easily be able to start or enhance current buying and discount clubs to include registration that tracks what titles customers have purchased and now have erights. Small stores and publishers could work with companies such as Baker and Taylor and Ingram – the latter of which is already deeply invested in large scale ebook repository development. Even the corner store on Main Street will be able to offer a customer ebooks on their customized corner of a distributor’s website. This will be a key value that distributors will provide their customers.

It goes without saying that used books would of course specifically NOT come with an ebook license.

In the end this could be a marketer and merchandiser dream. I believe moving to free ebooks with the purchase of a new print title would cost or lose the industry nothing in sales as ebooks would still be available for individual purchase for those who don’t want to spend on print. What we would gain is that books – print books – would increase in value and utility. Reading – pronounced dead by Steve Jobs just a couple of weeks ago– could receive a huge boost if it becomes easier and much more convenient. Buying a book and knowing you can always download the ebook if you need it would a very powerful incentive.

Who knows, over time, giving everyone an ebook with the print version may actually create more native ebook readers and expand the market share beyond what we can imagine today.

Evan Schnittman is OUP’s Vice President of Business Development and Rights for the Academic and USA Divisions. His career in publishing spans nearly 20 years and includes positions as varied as Executive Vice President at The Princeton Review and Professor at New York University’s Center for Publishing. He lives in New Jersey with his wife and two children.