The Future of Electronic Publishing

[KatG]

Okay, okay, take it easy. We're just spit balling here. Laer, not everyone here is a SF writer. Near future or far future, we're just guessing.

Ramirez, you may find this article interesting if you haven't already seen it:

http://www.spiegel.de/international/zeitgeist/0,1518,710139,00.html

 

[Laer Carroll]

Much of the discussion of ereaders focuses on the physical aspects, such as the display. Understandable. Hardware is visible, can be picked up and looked at from all angles, the textures can be felt. Various parts will be slick, matte, or rough. But much of the future development will also be software and peopleware.

One of Apple's innovations in the iPad was to support HTML5 for its visual software standard, rather than Flash. HTML is a public standard, Flash is proprietary. On the surface this is A Good Thing. Generally public standards enable new products from many vendors to talk to each others. But in this case some observers guess that Apple's real reason was to divert market share from ereaders which used Flash, and lock ereader customers into the Apple product - the direct opposite of the general effect of adopting a public standard.

However, the HTML5 adoption, once the market has shaken out in the next couple of years, really is A Good Thing. The adoption of this and other software standards will indeed level the playing field between vendors.

Then there are peopleware advances. There is currently much in-fighting among the various creators and distributors of books over just how the various affected people (writers, agents, editors, publishers, distributors, book stores) share in profits. One of the tools of some publishing factions is the adoption of the "agency model" for profit sharing.

These are some of the issues we have to look at, beyond the physical, to get some idea of what will happen in the future.

 

[Steven L Jordan]

One of Apple's innovations in the iPad was to support HTML5 for its visual software standard, rather than Flash. HTML is a public standard, Flash is proprietary. On the surface this is A Good Thing. Generally public standards enable new products from many vendors to talk to each others. But in this case some observers guess that Apple's real reason was to divert market share from ereaders which used Flash, and lock ereader customers into the Apple product - the direct opposite of the general effect of adopting a public standard.

Apple has always made an effort to be more advanced than other software/hardware sellers. It isn't so much that they're trying to lock-out Flash users, but that they're supporting the latest standard first, and trying to attract customers who appreciate that. As you say, when HTML5 is commonplace, that effect will have worn off... but by then, Apple will be working on the next advanced tech, and attracting new cutting-edge people.

Then there are peopleware advances. There is currently much in-fighting among the various creators and distributors of books over just how the various affected people (writers, agents, editors, publishers, distributors, book stores) share in profits.

This in-fighting is going to force many creators to try more independent and experimental contract and distribution forms... which will, in turn, force the more conventional creators to adapt new methods of contracting and distribution. The beginnings of this are already happening through outlets like Amazon and Smashwords, and through indie publishers (like myself) who can bypass them all and make sales.

The ability of independents to sell ebooks will keep big publishers from straying too far from equitable agreements, for fear of losing their big draw authors to other services. But the big pubs will still want to exercise as much control as they can, and stack the deck in their favor (mostly through major advertising channels) to make sure their sales back up their efforts.

The vague nature of ebook sales (and the problem of individual book security that allows piracy to function) will also impact the bottom line of big pubs, making it harder for them to maintain control over their markets.

It's hard to say whether the big pubs will eventually solve their problems and come to dominate, or lose their market share to indies in the face of a radically-changed market, and be forced to downsize and subdivide into smaller operations.

 

[Stephen Palmer]

More important will be blogs and Twitter-like communication - brief and to a point, in other words.

Quite an assumption there - that brief = concise. I think empty and vacuous might be a better description.

 

[KatG]

To keep in mind, the majority of authors have no interest in becoming their own e-book publishers, and when they do put in the enormous amount of work to do that, it tends to be for their out of print backlist titles or short, odder projects that they may also be doing with presses like Subterranean.

What is more of an issue for publishers are e-pub companies like Rosetta, who have made lucrative deals with authors for e-rights. E-rights as a subsidiary rights is being negotiated and in some cases will be part of the purchase price for the book license publishers do, and in some cases will be a separate subsidiary rights. Neither method is necessarily more lucrative to authors. The likelihood is that most authors will go with selling the rights to their publishers as part of the package, for increased advances or what is being worked out now -- standardized, bigger royalty rates. The format type for deals that publishers have with e-booksellers will not necessarily effect royalty rates.

 

[Laer Carroll]

Quite an assumption there - that brief = concise. I think empty and vacuous might be a better description.

Right! I'm on Facebook to help keep in touch with various friends and "kids" of several ages who are in my life, including four grand-kids. Most of the posts are pretty banal and brief.

But some are revealing. I just found out that the next-to-youngest, a poor student, has just become hooked on reading YA books, because he posted an enthusiastic FB "Like" of a Young James Bond novel. Thank you, Muse of Knowledge!

In the developing world, however, where it's more of an effort to gain access to the Internet, communications are more likely to be about an important subject. And it is in the developing world where much of the Inet pioneering will take place.

 

[Laer Carroll]

Laer, not everyone here is a SF writer.

Are there writers of other genres here besides SFF? Or are you referring to fantasy writers?

I address myself to SF writers because we are most concerned with the future. But the best fantasy writers are very imaginative, and often spend a lot of time thinking through the implications of the bedrock of their fantasy worlds.

They may be better than SF writers at considering the future. Less bound to SF cliches and stereotypes.

 

[KatG]

That's possible, but you're saying that SF writers have to look at the larger, later future, and I don't know that this is true and some of us here are not writing SF and may not be interested in considering the far future, but may be very interested in what will happen in the near future with electronic publishing as that is very relevant for all authors.

 

[goldhawk]

...but may be very interested in what will happen in the near future with electronic publishing as that is very relevant for all authors.

To those in the publishing business, it will grow very, very fast. To those in hi-tech, it's granny in a horse and buggy.

 

[Laer Carroll]

One way to simplify consideration of a complex subject is to reduce one variable to zero, then increase it in little jumps till the variable approaches the real situation.

So I look first at a far future situation, then a nearer future situation. In the far future the cost of a physical ebook will be zero. In the nearer future it will be more than zero but still quite low.

You can take it from the opposite end. Look at the cost of ebooks when they were introduced, then the cost a year or two ago, finally that of the present. I think present costs are about a third or fourth what they were at introduction.

However you do it, I think once conclusion is inescapable. The cost of a physical ebook will continue to decline. I suspect (but of course don't know) that five (or ten) years from now they will be cheap enough that the average US family will have several dozen ebooks scattered around their house and autos.

I'm talking about the real cost of an ebook. Some "free" cell phones (and soon "free" ebooks) are actually expensive but their cost is hidden in a required (say) two-year subscription plan. In effect the phone company (and soon Amazon and the like) loans you the cost of the phone then takes out a part of your monthly subscription fee to pay back the loan.

So the question becomes: when ebooks are free, where does the reader's money go? Some of it goes to the authors. Some of it goes to those who give the author services, including agenting and editing and selling and distributing your books.

Right now there is a big struggle between Amazon and traditional publishers over the pricing of ebooks. Eventually I suspect Amazon will win: they have near-monopoly of the online selling of ebooks and regular books. They have also shown that they are ruthless in using their size to force publishers, even the biggest ones, to give them price breaks on the cost of the books they sell.

And this is only one of the peopleware aspects of publishing.

 

[KatG]

To those in the publishing business, it will grow very, very fast. To those in hi-tech, it's granny in a horse and buggy.

Yep, that's it exactly. And it's going to stay that way because the high-tech folk have no interest in taking over book publishing, even the educational part.

In the far future the cost of a physical ebook will be zero.

Well no, it won't. That's not possible. Even if you turn it into a subscription phone plan (which won't work because people don't buy books like they do services and movies, and because the Internet and phone companies don't want to be booksellers for the most part.) Because you have to have someone to check the print in the file for each electronic format, separate from the print version, several times. So one e-book has to have the file copyedited and proofed about 18 times in addition to what is done for the print version. And you have to pay people to do that. And then there are other costs specific to e-books that have to do with production of each book, and others that have nothing to do with production and everything to do with the vendor. And unlike print books, there's no up front money from the vendor for the units -- the only units you get money for are the units that sell. And so you can't float money to pay people and the author and promotional costs, etc., while you are waiting for sales.

And the e-book sales have to be accounted in addition to the print sales, and that accounting includes additional accounting to the author and comes from a variety of vastly different e-book vendors, all of whom have different arrangements and price discounts, and those price discounts change over time. And you have to pay people to do that additional, very complicated accounting specifically for e-books. And the author does not get the money right away, sometimes does not get it for two or three years after selling the rights to a publisher. And the author needs food to live while writing the book and tends to go with the publisher who will give him money up-front so that he can have food if he can. Only there's no up-front money from other books with e-books. It's a workable system, but it's a different system so it will require a different process. All of which requires a separate, different infrastructure for e-books with continued costs.

And then there's promotion for e-books which is very different from the promotion of print books and requires additional, specific costs. And you have to pay people to do that too, only there's no upfront money. There are no returns either, so that's nice but you don't get any interest on the deposited gross sales monies either.

And then there are additional legal costs with e-books because of piracy and copyright infringement, much bigger costs than print books. Even small presses have to deal with some of these costs. And you have to pay people to do that too. And then there are the IT people who have to help when there is a problem with an e-file or the device that reads it or the interface of the two, and this is also specific to e-books, separate from print. And the IT people have to be able to do it in multiple formats, with multiple devices sold by very different types of companies in several different industries. And the IT people also have to monitor the storage of the e-books and delivery systems, etc. And you have to pay them too, and they are way more expensive than the copyediting proofing people, even if they come from the printing industry.

And then there are the marketing sales representatives who sell the vendors of e-books on what titles they will offer from the publisher, and what terms that sale will have between publisher and vendor, which are often different from vendor to vendor and on the type of e-book. And you need additional marketing sales reps to do this, ones who are trained in the electronics industry, not just publishing, and you have to pay them.

And so on and so forth. So unless you have a magic fairy, it's not going to cost zero.

Amazon did a power grab to hold on to their monopoly of the e-book market. They already have lost. They lost as soon as the iPad launched and they knew they were going to lose. The price fight was about stemming market control erosion, electronic rights issues, and accessibility to titles, not prices. Amazon will continue to be a very important player in the e-book market, but where they once were 90% of the market because there was pretty much no one else, they are now maybe 60% of the market. They will probably get down to at least 30% of the e-book market. They are 18% of the online print market, which is significant, but firms like WalMart and Target are trying to eat into that share. In the far future, Amazon may get out of the book business altogether because it is a low money business and does not provide most of their profits. They have a bigger problem dealing with Google and Comcast for control of parts of the Web (Amazon has very ambitious plans that are not about retail.) Still the Kindle has been a media promotional bonanza for them, and the books are kind of like their logo, so they'll stick it out for awhile.

 

[Sparrow]

Amazon did a power grab to hold on to their monopoly of the e-book market. They already have lost. They lost as soon as the iPad launched and they knew they were going to lose. The price fight was about stemming market control erosion, electronic rights issues, and accessibility to titles, not prices. Amazon will continue to be a very important player in the e-book market, but where they once were 90% of the market because there was pretty much no one else, they are now maybe 60% of the market. They will probably get down to at least 30% of the e-book market. They are 18% of the online print market, which is significant, but firms like WalMart and Target are trying to eat into that share. In the far future, Amazon may get out of the book business altogether because it is a low money business and does not provide most of their profits. They have a bigger problem dealing with Google and Comcast for control of parts of the Web (Amazon has very ambitious plans that are not about retail.) Still the Kindle has been a media promotional bonanza for them, and the books are kind of like their logo, so they'll stick it out for awhile.

I think the business model to watch is Apple's iTunes and how they expand media integration.
Apple already has a hugely successful hub, iTune, where you only purchase the content you want. They have winning devices, a reliable and powerful operating system, and they've been jumping into bed with giant media/service providers. Companies like Comcast, Dish, etc, should be very scared of what trends seem to be gathering steam.

 

[PeteMC]

Are there writers of other genres here besides SFF? Or are you referring to fantasy writers?

Well I regard myself as primarily a horror (or dark fantasy, if that's actually different and not just something a marketing person made up) writer than a fantasy writer, and I'm definitely not an SF writer for the simple reason that I tried to be, and the results were bad!

 

[KatG]

I think the business model to watch is Apple's iTunes and how they expand media integration.
Apple already has a hugely successful hub, iTune, where you only purchase the content you want. They have winning devices, a reliable and powerful operating system, and they've been jumping into bed with giant media/service providers. Companies like Comcast, Dish, etc, should be very scared of what trends seem to be gathering steam.

Except that's not working because you can't slice books like you can albums -- consumers buy music and books differently. iBooks are not selling, partly right now from a lack of titles, but also because most people are not using their iPads as an e-reader. It's still a very useful market for publishers, because there are so many millions of them and Apple products that can take iBooks so even if it's miniscule for the electronics market, it's effective for publishing, whereas for music it would be a disaster, but they can't rely on Apple the way the music industry has. The music business is just way too different from book publishing, and book publishing's biggest problem is always expanding the number of vendors, not decreasing them into a disasterous monopoly. That was part of the problem -- still a bit of the problem -- with Amazon and online retail selling, then e-books and with losing supermarkets and being more reliant on the superchains who are now a mess. And the bulk of Apple's music sales is for one device, their line of iPod MP3 players, which is the most popular one. But Apple's tablet, laptops, etc. are a strong minority in the computer market, not majority. There's no guarantee they'll remain the big selling tablet provider, the tablet being closest to an e-reader in features.

I'm not saying a hub set-up might not fall into place, especially with all the Cloud stuff going on and bundle packaging. I'm just not real clear what it's going to look like yet. But I do know that books are not and will not be copying music, i's notwithstanding.

 

[Sparrow]

Quite an assumption there - that brief = concise. I think empty and vacuous might be a better description.

That's how I equate all this connectivity we enjoy-- hollowness.

 

[Sparrow]

Except that's not working because you can't slice books like you can albums -- consumers buy music and books differently. iBooks are not selling, partly right now from a lack of titles, but also because most people are not using their iPads as an e-reader. It's still a very useful market for publishers, because there are so many millions of them and Apple products that can take iBooks so even if it's miniscule for the electronics market, it's effective for publishing, whereas for music it would be a disaster, but they can't rely on Apple the way the music industry has. The music business is just way too different from book publishing, and book publishing's biggest problem is always expanding the number of vendors, not decreasing them into a disasterous monopoly. That was part of the problem -- still a bit of the problem -- with Amazon and online retail selling, then e-books and with losing supermarkets and being more reliant on the superchains who are now a mess. And the bulk of Apple's music sales is for one device, their line of iPod MP3 players, which is the most popular one. But Apple's tablet, laptops, etc. are a strong minority in the computer market, not majority. There's no guarantee they'll remain the big selling tablet provider, the tablet being closest to an e-reader in features.

Yeah, I wasn't talking so much about downloadable books.

I think we have to be honest and recognize that books play a rather insignificant role in our culture. Except for kids in school a very small percentage of the population even read on a regular basis. Most books don't ever make a profit, and the ones that do, the profit is negligible.

 

[goldhawk]

I think we have to be honest and recognize that books play a rather insignificant role in our culture. Except for kids in school a very small percentage of the population even read on a regular basis. Most books don't ever make a profit, and the ones that do, the profit is negligible.

But those who read are very influential. Books have an influence out of proportion to their numbers.

 

[Laer Carroll]

In the far future the cost of a physical ebook will be zero.

Well no, it won't. That's not possible.

You misunderstood, likely because I expressed myself poorly. I should have said the cost of the physical ebook READER will APPROACH zero. We already see this as the cost of readers gets ever cheaper.

Eventually a new reader might be a paper-thin device so cheap that thousands of them can be bought for pocket change. They might be stacked on lunch counters to be used and discarded the way we discard paper napkins. Or re-used if sturdy enough. The menu for the day could be loaded into the stack of readers by a device similar to a printer which loads print onto pieces of paper. The physical ereader cost would not be zero, but it might be pennies, and taken out of the overhead for the cafeteria or restaurant.

The ereader CONTENT is a different matter. Creating the menu would cost something. This would include the labor cost of the "author" of the menu, and the devices used to edit the menu, and the power used by those devices, and of ceiling lights, and air cooling or heating of the work environment, etc.

Creating additional content, such as a daily digest of news, would cost something. The cost of a creating the content of a magazine or book would cost something. Each person viewing the magazine or book would pay for that in some fashion.

Loading the disposable ereader with the content of a magazine or book could be done, perhaps, by laying the ereader atop the table the person is using to hold hi/r lunch tray and triggering the download via a sub-audible request by the person, or via a neural link tattooed or pasted on the person's temples.

What's the purpose of these science-fictional scenarios? To separate out the strands of cost and effort which go into publishing a book or magazine or whatever. Which Kat explored in depth in a previous post.

I also want to briefly focus attention on the evolution of the physical part of an ereader, as opposed to the non-physical part: the content. That cost will continue to drop, eventually shifting the focus of the publishing industry off the ereader itself and onto the content. And onto the creators of that content.

 

[KatG]

I should have said the cost of the physical ebook READER will APPROACH zero.

Oh. Yes, that would have been clearer.

 

[Laer Carroll]

I just got another cell phone this afternoon. It's used, but in as-new condition. It cost me $50 and was not tied to any phone plan. I just swapped my sim chip into it and now can use it on my old phone plan. It supports two additional channels so that I can use my cell in Europe as well as the US. It has a camera.

And it can connect to my computers and display on them, and vice versa. This is a hack by a techie acquaintance and not available on most low-cost phones. It may be available on Blackberries and the like, but I'm not interested in those kind of phones yet so I don't know. Maybe those of you who have these high-end phones can tell me.

Potentially it could connect to special-purpose ereaders and general-purpose tablets. When that happens we'll be able to preview an ebook on our phone and buy it if we like it. Maybe start reading the book while we wait for a friend or bus or dinner, then continue reading it when we get home on (one of) our computers at a desk or table, and continue on an ereader or tablet in bed.

The point of this is that the display device and the content it displays can be separated. To do it easily and conveniently requires a lot of behind-the-screen action which the phone/reader/tablet/computer user never needs to know. But it's an engineering field called device-independent display, and includes some XML-based publishing standards.

Currently Amazon, Apple, Barnes & Noble, and the like want to tie display and content together. You can only read Amazon-vended book and magazine titles on a Kindle, Apple-vended titles on an iPad. (Apple claims to support public standards such as HTML5 and ePub, but it's more lip-service than actuality.)

For a year or two these companies will get away with their monopolistic practices, but it can only be foot-dragging which will shore up their bottom line short term. Likely the bosses of these firms know this, and will trumpet newer products down the line as "freeing the user" when they are dragged kicking but not screaming into true device independence.

Similarly communication between devices can be separated from the device and the content. This is what all the fuss is about with the talk about 3G versus 4G phone plans, AT&T versus Verizon.

As standards slowly advance despite foot-dragging by individual companies, and devices and services become ever cheaper as they propagate around the globe and into our homes, prices of the means of communication and display will drop. But not the price of creating the content. That can only be done by creative minds. Like yours.