E-books are booming. Similar to Gutenberg’s printing technology that replaced handwritten manuscripts, digital technology is replacing printed books.
E-books are not new. They existed in various formats, PDFs mainly, for a number of years. However, the launch of Amazon Kindle in 2007 changed the game. Light, easy to carry Kindle could hold hundreds of books. A year after, Barnes and Noble followed with a Nook reader. Later, Borders joined the contest by partnering with Kobo, Toronto-based e-reader manufacturer. In 2010 Apple’s device iPad was released, providing a more efficient way to buy e-books from various providers including the Apple’s own iBooks app. Android tablets followed the suit. By the end of 2010, Amazon reported for the first time that they sold 115 e-books for every 100 paperbacks, excluding free book downloads.

While Amazon’s Kindle, Barnes and Noble’s Nook and Apple’s iBooks reap the most benefits from e-book sales, publishing houses have to face the most dramatic change since Gutenberg’s times. Traditionally, publishers have not worked with end consumers. Instead, they employed a middleman – a bookstore. But bookstores have their own agenda. The Internet makes everything cheaper. Amazon, a dominant book retailer, deliberately reduced e-book prices in order to increase its market share and sales of Kindle devices. For example, if a book retailed for $26, Amazon would pay a wholesale price $13 to a publisher, and sell the book for $9.99 to an Amazon customer. By taking losses, Amazon ensured cheaper prices of e-books.
Apple proposed a different pricing model. Apple allowed e-book sales through their iBooks App by charging 30% per transaction. Publishers liked a new model as it let them set the price of the book rather than dealing with Amazon’s draconian methods. As a result e-books became more expensive. Amazon did not have a choice but to adopt a new agency pricing model. At the same time, Amazon did not forget to innovate. In September 2011, Amazon announced a new Kindle Library lending program. Library users with access to Kindle software can borrow Amazon books for free from their local libraries. In addition, the majority of libraries offer free Kindle instruction sessions ensuring that e-book opponents can receive guidance and sufficient training on how to use e-books.

Publishers have fewer outlets to sell books at a regular hardcover price. However the costs of running a publishing house did not change. Publishers spend money on author advances, royalties, printing, advertising and distribution, facilities and operations, editors and so on. In addition, more and more authors prefer self-publishing. By avoiding a publishing house, authors reach out to consumers by offering books mainly in 99c range. Moreover, all classic literature is available for free to download due to expired copyright protection rights. How can publishers put up with disruptive digital publishing?
Guido Lang, VP of Business Development at MintRight, Inc., a global e-book distribution platform, says: “Publishers have to answer the question of how they add value. In a world where you can publish online in real time and at little or no cost, it is hard to convince someone to pay for a publisher. On the flip side, publishers have great experience in identifying, developing, and marketing great stories, which will remain a key skill. However, publishers have to adopt the new tools of their trade – e-books, apps, and social media.”
Of course, opponents of e-books may claim that an e-book will never replace a ‘real’ paper book. However, what is real? The first books known to humanity were set in stone, written on papyrus scrolls, clay tablets, parchment and silk. Paper books replaced ancient forms of book making, and Gutenberg’s printing technology replaced handwritten books. Digital technology and e-readers are ready to transform the whole industry of publishing.
Will paper books cease to exist? Probably not. While everything that is released in paperbacks can be easily digitized, books with colorful illustrations, such as cooking books or art books are perceived better in paper formats and are great gifts. As an analogy, mass produced prints did not replace handmade paintings. The challenge for publishers is to update their existing business model and innovate.









I teach in the NYPD Leadership program at John Jay College. This job comes with special challenges that other professors do not encounter. For example, my students, all active duty NYPD officers are often asked to work mandatory overtime. This semester between the September 11 10th anniversary, increased activity at the United Nations surrounding Palestine’s efforts to obtain UN membership, and lately Occupy Wall Street, there have been many empty seats.







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