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Article by: David Viney
The Current State of the Market
In my first article, I outlined the massive advantages to eBook
publishing, particularly for the author! Now you have become excited
by that, it is time to inject a little realism! Ever since the
emergence of personal digital assistants (or ‘PDAs’)
and the growth of the Internet, market enthusiasts have been predicting
the ultimate demise of the printed book.
This is, of course, nonsense! Traditional books do not require
a power supply or batteries and can be read even when badly damaged
(so called “graceful degradation”). Printed pages have
better contrast and fonts are serifed, to aid the eye in scanning
the text. Readers do not need technical skills or expensive and
fragile devices to access them. Traditional printed books are
here to stay!
Over time – and as technology improves – some of these
differences will be eroded. However, at the moment, eBook sales
are still only a tiny fraction of overall book sales wordwide
and electronic publishing remains a very immature industry. There
are many companies, testing different possible business models.
There are also competing software formats and handheld device
manufacturers (as well as traditional PCs). This diversity will,
in the short term, hamper progress.
Future Growth Prospects
It is also wrong to dismiss eBooks as an idea that will never
take off (as several industry stalwarts seem wont to do). Why?
Well, because that fact is that (a) eBooks are already doing pretty
well and (b) the major players are still investing!
Lightning Source, the eBook distributor used by Amazon in the
US, sold its millionth print-on-demand book in April 2004. Try
telling them that it’s an idea that’ll never work! In
2005, Amazon recently bought French company Mobipocket from Franklin
for $2.5 million (to distribute eBooks) and BookSurge.com (to
cover print-on-demand books). Look at the Amazon PageRank of eBooks
on Amazon’s site and you might be surprised how well many
are doing!
In fact, eBooks are particularly suited to the distribution of
business, computing and academic works (with a small but high
value niche market). They have also proved to be a viable complimentary
channel for popular mass-market paperback titles. Members of the
Open eBook Forum (OeBF) reported $3.2m of sales in Q3 2004, a
25% increase over the same period in 2003. The equivalent volume
increase was 11%, so eBooks are commanding higher prices as consumer
acceptance grows.
Features of the eBook market
At a basic level, one can distinguish five main components to
the emerging ePublishing market:
1) Free distribution - epitomised by Project Gutenberg; started
in 1971 (in the very earliest days of the internet) and now maintained
by an army of volunteers. At time of writing, there are 16,700
free etexts in it’s catalogue and approx. 1.8 million downloads
a month. Top 20 downloads include the War of the Worlds by H.
G. Wells and Pride and Prejudice by Jane Austen. Peer-to-peer
(free and generally illegal) distribution using Internet Relay
Chat (IRC), Usenet and file sharing software (like Kazaa, BitTorrent
& Limeware) has yet to take off in the book market as it has
in recorded music. It might be easy to burn MP3s from a CD, but
scanning a book, page-by-page to create a text file is beyond
the skills and patience of almost everyone! Everyone, that is,
other than the dedicated volunteers at Gutenberg!
2) Own distribution - all about selling your eBooks via your
own website. I recommend this option as a complementary channel
to Booksellers, Distributors and Aggregators. At the basic level,
you register a domain name via a hosting agency (e.g. 1&1
Internet Ltd) and create some pages using Net Objects Fusion or
similar design software. PayPal is emerging as the simplest and
most widely accepted payment interface (with 71 million users
worldwide).
3) Bookseller distribution - the biggest and most confusing component
of the marketplace. At one end of the spectrum is the online equivalent
of the traditional ‘vanity publisher’ companies; where
you are charged an up-front fee to list your book but then get
100% of the sales receipts. Examples include ebookpalace.com and
ebookomatic.com. With Alexa PageRanks over 170,000, there are
just not enough users regularly visiting these site to make them
worth your while (especially when one excludes the hapless authors
admiring their works).
In the middle of the spectrum is the royalty bookseller who does
not levy an up-front charge but instead pays you a %age royalty
on each eBook they sell for you. Examples include lulu.com, ebookad.com
and cyberread.com. Unlike some less reputable operators, Lulu
do not levy hidden up-front charges on top of royalty percentages.
They also generate reasonable web traffic, with an Alexa rank
of 5,421 – so I would consider Lulu but ditch the rest in
this category.
Finally, at the other end of the spectrum are the major online
booksellers. Of the big four (Amazon, Borders, Barnes & Noble
and BOL.com) only Amazon distribute eBooks on their site and even
then Amazon only accept titles from their distributor, Ingrams.
4) Distributors - The best “back door” into Ingrams
(who normally do not deal with small publishers) and thus into
Amazon is via their subsidiary Lightning Source International
(LSI) LSI handle the inventory and technology for secure download
of titles on Amazon.com, eBookmall.com, Diesel-Ebooks.com and
Powells.com. I receive most of my sales via LSI (bot surprising
when one considers Amazon have an Alexa Rank of 13! Sites with
low AR get tens of millions of visitors per month. Sites with
an AR over 100,000 get thousands (and thus will only convert hundreds
or less into actual sales across the whole catalogue).
5) Aggregators – Content Reserve are the biggest and best
known, serving a growing number of public libraries, as well as
a network of retailers including eBooks.com, WHSmith, SimonSays,
Fictionwise and eFollett.com. However, Content Reserve do suffer
from a “bad press”, at times, in Internet forums on
their speed of payment. They also charge up-front storage fees
for holding inventory (a charging structure that penalises small
publishing outfits with few titles).
eReader.com and Mobipocket complete this group, being both vendors
of (free to download) eBook reader software and a repository for
eBook downloads. Whilst eReader is currently more popular, particularly
with Palm users, Mobipocket looks set to grow in importance, given
it’s recent sale to Amazon Europe and Amazon’s plans
to integrate Mobipocket into Amazon UK. Mobipocket’s reader
software also works on Blackberries and Smart Phones (thus being
more platform independent) and is compatible with the emerging
and non-proprietary Open eBook format.
Conclusions
With such a limited number of publishers testing eBook models,
the market for me essentially boils down to Lulu, LSI, Content
Reserve and Mobipocket. Whilst immature and limited by diversity,
the eBook market is growing rapidly. This growth looks set to
continue.
David Viney (david@viney.com)
is the author of the eBook Self-publishing Guide; Desktop to Amazon
in 10 easy steps. The book is a handy pocket guide on how to get
your eBook distributed via Amazon and other sites in the UK and
US and marketed for maximum sales.
Read further free extracts from the guide at http://viney.com/free-ebook-self-publishing-guide/
or download the full copy of the book from there.
In chapter 3 of my free eBook Publishing Guide ("writing
your eBook"), I explore how to write and format your
book for eBook distribution, including the creation of covert
art.
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