eBooks - The Future

June 2006

As things stand, I'm not convinced that epublishing has a great future. Legal music downloads account for about 2% of music sales, and it looks like ebooks are going to account for a similar miserable percentage of book sales, at least in the short term. The main problems are screen-reading and digital rights management (DRM).

The new Sony eReader, and more importantly the clone versions that will follow it, should get over the most of the screen-reading issues in the medium term. It's a reflective light system, not emissive light like a computer screen, and about the same size and weight as a paperback. Ideal.

But DRM is a sticky issue. The current DRM (copy protection) systems are not good, not liked by customers, and effectively mean an ebook is on loan, never really owned (see About eBooks, For Customers). This is a huge limitation for epublishing.

Specialist epublishing

Because piracy is less of an issue in niche markets, and they don't need aggressive DRM, epublishing should be successful for titles that sell in the hundreds or early thousands. It's big selling books that have problems.

Here's a suggestion

Maybe the answer is to accept the current limitations of DRM and offer ebooks as the digital equivalent of library books – for a fee. This is quite different to anything that currently exists. It would be a new marketing model.

For example, a bestseller could be offered as a one-year loaner ( a leased ebook), in encrypted form with strict DRM, with almost no transfers to other machines allowed, just the original computer it's downloaded to and one hand-held. When the year is up it can no longer be read.

The success of this new model would be pricing. It would have to be priced low, just covering the author's royalties, the publisher's profit, and DRM server costs. Currently ebooks are offered at high prices, close to traditional paper books, even though the overheads are relatively low for digital distribution.

To put this in perspective, traditional books were generally sold at 25% of their cover price to distributors, who offered them to retailers at 50% of cover price. Supermarket sales and bookshop chains have kicked out the distributors and changed these numbers in the last decade, but it's still the case that publishers receive a minority percentage of the cover price.

If epublishers took on this new marketing model, they could sell at a low price and gain high volume sales, so bringing their ebook overheads down.

And readers who wanted to keep the book in the long term would then need to buy a real paper copy. A double sale.

It's just a suggestion.

More TinHat articles on Ebooks and Epublishing