If the music industry thinks it's having a tough time getting its arms around digital distribution, it should look to the world of book publishing for a reminder of just how much further behind it could be. Publishing execs gathered Wednesday at Jupiter Research's media forum in New York made it clear that the market for E-books is a nascent one that doesn't figure to mature any time soon.
In some ways, the industry has only itself to blame. In a keynote address, Larry Kirshbaum, chairman of Time Warner Trade Publishing, told attendees that the industry has underestimated the technical challenges involved and that even converting a digital file into an E-book format has proved more complex than anticipated. In a moment that perhaps symbolized the industry's uneasy relationship with technology, Kirshbaum admitted that his Jupiter presentation represented his first experience with PowerPoint software.
The result is a market that's been slow to take off. According to Jupiter, sales of E-books are expected to generate just $70 million in revenue this year, with the figure growing to $830 million in 2005. Jupiter analyst Robert Hertzberg said in his conference-opening comments that E-books simply have yet to become relevant to consumers. "I know virtually no one who owns an E-book reading device, or, more important, who consumes books in a digital format," Hertzberg said. But Publishers Weekly editor-in-chief Nora Rawlinson, who sat on a subsequent panel, said publishers needn't worry about whether people are actually reading E-books. "Publishers have made a living on people buying books, not reading them."
To date, the only notable E-book success has been Stephen King's 66-page Internet-only novella "Riding the Bullet," which has generated 557,000 downloads since it was made available last year, said Jack Romanos, president and chief operating officer of Simon & Schuster Inc. and a panelist at the forum. Romanos said the next-biggest E-book seller for S&S has been downloaded a mere 35,000 times. Still, he remains optimistic. "The King exercise proved without a shadow of a doubt that E-book readers are out there."
Britta Narum says everything she heard tells her the publishing industry doesn't get it. Narum, a business development professional who's at the forum in search of content ideas for Dutch telecom company KPN, says, for example, that some kind of subscription service that allows access to portions of textbooks or travel titles could generate significant revenue. "We're constantly looking at how we can exploit content," she says. "They're not looking at the parallel alternatives."