Do eBooks spell the end of bookstores and libraries?

A Librarian down in Australia writes about eBooks and Libraries and while he thinks Libraries are at the forefront of the eBook revolution it’s worth taking a non-librarian view of two questions he asks –

Do you think it means the end of bookshops and libraries as we know them?

Will book people have to turn into e-book people to meet the brave new world?

Let’s start with the second question.

Price separates eBooks from Books

At the moment Publishers are trying to get eBooks to subsidize the costs and inefficiencies of physical books.

Let’s put aside people’s emotional preference for paper books (just till the next section) and compare physical and electronic books on price –

  1. eBooks don’t have printing, ink, and shipping costs (to be precise they’re much, much lower). Approximately 20% of the cost of paper books is eliminated.  
  2. eBooks can be tracked better and risks can be reduced and numbers to print can be optimized. You can literally reduce risk and increase rewards.
  3. eBooks kill sharing and the used books market – allowing eBook Publishers to price eBooks even lower.   

No matter how you look at it eBooks beat paper books on price.

If you have a book in two forms the only reason to choose the more expensive form is if it has some additional intrinsic value.

How much will people pay for their emotional attachment to physical books?

You have some actual benefits – sharing, reselling, decorating, signalling, and so forth. However, the first of those two benefits are factored into lower eBook prices and the latter two require just some physical book purchases.

The biggest reason people prefer physical books is that they are in love with paper and ink.

What premium are people willing to pay for their love of paper books?

Well, not the high premium they would have to pay to sustain physical books as the main form of books.

My argument is that when eBooks are done right they so much cheaper than physical books (40-50% cheaper) that if they were reasonably priced they’d turn hardcovers into high-end items.

  1. The first clue is that Publishers are desperately trying to keep the price difference between paper books and eBooks low – all via artificial means.
  2. The second clue is the strong reaction to eBooks and eReaders and the attempts to kill both off – If paper books really are so much better than eBooks why would anyone care?

eBooks are much cheaper than paper books and if the real price difference was reflected in list prices people would not be willing to pay the premium for paper books. They’d still buy paper books – However, paper book sales would be less than 25% of total book sales.

Will eBooks spell the end of Bookstores?

Even without eBooks the Internet and Internet stores were killing physical book stores. Borders is about to go bankrupt and Barnes & Noble is struggling.

Physical bookstores are doomed. Let’s not blame the eBook for something the Internet has wrought.

All eBooks will do is finish the job.

People might like bookstores but they like low prices and convenience more

In a way the fall of bookstores is a preview for what will happen with paper books.

Everyone loves bookstores and browsing and the smell and the experience. Yet more and more people buy books online. People say they love their local bookstore and want to support it and they do – just not enough to keep it in business.

Despite bookstores providing a better experience they are dying – the prices aren’t low enough, they aren’t open 24/7, and they aren’t built for lazy shopping in your pajamas.

They’re the perfect illustration of a model that’s past its time and finally beginning to die. There’s no guarantee that paper books won’t be next.  

eBooks will be the final nail in the coffin of bookstores

There’s no way to pretend eBooks don’t hurt physical bookstores – they do. Bookstores were already weak and suffering at the hands of online stores. Now, with eReaders and eBooks there are stores in the hands of readers and Physical Book Stores have an impossible task ahead of them.

Option 1 is a physical bookstore that’s 30 minutes away, has mileage costs, has taxes, has more expensive physical books, and in general is not very convenient.

Option 2 is a virtual bookstore that’s in your eReader, open 24/7, has lower priced books, and has more range.

It’s a fond goodbye to bookstores.

Will eBooks spell the end of Libraries?

It’s unlikely. Libraries are still vital for ensuring everyone can get the books they want.

With eBooks we have books that are cheaper – However, they aren’t yet cheap enough and you have the additional barrier of expensive eReaders. That means ending Libraries or reducing their role would take us back to a time of inequity where only the rich and well-off had access to books.

Let’s first look at the biggest threat to Libraries from eBooks – not death but a huge reduction in influence and scope.

eReaders are a limiting factor

A library with 50,000 books can serve, at least theoretically, 50,000 people at the same time.

A library with 50,000 eBooks and 500 eReaders can serve only 500.

It’s much tougher to serve a large number of people with eReaders and eBooks than with physical books. The only possibility is that lots of people buy eReaders on their own and use libraries for just eBooks.

Libraries need physical books as much as Publishers – perhaps more.

Libraries will need subsidies and very good strategies

It seems ridiculous to suggest that when eBooks take off the role of libraries will be cut to a fifth or a tenth of what it is today – However, it’s quite likely.

Look at all the things Libraries will have to pay for – eReaders, eBooks, licenses, buildings, staff, and so forth. The only advantage eBooks give Libraries is that the Internet Archive and a select few non-profits are actually adding free books. Every other advance in eBooks is a negative and threatens to gradually marginalize libraries.

It’s amazing to see Libraries completely miss the initiatives and changes that are going to kill them. They really need much better strategies. Titling a post ‘Libraries lead the eBook revolution’ is fooling no one.

eBooks are revolutionizing Publishing – It’s about time bookstores and libraries prepared for it

It’s unfortunate to see both libraries and bookstores treat eBooks as a small change – as if it were simply a case of all hardcovers suddenly getting acryclic leather covers that shine in the dark.

eBooks are a very, very big change.

They have the potential to take down the established Publishing power structure and create a completely new world of Publishing. Bookstores have little hope of surviving so they might as well keep believing whatever they like – we can’t do much to help them and perhaps neither can they.

Libraries, on the other hand, have a very good chance of surviving. There are a lot of companies that are doing big, positive things and Libraries can use that and embrace eBooks and stay away from the new breed of middle-men who’ll suck them dry.

It’ll be interesting to see if libraries will go down with Publishers and the existing power structure. Perhaps they will be more flexible than Publishers and survive and thrive. Perhaps they will need bail-outs to survive. Perhaps their role will be reduced to the point that they are no longer a pillar for reading.

How many apps will there be at kindle app store launch?

It’s a rather interesting question to think about – Will there be 10,000 Kindle Apps when the store first launches? Will there be just 150?

  1. Let’s say there are 20 companies Amazon has given the early bird privilege to (including Electronic Arts and Sonic Boom). They make an average of 2.5 apps – That’s 50 apps right there.
  2. Let’s say another 100 companies (including game companies and iPhone app companies) make an average of 1.5 apps – That’s another 150 apps.
  3. Next, let’s throw in 1,000 developers who take a shot and make an average of .7 apps (because a lot of them drop out) – That’s 700 kindle apps.
  4. Finally, we have 10,000 enthusiasts and interested people who make an average of .2 apps each. That’s 2,000 kindle apps.

It’d be fair to assume that quality drops as we go from invited companies to enthusiasts. That means we could be looking at 200 quality apps from companies and 2,700 apps of varying quality from developers and enthusiasts.

That’s 2,900 kindle apps at launch. Really think that’s close to the most likely scenario.

What’s the worst case scenario?

In the worst case scenario everyone waits to see how the Kindle App Store does or they are busy coding for the iPad. That would mean –

  1. 10 invited companies that contribute 25 quality apps.
  2. 40 companies that contribute 60 quality apps.
  3. 300 developers that contribute 210 apps of varying quality.
  4. 2,000 enthusiasts who contribute 400 apps of varying quality.

We might see the Kindle App Store debut with just 700 or so kindle apps. It wouldn’t mean failure – just a very slow start.

How much overlap will there be?

It wouldn’t be a surprise to see 5 or more each of –

  1. Chess App.
  2. Sudoku.
  3. Crosswords.
  4. Screensavers app. 
  5. Hangman.
  6. Twitter Client
  7. Facebook Client.

There’s definitely going to be a lot of overlap and there may be just 25% to 50% unique apps.  

It’d be nice if there were a site that let us know that The New York Times was creating a crosswords app – that way the other 10 people building one would know what they were up against.

What pricing will apps use? What will people pay?

Perhaps a lot of people code free apps and spoil the revenue potential for everyone else. Perhaps everyone prices apps at really low prices and that makes profit scarce.

The other problem is that a lot of the apps for which people would pay well ($5 or more) are ruled out – No Folders, No PDF reader, and No ePub Reader.

How much will people pay for Chess? How long before someone comes in with a $1 chess app? How long before someone codes a free version?

How would you estimate all these things?

Developing a kindle app is a black hole –

  1. We don’t know how many other people are coding apps.
  2. We don’t know how many other people are coding the exact same app.
  3. The exact Kindle App Store debut date isn’t known.
  4. Pricing of apps is an unknown.
  5. What people will pay for apps is unknown.

It’s really quite difficult and it wouldn’t be a surprise if people just took cues from the iPhone App Store and priced everything at $1.

What do you think – How many apps will we have at launch? What price will people pay? How many apps will be sold? Will people keep buying apps or will it be a short term spike in interest?

Will readers pay more for books because of a beautiful argument?

This is a question that comes up again and again when reading all the posts and articles by authors and publishers claiming that $9.99 is not a sustainable price and that $14.99 is the minimum price point to sustain books.

At some basic level Publishers are not selling a product when they try to raise prices from $9.99 to $14.99 – they’re selling an idea. They expect readers to buy this idea and start paying 50% more for books.

Are readers really going to buy the idea?

It’s got to be an amazing idea and amazingly persuasive to convince readers to pay 50% more for every eBook they buy for the rest of their lives. 

Let’s start with the unknowns that underlie eveything – the real cost of publishing books and a sustainable price for eBooks.

Is $9.99 a sustainable price for eBooks?

We don’t know. We can only infer things from how authors and publishers behave –

  1. Indie authors are willing to give away their books. Zero is obviously not a sustainable figure.
  2. Smaller Publishers are willing to sell books for $3 and $4. Perhaps this is a sustainable figure – Are these small Publishers thriving or barely surviving? What is the quality of books?
  3. Some big Publishers are selling their books for $9.99. How are these Publishers doing?
  4. Other Big Publishers want to sell books for $14.99. Why do these Publishers need a $14.99 price?

Which one of these prices is sustainable? What’s a reasonable ebook price?

Publishers have ensured that no one really knows what the cost of Publishing is. It’s a black box so when they claim $14.99 is a necessary price we don’t really have the data or insights to know whether they’re lying or whether they really need $14.99.

Is $14.99 about books or about Publishers?

What exactly do Publishers mean when they say $14.99 is necessary to sustain Books?

  1. That $14.99 is necessary to save books.
  2. That $14.99 is necessary for books to flourish.
  3. $14.99 is what they are comfortable with.
  4. $14.99 is critical for them to stay in their comfort zone.
  5. It’s needed to ensure physical books don’t become unsustainable.

Publishers are obviously talking in terms they think readers can relate to – However, what is the real reason Publishers want $14.99?

Are Publishers being honest? What about to themselves?

It’s amusing that the less necessary Publishers become the more rules they want to enforce and set –

  1. Digital distribution comes into place and Publishers want to set DRM and restrict sharing. 
  2. Books become cheaper and more easily accessible and Publishers want to raise prices and delay ebook releases. 
  3. Books get features like Text to Speech and Publishers want to kill them off.

Are Publishers being honest to all of us about their role and their importance? Perhaps they aren’t even being honest to themselves.

Publishers aren’t gatekeepers any more because anyone can Publish. They aren’t risk aggregators and venture capitalists because the costs and risk have been reduced immensely.

What is their role? Are they reduced to the role of a shared enemy for readers and authors and platform owners? Are they simply the last obstacle to the rise of a bright new Publishing future?

Will people pay more for Beautiful Arguments?

We have had some of the best writers (arguably) of our generation rant and rave against eBooks and talk about the importance of high eBook prices and eloquently praise paper and ink.

Those are beautiful words. Perhaps if they were bound into a book they’d be worth $14.99.

However, are the arguments so beautiful that they make every single $9.99 book worth $14.99?

It’s a very important question. Publishers and published authors are working under the assumption that they can undo the $9.99 price point that is anchored into readers’ minds. They actually think that they can publish a few articles and beat their chests and wail about the death of books and it’ll just magically transform everything.

The most beautiful argument in the world is worth nothing

An argument’s utility to people is ZERO.

Publishers and their allied Authors can craft the most beautiful argument in the world and conjure up an image of puppies drowning and pandas going extinct and kittens being stomped under boots if we don’t pay $14.99 for books.

It doesn’t matter – Most people are not going to buy it. The only readers that are going to be swayed are those who fall for the argument and start believing it’s true (not many because readers are generally smart people) and those that don’t care about $5 extra per book.

That leaves the vast majority who will not go for $14.99.

It’s quite simple – A $9.99 eBook is worth the money and a $14.99 eBook is not. Tagging on $5 extra isn’t justified no matter how pretty the argument or how flowery the language used to argue it.

Instead of words it’s time Publishers used hard facts – Show us the ledger books and the real costs and why $9.99 worked for 2 years and suddenly doesn’t work now.