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Digital dominance by… when?

Two news stories stand out this week in the snowballing growth of digital content.

Digital Book World (http://www.digitalbookworld.com) held their annual conference in New York City earlier this week.  Among the many stories circulating was news that a poll of publishing executives suggesting digital sales may overtake physical book sales in value by 2014.  According to James McQuivey, of analysts Forrester, 10.5m Americans now own an e-reader, and that (furthermore) there are 10m iPads and other tablets out there too.  2014, eh?  Phew.

Then, on Friday, Amazon announced more record-breaking sales by value ($1bn in Q4 of last year) before switching seamlessly to a volume milestone – 115 ebooks were sold for every 100 paperbacks.

As ever, Amazon teases us with bits of information and we have to fill in the gaps – what was the average selling price of those eBooks?  How many hardcovers did they sell in Q4 – Christmas is strongest for hardbacks, weakest for paperbacks across the retail year.

Nevertheless, the trend is clear and acute.  The low retail prices on copyrighted ebooks for Kindle baffle me, perhaps even more than the preponderance of “free” as the default value of all that old out-of-copyright junk (you know, Dickens, Shakespeare, that sort of thing).  Whether low prices are a function of Amazon’s pricing policy and their desire to drive ebook volume, or the low on-costs of publishing amortised properties, I have no idea.

But the relentless drip-drip-drip continues.  The fair price for downloaded content is “free”, because after all, from YouTube to the BBC, from pirated MP3s to some middle-aged blogger, “free” is what we all expect to pay.  Moving back from “free” (or negligibly priced – less than a cup of coffee, say) to economically viable will be tough, once the physical book has been reduced to a historical curiosity, and the sale of digital content has to support the authors, agents, publishers and (r)etailers.

This is a blog entry, not an extended essay, so I’ll stop for now, but we’ll return this topic.  Meanwhile, the snowball grows and gathers momentum.

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One Comment on “Digital dominance by… when?”

  1. Aaron Carter says:

    You could be looking at this the wrong way Philip and you miss some of the key considerations for selling digital product. The overheads for producing a digital edition of a book are smaller than producing a physical edition – I’m obviously referring to print, distribution and warehousing here – and it is right that the value perception of digital product is lower than for physical editions. For eBooks to really take off (and for the future of reading books this is essential), they’ll need to have a great value perception. In fact, with Amazon, Book Depository etc, discounting physical front-list titles as much as they are, some publisher’s pricing for eBooks seems expensive. I’d be interested to hear what you consider to be the ‘sweet spot’ for digital pricing, remembering that an eBook is competing with downloadable movies (a couple of $$ per movie or unlimited for 9.99 pcm on Lovefilm), games (incredible production levels)and particularly apps, for people’s attention. Consider also that most eBook DRM doesn’t allow you to do lots of the things that people enjoy about physical books that affect the emotional relationship people have with reading (as well as affecting readership numbers rather than just sales) – ie, sharing & loaning to friends, passing on to a 2nd hand book shop when finished etc. So as a user purchasing an ebook, you are almost buying a limited license just to read the content. It’s a good thing that more people can access books for less money (not everyone can afford RRP for hardback new releases) and that we’re lowering our environmental footprint in the process.

    I’m a huge lover of physical books but change is here and it’s all good and Amazon should be applauded for trying to make eBooks accessible through aggressive pricing. We want people to buy them after all.