E-Books Area of Growth, Change in Years to Come

The last couple of years were hardly the best for American businesses, but that didn’t stop the e-book market from expanding. Even while print trade sales flatlined, e-book sales from the thirteen publishers who report to the Association of American Publishers grew by 176.6 percent.

In 2010, the market is still growing and its landscape is changing. For one, Kindle’s domination of e-book readers seems to be at an end. Credit Suisse predicts that over the next five years Amazon’s 90 percent of e-book market share will drop to 35 percent. That’s because Apple and Google are muscling in with snappier readers (the iPad) and the easy-to-access, direct e-book downloader, Google Editions. Assuming Apple and Google are successful, these three powerhouses will soon be splitting the market roughly evenly. Should Amazon be worried? Should publishers?

While Amazon’s share of the pie will shrink to a third, the pie itself should be growing rapidly, from 1 to 3 percent of total books sold by the end of 2010. This means that while Amazon will sell a smaller percentage of books sold, its profits may triple by 2015. It will still be important for publishers to get their books onto Amazon, but it won’t be enough. Google and Apple will be equally important outlets for selling books, and there may be more room for other, smaller distributors.

As e-readers change and the market grows, the more platforms a publisher can offer their books on, the better. The better, too, for customers. With more choice about where to spend their money, buyers may spur giants like Amazon and Apple to greater technological heights or make a start-up into a new industry giant, keeping the e-book industry growing.

Protecting Your E-Books on the iPad

The iPad will hit the streets on April 3rd, and several major publishers—Penguin, Macmillan, Simon & Schuster, Hachette, and HarperCollins for now—are on board. When the iBookstore opens for business, these publishers will be armored against the inevitable efforts of pirates with Apple’s FairPlay digital rights management (DRM) software. DRM protects content by allowing an e-book to be downloaded only to a finite number of devices. As pirates attempt to hack the system, Apple responds with harder-to-hack software—a back and forth that began while attempting to protect music and has no end in sight.

Given the buzz about the iPad, publishers hope that this will keep e-book sales rising. The opportunity to introduce their content to millions of iTunes and Apple users is one of the reasons Penguin chairman John Mackinson is excited to have his company on board. Of course, iPad won’t just have iBooks. There will be “apps” for using “Kindle for iPhone, Stanza, Iceberg Reader, eReader, and Kobo,” just to name a few.

Prior to the announcement of the iPad, there was debate about whether or not Apple would use DRM on its iBooks. After all, Amazon has been criticized by some for using this technology and there are a handful of publishers electing to go without. Most publishers, however, including all five of the major publishers on the iPad, are opting to protect their books with DRM. In a culture where people are used to paying for books, the transition to the e-book may not mean that consumers will suddenly expect content for free. Still, it never hurts to be safe.