E-books: Are publishers keeping up?

Sandra Parshall

A New England prep school has replaced traditional books with a library of e-books and e-readers. The University of Texas at San Antonio’s Applied Engineering and Technology Library has removed all paper books and replaced them with a digital collection.

Anomalies or harbingers of a digital future? I lean toward the latter. Printed books may still be around for a long time to come, but only ostriches can deny that an e-book revolution is underway and picking up speed.

So how are traditional publishers coping with the flood of new e-readers and the consumer demand for new content? Are they shifting or expanding their focus to stay alive in a market where e-book sales may soon equal or surpass hard copy sales? Are they making money on e-books? Two surveys conducted by Aptara this year show how rapidly the market has grown in only a few months and indicate that publishers are racing – not always successfully – to catch up with demand and make their books available for numerous e-readers.

Aptara, a company that has converted millions of pages of content to digital form for the Kindle, Sony Reader, and Apple iPad and iPhone, questioned about 300 publishing professionals early in the year and did a second survey of more than 600 industry representatives during the summer. Results of the second survey were released last week. The biggest development between the first and second surveys was the release of the iPad, which provides a platform for illustrated books and educational materials that don’t translate well to text-only e-readers. Although the iPad wasn’t released until April, by summer 36% of all publishers (and 50% of trade publishers) were producing content for Apple’s tablet device.

In the space of a few months between Aptara’s two surveys, the overall percentage of publishers producing e-books jumped more than 10% and stood at 64% at the time of the second survey. The biggest increases occurred in trade publishing (the segment of interest to novelists), which saw a jump of 23%, and scientific/technical/medical publishing, which went up 24%. By summer, 74% of U.S. trade publishers were producing e-book versions of some of their products. Of those, 83% said e-publishing is an important element of their company strategy and growth plans. The new source of revenue and the chance to reach a new audience are the main reasons publishers give for making digital content available.

But are publishers making money on e-books? Only 15% of trade publishers say the return on e-books is better than that on printed books, about half say they don’t know yet, and 13% say they see a lower return of investment on digital than on print.

The Aptara report points to two possible reasons why publishers aren’t profiting as much as they could from e-books: they may not have shifted yet to streamlined procedures that would keep costs down; and no industry-wide format exists that will work with any e-reader. EPUB, the de facto standard, is accepted by almost all e-readers – but not Kindle, which has its own proprietary format (AZW). EPUB has some drawbacks, but a revised version expected next spring promises to increase function and reduce incompatibilities between e-books and e-readers.

The format of the source files can also create obstacles to fast and low-cost conversion of print to electronic form. The two most common source formats are PDF and Adobe Design, but the far more flexible XML is gaining ground. The Aptara survey points out that XML allows publishers to separate the text from its formatting, then easily and simultaneously generate e-books for a variety of e-reader formats.

Right now more than a quarter of publishers are taking a hybrid approach to producing e-books, doing part of the work in-house and farming some of it out to commercial services, while about the same number use outside conversion services exclusively.

Despite the rapid move to digitize backlists and offer e-book versions of new publications, publishers haven’t been as quick to produce enhanced and interactive e-books that would include videos and other material not available in print books. Nearly a third of publishers surveyed say they’re still investigating the possibilities, and 13% say they have no plans to provide enhanced e-books. Others say they’re holding off for various reasons.

Consumer demand for enhanced books is likely to grow, however, as more people buy devices capable of hosting them. Aptara predicts that multi-function tablets like the iPad will take over the e-book market in the next couple of years unless makers of single-function readers like the Kindle make their devices more versatile.

Will publishers ever make a profit on e-books? Yes, if they learn how to produce them economically and make their backlists available in digital form. Backlist e-books could be a saving source of income for traditional publishers. As the Aptara survey notes, “Backlists are critical assets with infinite resale value and significantly higher profit margins than front lists... Publishers are no longer dependent on one or two bestsellers to cover the cost of lesser-known authors.” 


A final note: More than one-third of the publishing representatives surveyed said they don't personally read e-books, but among those who do the iPad has rapidly eclipsed the Kindle as their favorite e-reader.

You can download the study free of charge here. You will be asked to provide a minimally invasive amount of information about yourself.