Hugh McGuire Year in Review: E-books Have Arrived

Hugh McGuire is the mastermind behind LibriVox as well as the co-mastermind cooking books at Book Oven

I started off 2009 with a trip to London, to attend BookCampUKan unconference about books. While there were big rumblings of fear and hand-wringing about the arrival of the digital age in the publishing world, BookCamp was a great start to the year: a group of publishers, technotypes, writers and book-lovers collecting in one place for some open discussions about the future of books. I left more enthused about books than ever, and promptly started organizing BookCampToronto, leading into another group of West-coasters putting together BookCampVancouver.

By March, the rate of change in the business had become positively dizzying. At BookNet Canada’s Tech Forum, Neelan Choksi, of the beautiful iphone e-reader Stanza, presented a slide listing all the major announcements in the e-book space in the first three months of 2009 (Amazon’s new Kindle, Google Book Search, Indigo’s Shortcovers which has since become Kobo, and on and on). By there end of 2009, there would be no font small enough to allow all the significant announcements in publishing and digital to fit on one slide.

So, where are we, and more importantly, where are we going?

Digital is Here

Firstly, e-books have arrived, there’s no getting around it. If you can believe Amazon’s opaque data regarding the Kindle, in many cases ebook sales are already outstripping hard copy sales from Amazon. Ebook sales remain a small part of the publishing business (~5%), but once you get up to around 10%and if the growth curve remains exponential, that will happen soona business with notoriously thin margins gets turned on its head.

You Want How Much?

It gets turned on its head because profit margins start looking very worrisome at $9.99, which appears to be the consumer comfort-level for e-books. Publishers want to charge more and it’s hard to blame them: would you rather get 50% of $34.99 for a hardcover or 50% of 9.99 for an e-book? Publishers rightly claim that manufacture and distribution are relatively small parts of the the cost of a book, with the real costs sunk in advances, editorial, and marketing.

But whatever the publishers want to tell you about pricing, ultimately the consumers will decide what they are willing to pay. And the problem with books is not so much consumers comparing the price of a hardback, a paperback and an e-book, but rather all the other things readers might do with their time. Humans these days are bombarded with leisure and information-delivery options, and books now compete with so many other forms of entertainment (Xboxes and Facebooks and Youtubes, and on and on). The business has to keep making it easier to get books, and part of that means pricing so that readers want to buy.

Go and Get Them

Which brings me to a prescriptive, rather than descriptive, observation: publishers are going to have to go out and find their readers, find new ways to engage with them. As many have said, Twitter won’t save publishing, but at least the idea is right: go out and find your audience, and talk to them. This is a difficult adjustment for many publishers who traditionally have left that messy part of the business to book retailers.

Yet books are far more than words on a page. They are the stuff that ideas are made of, they are primarily conversational. This conversation happens between reader and writer, between reader and reader, and in order to help their books compete in a crowded marketplace, publishers will have to embrace this conversation, and not leave it to others to manage.

Everyone in the business knows how to get words on a page; the real art of publishing is getting people to engage with those words. If you want any hints on how to do this well, take a look at Harlequin, O’Reilly and Tor.

Pirates and Formats

I won’t say too much about piracy and Digital Rights Management, except this: we need a standard format for e-books, otherwise readers will get very annoyed when they can’t move their books from one device to another. And if you are considering Digital Rights Management to help stop piracy, please follow Brian O’Leary’s research on the topic. He has actual data about sales and piracy, and every publisher should be forced to read it. Conclusions thus far: DRM doesn’t stop piracy; and maybe you don’t want it to.

Where Are We Headed?

So with all this, where are we? Well, here are my predictions:

  • Thin margins will get thinner, and publishing houses will get leaner.
  • More digital and paper book sales will be split 50-50 by … oh … 2016.
  • There will be more consolidation at the top, and a proliferation of small publishing houses at the bottom of the pyramid.
  • Self/independent-publishing will explode.
  • More people than ever will be writing books, but fewer people than ever will be reading books.
  • Publishers who continue to think of retailers as their main clients will suffer and die.
  • Publishers who spend their time asking what readers want (not just what kind of books) will survive and thrive.
  • There will be fewer well-paid writers at the top.
  • There will be more poorly-paid writers everywhere else.
  • There will be a great golden age of wonderful writing and reading.