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At the international London Book Fair this April, a stroll
through the massive exhibition hall could have lulled a visitor into thinking
the book business is alive and well: Publishers were busy striking deals over
foreign rights for printed books, sipping white wine to celebrate.
But despite appearances, anxiety about the industry was palpable,
as publishers and booksellers attended seminars on digital publishing with
gloomy titles like “Where's the Money?”
At the fair's first-ever “Digital Zone,” Janet Hawkins, an
independent bookshop owner from Blessington, Ireland, was trying out a
hand-held Sony Reader as she considered offering digital e-books downloadable
from a computer terminal at her shop. Hawkins is “terrified” her business will
be destroyed if Amazon's Kindle, a competitor of the Sony Reader now available
only in the United States, is introduced in Britain. Unlike the Reader, which
must download books from a separate computer, the wireless, hand-held Kindle
downloads from Amazon's proprietary online bookstore and would eliminate any
role for shops like hers. (Her window of opportunity may soon evaporate,
however; the trade press has been reporting that Sony plans to join Amazon in
producing a wireless reader. )
Last year's drop in American book sales, following years of
little or no growth, led Michael Healy, executive director of the Book Industry
Study Group, to ask if book publishing was “doomed to follow its dinosaur
cousins, newspapers, to extinction.”
What little growth the industry has seen in recent years has been
driven almost solely by increases in book prices, not the number of books sold,
according to Healy, whose group tracks industry statistics. He bluntly told a
roomful of publishers that theirs is “an industry in decline.”
Publishing faces a “perfect storm” — more book titles every year
but fewer people who want to read them, Healy warned, citing declining spending
by households on books and independent bookshops struggling to survive.
The keys to survival, he told the publishers, are the
proliferating channels of digital content able to reach the tens of millions of
readers who look for information on the Web but don't frequent bookshops. Stop
putting the physical book at the center of your thinking, he urged: “Experiment
at all costs” by offering digital content — and make it free if
necessary.
As further proof that the market is changing, the core audience
of American book buyers — middle-aged women — will be dwindling in coming
years, according to Bowker, a leading source of publishing industry data. By
2016, those baby boomers will be retiring, going onto fixed incomes, while the
Gen X-ers stepping into their shoes will constitute a smaller, more
screen-savvy generation of buyers.
Despite all the attention to new mobile readers like the Kindle,
desktop personal computers and laptops are still the devices used most
frequently for reading e-books, and it may have something to do with all those
female romance readers, who are leading purchasers of e-books. You're not
likely to be detected reading a “bodice-ripper” at work if you do it on your
PC, romance publisher Harlequin discovered from reader surveys.
Yet iPhones hold the greatest potential for growth among readers
who don't have gray hair, Bowker Vice President for Publisher Services Kelly
Gallagher predicted, even though a company survey found iPhones account for
only 10 percent of e-book purchases, trailing behind PCs and Amazon's Kindle.
Surprisingly, Kindle's largest ownership group is middle-aged, the survey
found, countering its reputation as the reading device of future
generations.
Over in the Digital Zone, fairgoers could see some of the reasons
why 1.7 million (mainly young) people have downloaded the Stanza reading
application onto their iPhones. Its latest features include 135 new background
colors to pair with 21 crisp fonts as well as background “themes” like
“bedroom” (red, satiny sheets) and links to a dictionary while reading.
Worries About Piracy
Piracy discussions at the fair underscored a central anxiety — how to make money on digital publishing without being ripped off. One speaker
pointed to a decision by a Swedish court as a sign that piracy is being
stifled. On April 17 the court sentenced four founders of The Pirate Bay, a
popular file-sharing site, to a year in jail for violating copyright.
Online books and hand-held digital readers were a big feature
of this year's London Book Fair.
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But skeptics at the fair predicted new piracy sites would pop up
in its place. (As of May 27, Pirate Bay's Web site had not been shut down, and
similar sites also were operating.)
The day after the digital seminar, The
Independent, a British daily, reported substitute approaches already
emerging. For example, searches for copyrighted material are being conducted by
networks of individuals, avoiding the need for a legally vulnerable centralized
Web site.
Paradoxically, piracy has stimulated sales of some titles by
giving them more publicity, according to a study cited by industry consultant
Mike Shatzkin, CEO of Idea Logical Co. He argued
that publishers' encryption of e-books to prevent piracy — known as digital
rights management — has been ineffective.
It would be more effective to price e-books cheaply enough so
consumers don't feel they have to search for free versions on pirate sites,
Shatzkin argued. Strong consumer demand for cheaper books is evident in the
recent growth in used book purchases, which explain in part why fewer new books
are being bought, he said.
Consumers expect e-books to be priced more cheaply than printed
books, and they will be because publishers and booksellers have fewer expenses,
Shatzkin predicted. That couldn't have been reassuring to the publishers in the
room who wondered aloud why they should be investing in a sector that now
commands barely 1 percent of U.S. book sales.
Indeed, British publishers at the packed “Where's the Money?” session argued heatedly against lower pricing for e-books. Such a move, Penguin
Group Chairman and CEO John Makinson told the standing-room-only crowd, would
be “short-changing authors.”
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