This will force a very painful transition. “As we've seen in other media industries, many times companies can't make the transition to being smaller, with smaller revenues,” she says. Denying consumers access, as record companies tried to do, is pointless. “Book publishers need to understand that e-books are their future,” says Ms. Rotman Epps. “Then they need to think very critically about how to build a profitable business” around them, perhaps selling subscriptions to their catalogues or partnering with retailers.
It's the textbook market, however, that Ms. Rotman Epps believes will be the e-reader “killer app.” There are issues around colour (still not widely available), highlighting and note-making capabilities and various standards, but she thinks these will be solved over the next 12 months. Getting content ready will take longer. “For students to justify the cost of the device, nearly all the books and course packs need to be available,” she notes. Still, the business proposition is irresistible for publishers and consumers: Publishers will slice into the used-book market and students will see their book costs drop by as much as 50 per cent.
Newspapers and magazine publishers are also eyeing e-readers, but Ms. Rotman Epps doubts the technology will solve the news industry's problems. “The terms are not good for newspapers – for example, Amazon keeps 70 per cent of Kindle revenue, publishers can't maintain customer data, and they can't show the ads.” For that reason, some news organizations, such as Hearst and The Financial Times, are teaming up with technology companies to develop their own e-reader platforms. Ms. Rotman Epps thinks print media should consider subsidizing the devices for their subscribers to drive their adoption, and through them, the sale of digital subscriptions.
Getting the bulk of consumers to change that behaviour will require an experience superior to that of the printed page. — Analyst James Belcher of NextGen Research
Not everyone sees e-readers as being quite so transformative. In a recent report, analyst James Belcher of NextGen Research points out that the parallel between publishing and music industries is imperfect. “Consumers have read books printed on paper for hundreds of years, without having to endure the multiple format changes seen in recorded music,” he notes. “Getting the bulk of consumers to change that behaviour will require an experience superior to that of the printed page.”
Such experience may not be far away. Inside the Xerox Research Centre of Canada in Mississauga, Ontario, for example, Paul Smith is overseeing development of “printable organic electronics” – light, flexible backplanes on which electronic circuitry can be literally printed. “A Kindle or Sony [Reader] are heavy, their structure is quite stiff and they're quite expensive to manufacture,” says Mr. Smith. “You want e-readers to be lighter, flexible, more like a piece of paper.”
Imagine rolling up your e-reader like a magazine and stuffing it in your pocket. Will that be enough to tear people away from their beloved paper? The answer may be available as early as next year.
