TOC – Lessons Learned from the Failure of Ebooks in 2000

Tools of Change – Lessons Learned from the Failure of Ebooks in 2000, and What They Mean to the Future of Electronic Publishing – Feb. 23

Michael Mace, Rubicon Consulting –

Don’t fall in love with the way you do business today because that will change.

Mike’s Agenda:

  • Barriers to eBook adoption
  • Printed books may be the last things to get converted
  • Economic structure of traditional publishing is unstable
  • Be prepared

Lessons from last time – circa 2000

  • more readers then than there are now
  • Mike shared quotes from 2000/01 which predicted a huge adoption of ebooks and readers

Issue 1  Not enough books

  • core customers are reading enthusiasts, they want everything and not enough was available
  • books were slow to become available, expensive to convert and publishers treated this like an experiment

Issue 2 Prices were too high

  • customer perception – an ebook is disposable, they value the hardcover and don’t want to pay
  • pricing was high b/c publishers wanted to protect their bookstore channel, hardcover pricing, and they were scared
  • high prices plus limited availability equals reluctance

Issue 3 Usage patterns

  • since they won’t buy a device we will put books on the thing they carry
  • problems – PC’s not comfortable, mobile devices too small and unique use pattern

Issue 4 Not enough periodicals

  • magazines and newspapers were viewed as disposable and a better fit than books for ereading
  • immediate delivery- before others was important
  • consumed in small chunks
  • but the electronic version has to be considered as good as the print version, advertising isn’t the same and there is competition with free websites

Issue 5 Marketing

  • right way is to find out who is the customer and what compelling problem can you solve for them
  • the challenge is, for most consumers books aren’t broken
  • marketing isn’t doing a good job of making the pitch
  • Mike feels B and N is doing the best pitch right now

Summary of the past

  • not enough content to justify buying readers
  • not enough readers
  • weren’t solving a problem

4 issues in the past that effect us today:

  • marketing is lousy
  • pricing and devices are close to lousy
  • critical mass of content  is better, but not great

What does this mean for the future?

  • These things need to be solved – short stories for the electronic marketplace and the backlist
  • rethink the periodical – we have made a ton of assumptions that are driven on print and we need to move beyond that, how can magazines survive on just the editorial staff in an online environment?
  • disaggregated value chains – cut out the middleman, sell direct to customers
  • How much reader-visible value does our editing add?
  • How much demand generation do we really do?
  • Could an author get the same value through contract services? Will someone you just laid off go out there and do it themselves for a cheaper price?
  • Do the readers value your brand?
  • Do printed books go away and when?
  • When does it pay an author to go electronic only?  (established author selling via electronic outlets) when 20-30% of the public have ebook readers, that is the tipping point  (were still under 5%)
  • follow the money, when 25% of the population has devices, book publishing will change dramatically, the iPad brings the tipping point closer, when the price of an ebook raises the tipping point gets closer, competition b/t Amazon and Apple brings it closer