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Five reasons why piracy will kill the ebook digital publishing industry

The ebook market looks likely to take off in 2011, and yet book publishers aren’t particularly worried.

Why? Because book publishers are like water companies which control the water, not the pipes (this analogy from the brilliant Merchants of Culture, a book about the publishing industry in the 20th century). Publishers control the content, not the form (that’s what printers do, and they will be worried). If customers want the latest bestseller on ebook rather than in print, publishers can arrange that. The pipe changes, but the water doesn’t.

So what should publishers be wary of?

Here are six straightforward reasons why piracy in ebook publishing could take off even easier than it did with Napster in music.

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1) Books are losing value: Customers think ebooks should mean cheap – no printing, no shipping, no storing, no rent and no employees. When Amazon started selling $35 hardback editions for $9.99 as ebooks, people considered this a fair price. It didn’t matter that Amazon was losing $8 on every sale. Amazon is continuing to subsidise sales of its Kindle ebooks by selling digital bestsellers at below cost price (against publisher’s wishes).

The reality is that printing and distributing is only a very small portion of the publisher’s overheads. I’ve previously linked to the breakdown costs of a print book compared to an ebook, and when you strip away author royalties, marketing, design and the publisher and retailer’s profits, the actual printing cost is only a small percentage of the sale: just $3.25 on a $25 book. Strip away printing costs and you still have a $22 ebook.

The price of a book is linked to the value of its content, not the physical cost to make it.

A book as a collection of blank pages is worth nothing (except as a notebook). When a reader buys a book, the value they are paying for is in the content, the writing, the knowledge. The value of content is undermined by Amazon charging below cost for an ebook, and the fear is that the perception of cheap ebooks will stick, and people will be unwilling to ever pay near-print price for a digital version again.

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2) Ebooks are tiny digital files, and even easier to share: Print files are much smaller even than music files. A gigabyte of space will hold maybe ten albums, putting an instant cap on illegal downloads. Ebooks will be measured in kilobytes, not megabytes, and this means people can download thousands and even millions of books at a lightning fast rate, and store them indefinitely on hard drives. Ebooks can be passed around through emails and instant messaging, or just posted in full on hosting websites. Once a book is unlocked from any digital management rights, it is gone forever.

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3) With ebooks, there’s no issue on quality: The opening weekend is incredibly important for the movie industry. Hollywood films are saved by the initial poor quality of illegal copies filmed in the cinema on handheld cameras. No-one can stand the appalling audio and visual quality of illegal movies, which provides an incentive to go to the cinema. Similarly, no-one likes listening to new music if the sound quality is bad, or if DJs are talking over the song.

Books have no variance in quality, and need no quality control. No audio problems, no visual issues. It’s just black and white text, whether it’s scanned, downloaded or photographed.

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4) Most people don’t cherish books: Some people love print books, and have the heavy bookshelves to prove it. A lot of people don’t. A lot of people read celebrity biographies, trashy crime and romance thrillers, and books about conspiracies and sports. A lot of people only read on holiday, and might leave the book in the hotel. It is to these people the ebook – or more likely the illegally downloaded ebook -  is perfect. They can take it with them, read it on the beach and the plane, and then discard it.

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5) Authors have no ancillary income: When musicians got hit by illegal downloads, the industry changed. Global and national tours became an important revenue stream for musicians and bands, and ticket prices got higher. Authors have no such fallback. When piracy hits book sales, authors will get poor. This will strangle creativity, lead to less books being published and push true talent to the sidelines.

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Print books will never leave the market,


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8 Responses to “Five reasons why piracy will kill the ebook digital publishing industry”

  1. Thanks for the excellent article. I found it by following Diana Luger (@DianaLuger) on Twitter.

    I have to disagree with your #3, that there are no quality problems with ebooks. I wish that were true, but right now it’s not. Ebooks in ePub format often come with typos and little text glitches due to the bookmaker not having proofread and having trusted the conversion software.

    Beyond that, the current ebook formats are lacking in features. The biggest problem I have is with blockquotes, which would normally be set off visually from the rest of the test but aren’t done that way inn ebboks. I will be reading and then have the jarring sensation of realizing that the tone or the author of a certain segment of text has changed without any visual clues to indicate it. I also find that the way ebooks deal with footnotes is cumbersome.

    So for me, there are features that a physical book provides that ebooks lack. I have therefore found myself wishing I had actually paid more and bought the paper book. This doesn’t exactly change your core argument in this article, but it does provide an argument that the paper book format still delivers much more of the value of the content to the customer than ebooks do, and ebooks should therefore be priced significantly lower.

    This will remain the case until the various ebook formats in use evolve and improve.

  2. Brian says:

    I have a tablet now and I also have used a HP iPaq for years and read books on them, BUT I have a library in my house that holds approx 2000 Hard Covers ( a lot of them first editions) I have found that over the years the only books I read on my iPaq or tablet are books that I already own in HC and want to reread them when I am travelling. I also have a GPS that I can listen to audio books in my car. A couple of years ago I was visiting family in the Maritimes and bought and read 23 books over the course of 6 weeks and not one of them was digital. I agree with most of what you say. I really do find that a paper copy is preferable for me

  3. You make some interesting points, but I don’t buy your argument that piracy will make publishers not sell ebooks. Since you can, with the right equipment, easily create an ebook from a print book, not publishing ebooks won’t stop piracy. Try Googling for Harry Potter ebooks on torrent sites and you will see they are out there. In fact, selling ebooks for a reasonable price (a little less than the cheapest print version available) should discourage piracy, because it gives people who want the ebook a place to buy it.

    And I would go farther than the above commenter to say that often it is the legal ebook versions that are truly bad as far as formatting– hard hyphens inserted into words, fractions where diacritical marks should be, etc.). Some publishers are just not paying attention, especially when they convert their backlist titles to ebooks.

    One thing that really needs to change in publishing is to create workflows that work to drive both print and digital formats. Publishers have always treated each book as a collection of typeset pages, but really books need to be data, tagged in a logical way, that can be output as pages or output as ePub, Mobi, or whatever digital format is needed.

  4. gojko says:

    @karen wester newton: “with the right equipment, easily create an ebook from a print book”

    You can, but not easily. Scanning a book is a tedious task. Then you have to OCR (recognize the characters) , proofreading it and correct the found errors. I did it once with a medium-sized book and it took me almost a whole weekend. Never again.

    Compare this to ripping a CD.

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