NYT: Random House Sees E-book Sales Jumping

[SensualPoet]

In the Reuters feed of the New York Times this morning:
http://www.nytimes.com/reuters/2010/...se-ebooks.html

VIENNA (Reuters) - Bertelsmann's Random House, the world's biggest book publisher, expects electronic books to contribute more than 10 percent of its U.S. revenue next year, its head was quoted as saying on Sunday.

Chief Executive Markus Dohle told German magazine Der Spiegel that e-book revenue had already jumped to 8 percent in the United States and had turned into a new growth driver for the publisher of Dan Brown, John Grisham and Stieg Larsson.

"We're at 8 percent in the United States currently, it rose by leaps and bounds," Dohle told Der Spiegel. "I could well imagine that we get beyond 10 percent next year," he said.

"This is a major opportunity for us. It helps us record new growth."

Dohle noted he expects e-books to overtake paper in five years, not one year (although Amazon's view was for Amazon sales mix, not the industry).

Random House was the sole major hold-out choosing not to participate in the price fixing deal with Apple that five other major houses cooked up. Dohle stated: "The question is if publishers know how to find the right retail price... This hasn't been our job in the past."

[wallcraft]

Originally Posted by SensualPoet

Dohle noted he expects e-books to overtake paper in five years, not one year (although Amazon's view was for Amazon sales mix, not the industry).

Also, Amazon was talking about books sold, not revenue generated. Even so, I would be surprised if it took 5 years for ebook revenue to exceed paper book revenue. For this to be the case ebook penetration would have to hit a wall. In much less than five years from now dedicated ebook readers will be less than $50, and at that point a sizable majority of the reading public would have to really like hardback books over ebooks for hardback sales to be strong. It is more often predicted that ebooks replace paperbacks, but I think it is hardbacks that come under pressure first.

[HarryT]

Originally Posted by wallcraft

It is more often predicted that ebooks replace paperbacks, but I think it is hardbacks that come under pressure first.

I'm not so sure about that. A large proportion of hardbacks are, I'd imagine, bought by people who buy them to keep, whereas paperbacks are more "read and throw away" items. I can see eBooks matching more the "disposable" idea of paperback myself.

I'm sure that eBook sales will soon overtake hardbacks (indeed, Amazon claim that they already have done in their business), but I don't think that eBooks will replace hardbacks any time soon.

[Graham]

Originally Posted by HarryT

I'm not so sure about that. A large proportion of hardbacks are, I'd imagine, bought by people who buy them to keep, whereas paperbacks are more "read and throw away" items. I can see eBooks matching more the "disposable" idea of paperback myself.

I agree, and a world where I had bookshelves of treasured hardbacks with a vast library available as eBooks to replace my paperbacks would be rather nice.

I wonder if that's where we'll end up, with well-bound, well-printed books making a bit of a comeback?

Depends on those youngsters that seem to be all over the place these days, I guess.

Graham

[fjtorres]

Dohle and Bezos could both be right.

Dohle is talking the industry as a whole, which includes textbooks, coffee-table books, non-english books, etc, where-as Bezos was talking of Amazon sales which, despite Kindle's international presence, is going to be mostly driven by North American and UK sales. Plus, if we're realistic, there isn't a single device on the market that makes a proper technical/academic/textbook reader. Most reader devices are still way better for recreational reading than technical use.

The Bezos projection does sound optimistic and the Dohle projection conservative but then, Amazon is an agressive retailer and RH a conservative BPH so their projections are bound to reflect their world-views.

The more interesting quote, to me, is Dohle's admission that ebooks will make up 25-50% of the market. *That* from the most conservative BPH on the market? No wonder Penguin is now trying to (belatedly) make friends with ebook buyers...

[tompe]

Originally Posted by HarryT

I'm not so sure about that. A large proportion of hardbacks are, I'd imagine, bought by people who buy them to keep, whereas paperbacks are more "read and throw away" items. I can see eBooks matching more the "disposable" idea of paperback myself.

Not for hardback best sellers. They are bought for early access.

[vaughnmr]

Originally Posted by Graham

I agree, and a world where I had bookshelves of treasured hardbacks with a vast library available as eBooks to replace my paperbacks would be rather nice.

I wonder if that's where we'll end up, with well-bound, well-printed books making a bit of a comeback?

Depends on those youngsters that seem to be all over the place these days, I guess.

Graham

"Those youngsters" now days don't want "libraries" with wall to wall bookshelves and hardbacks, they want "media rooms" to watch their movies. I was tickled pick to get rid of my pb library, got tired of moving the darn thing, a whole lot easier to do with my laptop and Kindle.

[TimMason]

Too late for me now, but if I were just beginning to make up a collection of books I'd go for all digital. Ease of use is phenomenal already, and it's just going to get better. You can find any word you want in the text in an instant, and you can run a concordance analysis on "Bleak House" or "Moby Dick" with the stroke of a finger. Reading is going to get a whole lot more interesting; a very minor example would be those old children's books that you could read in different ways by going to different pages - they are coming out in eBook form now, and I would imagine that they will be far easier to use.

[mknopp]

Until they cut the DRM they ARE going to eventually hit a wall. Just like music did. There will be those who will have no problem with not actually owning their eBooks, and they will drive early adoption. However, eventually they will saturate that market and run into the people who will only buy once they get rid of the DRM. A portion of these people will get their eBooks through illegal means, a portion will cherry-pick the DRM free eBooks for purchase and buy paper books for those that they cannot get without DRM, and a portion of these people will write off all eBooks for paper books until DRM is swept from all eBooks.

As the market becomes more saturated this will become more of an issue as more and more average people figure out that they can't do with eBooks what they have been able to do for centuries with print books. It will also become more of an issue as time moves on and buyers realize that all of their money spent on eBooks with DRM are really more a form of vendor lock-in than anti-piracy.

In many ways, I see DRM in eBooks being more of a drag on adoption than with digital music. With digital music Apple dominated the market with the iPod and because of that the majority of people didn't really notice the DRM. There is no dominate force in eBooks. So, the person who bought the Kindle this time might very well look at the Nook or Sony in a few years when their Kindle finally dies. That will be when they realize that all of their eBooks will not work on that device, and that is when the word of mouth will turn sour rather quickly.

As with music, I expect all sorts of FUD and lies from publishers about the necessity of DRM, but as with music they will eventually have to get rid of DRM. And then, as with music, their eBook sales will blossom again.

That is my gazing into the crystal ball. For what it is worth.

[SensualPoet]

There's no (legal) resale market for non-DRM mp3 purchased through iTunes, etc. either. DRM is neither here nor there provided it doesn't get in the way of ordinary users. There is nothing wrong with the current schemes for ePub library lending or Kindle personal buying. Back-up your data and you're fine. If you're really paranoid about Amazon or Adobe going bankrupt and taking their keys with them, use standard "personal backup deDRM routines". Do not resell your DRM content however: that is against your purchase agreement. Easy.

Personally, I'm thrilled to be able to add dozens of e-books to my collection wihtout anything new to dust.

As for the comments by Random House, if 8+% of revenue is already being generated by ebooks for the entire company, I can well imagine Amazon's ebook revenue vs pbacks and hard covers is well ahead of that since it is such a leader in the industry. When you think of it: two authors alone -- James Patterson and Steig Larsson -- have generated about 2 million e-book sales just for Amazon. Not one of those transactions required warehouse space, postage, packing or the labour to handle it ... and nothing to return to the publisher when interest in the items flag ... and never out of stock for the consumer. Pretty impressive, by any measure.