Investing in Ebooks & Epaper.

[JackieFrost]

Hey guys. I was wondering how many of you have invested or are thinking in investing in technology related to ebooks and e-readers. I for once am in the latter category. When I think about investment I am thinking about it either more directly, such as a reseller of reader devices would be, or more inderectly such as investing in an ebook start up.

I am sure that it is such the nature of this forum that the majority would at the very least be thinking of such investments if they haven't already made their moves. Anyone willing to share?

[lordmax]

I'm really thinking about an investment in the area.
Not in the ebook-reader reseller 'cause I'm in friendship with simplicissimu book farm but in an ebook café library near turin.

[HarryT]

Originally Posted by JackieFrost

I am sure that it is such the nature of this forum that the majority would at the very least be thinking of such investments if they haven't already made their moves.

I doubt very much indeed that the "majority" of people here would be thinking of investing in eBook technology companies any more than, say, the majority of people who enjoy cycling invest in cycle companies! You can enjoy something without wanting to become financially involved in it.

[DixieGal]

Right now is a good time to think about investing in gold. And oil companies. Probably not a time to invest heavily in riskier new technologies. (Says the girl who sold $1000 of ethanol stock yesterday for $33, and was lucky to get even that much.)

[DMcCunney]

Originally Posted by JackieFrost

Hey guys. I was wondering how many of you have invested or are thinking in investing in technology related to ebooks and e-readers. I for once am in the latter category. When I think about investment I am thinking about it either more directly, such as a reseller of reader devices would be, or more inderectly such as investing in an ebook start up.

I am sure that it is such the nature of this forum that the majority would at the very least be thinking of such investments if they haven't already made their moves. Anyone willing to share?

The question to ask is what you expect to get out of it.

Ebooks are a nascent market. Dedicated reader devices are a niche market, and publishers are still groping for a coherent strategy in addressing the market for electronic editions.

I'm not interested in ebook related investments at the moment. But if I were, I wouldn't expect to make money in the near term, and I wouldn't expect to make a lot of money in any case.
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Dennis

[philippd]

I'd like to invest in E-Ink corporation but unfortunately they're not traded at a stock exchange

so I bought a few amazon stocks. But it was a rather small investment. more like a "try"...

Do you know any other companies related to eReader technology you could invest in directly?

[JackieFrost]

@lordmax, sounds like a great idea! I suppose the readers would come free to distribute around for use and I suppose also with some subrscription to a newspaper or rss feed of some sort?

@Harry. I was under the impression that you had indeed some form of investment or involvment in the development of the technology. Anyway, I might be wrong about the majority but I think the cycling analogy is not at all representative of what I am talking about. Unless cycling is a highly specialized, high tech emerging technology...

@DixieGal. Right! But in the long scheme of things isn't it another issue?

@Dmc. Of course the simple answer in what to expect is, profit. Possibly the not so simple one is profit too, to begin with. Why do you feel there aren't a lot of profits to be made. I thought the consensus here would be that epaper and ebooks in one way or another are going to revolutionize paper and reading much like the mp3 players are doing to music.

@Philip. I wouldn't know that's why I am asking.

[DMcCunney]

Originally Posted by JackieFrost

@Dmc. Of course the simple answer in what to expect is, profit. Possibly the not so simple one is profit too, to begin with. Why do you feel there aren't a lot of profits to be made. I thought the consensus here would be that epaper and ebooks in one way or another are going to revolutionize paper and reading much like the mp3 players are doing to music.

Investing 101: you make money in two ways. You make money in the form of capital gains as your stock increases in value, or you make money in dividends because the company does well and pays them.

What available plays do you see in ebooks and related technologies that offer either?

You can invest in Amazon or Sony, betting that their investments in readers will pay off big time. But you'll pay a high price, and capital gains will be questionable, as both of these are fairly mature companies. You'll be in it for dividends. (And capital gains are entirely on paper until you sell your stock, at which point taxes kick in.)

What other publicly traded plays are out there? Not a lot.

Yes, ebooks might "revolutionize paper and reading much like the mp3 players are doing to music", but so what? Everybody listens to music. Only a small subset of everybody reads books, in any format. Publishers are all suffering because unit sales are flat or down, and revenue only increases (if at all) because of higher prices. Entertainment conglomerates who bought up publishers are beginning to divest them because publishing can't provide the sort of margins and earnings that other forms of entertainment can. As custodians of Other People's Money, the management of those conglomerates are required to invest corporate funds where they will earn the highest rate of return, and publishing is not such a place.

The question is whether the ebook market is big enough to provide significant gains. Maybe, but it's not a bet I'd wager a lot on. If my goal is to get the maximum return on my investment, I might look elsewhere. Use the "opportunity cost" test. Look at various investments you could make that are relatively safe, like index funds or bonds. Look at the return you can make from them. Then say "What is the risk in this new investment I'm thinking of making, and is the possible reward high enough to justify the additional risk?"

I might invest in ebook related ventures, but if I did, it would be because I loved ebooks and wanted to further them. I'd try to make sure I didn't lose a lot of money, but I wouldn't expect to make a fortune, either.
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Dennis

[JackieFrost]

Points well taken, Dmc. You 'll definetely bump on my thread at the books sub-forum where I ll be asking for introductory books on investment. No, seriously. I am a computer scientist and I 've never dwelved into investing beyond the very basics, so excuse my ignorance and thanks for the free mini lecture! I can appreciate what you are saying, makes perfect sense, all of it.

[DMcCunney]

Originally Posted by JackieFrost

Points well taken, Dmc. You 'll definetely bump on my thread at the books sub-forum where I ll be asking for introductory books on investment. No, seriously. I am a computer scientist and I 've never dwelved into investing beyond the very basics, so excuse my ignorance and thanks for the free mini lecture! I can appreciate what you are saying, makes perfect sense, all of it.

Note that I'm not saying "Don't invest in ebooks". I am saying "Be clear about what you expect to gain, what you'll do if that doesn't happen, and how much you are prepared to commit to the investment.

Essentially, have an exit strategy, don't but all your eggs in one basket, and understand the risks and rewards involved.

A bigger question is what ebook related investments exist, and frankly, I haven't the foggiest idea. Amazon and Sony are both making ebook readers and selling ebooks, but ebooks are a small fraction of their total business, and unlikely to affect their bottom line (and therefor, their stock price) a great deal one way or the other.

iRex, Bookeen, and a few other places make dedicated readers that are niche market devices. They do well enough to stay in business, and they are "pure plays" in ebook technology, but I don't know if their shares are publicly available and I wouldn't expect dramatic gains in the value of my holding if they were. And some of the readers are made by folks like Chinese manufactures, where I suspect you can't invest in them.

There are a few ebook distributors like Fictionwise (who also now owns eReader.) Again, I have no idea about availability of stock.

Since the critical differentiators in eBook readers tend to be the displays used, on place that might bear looking at is manufacturers of displays. PVI is the sole source eInk displays, and I don't know about stock availability, but there are some other outfits I've seen news items on investigating different technologies for displays. eInk is popular because it's a clear, crisp, easy to read display, with very low power requirements. My reading device of choice is a Palm OS PDA. The screen must be continuously refreshed, and battery life is largely a function of the brightness setting. eInk avoids that issue.

(I need color, which eInk doesn't currently support, and a devices that does other things besides display ebooks, so an eInk device isn't an option for me.)

I don't see investments in publishers as great sources of gain. Publishers are slowly discovering ebooks and beginning to offer them, but ebooks sell to the same market that buys paper books. Unless books in electronic form can dramatically increase the size of the book buying market, I don't see publishing making significant gains from selling ebooks as well as paper editions.

Beyond that. I'm not sure what ebook related opportunities might exist.
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Dennis

[JackieFrost]

Hey dmc, wouldn't you say though that Amazon have a lot more of their business than Sony? As for irex and bookeen I would like to find out if they are publicly traded. I can understand that if colour is a necessity e-ink as currently is would not be an option, but what about eye strain? For me that's the sole most motivating factor behind e-ink, I can't stand an lcd for more than a certain period of time, and even before that time frame where I get tired I can't read as well, in terms of concentration and comprehension, as I do with paper.

For me one of the areas that should be targeted is the small to medium office that aim to cut operational costs by eliminating paper, or at least cutting it down to the basics. How many time does one need a print out just to read something away from the computer? That's just one example of the many. So someone should make inroads to the small and medium business from a marketing standpoint. If a reader (such as the iliad) manages to penetrate this market with some success and establish themselves that would open very profitable ways for them. For me this is one of the final tec frontiers, the office and the elimination of paper.

[DMcCunney]

Originally Posted by JackieFrost

Hey dmc, wouldn't you say though that Amazon have a lot more of their business than Sony?

You mean, a larger share of the market for ebooks and dedicated readers to read them? Possibly. I have no numbers and can't say. But the same caveats apply to both companies: ebooks and readers are a small part of what they do. Investments in either will rise or fall depending on how the overall company does, and aren't likely to be dramatically affected by the ebook operations.

As for irex and bookeen I would like to find out if they are publicly traded.

iRex has no indication I could find on their web site that they are publicly traded, and they seem to be a Dutch operation in any case. Bookeen is a French outfit, and I see no indication on their site that they are publicly traded, either.

I can understand that if colour is a necessity e-ink as currently is would not be an option, but what about eye strain? For me that's the sole most motivating factor behind e-ink, I can't stand an lcd for more than a certain period of time, and even before that time frame where I get tired I can't read as well, in terms of concentration and comprehension, as I do with paper.

<shrug> I spend about 16 hours a day looking at one LCD screen or another. I don't find it a problem. Others do.

Meanwhile, as mentioned, eInk isn't an option for me. The bigger issue is that I need a device that does other things besides display ebooks. The is a limit to how many gadgets I'm willing to carry around with me. Cell phone and PDA, yes. Cell phone and PDA and eBook reader, no.

For me one of the areas that should be targeted is the small to medium office that aim to cut operational costs by eliminating paper, or at least cutting it down to the basics. How many time does one need a print out just to read something away from the computer? That's just one example of the many. So someone should make inroads to the small and medium business from a marketing standpoint. If a reader (such as the iliad) manages to penetrate this market with some success and establish themselves that would open very profitable ways for them. For me this is one of the final tec frontiers, the office and the elimination of paper.

See the thread elsewhere here from the academic looking at ebook readers as a link in the chain of paperless assignments and grading.

Meanwhile, I've been involved in computers for many years, and I don't think I have ever seen an installation that actually reduced paper use.

The question is exactly what function a reader would serve in the small/medium business market. Right now, with the partial exception of the iLiad, they are "half duplex". You can use them to display information, but not to create it in the first place.
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Dennis