By Lewis D. Eigen
The iPAd has been descibed as an “iPhone on steroids.” However, in addition to all the nifty things that are hyped, the most important role may be as an E-Reader. Apple cut a deal with the NY Times for a special edition that takes advantage of the technology and not just a newpaper on a screen.
There have been some major shortcommings of the e-book readers to date:
Too Small: The Kindle and the other e-books are too small. Sure you can infrease the font size but that slows down reading. Books are the size they are for a reason. Too many words on a line and you have to make too many eye movements to read; too few, and you waste the movements that you do make and only get a few words per line.
No Color: The e-reader and Kindle designers have been trying to mimic paper–the look and feel of ink on paper. It tuns our that no one really cares, we are so used to looking at screens that a paper experience is unnecessary. Most Americans spend much more time looking at screens than looking at ink on paper. E-books have been emulating a property that no one really cares about. Yet without color, Kindle is a throwback.
Taking Notes: Many of us read for work and study as well as pleasure. We want to mark content, copy and paste into notes and the like. Not easy and many functions are impossible with Kindle et al
Integrating with Video: Even in the book world, authors and publishers are setting up websites to support textbooks and scholarly documents. Now this is not only unnecessary, but even if you do use it, you can display on the device itself.
The new Apple iPad solves all these problems. With 10 hours of battery on a charge, that might be the only shortcomming for going away with a lot of books for a weekend of limited electricity.
However, not only does Apple have the right device for the right time, it appears as if they are going to work on the biggest problem of e-books–the complex distribution channel which makes books so expensive. I do not refer to the blockbuster best selling novel or others that make the NY Times list, but to the majority of the books ranking from 100-5000. Today, the author does all the creative work and has to find a publisher. Typically the publisher pays the author a royalty of 15 percent–much less on paperback books. However if a book retails for $20, the author will get only $3.00 for each book sold.
Now Amazon wants to sell the book version–the ink smeared on the dead trees as well as the e-book. They take a huge percentage as they had a de facto monopoly. However, a short time ago Google, started producing e-books and encouraged authors to reduce prices and took a smaller percentage than Amazon had for Kindle books. If Apple follows Google’s lead in taking a smaller percentage from the author, and Google follows Apple’s lead with the hardware, BOTH companies, and I think many others, will be publishing and distributing e-books and giving the lion’s share to the author. As an author who has been caught up in a system created for a different economy, a different technology, and a different world, I see the very existance of an iPad as a real game changer. If my next book sells 10,000 copies through a publisher, I will make $30,000. But if I priced my book for the reality of this economy and technology I could charge $4,50 cents to the consumer on the Google or Apple site and end up with more than $3 a book. If I sold the same number of books, I would make more money. The consumer readers will save a bundle also. Instead of $20. they will save more than 75% to read the same book. Google and Apple and others who go into the electronic book publishing business will not only make money, but they will make a great deal of money. They will get volume and have almost no costs to sell and deliver my book or any other.
So who suffers? Technology often, even as it enriches a society as a whole and many individuals within it, is a destructive force for some. UPS, Federal Express and mostly the U. S. Post Office (they have most of the business since they have a subsidized media rate) will suffer, since there will be far fewer books shipped. The paper companies will be losers as will the logging industry in America and Canada. Chemical companies who make printing ink will also suffer, as will the printers and binders and the companies who make printing presses and bindery equipment. But the biggest losers will be the book publishers. It need not have been. They could have taken the lead, gotten together and worked with Apple or HP to produce a book size reader, and started selling their books with the pricing of the new economy. But like so many companies who simply cannot make the shift away from the business as they have known it, they will go down the tubes along with the typewriter manufacturing companies, the floppy disk manufacturers, the audio tape reproducers, and many others. The book publishers will be in very good company as they go through their death throes. The newspapers, the magazine publishers, and the advertising industry who surrender more and more of their business to others who have no compuctions about destrying the industry and culture that they have known.
There will be a publishing industry to be sure. The few book publishers that survive toward the end will fight it out to see who will publish the Best Seller List books, And there will be the beautiful “coffee table books” of art and photography, and National Geographic will go on for a long time–gradually shifting to electronic magazine publishing.
The only thing that could stop the iPad type e-books now, is the behavior of Apple and Google. If they follow the Amazon.com. Kindle business model developed by Amazon CEO Jeff Bezos and take advantage of their power position and leave the authors with too small a share, the authors will not make more money by selling their books for much less. It takes a 70% to 80% discount off the printed book prices to make the e-book really work. Everyone focused only on the hardware, but now that Apple had broken through, the key variable will be the revenue sharing model that Apple and Google impose on the authors. And they can impose whatever they decide. No author or group of authors can really challange them. It is the market that will challange them as it has Amazon.com which basically charges the consumer about twice the rate that they should so that they make a HUGE margin and the authors get their usual. But Google and Apple can and will likely cut the prices in half and let the authors keep a larger share and these new e-publishers will be selling huge numbers of copies to a media sophisticated audience for prices far less than current. It is the authors who have to make the decision on final prices and they can only discount the e-books even heavier if they glean a much larger royalty than Amazon has been willing to give.
Finally we have an e-book, which provides us with the size and colors that we are used to, weighs about the same as a regular printed book, can be taken on a subway or to a toilet and will be comfortable reading in bed. The remarkable thing is that for the first millions of iPads that Apple will sell, the motivation of the buyer will mostly be to obtain all the other benefits and capabilities that the iPad offers. So our book will be our video player, our music player, our photo album, our notebook, blog, web browser, and even our telephone if we want. Kudos to Steve Jobs and Apple, not only for the hardware but the possiblity of a major busienss breakthough which while it will hurt a few types of busiensses, will bring enoumous benefit and value, economic, cultural, scientific, and artistic!
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