Although some publishers and distributors were in the digital space long before Amazon introduced the Kindle in November 2007, the then-$399 device offering seamless downloads of relatively inexpensive digital books was definitely the game changer. In the intervening five years, not only have devices and formats morphed and multiplied—and with them challenges, not least of which is how many ISBNs a single e-book needs—but new retail players have continued to emerge. Zola Books, which is still in beta, will begin selling later this year; Kobo is about to relaunch in the U.S. with independent booksellers; and even Ingram is working on an e-book platform (no date has been set yet).

Despite the recession and churning in the marketplace, publishers and distributors continue to see huge opportunities for growing sales of e-books. Rick Joyce, chief marketing officer for the Perseus Books Group, which offers a suite of digital distribution and conversion services through its Constellation division, anticipates e-book sales doubling in the U.S. this year and increasing two-, three-, or even fourfold in the rest of the world, which is two years behind the U.S. in e-retailing and devices. The biggest e channel continues to be online retailers, according to Sabrina McCarthy, president of Perseus Distribution Client Services, Argo Navis, and Perseus Distribution, who is seeing sales of some titles be as much as 30% to 40% digital, while others, like serious nonfiction, average 10% to 15%.

“We’ve had a great 2012 in both print and e, although our e-book business is growing at a faster pace than print, with e-book sales having grown each and every month versus the prior month,” says Larry Bennett, president of distribution at BookMasters. “Overall, we are aiming at generating close to 20% of our sales through e-books.” Because of an international push earlier this year, BookMasters has seen a 10% increase in sales across the board and has had good pickup, particularly for its Christian and romance titles.

At National Book Network, which offers e-books and conversion through NBN Fusion, e-book sales have more than doubled in each of the past three years. “As a percentage of overall sales, e-books should exceed 10% in 2012,” says Ron Powers, v-p of digital publishing. During the Frankfurt Book Fair, NBN is doing a full push to all 90 publishers represented in the U.K. and EMEA (Europe, the Middle East, and Africa) by its sister company, NBN International, so that they have access to the full suite of NBN Fusion services, including international e-book distribution.

Where once publishers dipped their toes into digital with one distributor and print with another, increasingly presses are seeing the value of looking at a title as a title—and having the same house represent both. “The same person who is selling Amazon is selling Kindle opportunities. The marketing is very, very similar. Then it’s up to the consumer what format they want to read,” says Publishers Group West president Susan Reich, who just signed Entrepreneur Press for physical distribution after working with it for a year and a half on digital. There’s still plenty of room for digital-only specialists in a dynamic market. INscribe Digital represents a number of print publishers along with individual authors. It sold Bared to You in digital until author Sylvia Day signed with Penguin, and recently added Jackie Collins’s backlist and some digital-only titles to its roster.

New markets continue to open up. “It’s no secret that the big U.S.-based retail and consumer media companies are selling a lot of digital books,” says Shawn Morin, COO of Ingram Content Group. “However, we continue to see an emerging trend in categories and verticals that may be best served by subject. We have also just started to see some retailers—such as Flipkart in India, Bilbary in the U.K., and Fishpond in New Zealand [and Australia]—start to service more international customers. We will continue to look for customers that have the capability to help us connect publishers with consumers.”

At BookMasters, too, the lion’s share of sales goes through the top four retail outlets—Amazon, Apple, Barnes & Noble, and Kobo. “But what is most interesting,” says Bennett, “are the numerous smaller e-book outlets that cater to specific niches, be they public library lending programs or genre-specific e-book stores. Our Christian titles very much benefit from the smaller Christian-specific outlets in the U.S. and around the world.”

At Independent Publishers Group, in addition to the U.S., Canada is doing “nicely,” says president Mark Suchomel. “We’re not just continuing to keep up with the market. We’re exploring where we can sell directly to libraries and consumers.” In the past few months, IPG began experimenting with putting its shopping cart on its publishers’ Web sites. When a customer clicks the Buy button at sites for Nomad Press or the Urban Land Institute, the order goes directly to IPG’s back office. “We try to identify where publishers have problems and provide a solution for them,” says Suchomel of the program. “It doesn’t make sense for publishers to build it themselves. We have everything right here. Publishers only incur a cost when a book is sold, and that allows them to retain customer information.”

The digital landscape is changing so fast that distributors recommend that any presses that have been either reluctant to get started or don’t have the money to convert their entire backlist begin by making at least a few bestsellers available as e-books now. “Make a strategy rather than [anticipate] where the broad market is going,” says Perseus’s Joyce. Quoting Stephen Page, CEO of the U.K.’s Faber & Faber, a Perseus partner, responding to journalists’ questions about when the market is going to be 50% e, he adds, “Stop trying to figure out what’s going to happen in three years. Prognostication is procrastination.”

The Road Ahead

Not that going digital isn’t without its difficulties, especially as the Department of Justice lawsuit on e-book pricing continues to wend its way through the courts and throws a wrinkle in the agency pricing model. As NBN’s Powers points out, “It can be challenging doing profitable business in a constantly changing landscape.” Even so, the evolution of the agency model is just a small speed bump compared to providing e-book files in multiple formats, handling complex treatments like cookbooks, and managing metadata.

“We’ve spent a lot of the past six to eight months on what the future looks like, and we’re focused on a greater move to digital, and we looked at how we ensure that our developers are streamlining what they do,” says Anne Kubek, executive v-p, general manager, of INscribe Digital. “We really believe that is where the future of this industry is going.” By having fewer human hands touch the metadata, she notes, it will be more accurate. “Incomplete or error-ridden metadata really slows everything down,” she adds. And if it can be submitted more easily, her hope is that it will free publishers to spend more time creating more device-specific content, as Becker & Mayer! is doing, looking to launch a digital series in 3-D.

Another challenge is finding ways to counter showrooming at bricks-and-mortar bookstores. “Traditional retailers are an important part of the content distribution network, whether e or p,” says Morin at Ingram, which will begin distributing Kobo devices for the American Booksellers Association when its partnership with Kobo rolls out at more than 400 independents in the U.S. “At a certain point, retailers need to be in a position to create a unique selling proposition for consumers.”

Others are taking a more active stance. “We want to help retailers maintain their consumer base,” says Bill Schanes, v-p of purchasing at Diamond Comic Distributors. Six weeks ago Diamond and digital comics vendor iVerse Media launched Diamond Digital to enable comics shop owners to do exactly that by selling digital downloads of comics. On any given Monday retailers can download a list of codes for digital comics that will be available in print two days later. They can then use the digital edition as an add-on sale in-store. For an additional 99¢, customers can have both the print and a “plus” digital copy. Or customers can buy just the digital edition for $1 less than the print price.

“It may not be the sexy way to do this,” says Schanes. “We really feel like [retailers are] being left out in the cold.” So far the program is available only for comics in North America, but Schanes says that graphic novels will be available soon and that digital comics will roll out internationally in the first or second quarter of 2013. Comics shops have been slow to adopt. Although Diamond services 2,000 direct comics shops, only a tenth, or just under 200, have signed up.

“Showrooming is going to exist. Rather than fight it, let’s facilitate it and give everybody credit for it,” says IPG’s Suchomel, whose goal is for sales representatives to be able to talk about, and sell, all formats with all retailers. Currently, he’s in conversations with Zola to compensate IPG’s reps on consumer purchases through bookstores’ presence on the Zola site. “It will give them good incentive to pay attention to our e-books,” says Suchomel, who is open to a similar arrangement with Kobo. Both e-tailers offer booksellers commissions on e-book sales. To date Kobo hasn’t reached out to credit reps for digital sales at indies.

“It’s still such an early-stage industry,” INscribe’s Kubek points out. But with $35.3 billion in online sales overall in November and December 2011, according to, an increase of 15% over 2010, and strong e-book sales in the following quarter, e-book distributors and their clients are poised to benefit this holiday season.