Last Wednesday afternoon as Apple CEO Steve Jobs prepared to unveil the iPad on the West Coast, at the first Digital Book World in Manhattan everything seemed to freeze in place like a glitchy computer as distracted attendees slipped out of panels to loiter around laptops, smartphones, and netbooks to get a glimpse of Apple's much-anticipated new reading device. A small cheer went through the group when Apple showed off its new iBooks e-reading software, and once again books and reading held center stage in the media world. To be sure, the fact that one of the world's most innovative companies, whose CEO once said reading was dead, has entered the digital book market, has given a lift to the entire industry.
While DBW offered presentations on digital piracy, e-book pricing, and territorial rights, Jobs presented a device that will likely have a significant impact on all those issues. At 1.5 lbs, and ½-in. thick with Wi-fi/3G, full color 9.7-in. touch screen and with a price starting at $499, the iPad offers an impressive alternative to both the prevailing digital reading technology of dedicated e-ink devices and the current pricing model—both pioneered by Amazon. And while Apple has developed iBooks, its own e-reading app, and will launch an iBooks Store, Apple confirmed to PW that the iPad will run the full range of e-book apps—among them Kindle for iPhone, Stanza, Iceberg Reader, eReader, Kobo, and others—currently available through the App store and which offer consumers a wide range of pricing and e-reader functionality.
Apple announced content deals with five major publishers—Hachette, Simon & Schuster, Macmillan, Penguin, and HarperCollins. Random House's Stuart Applebaum issued a short statement to explain Random's absence from that list. “Random House welcomes Apple's iPad and iBooks app and we look forward to our continuing conversations with them about how we might best work together.” He added that Random is “taking its time to fully discuss” an agreement with its various partners. Random has acted cautiously in the past in moving to some new digital areas; most recently it delayed selling titles for the international Kindle until just before Christmas.
Despite reports of iBooks titles priced between $12 and $15, both Apple and the publishers PW contacted declined to discuss the most important issue—the number of e-books that will be offered through the iBooks store and their pricing plans. And of course the impact of the iPad on the market for e-reading devices remains to be seen. Kevin Hamilton, president of IREX, producer of a dedicated e-ink reading device, told PW that while Apple “helps validate the e-books category, there's room for everybody. There are a lot of devices coming into the market this year and you don't have to win the whole pie.”
Publishers were unrestrained in expressing their excitement over the potential of the iPad to push digital reading (and e-book sales) to new levels, not to mention provide some serious competition for Amazon. “We're extremely excited about the iPad, that's why we wanted to be a launch partner,” said John Mackinson chairman of the Penguin Group. “It's an opportunity to introduce our authors to new readers, iTune users. Books will be sold through the iTunes store, and we can put our books in front of a million new users.”
Hachette chairman and CEO David Young also pointed to Apple's “proven ability to seamlessly deliver a wide range of content to the consumer,” and said the new device “will boost the popularity of e-books and get more people reading.” S&S's chief digital officer Ellie Hirschhorn said, “We're excited about the iPad. We're looking for the widest possible distribution and working with an innovative retailer like Apple will help us bring books to consumers in a cool and enticing way.”
Apart from the looming presence of Apple and the iPad, Digital Book World drew a big audience, and panels were packed with a familiar crowd of publishers, entrepreneurs, and digital consultants, eager to discuss a fairly familiar range of issues—e-book pricing, reading devices, piracy, territorial rights, and new business models.
Indeed, Macmillan president Brian Napack's call for a coordinated all-out war on digital book piracy, which included lawsuits, takedown notices, securing in-house manuscripts and galleys, and even a retreat from free promotional e-book offers, generated a mixed reaction to a plan that many in attendance said reminded them of the music industry's failed anti-piracy tactics.
At the panel on Tomorrow's Book Contracts, agents and publishers struggled to define how an industry based on territorial rights for books—not to mention defining book-like “adaptations” like the Vook or iPhone apps—will function in a digital environment without physical barriers to production or distribution and where e-books are easily accessed from anywhere in the world.
Verso's Jack McKeown offered a consumer book survey that acted as a counterweight to Napack's manifesto. Verso's survey suggested the possibility of increasing book sales using convenience and affordable pricing and showed large percentages of avid book readers—those who buy 10 or more books a year—open to both slightly higher prices for e-books above the unofficial $9.99 standard as well as showing a large percentage of readers who have not downloaded e-books illegally in any large numbers—so far.
At a panel dedicated to e-book pricing, Kobo's Michael Tamblyn displayed a chart that showed unit sales of e-books at Kobo peaking between $9 and $10 and falling off sharply for higher priced titles. Kobo doesn't make money on bestsellers sold at $9.99, and Tamblyn said that while he would like to come off that price, it is impossible, given the competition. Penguin's Tim McCall defended publishers' desire to see e-book prices rise, explaining that in arriving at an e-book price, Penguin considers e-books as one part of the publishing model, noting that it is a format that, despite its rapid growth, has only a 4% market share.
The conference also showed more evidence of a sharp divide about when e-books should be released. While Tamblyn called for e-books to be released simultaneously with hardcovers, Trident Media Group head Robert Gottlieb reiterated his belief that e-book releases should be “windowed,” and come out a few months after a hardcover. Like McCall, Gottlieb said that while he is excited about the potential for e-books, the current market is small. “You can't reinvent your business model around a format that is 3% of sales,” Gottlieb said. “We are still in a print world.”
