ETEXTBOOK DREAM
The glossy ads of e-reader device makers would have you believe that they will usher in a new era of reading. They claim their devices will revitalize newspapers, magazines, and textbooks by transforming them into multimedia formats of Potter-esque perfection. That vision may someday be realized, but only if e-reader companies and ebook sellers either help publishers to create materials or if they go into the business of publishing in these new multimedia formats themselves.
Though there are two diverging philosophies on e-reader design they will quickly converge into one. Apple represents the Swiss Army knife of e-readers- a multimedia tablet- rather than an e-reader. Apple is betting that multimedia will revitalize reading, newspapers, and magazines and that these new multimedia versions will once again make these media profitable. The effects on reading are somewhat detrimental but not really considered by Apple.
On the other hand, Amazon has created an “invisible” device that preserves the reading experience. This may be rethought in the aftermath of Apple’s announcement, but the Kindle has brought some interesting innovations to reading since its introduction. The three most prevalent innovations are instant access to new reading materials, portability allowed by large storage, and resizeable text.
So how do these visions of reading affect the textbook market? The early textbook market for these devices will be higher education because of the cost, and the consumer base for these books. Though Amazon was recently forced to stop its trial in the college textbook market, much can be learned from this program.
Amazon appeared to target the price and physical size of textbooks as the selling point in their trials. It was a good strategy since textbooks can cost students up to $2000 per year.
Apple on the other hand will probably run its first trial program around interactivity and the HTML5 capabilities for multimedia. The iPad will not support Flash and for e-textbook publishers that may be a problem. Apple seems to make two underlying assumptions that I think might be false. The first assumption is that college students will spend more on textbooks with interactive multimedia features. If college students are given the alternative of a text and static image textbook for a lower price I think that would be a more attractive option than a multimedia textbook.
The second assumption that Apple makes I think is an even larger problem. Apple seems to be assuming that e-textbook publishers will be able to churn out high-quality interactive textbooks that will drive college adoption of their devices and the proprietary formatted ebooks that play on them.
THE ETEXTBOOK REALITY
1) Few publishers have the vision or technical prowess to produce interactive textbooks. These people are steeped in a 500-year-old tradition of producing books. All of the interactive books I’ve seen from publishers are just electronic versions of a book. The most innovative thing you can find are voiceover, or flash-based books that allow you to turn virtual pages. So they will probably not reinvent the book and reading. Even if they can create specifications that will allow professional designers to be innovative, the cost of hiring experts will greatly increase ebook production costs.
2) Those few publishers that have the technical prowess to produce innovative products depend on Flash. And currently, there are not robust and reliable tools to do conversions of large quantities of publishers Flash-based existing product lines. So Apple’s vision of reading will have to be quickly followed by a major investment in internal or external development teams at publishing houses.
3) Publishers have built their highest margins on almost annual editions of high-priced textbooks. Thus publishers will not easily lower their list prices on books for the sciences. Instead, they will leverage the lower production costs offered by text-based e-textbook publishing workflows to increase their profits, and prices for ebooks (licensed, DRMed, and proprietarily formatted computer files) will remain high. And since these files cannot be resold they will remain thoroughly unattractive to students. Lastly, the costs of producing innovations in textbooks through multimedia will greatly increase ebook development overhead for publishers which of course makes it less desirable for them.
Though I think college students will eventually be a large market for ebooks due to the ebook’s convenience and possibly lower price; I think this market will take serious innovations to fully develop. There will have to be trading and sales channels for used ebooks. To jumpstart these markets, publishers might sell revision packs. As a used ebook is turned in, the student could get a lower price on the newer version and there might be an easy way to add just the new content as is done with software updates.
Another thing that might work is subsidies on the e-reader prices for students and faculty. What is the incentive for someone to buy a device that chains you to proprietary files and prevents the resale and sharing capabilities of a physical book? Currently, the only selling factor in this market is weight and possibly price (which will entirely depend on the publisher’s understanding of this new market). And I don’t think that is enough to build a market on.
