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Part 1 of a special DCLnews report into the state of the electronic book industry.

eBooks Alive & Well, Living Under An Assumed Name!

An electronic book revolution has happened; only it came in by stealth, and was not reported by mainstream media.

Five Prime Indicators For An eBook:

DCL president Mark Gross identified five indicators for eBook supremacy:

1) Readers need access to a very large amount of data, but are only interested in looking at a little bit of it. E.g. reference books, technical documentation, and legal libraries.

2) Data changes rapidly - such as news, weather, and technical information. Repair manuals are another prime example. They often change every few weeks, every few days, or even every few minutes. If users need the most up-to-date information, then there is a tremendous advantage to publishing the data electronically because it can be delivered very fast and cheaply.

3) Rare books and manuscripts that are too fragile to touch. Libraries and museums are the custodians of rare materials that are easily damaged, but at the same time they need to allow the public access to them - usually by appointment. Publishing rare books and manuscripts electronically allows them to be made available to all, irrespective of where people are in the world. It gives old books a new lease of life.

4) Materials that have low publication and distribution volumes. University presses, for example, often publish specialized materials that are only of interest to a few hundred people worldwide. For low volumes, the cost of printing a paper book is very high compared to putting it out as an eBook.

5) Self-published books. If an author can't find a publisher, they can simply turn their manuscript into an eBook and market it themselves. Alternatively, a publisher who wants to test the market for a given title could release it as an eBook first.

BARNES & NOBLE announced in September that it has stopped selling eBooks. Daniel Blackman of B&N.com said downloadable books have not lived up to their hype. "There is a market," he said. "But it has not materialized to the point that we will be able to support the business."

While the eBook world might have been shaken by the announcement, it doesn't mean the industry has died. Just the opposite, in fact. Look around. eBooks are everywhere. Buy a piece of software and the user manual is either online or on your hard disk. Need the latest news or weather? Go online. Need to get from points A to B? Visit MapQuest or use GPS. Need to fix an airplane? The new Boeing airplanes only come with electronic manuals. Many law firms no longer have libraries, and many doctors read their journals online and some even on their PDA's.

Everywhere you look, reading matter is online. An electronic book revolution has happened; only it came in by stealth, and was not reported by the mainstream media.

"The reason the media hasn't caught on to this story is that digital books are not for everyone and the digital books people are using every day, such as technical manuals and online reference titles, aren't perceived as eBooks," says Mark Gross, president of Data Conversion Laboratory, Inc. "Plus, when people think of eBooks, they picture specialized devices that look like a paperback. But eBooks are independent of all that. They can appear on PCs, laptops, and on Palm Pilots - as well as specialist eBook readers."

Mass market titles don't sell as eBooks

Commenting on the Barnes & Noble announcement, Gross pointed out that it was really highlighting the fact that mass market books, which are the type generally sold by Barnes & Noble, have not proved profitable as eBooks.

"It may be that those kinds of books may not make it as eBooks any time soon," added Gross. "If you are reading a book cover to cover there is not much advantage to an eBook. A paperback is quite a convenient way to carry around information."

According to Gross, novels and bestsellers are not where the eBook action is. "In technical and scientific areas, use of electronic books is quickly becoming the norm," says Gross. "There are already electronic journals that are only available online and are not even published on paper, and that phenomenon will only increase."

Signs of real growth

This is backed up by eBook industry insiders, who say they have been seeing real signs of growth from every direction. "Libraries are a huge growth category as they look to revitalize themselves in the Google age; school systems are finding that today's kids like to read when the media is digital; and consumers are snatching up better devices and more titles as fast as they can," says Nick Bogaty, executive director of Open eBook Forum (OeBF), the electronic publishing industry's trade and standards organization.

Up until now, the evidence of growth has been anecdotal. Which is why the OeBF has conducted a comprehensive analysis of the eBook industry. The results were published in September in the OeBF's first quarterly eBook and eDocument Publishing and Retail Statistics report.

Compiled from data submitted by 34 of the world's leading publishers and retailers, the analysis marks the first-ever quantitative assessment of the electronic publishing industry.

The findings bode well. In the first half of this year, alone, eBook sales revenues were up by 30% and unit sales up by 40% over the same period in 2002. This compares to an annual growth rate of just about 5% in traditional print publishing.


EBook Sales - The Bottom Line...
Retailers sold a total of 660,991 eBooks in the first half of 2003, a 40% increase over the same period in 2002, during which time 471,995 units were sold. Publishers did equally well. They sold a total of 620,277 eBooks in the first half of 2003, a 60% increase over the same period of 2002, during which time 388,589 units were sold.

Stealth eBooksPublishers and retailers that contributed included Amazon.com, Inc., AOL Time Warner Book Group, HarperCollins Publishers, Houghton Mifflin Company, Random House, Inc., Simon & Schuster, St. Martin's Press, and The McGraw-Hill Companies.

"Besides the fact that the numbers show strong growth for eBooks, it's good to finally have comprehensive statistical data to help us analyze the industry," says Keith Titan, Senior Director of e-publishing and e-commerce at Simon & Schuster. "Our own sales year-to-date have shown double digit growth, but it's great to see that the whole eBook market is vibrant and that progress is being made not just in sales but in content selection at retailers and in new releases from publishers industry-wide."

DCLnews Editorial
10.8.2003

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