PwC
12
1.1
eBooks: An Opportunity or
Risk?
The book market is undergoing a phase
of transition. Developers are introducing
new formats, manufacturers are building
new devices, companies are creating new
business models, and – most importantly
– new readers are making the leap from
paper books to eBooks. Experts agree
that eBooks and eReaders are gaining
momentum and are poised to make the
breakthrough that will significantly change
the book industry. But just what does
this transformation mean? What will the
market look like? What will consumers pay
for eBooks and eReaders, and what do they
truly want? Which formats will become
industry standards, how long will change
take, and how many eBooks will people
buy?
To determine the opportunities, potential,
risks and significance of this digital
transformation, PwC in Germany spoke
to more than 40 experts from companies
in the book industry. The survey included
senior executives from mass market
and special-interest book publishers,
physical bookstores, online book stores,
intermediaries, device manufacturers, and
libraries.
Here is what the survey revealed:
The breakthrough will be achieved in the
course of the next few years. We are at the
beginning.
Most experts are convinced that eBooks
will achieve a significant share of the mass
market in the course of the next few years.
However, there are reservations regarding
the extent of this development.
The following factors were cited:
The development, marketing, and
•
decreasing costs for eReaders with
eInk screens have attracted customers
because the devices simulate the
experience of reading ink on paper.
Consumer behavior is changing, with
•
the Internet becoming more pervasive
in all areas of life and mobile devices
– such as MP3 players, smartphones,
and portable game players – becoming
commonplace companions. Because
consumers are used to carrying
devices, familiar with technology, and
accustomed to reading onscreen, they
are also receptive to eReaders. Apple’s
iPad, although not designed solely to
read eBooks, has raised the profile of
eReaders and tablets. More books are
available than in the past, and more
content is made available every day.
The lack of content hindered eReader
adoption as recently as a few years ago.
Experts are also convinced that eBooks
will continue to be established in the
field of professional books. This result is
hardly surprising, as eBooks have already
made a significant share of revenue in
the professional book market segment for
several years.
Opportunities outweigh risks
Most experts interviewed consider digital
advances in the book industry to be an
opportunity. Accordingly, they hope that
new target groups can be addressed with
eBooks (young consumers, sight-impaired
persons, or certain professional groups)
and that new sources of revenue can be
generated by means of impulse buying and
personalized offers. They believe eBooks
complement printed formats.
However, some dispute the contention that
new target groups can be addressed with
eBooks. Critics say new types of reading
devices are not likely to convert nonreaders
into voracious readers. It is more probable
that people who read a lot of books today
will buy eReaders and continue to buy
a lot of eBooks tomorrow. As a result,
publishers may see an increase in digital
sales but lose hardcover and paperback
sales. The increase in overall sales would
be negligible.
The chorus of critics includes some
publishers, who say that eBooks represent
an increase in costs but not in sales. They
predict the digitizing process will require
investments that will not be offset, initially,
by additional income.
9
Printed books
would still be in demand, but likely with
lower circulations, and this would actually
increase their unit costs of production.
Some online bookstores also have
identified risks with eReaders and eBooks.
They say competition is becoming fiercer
because companies such as Google, Apple,
and Amazon have extended their business
models to include sales of electronic books.
What do the
experts say?
9
Publishers that have already invested in digital production systems may find the transition less costly and disruptive than those that have not. In the United States, publishers say the cost of
producing an eBook is low because the manuscript, editing, layout and production were already handled digitally.
