EBooks: changing the publishing industry, PwC

Turning the Page: The Future of eBooks

13

1.2 

Market Drivers

The eBook market is in its infancy, 

particularly with regard to mass market 

publishers. What factors will significantly

enhance the development of the market 

and pave the way to a mass market? In the 

opinion of experts, two aspects are relevant 

in this respect: attractive devices and the 

availability of content. 

Choice of attractive devices is important

Devices are driving the market. For 

almost all experts, it is very important 

or important that consumers are able 

to access a choice of attractive devices. 

Experts agree that Apple, in particular, 

will stimulate the market with the iPad. 

This device addresses a large mass of 

consumers, and enables eBooks to be 

downloaded simply by way of iBooks. 

Increasing number of eBooks

In addition to the devices, most experts 

agree that a wide range of available 

eBooks is key. Indeed, the shortage of 

eBooks in the past was one of the main 

reasons why the market did not develop. 

Many publishers now recognize the 

attractiveness of the eBook opportunity, 

both in terms of volume and margins. 

Accordingly, larger publishing houses, in 

particular, have significantly expanded

their eBook portfolio, and most of them 

publish all new books in printed and digital 

form. 

However, the digitizing process is posing 

several problems for publishers that should 

not be under estimated. For example, 

publishers frequently have the marketing 

rights only for the printed and audio 

content, particularly in the case of older 

books. Therefore, further negotiations 

with the authors will be required. These 

negotiations frequently fail because 

authors do not respond to the request of 

the publishers or do not agree to digital 

marketing. They also fail because of wide 

discrepancies between authors’ fees and 

the prices publishers are willing to pay. 

In addition, eBooks require a level of 

investment that is particularly difficult for

smaller publishers. 

The supplementary range of free content, 

such as that provided by the Gutenberg 

Project or Google Books, is considered 

to be less important. This is, at best, 

an additional driver for encouraging 

consumers to enter this market. However, 

this is not a crucial factor for market 

success, according to the experts. 

Closed systems

Experts are of divided opinions with regard 

to user friendliness and closed systems 

(so-called walled-garden models). It is true 

that the Kindle and iPad’s user-friendly 

experiences have helped kick-start the 

market. However, it was thought that 

such models in the long term would result 

in frustration and a lack of acceptance 

because consumers are critical with regard 

to access restrictions. 

At present, it is not possible to foresee 

whether open or closed systems will 

become commonplace. Special-interest 

publishers, in particular, are critical when 

discussing the chances of the success of 

walled-garden models; because users of 

special interest information primarily work 

with a laptop, any user restriction might 

quickly deter them. On the other hand, 

in the mass market, it would take longer 

before consumers expressed concern over 

restrictions. Not surprisingly, executives 

from online bookstores hope that open 

systems will become established so that 

they will be able to gain a slice of the 

digital pie. The industry also tends to be 

critical with regard to closed models. 

Additional content and updates

Publishers have different views with 

respect to additional content and 

multimedia enrichment. While all special-

interest publishers surveyed stated this 

was important, most mass publishers said 

such features were of minor importance. 

This trend is understandable if we 

consider that, for instance, an animation 

of the blood circulation in a medical book 

can significantly enhance the reader’s

understanding of the organism, whereas 

a video in a novel would be a hindrance 

to relaxed and in-depth reading. Indeed, 

according to experts, additional content 

is a crucial criterion for special interest 

literature because it creates added value for 

consumers and opens up further revenue 

possibilities in the digital environment. 

However, it is necessary to consider how 

added value can be offered to consumers 

with publisher’s content and also what 

services would have to be developed to 

make the content interesting.