Making its bookmark

Saturday, October 17, 2009

Digital publishing

by Biodun Iginla, BBC News and the Economist

Oct 16th 2009 | SAN FRANCISCO
From Economist.com
Google wants to shake up the digital book market
AFP
Correction to this article
IT WAS a fitting place to announce an experiment in bookselling. At the Frankfurt book fair on Thursday October 15th, Tom Turvey of Google revealed plans for a new online service that will allow users to download electronic copies of books from the search giant or from publishers using its technology. Called Google Editions, the service will launch in the first half of next year and will trigger a head-to-head battle between Google and another web behemoth, Amazon, the current leader in the digital book arena.
That arena is still tiny. The Association of American Publishers, an industry group, reckons that total book sales in America last year reached $24.3 billion, but e-books accounted for just $113m of that amount. Nevertheless those sales were 68% higher than the previous year and demand for digital texts is expected to rise steeply in coming years. The appetite for e-versions of books is being driven in part by a rapid expansion of the electronic-reader market, which is dominated by Amazon’s Kindle. On October 6th the company unveiled a version of its e-reader with international wireless access that can be used in markets outside America.

But Google reckons that Amazon’s proprietary content system will be its Achilles heel. Purchasers of a digital text for the Kindle can only view it on Amazon’s machine and some smart phones that have appropriate software on them, whereas Google’s digital editions will be accessible via a wide range of gizmos that boast a web browser, including smart phones and personal computers. That should make its e-books more attractive to potential purchasers. Google also intends to let publishers set the prices at which digital texts are sold through its service, whereas Amazon dictates the price of Kindle versions. That may tempt more publishers to work with Google.
The search firm, which on Thursday announced a 27% year-on-year increase in its third-quarter profit, also seems determined to outdo Amazon when it comes to the number of books that it offers. Google Editions is expected to launch with some 400,000-600,000 digital books on its virtual shelves; Amazon currently has around 330,000 books in its online library. Unsurprisingly, the company is deeply opposed to a mooted deal between Google and groups representing publishers and authors that would give the search firm the exclusive digital rights to millions of out-of-print books in America. An American court has given Google and its partners until November 9th to revise an initial agreement that met with stiff opposition from rivals and publishers both at home and in countries such as Germany and France.
Google’s proposed digital bookstore may eventually encourage Amazon to slash the price of its Kindle e-reader range deeply to encourage many more people to buy one before Google Editions arrives. A recent report from Forrester, a research firm, predicts that adoption of e-readers will only take off once the price of such devices falls below $99. The cheapest Kindle still costs $259, while the international model is $279.
Yet even a big cut in the cost of a Kindle will not solve the bigger challenge that it and other proprietary e-readers face. Already, many people are choosing to read books on smart phones rather than on other devices, weakening Amazon’s grip on the market. And both Microsoft and Apple are working on tablet-style computers that combine features of an e-reader with a panoply of multimedia capabilities. Once they become available, such machines will be ideal for accessing digital texts. Let the battle for readers’ eyes begin.

Correction: We originally said Kindle's international model costs nearly $500, but in fact it is $279. This was corrected on October 16th 2009.

Back to top ^^
Readers' comments The Economist welcomes your views.
View all comments (10)Add your comment

Posted by BiodunIginla at 12:23 AM Labels: bbc news biodun iginla, Google