For the love of books

For those confused by the title – checkout the ‘Idea’ Advertisement being referred to.

When e-books were first introduced in the 90’s, being a lover of the conventional paper books, it took me no more than a minute to write them off. The first generation e-book readers were so unaesthetic that major publishers did not see a reason to convert their titles to this digital format.

As booklovers, we found it too inconvenient and tiring to read an e-book on the screen. We resorted to it only if we had to wait too long, like when ‘Harry Potter and the Goblet of Fire’ released and none of the book stores had it in stock. Hence, the paper book continued to exist and thrive, even in the fast advancing Digital age.

Well, all that is set to change, in fact has already started changing. In the past few months, we’ve been introduced to Kindle2, Nook, iPad, and so many impressive gadgets, and have woken up to a reality that e-books aren’t that bad after all, if you have such nice gadgets to read them on.

The patented E-ink technology ensures your eyes have the same reading comfort as with ink on paper. Add to this the convenience they offer – download any book you want to read, in a matter of seconds, not having to wait for your next visit to the bookstore, or the 2 day wait for delivery of your order at LeBooks.in. There have been several occasions when we’ve told some of you that we’ll need to import a book and shall take about 4 weeks to ship it, and you’d hardly have a choice but to wait to get that title. Having to wait to have something that you can download? – Aren’t we called the impatient generation!! (remember that Airtel Broadband Ad). And how about being able to carry your complete 500-book collection with you, anywhere you go?

Now that I am convinced that the books – as we’ve known them for years are going to change, I wonder how the book industry would change over the next few years. Idling with these thoughts, and having a fair idea of the Indian book industry now, I can see several things changing.

Publishers would be publishing all books in e-book format(ePub) and making better margins. They need not wait for weeks to get copies printed and distributed to retailers in far flung areas using a distribution network that is unbelievably unreliable. Like the music industry, their biggest challenge will be fighting piracy.

The worst hit will be distributors and the brick and mortar retailers who will see almost half of their sales getting wiped out in the next 5 years.

Online booksellers like us will move to platforms to deliver e-books and also selling to those still crazy about the paper books. We’ll also keep developing applications/products to enhance your reading experience. In fact, the e-book model shall suit us better as we won’t have to waste time handling logistics and our only goal shall be to look after all the needs of booklovers.

Many would argue(as I did till sometime back) that we can’t really substitute our beloved paper books with those plastic slates. How can an e-book reader substitute that smell of paper, that experience of walking through tall book racks, the beautiful feeling of finishing a book and writing a note on the last page?|

All I can say is that we’ll adapt, we all will. I’m not saying that our paper books will cease to exist, but yes, they will definitely become much less popular. Our generation is going to miss them and narrate stories to their grandchildren about our beautiful experiences of flipping through the pages, using those lovely hand-made bookmarks, and stacking our cupboards with that primitive form of books.

How books are going to change, is anybody’s guess. But till the time e-books take over, I’m going to cherish these wonderful paper books that I have collected over the years, and will continue to add more to the collection till a stupid gadget gets me hooked.

Feel free to share your thoughts on how do you see e-books changing our world in years to come.

Amazon's Kindle

Its a well known fact that Gillette makes more money by selling razor-blades than by selling their trademark razor. HP’s Printer division makes more money selling cartridges than it makes by selling Printers. Similarly, there are a lot of companies that make money not by selling the main product, but by selling the tied-up product. This is an old business trick and is referred to as the Razor-Blade Model(Now you know who pioneered it). Today while reading about the recently launched e-book readers-Kindle and Nook, I realized how Amazon and BN(Barnes and Nobles) are relying on this old model and forecasting huge profits in the next few years.

Microeconomics says that there are three characteristics of any market structure (be it Monopoly, Oligopoly or free market)- number of players, barriers to entry and bargaining power of producers as well as consumers. The market for book retail has almost no barriers to entry and Amazon and BN being big players have over the years managed to capture a majority market-share. As time passed, both of them lured customers with heavy discounts and the price wars just got uglier. Needless to say, customers had no reason to stay loyal and made the best of this price war; while Amazon and BN just kept bleeding.

BN's Nook

Recently, with the advent of e-book readers these two giants saw an opportunity to finally establish a captive customer base by employing this tied -up products model. Amazon launched Kindle over two years back but the product did not have the potential to penetrate the market then. It wasn`t aesthetically designed and did not bring the much expected revenues. But with recent developments in LED technology and Google’s groundbreaking agreement with Publishers, there is renewed hope that e-books might prove to be a fatal blow to the conventional paper books.

Now if this is really going to change the future of the publishing industry and the way we read books, the big players of tomorrow should emerge now. And that is precisely what Amazon, Sony and BN are attempting to do. Each of them launched e-book readers with their own non-standardized formats, with the intention of hooking on a maximum number of readers to their particular product. Amazon, being the book retail giant that it is, used its clout to arm-twist publishers into providing it e-book formats for all major releases. BN joined the bandwagon too and managed to obtain most of these titles in its e-book format. In this race, Sony got left behind because of its inability to convince customers that it would be able to provide as many titles as its competitors in its own e-book format. It is this uncertainty coupled with the marginally better product aesthetics of Kindle and Nook that have led to the emergence of two leaders in the e-books business.

Coming back to the economics of this, we can understand why neither Amazon nor BN is hoping to make significant profits from the sale of e-book readers. Also, the fact that both these e-book readers are priced the same, tells us that both these Companies understand that a price war now would cause both to bleed as they do not have any margins on the e-book reader. It will be a while before either Company would have sold significant volumes to recover the enormous product development costs.

However I feel that there is a big question mark on whether these two will actually make the money that they are hoping to make. Aren’t they undermining the smartness of techies today, who would probably soon work out a way to crack each of their proprietary formats and create millions of free copies in no time. Isn’t it going to make piracy of books even easier and much more widespread. The entertainment industry has been struggling to fight this piracy for years. Won’t Amazon and BN face this same challenge when there will be on an average, 1000 copies circulating for each legitimate e-book they sell.

But none of this seems to concern Amazon and BN who are both currently focusing on meeting the high [expected] demand for e-book readers in the upcoming festive season. While these big companies fight it out in the electronic format market, the individual customer is definitely happy with the idea of have access to a cheaper electronic copy of the book, downloadable from anywhere at all. Also, the prospect of free copies of e-books being easily available in the near future has book lovers thronging stores to pick that gadget that will be their reading companion for next few years to come.