Digital rights continue to stymie business case for mobile reading, despite 25% growth in e-books

Mobile reading devices are opening new revenue opportunities for book publishers in Canada, but securing rights and identifying profitable business models continue to be a problem, says Jack Illingworth, a marketing technology consultant with the Association of Canadian Publishers. Like the music industry, book publishers have explored online opportunities both in marketing and content delivery. In terms of marketing, sites like Amazon and individual publishers’ websites rake in millions in annual sales. The advent of mobile reading device, such as the Sony Reader, and other online avenues, have opened up new revenue streams, contributing to a 25% growth in the e-book sector in North America. But despite this growth, publishers still face challenges in negotiating rights.“Very often, publishing contracts predate the digital era and don’t have digital rights built into them,” he says. “Going back to make sure publishers have the right to exploit their books digitally is a very laborious process.”It’s also tough pinpointing online business models that can produce good returns from multiple platforms, including PDFs, digital transcriptions, and re-flowable text formats that can be used on portable devices. Although online business models are still quite shaky, Illingworth says Canadian publishers are embracing them.While mobile devices offer a possible revenue avenue, Illingworth also points out that not all books—except bestsellers—seem to be selling well on this platform.“There’s a cost associated with bringing your content into that platform and keeping it there,” he says. “And until the revenue you are getting out of that platform outstrips the money you put into it, there’s no point in being there.”Even with the advent of portable reading devices, there are still pricing and revenue-sharing questions that need to be resolved between publishers, authors, and companies operating the devices, says Illingworth.“So the behind-the-scenes nuts-and-bolts on who gets what are questions that are still very much in the air.”Much of the buzz about new platforms is not for nothing, adds Illingworth. Bulk sales of e-books, mostly in PDF format to academic libraries have so far been quite profitable for the book industry.The digital era also opens up a possible revenue stream for publishers in the form of selling content in bits—chapters or even pages—that can be sold in different forms of digital platforms. But even the technicality of sharing profits on this avenue is still up for grabs, says Illingworth. Without looking at digital platforms as revenue sources, the fact that digitization has given rise to facilities like search engines, has been a boon for publishers, says David Caron, co-publisher with ECW Press, a Toronto-based publishing company.“Now you can monetize the specifics through keyword searches,” he says.Statistics on how much money Canadian publishers are raking in sales of books in mobile formats are still hard to come by, mainly because of the slow pace at which mobile devices are getting into the market and publishers’ reluctance to disclose such information, says Illingworth. This slow pace might also be contributing to slow sales, he adds.As to the future of books in the digital era, Illingworth says the key to staying on top is to embrace new technology and be willing to adapt.“For instance, publishers of cookbooks, travel guides and other reference material will have to evolve into multi-platform information companies or go bankrupt or be bought out,” he says.Caron, however, says conventional books are not going to disappear soon. The statistics on book sales and readership continue to show that readers still prefer books in paper form, but publishers have to recognize the revenue opportunities and innovation that exist online and exploit them.“Be prepared to take opportunities. As a publisher you have to realize that the digital world allows for interaction.”

Digital rights continue to stymie business case for mobile reading, despite 25% growth in e-books

Broadcast | November 6, 2008

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