Sunday, July 09, 2006

Of e-books and digital paper (6)

Finding ways of distribution

In the 1970s the stress in the development of e-Books was on production and study. But in the 1980s distribution came in sight. Online had become a channel for business information, but also online services for consumers such as CompuServe and The Source started to take off. Besides online, offline made its debut with the Laserdisc, which was originally intended as a carrier for movies, but also became a carrier of text and photographs.

The experimenting came from an unsuspected company: the US subsidiary Areté of the Dutch based company VNU. Areté was a general reference publisher, which started to produce the Academic American Encyclopedia (AAE). Originally this reference work was based on the Dutch language encyclopedia Great Spectrum Encyclopedia. VNU had hoped to repurpose 80 percent of the texts and illustration material; in practice only 20 percent was usable for an American edition.

But as the company has made use of phototypesetting, it was easy to use the magnetic tapes for other products. And the manager of Areté, Mr Green, started to experiment. He brought the text of the AAE online with the online service The Source. By the time of the Frankfurt Book Fair in 1981 he brought a magnetic tape along, so that a Dutch subsidiary could shop for a Laserdisc version with Philips.

An appointment was made with the Laserdisc department of Philips with a certain Mr Hoekstra, engineer by training. The objective of the meeting was to have Philips produce a Laserdisc version of the AAE and sell the electronic product to buyers of the Laserdisc player. The response was deafening: how many units of a Laserdisc player do you want to buy! At that time Philips people were hardly marketing sensitive and had hardly heard of bundling. So the Laserdisc version of the AAE never came about, but eventually the AAE was published as one of the first CD-ROM editions. As VNU was unable to sell the AAE, despite a recommendation of the American Library Association, it sold the publishing company to Grolier in 1982. In 1985 Grolier published the first multimedia encyclopedia on CD-ROM with more than 33.000 articles
CD-ROM became from 1985 onwards a favourite carrier for electronic books. During the early 1990s encyclopedias like the Grolier and Encarta were bundled in with CD-ROM players.

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Blog Posting Number: 438


Nicholas Borelli said...

Mr. Boumans, I would be interested to know your view of the future of the e-books vs the print book.

• Are the sales of e-Books and print books a zero sum game? That is, does the sale of an e-Book cannibalize a print book sale?
• The average American cannot afford the price of a hardback book at somewhere between $20 and $30. Would the advent of the e-Book expand sales of all books?
• Publishers reported 1,692,964 e-Book units sold and $11,875,783 in revenues for 2005. They also reported 5,242 e-Books (titles) published during this period. (Source: Int’l Digital Publishing Forum; A nascent industry at best.
• Will the new Sony eBook Reader technology prove to be the leap forward eBooks need to become mainstream?
• Will Harlequin's new foray into cellular telephone downloads for $2.49 per month bring the eBook closer to the mainstream (See the N.Y. Times Art Section of Tuesday, May 2, 2006).
• Will the ability of readers to download books to a PDA (Treo, Blackberry) spawn more sales of eBooks? My own book is available in this format and has ben downloaded to a PDA.
• The newspaper business is declining. Young people do not buy newspapers in the volumes prior generations did. They seem to prefer to read screen, from which they obtain the inews, nformation and entertainment they want and need. Does this bode well for the future of eBooks?
• Author Print Book Profit: Usually, an author receives 15% of the list price of a hardcover book. A $25 book yields an author $3.75. She pays her agent 15% or $0.56 (56 cents) per book, leaving her $3.19 before taxes.
• Author Selp-Published eBook Profits: Set up costs about $1000 to create a website. After that, the only costs are maintaining the site on a server, which amounts to about $250 per year. There are no production costs, with the possible exception of the cover and cover art. Add an additional $1000 for that, bringing the total startup costs for an eBook to $2000. The price I sell my book (FATA! The Act of the Avengeance on at is $3.99. I pay transaction costs of 2.9% of the price plus $0.30 per transaction. I net $3.57. Therefore, from an author's standpoint, even a very low-priced eBook like mine is no less lucrative than a print book. Moreover, an eBook priced higher than $3.99 is a more lucrative (possibly much more lucrative) proposition for the author than a print book.

Thank you.

Anonymous said...

Hi! I see you were talking about Groiler Books here. Groiler Books focuses on providing a variety of these written or printed works consisting of pages glued or sewn together along one side and bound in covers about education and schools. You have to learn about the company on this great site It is not actually the corporate information, rather the other type. The thing is that you can learn about the consumer reports about the company.

Jak Boumans said...

Dear Chery,
Start reading first before ranting. I talk about Grolier and not Groiler.