How to Grow Ebook Revenue: Raise the Bar on Quality
About 17 years ago or so, digital media folk were asking an important question: would consumers buy online? Would consumers take the leap and actually enter their credit card information on a seller’s website? More specific questions also arose about the growth rate of online commerce. In the course and fullness of time, we got our answers. ComScore and the Commerce Department now put annual online retail spending as somewhere around $165 billion.
Similar questions continue to surround digital publishing revenue, specifically about the role and significance of ebook revenue.
Beginning in the fourth quarter of 2011 — driven in part by the launch of the Kindle Fire and Nook Color readers — the significance of ebook revenue became a bit clearer. Many publishers from a variety of industry segments have been caught by surprise at the strength of ebook sales.
Recent research data summarize publishers’ results:
- A Pew study concludes that 1 in 5 US adults have read an ebook in the last 12 months.
- 2011 ebook revenue came in at $1.7B, a number that may jump considerably in 2012 with the new ereaders.
- Forester predicts that 1 in 4 Americans will own an ereader in by 2016.
Yes, Virginia, people will pay for ebooks — in large numbers to boot. As gratifying as these recent projections are, some significant financial and non-financial questions remain:
- Does direct cannibalization occur? Will ebook sales represent replacement revenue of lost print sales or will ebook sales become an opportunity to develop incremental revenue streams?
- Can ebooks become a platform for attracting sales from additional customer segments, who may not already be immersive readers? The Pew study indicated that ebook buyers are overwhelmingly consumers of books in all forms. In other words, ebook consumers are immersive readers who are already a receptive market. Will the value delivered and quality of experience of an ebook be considered equivalent to the print experience, or viewed as low-cost, ancillary experience?
The answers to these questions will not be determined solely by the disposition of the marketplace but to a large degree will be driven by the actions of publishers. Great product revenue is often driven by great product experiences. And it is up to publishers — both individually and in aggregate –to pave the way to compelling ebook product experiences, which in turn will lead to increased revenue opportunities.
As the recent survey data has attested, some customer segments perceive the value and quality of the ebook to be of a sufficient level to be nominally salable. However, one would be hard pressed to make the case that, apart from a factor of convenience, the ebook experience is on average of the same level as the print product. In most cases, it clearly is not. This supports the argument that the price point of ebooks should be kept low, since it is clearly a secondary product.
Some of the challenges in quality of ebook experience derive from limitations in the ereaders themselves. Apart from being marvelous portable ecommerce devices, ereaders are often limited in terms of creating enjoyable and immersive media experiences. The release of the Fire, Nook Color, and the advent of HTML5 and EPUB3 will improve some of the device limitations.
Beyond issues related to devices however, other issues remain that compromise the quality of the experience of the ebook. These are issues that are in the domain of the publishers. Performing even a cursory survey of ebooks that are commercially available will indicate that the ebook marketplace is rife with quality issues and challenges that undermine the value proposition of the product.
Many problems exist in terms of fundamental editorial quality control. Whether a publisher adopts a print-first approach for ebook production (converting an ebook from a file meant for print composition) or an XML-first approach (using a device-neutral file for both print and ebook), the process of creating an ebook can introduce quality problems. Issues related to editorial quality can be largely addressed:
- Publisher articulated mandate that ebook editorial quality is as important as print editorial quality. This is often not the case or is not stated, but needs to be for a high-quality ebook experience. Publishers need to express intent for ebook quality.
- Designing and implementing ebook quality assurance processes. Often, especially in a print-first workflow, ebooks are given only cursory review.
- Implementing automatable processes. Automation not only leads to greater efficiencies but greater consistency of output as compared to manual processes. Quality issues will still arise through automated processes, but they can be remediated much more efficiently than quality issues that are introduced through manual errors.
Refining the Ebook Format
Beyond editorial quality, publishers need to continue refine the structure of the ebook format. Reflow-able ebooks do not have fixed page numbers. Page numbers have been a fundamental organizing system of books for millennia, but in ebooks have no relevance. Therefore, the industry needs to continue to evolve and refine the ebook format to be as useful and efficient as a print title without the benefit of page numbers. The implications are far-reaching, and impact indices, intra-text page references, and all other ways in which page references occur. Thinking through the implications of a book that lacks page numbers is a critical task in making ebooks work.
The manner with which individual publishers and the industry at large address the issues relating to quality and format refinement will have no small impact on how significant ebook revenue will become. If ebooks are presented — as they often are today — as a form that does not have the refinement and quality of the print product, then the market will logically assume that it will be available at a far lower price point than print. Worse still, would be the assumption that the lower quality ebook is a free ancillary, bundled with the print title. This is a distasteful scenario we know only too well from the higher-education marketplace.
On the other hand, if quality of ebook experience is made a priority, then the publisher will present a level of quality that can support a higher sale price. In addition, ebook revenue may hold the promise of representing more than a replacement of lost print sales, but a source of truly new, incremental revenue – ideally including customers that are not regular print customers today.
Improving quality and refining the format will require additional effort and investment, made even more painful by a very tough economic climate. However, if this investment is not made — in the belief that ebook revenue will not be robust enough to provide a return on that investment – then a very weak value proposition will continue to be presented to the marketplace, resulting in lower price points and slower growth. The belief that ebooks have a marginal role in driving revenue will become a self-fulfilling prophecy.