The New York Times
December 9, 1999
Racing to Convert Books to Bytes
Evolving Market for E-Titles
By DOREEN CARVAJAL
Rarely does anything between covers astonish a librarian like
Dennis Dillon, but he says he is shocked when he examines the
latest reports about reading patterns of students at the University
of Texas at Austin.
Photo credit:
Frank Curry for The New York Times
Photo Caption:
Dennis Dillon, head of collections and information resources at the
library of the University of Texas in Austin, says he is surprised at
the popularity of the university's newly purchased electronic books.
_________________________________________________________________
Circulation is down. Turnstiles are moving at a slower pace at the
most populous campus in the United States. But with a bare minimum
of promotion, the university's newly purchased electronic books,
like "From Barbie to Mortal Kombat" or "Euthanasia: A Reference
Handbook," are suddenly circulating like freshly published Grisham
novels.
"No one was sure whether anyone was going to read any digital
books," said Dillon, the university's head of collections and
information resources. "We were somewhat skeptical. Usually a book
has a one-third chance of being checked out. So to have some title
checked out 25 times in two months -- that's shocking."
With a $1 million budget for digital materials, the University of
Texas is preparing to increase its 6,000-title collection of
digital books. It is investing in the evolving electronic frontier
of the book market, which is preparing for rapid change despite
widespread skepticism that the vast majority of readers are truly
ready to cuddle up to a good byte.
New players like netLibrary -- which sells collections of digital
books to libraries -- are engaged in a frantic international race
to convert paper books to bytes with the ultimate goal of
dominating the evolving market.
And traditional publishers are cautiously preparing for an
uncharted future, digitizing thousands of old backlist titles in
preparation for an e-new world where books can live forever because
they will never go out of print.
Yet some publishing experts doubt that changes will come rapidly,
given the demographics of the American book market. The most
reliable and free-spending group of book purchasers was raised on
paper and they are edging into their mid-40's and up.
Nevertheless, a number of major publishers here and in Europe are
preparing for the possibility of a surge in demand for electronic
books that many believe could be driven by the same type of readers
that powered the paperback revolution: the young.
As the market develops, the definition of a book is evolving into
an exotic collection of literary hybrids -- electronic titles that
can be read as e-mail, retrieved by a portable electronic reading
device, downloaded on a computer or converted quickly from digital
versions into bound copies that can be printed in less than 30
seconds.
And in the very near future, readers will be able to mince these
digital versions into customized titles available by the chapter or
page. For example, in the next six months, readers of IDG's Arthur
Frommer's travel guides will be able to create am electronic book
so narrow in scope that it explores restaurants in the Loire Valley
in France with reservation links to recommended hotels or airlines.
With the immediacy of electronic books, digital titles can be
published at greater speed and at greater peril for unchecked
information. The forms of writing in electronic versions are
shifting, allowing authors to create never-ending electronic books
with constant revisions or expanded titles that include the
literary flotsam of notes, diary entries, memos, images and maps.
Not everyone agrees as to when this new future will take hold.
Technology giants are boldly promising swift change, with Microsoft
predicting that many e-titles will outsell their paper cousins
within a decade.
Random House, the nation's largest publisher, is not making the
same boasts, but the company, part of Bertelsmann, has embarked on
a two-year project to digitize all of the books on its entire
backlist of 20,000 titles, with 5,000 already converted. Simon &
Schuster, part of Viacom, is formatting all of its new books in
digital form and is preparing to digitize at least 4,000 of its
20,000 backlist titles next year.
But because of security and piracy concerns, Simon & Schuster is
still reluctant to allow Microsoft access to its titles for use
with new digital display software that will be available next year
for reading, searching and annotating books on a computer.
"We're trying to create a strategy for the future that is not
totally clear because it's evolving and changing and converging at
the same time," said Jack Romanos, the head of Simon & Schuster's
consumer trade division, where electronic book sales at this point
have totaled less than one-tenth of one percent of isales. Still,
he added, "We believe there is an electronic future."
_________________________________________________________________
Publishers are preparing for an uncharted future.
_________________________________________________________________
In Europe, the French publisher Havas and the Italian publisher
Mondadori announced agreements in October to publish electronic
books that can be read on the coming Microsoft Reader software and
downloaded from Web sites. Major European publishers of science,
technical and medical books have joined with American publishers
like John Wiley & Sons to electronically link citations listed in
their journals -- a network that ultimately could lead to links
between electronic textbooks.
And last month, the nation's leading bookseller, Barnes & Noble,
purchased a 49 percent stake in iUniverse.com, a new electronic
vanity publisher in Campbell, Calif., that charges a modest fee to
would-be authors to post manuscripts in electronic versions.
Such newcomers to the book industry are spread far from the
traditional capital of publishing in New York.
To a certain extent, these companies are caught up in a classic
chicken-and-egg quandary. To attract readers, they must offer a
wide variety of titles. But to persuade publishers to sell titles,
they have to demonstrate that there is a market and that the
technology is secure from piracy. As a result, many of the
companies are expanding their collections with public domain
titles.
NetLibrary, for instance, has outposts in China, India and the
Philippines where workers are converting books to electronic copies
by typing the text into computers. Scanning the material directly
into a computer posed too much potential for errors, according to
the company. And so now the digital versions are copied in other
parts of the world and then edited and refined by "book builders"
at netLibrary's rapidly expanding headquarters in Boulder, Colo.,
where two shifts of employees work, from 7 a.m. to midnight. The
company is converting about 50 books a day, but by December, the
rate will rise to 200, said David Melancon, the company's marketing
director.
A start-up, with $105 million in new financing, netLibrary is
aggressively pursuing major libraries to buy electronic collections
so that library users will have 24-hour access to titles, with
full-text searches. Since August, it has sold more than $1.5
million in electronic books to libraries like the one at the
University of Texas, which bought 1,000 copies and acquired 5,000
more titles through consortium purchases. At this point,
netLibrary's digital collection is dominated by reference and
scholarly titles from academic presses, but the company intends to
offer popular trade book titles that could also be offered to
individual users by subscription.
"Everybody realizes how quickly the business is going to change,"
Melancon said. "And once it starts, having first-mover advantage is
huge. The key to grabbing the market is having the most content."
Other Internet start-ups are expanding their offerings by making
publishing as democratic as possible.
Photo credit:
Nico Toutenhoof for The New York Times
Photo caption:
Eileen Despain edits a book at netLibrary's headquarters in Boulder,
Colo.
_________________________________________________________________
Fatbrain.com is an online bookseller of computer and technical
books that started a few years ago in a Silicon Valley garage. Last
month it announced an infusion of $20 million in venture capital to
support a publishing program that allows authors to sell their
works online for a 50 percent royalty.
The result has been the appearance of such works as Richard Bach's
"Air Ferrets Aloft." A Fatbrain.com summary describes the title as
"the first widely published disclosure of the remarkable activities
of the world's domesticated ferret community, told through the
stories of outstanding individual animals."
Soon to come: "Philosopher Ferrets in the Wilderness."
Already there is some restiveness about whether this new technology
will produce wider selection or simply digital slush.
Netlibrary, for instance, will not accept any self-published titles
on its site. The company's view is that books have more credibility
when they are screened and filtered by professional editors.
"We're not allowing people to post their titles," Melancon said.
"If you do, it devalues the other books because it doesn't have
credibility. Say I go to a Web site and I look up books on low
birth weight and prenatal care in developing countries. I pull up a
book by Sam Jones and I have no idea who Sam Jones is."
The price of netLibrary's books are the same as print versions, but
other companies are already starting to experiment with e-book
price discounts because of reduced costs for storage, inventory and
paper.
Zéro Heure, a French publisher founded two years ago, is able to
offer discounts for electronic titles that the Bertelsmann-owned
online bookseller, Bol.Fr, cannot match for printed versions
because of European rules regulating cover prices for conventional
books.
A minute after an order is placed, the electronic publisher will
e-mail some of the latest French best sellers at one third off the
list price to American customers with no access to print versions
in stores here.
Zéro Heure is buying the electronic rights for print books, but is
also publishing its own original titles.
Next month, for instance, the company intends to publish "Ici
Kaboul," a continuing book about an Afghan woman's experiences in
Kabul that will be updated quarterly with new electronic chapters.
"She's writing a chronicle of her life and this could continue as
long as she wants," said Jean-Pierre Arbon, one of the company's
founders and the former managing director of the French publisher
Flammarion.
This experimentation with literary forms has spread to new
companies with no publishing experience like CyberGold, an
e-commerce company that offers an array of digital products.
This month, CyberGold featured its first electronic title, "Dark
Again," a thriller by David Saperstein, the author of the book,
"Cocoon," which inspired the movie. It is available for $7.50 for
the entire book or 50 cents a chapter. Each chapter includes
additional material -- from the assassin's corporate memos to diary
entries.
One very basic question that all these companies must confront is
whether readers will warm to the new forms.
Some companies, like netFind, are counting on a generation of young
readers, weaned on computers, that is ready to read on screens. But
as skeptics have pointed out, for years to come companies will also
have to reach the much larger group of older readers to make the
market viable.
"I'm 48, and for me I can't do it," confessed Dillon, who is still
in charge of amassing electronic titles for the University of
Texas. "But my kids are in high school and they read books from
beginning to end on the Web."
Despite his own personal misgivings, he is still betting on a
generational shift that will raise the popularity of e-books. He
noted, for example, that the library had expected that readers
would only be interested in electronic versions exploring computer
topics. But the taste in digital fare is far more eclectic, with
readers checking out titles from "Art, Ideology and Economics in
Nazi Germany" to "100 Years of Tomorrow: Brazilian Women's
Fiction."
"We're willing to put the money there because we're guessing that's
what will happen," he said of student demand. 'It's getting harder
and harder to get them to go into their car to come to the
library."
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