February 14, 2010
Will Printed Books Soon Be Obsolete?
Will Printed Books Soon Be Obsolete? Posner
I agree with Becker's analysis, but will suggest a few additional points. One is that the potentially lethal threat that online publishing poses to newspapers comes from the fact that a newspaper is a bundled good; no one is interested in all the different parts (news, sports, opinion, fashion, theater, travel, book reviews, financial data, classified ads, etc.). In addition, much of the contents of any newspaper is ephemeral; people want their news now; it can become obsolete in a matter of hours. Online publication offers both unbundling and immediacy.
That is why handbooks and other collective works are likely to migrate to the Web as well, as Becker suggests; also "quickie" books dealing with current crises.
The printed book has some important technological advantages over the online book. One is that it is easier to skim, and, a related point, easier to go back and forth in. It is also slightly easier to underline words in a printed book and write notes in the margins. And many people find it tiring to read consecutively a long work on an electronic reader, though that may just be a matter of lack of experience with the new medium. And on the other hand it is much easier to search an online book for a word or group of words, and, of course an online book adds nothing to weight: the weight of the electronic reader is the same no matter how many or how long the books stored in it are. In the case of many books—since each form of publication has both advantages and disadvantages—the reader will want to have the book in both print and digital form.
The most important question raised by the new medium is what impact it will have on the total number of books (whether ebooks or printed books) published. The impact should be unequivocally positive, on balance and in the long run. A book published entirely online (that is, a book that is not also printed) is cheaper to produce, as well as providing greater value for some readers for the reasons I've discussed. The publisher is protected by copyright against unauthorized copying of the work, whatever the medium in which it's published.
We should think of the electronic book as a novel method of distribution, as the department store once was; and any improvement in distribution should help the industry that provides the goods to be distributed. Another analogy is to the invention of the paperback book; by reducing the cost of books, it increased the demand for them. It enabled publishers (and through them, authors) to increase their revenues by practicing price discrimination—charging a higher price for the hardback edition of a book and a lower price for a paperback edition published later, much like the different ticket prices for first-run and subsequent-run motion pictures.
The reason that Rupert Murdoch and others have said that the Kindle (the first popular electronic readers, although electronic readers have been around for a number of years) will kill the book industry is that Amazon (which makes the Kindle) is charging a very low price for many of the books that it sells for downloading to the Kindle. It does this partly for promotional reasons and partly because it derives its revenue from a combination of the price of the Kindle and the price of the books; the Kindle's customer will not pay as much for a book to download because he also has to pay for the Kindle. But from a publisher's standpoint, the price is the price he receives from the distributor; he wants to minimize the distributor's spread, that is, the difference between what he charges the distributor and the price to the ultimate consumer, for the lower the latter price, the greater the demand for the book. The publisher decides whether to license Amazon (or any other producer of an electronic reader) to publish his book, and can refuse if the price Amazon offers him will decrease his profits.
In short, it just is very hard to see how improvements in distribution hurt the maker of the distributed goods.
Probably what underlies the fear of the effect of the e-book on the book-publishing industry is a broader concern with the competitive impact of the Internet and the Web on the demand for books. Books compete with other forms of intellectual property, the demand for which has grown with digitization: such forms as the numerous free online repositories of information (such as Wikipedia—which provides a substitute for countless reference books, including dictionaries and encyclopedias), but even video games, which compete for use of leisure time with books.
Are e-Readers the Beginning of the End for Books? Becker
In January, Steve Jobs unveiled Apple's iPad tablet that, among other things, digitally accesses and stores many books that can be read on a 9.7-inch screen. The iPad follows the great success of Amazon's e-reader, the Kindle, which can hold up to 1500 books. This has led to speculation that these and subsequent e-readers mark the turning point in the market for hard copy books. I do believe that e-readers foretell an enormous change in the book publishing industry.
I do not expect the market for hard copy books to decline rapidly at first, but decline it will, as e-books substitute increasingly for hard copy books. The competition offered by e-books will increase as the prices of Kindles, iPads, and other e-readers fall from their present levels of over $250 for Kindles, and $499 and up for iPad tablets (these tablets are far more than just e-readers). Within a few years, the most basic e-reader models will sell for considerably under $100, and they will become much easier to use.
Mysteries, beach-reading books, biographies, and other books with a general appeal that are read while traveling or on holidays are most suitable for e-readers. Why pay more to buy hard copies of such books when it is far more convenient to carry many books around in a digital form? Less attractive for e-readers are more technical books, such as books on economic theory or mathematics, where it is frequently necessary to go back and forth between earlier and later discussions. These books are much less likely to be popular in e-book form than the less technical and quick-read books.
A good comparison is with the devastating effects of the Internet on the markets for newspapers and recorded music. The Internet has permanently changed these industries. Readers can more efficiently and quickly obtain updated news about sports, weather, movies, advertising, stock market performance, and political developments from the Internet rather than from hard copy newspapers and magazines. Hardly any young people any longer read newspapers, certainly not general-purpose newspapers like the New York Times, Washington Post, or even The Daily News.
Owners of the major papers are still searching for ways to make a profit with their online editions. The New York Times first gave away their content online, then tried to charge for some of it, and then went back to giving all of it away-the present state. The Times recently announced that in a few months it would again start charging for some of its online content. The Wall Street Journal has continued to charge for some online articles and opinion pieces, but it is unclear whether their online business is profitable.
The music recording business has been even more affected by the Internet than newspapers since unauthorized copying of online songs in the early days of the Internet greatly reduced sales of new albums. Album sales were finally killed after Apple's launch of the iPod in 2001 that allowed individuals to download single songs cheaply. Total music recordings are down considerably due to the competition from digital sales. Yet the great success of the iPod preserved a considerable demand for music, even though much of the revenue now goes to Apple rather than to either recording studios or musicians.
Cheap and efficient e-readers will have comparably huge effects on the book publishing industry. The cost to publishers of selling e-books is much less than selling hard copy books since publishers save paper, printing, and shipping costs by selling books in digital form. Amazon originally set the price of most books it sells for the Kindle at the same cheap level of $9.99, although it recently agreed with MacMillan to allow publishers greater say in pricing books sold for the Kindle. Apple announced that it would allow publishers considerable discretion in setting prices of books sold for iPads.
Digital copying of e-books will become a problem for the e-book and hard copy book markets, as it has been for the music market. Already available software will make copying easier, and hence more threatening to the entire market of published books.
Handbooks of essays on particular topics, and other collections, including articles by the same author, will be less popular on e-readers than they have been in hard copy form since individuals can use their e-readers to easily buy and store the particular articles that interest them. The market for books may follow the film industry where publishers have an initial limited run of hard copy books, and then follow that rather quickly by making new books available for e-readers, where most of the sales will occur.
I have no doubt that e-readers will eventually enormously affect the types of books published, and the form they are published in. That does not mean quick and sharp declines in the book publishing industry, but it does mean that the industry will eventually be radically transformed.