What is the Future of Books? Kindle Lending Library, Piracy, and More!

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Kindle Public Library

Kindles are the latest e-readers making their way into public libraries.

Going to your local public library? Don't forget your e-reader. Amazon recently announced that their new Kindle Lending Library feature will be arriving "later this year". The Kindle Lending Library will allow over 11,000 public libraries in the US to lend copies of digital books to Kindle users for short periods of time (probably 7-14 days). This lending system will be run by OverDrive,which already has similar programs in place for iPads and other platforms. Now that public libraries, one of the last bastions of printed media, are thoroughly open to digital lending, the death of physical books seems more inevitable than ever. How will the demise of print change reading in the 21st century?

While Amazon hasn't released many of the details of their Kindle Lending Library scheme, OverDrive's software for managing public loaning of digital books, called Media Console, is old news. CNet gives a good look at how it works in the video below, but there aren't any big surprises. You download digital rights management (DRM) protected books from your library. After these copies hit their expiration date they get removed from your copy of Media Console. Typical lending periods are either one or two weeks, and each library is limited by the number of copies it legally owns. The only news to add to CNet's coverage is that OverDrive is now working with Apple for the iPad and will be bringing their expertise to Kindle sometime in 2011.

So public libraries in the US can now lend ebooks out to their patrons. Big deal, right? I mean, that alone can't kill printed media, could it? No, of course not...but this trend is far from being alone. Everywhere you look, the rise of ebooks over printed copies seems clear. While digital downloads still only make up about 9% of the total book market, other indicators show that this share is going to increase considerably. The Kindle is Amazon's top seller with ebook sales surpassing paperback sales this past January (2011). Barnes and Noble sold 1 million ebooks on Christmas Day in 2010. Apple has sold 100 million digital tomes since the iBooks store opened. According to Codex Forrester and Gartner Research 30% of all readers in the US consume both digital and physical books, with sales of digital books totaling about $70 million per month in January 2010. During that same period, adult paperback sales dropped to $83.6 million, down from $104.2 million the previous January. Codex Forrester and Gartner Research predict that there will be 18 million e-readers sold in 2011 (basically double the 2010 figures) and that 35% of readers will consume digital books. These trends will continue in the years ahead.

There are differing opinions as to what year will see digital downloads become the clear majority of book sales by number and revenue. Could be as early as 2015, probably not going to be later than 2025. There's also debate as to what level printed media will sink to. It's unlikely that physical books will completely disappear, but will they account for just 30% of sales? 10%? 1%? As interesting as that debate can be, I find it is dwarfed by a much larger question: how is the 'death' of print going to change media forever?

Things are already changing. Your average physical book is retailing for around $15, while ebooks average closer to $9. The difference can't be attributed to the loss of physicality alone, in traditional models of publication making the book usually only accounts for 10-20% of the price and generally is less than $3 for most titles. It may have something to do with the nature of book return policies (unsold physical books are returned to the publisher who passes the cost onto you the reader via higher prices). Fundamentally, however, I think we value digital books less, and probably at least in part because they are essentially free to recreate.

Mrs. Duffee Seated on a Striped Sofa, Reading Her Kindle, After Mary Cassattphoto © 2010 Mike Licht | more info (via: Wylio)

Which brings us to the 600 pound gorilla in the room - why are people going to pay for something that is free to copy? Publishing companies are scrambling to find ways to maximize their profits by making deals with Google, Amazon, Apple, and other ebook providers about shared costs, availability, revenue rates, etc, etc. These companies, along with publishers, spend millions making sure that books are available digitally in their special little DRM-protected zones of distribution. Yet anyone with a scanner, some object character recognition, and some time can produce a DRM-free copy of any book that is sold (physical or digital). Pirating books is really really easy.

That is probably why it's so rampant. Even the briefest of web searchers will find you hundreds of torrents that contain massive lists of books. Text files are small and easy to share. You can get an author's entire lifework in less than half an hour. And that's for really prolific writers. Most novelists can be pirated in ten minutes or less. Many torrents don't even focus on a single writer, they put hundreds or thousands of books in a single group totaling a few gigabytes of data. You thought theft of music and movies changed those industries - think what it could do to books! Everything you could ever want to read could be yours in minutes, for free, and at the same quality as the DRM versions available for $10. What would you choose?

The only thing, that I can tell, that has held off the flood of intellectual property piracy from hitting literature has been reader's preference for physical books. Clearly, however, the popularity of e-readers and ebooks shows that preference is changing. If most of us own an e-reader by 2015, then most of us are going to be susceptible to the temptation of piracy. Already digitization has dropped the price of books from $15 to $9. Piracy could bring it down to $0.

Sure, printed books are dying, but the bigger news is that traditional publishers are probably going to die with them.

I'm not entirely against the idea. As I've mentioned when discussing digital education, publishers aren't really necessary. Most of what they provide is vetting, marketing, distribution, and branding. We've already started to crowd-source vetting through user rating systems (stars on Amazon, Netflix, etc), expert rating systems (critics or editors picks), and 'liking' things on social networks. Marketing is achieved virally, and with some really strange (some might say more egalitarian) results as seen in what's popular on YouTube. Distribution is already taken care of within legal channels like Amazon or in semi-illegal channels like torrents on ThePirateBay. So, that really just leaves us with branding. In the future, you may choose to read a book because it comes from a trusted channel like Tor or Penguin or Random House...but I doubt that will be enough to keep most of these businesses afloat.

That's going to change the role of writers considerably, but for some authors it might get better. Sure, people could steal your intellectual property. Paying $0 for a book is really tempting...but it might be less so when the books only cost $1. Even with the ease of piracy always lurking nearby, readers may be very willing to support authors when prices are low. Especially if they know that most of the money they spend is going to the writer. Typical royalty rates for physical books are 8-15%. Your share on Kindle when you self publish is 35 or 70%. Eventually I imagine there will be an industry around enabling writers to publish easily to Kindle, iBooks, etc. Using the music industry as an example, there are seveal companies, TuneCore being one of the most popular, that will push your songs onto iTunes, Amazon, Rhapsody, etc. for an affordable fee. This makes most sense for small scale artists, but even big names flock to TuneCore for higher royalties. (For example, many self published artists on iTunes get around 70% of sales). I'm not saying that the death of print will increase the money made off of books, but I do think it could redirect that money towards the people who actually create the content.

Whether or not I'm correct, it's clear we're about to undergo a major change. Public libraries are one of the cornerstones of reading in our culture. Now they are slowly moving towards providing their books as digital downloads. As e-readers rise in prominence libraries have to shift their habits to match the demands of the times. That's a shift that all of us are both fueling and dealing with as it happens. As print media dies it's going to take down a good chunk of the old industry around it. Hopefully what grows from the bloated carcass of publishing will be something better.

[image credits: Amazon, Diliff modified (GNU via WikiCommons), Wylio as listed]

[sources: Amazon, OverDrive, Fortune]

Discussion — 5 Responses

  • Frank Whittemore April 26, 2011 on 11:25 am

    Kindle Singles, a new Amazon publishing format, are only published in an electronic format.

    Click on this link for more information – http://www.bloggingthesingularity.com/2011/01/28/tedbooks-are-now-on-amazon-kindle-singles/

  • Courtney Kirchoff April 26, 2011 on 12:44 pm

    E-books may well spell doom for publishers, but if the piracy isn’t kept under control, it will spell doom for writers too. I just published a book to both paperback and e-book. Yes, the royalty is higher on e-books, but if you sell each book for a buck, the high royalty vs. low royalty on a higher priced book evens out. Plus, having a book for such a low cost devalues the work. It took six years for me to pen my novel to completion. I loved doing it, but it’s certainly worth more than a dollar. The low price you’ve suggested does not even taking into account if the book is good or if it’s crap, the notoriety of an author (value), length, none of that.

    Music has stayed fairly consistent. To get a CD one paid $12-18 for, well, 12-20 songs. Broken down, each song was worth a buck or more. And because people could pick and choose what they wanted, rather than having to spend so much money for a few songs on an album, customers were happier and higher quality was demanded, possibly more music was sold.

    Books are much different. Writers don’t get to go on tour for sold out concerts. We’re not paid royalties each time our book is read over the air. The only way we make money is from the purchase of our books. It’s great if people can read cheaply, but if anyone expects good content to keep pumping through the system, writers MUST be paid for their work. We can’t take piracy so lightly.

  • GTJon April 26, 2011 on 1:11 pm

    Over the last couple years, I’ve been writing and self-publishing a small collection of gaming books. Almost every dollar I’ve made has come straight from the digital market.

    The lesson, I think, is that decentralized publishing systems aren’t just going to redirect money from large companies to popular authors. It will change the market for authors in a more fundamental way. Without the massive, publisher-funded marketing campaigns, or a cost of distribution, the popularization of authors will be more fragmented. The only gatekeeper will be the public; more risks will be taken, more people will make a little bit of money writing, and the product as a whole will be improved. On the other hand, total dollars spent on books probably won’t change much, so the slices of that pie are going to be a LOT thinner (with a few exceptions as always).

    I, for one, am looking forward to a Netflix- or Pandora-like system for distribution of books. The steady-state for digital media seems to be the cloud; owning a physical book makes people comfortable, and paying ten bucks a month for unlimited access to someone else’s library makes people comfortable, but this business of paying a one-time fee to ‘own’ (if we decide not to take it back) a piece of data (but please pay for it like it was an object) that you are permitted to use (and hopefully forget that it cost nothing to reproduce) has got to go.

  • geoburke April 26, 2011 on 8:51 pm

    I think ebook swapping sites like http://ebookfling.com have helped stave off piracy as well. The ability to borrow a book legitimately would seem to be the reader’s preference, but the publishers need to get behind this concept in order for it all to work. Right now very few big-10 publishers allow Kindle & Nook lending. So when downloading a torrent file is quick, simple, and free, I wouldn’t be surprised if non-lendable titles are being pirated more often than lendable ones.

    – George Burke

  • Mike Radivis April 27, 2011 on 2:28 pm

    I’m not a fan of artificial scarcity, so I don’t like the DRM concept. If a good can be copied with virtually zero cost, then why pay for it? The only aspect that makes sense for such form of payment is that the creators of that good are paid for their work. But that payment doesn’t really require the artificial scarcity that DRM systems try to establish. In an ideal world you would just donate some amount of money to the writer.

    Of course, we don’t live in a perfect world, yet. Recently I had an idea about an alternative system of payment for writers, which I presented on my private blog: http://deathrant.net/2011/04/aura-an-open-content-system-idea/

    It involves publishers redefining themselves as creators and administrators of platforms that connect readers with authors in an optimal way. Authors would be paid by subscribers who are fans and have premium access to special platforms like blogs, or forums, or even virtual worlds that represent a canonical meeting place for fans and authors alike. Of course, writers could put up special virtual meeting places themselves, but that might distract them too much from writing.