If media opinion is any indicator, then 2010 may well be the year of the eBook.
Everyone is talking about the flux in publishing industry and how it is going to change forever due to the digital media. Reports about e readers and eBooks appear with increasing frequency. According to Mobiclix, the number of eBooks has surpassed games on Apple itunes store and Penguin has announced eBook sales four times higher than in 2008. eBook shipments are expected to increase from 1 million units in 2008 to 78 million units in the next decade. Forrester predicts that USA will be the biggest market for eBooks. However, marketers know that countries like India and China will determine success.
India has a large English speaking population and its population of young literate readers is 333 million.
The Indian Book Publishing industry and book retailing business is estimated to be growing @10-30% per annum.
Keeping that in view the typical nature of the Indian market it is expected that the eBook business may not follow the same growth trajectory as in US or UK. There is a view that India and China may see eBook sales leapfrog as downloading eBooks on mobiles becomes a possibility, bypassing the need to have an eBook reader or even a lap top.
A 2008 estimate of Indian book publishing industry by industry analysts estimates a market size of Rs 10000 crores. As of now, eBooks account for only 1-2% of this market ( which translates to a present market size of Rs 1-2 billion, ready to expand).
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At a global level, publishers are still debating about the production costs and pricing of eBooks. An interesting read is the NYT article Math of Publishing meets the eBook.
The article discusses the costs involved in producing printed books vs eBooks and why publishers have to share savings with consumers. However, the concerns about pricing of eBooks remain on top of the publishers list. Publishers don’t want the prices to go low because essentially eBooks translate only to savings in printing and logistics; all other costs remain the same.
The summary of facts presented in the article are:
| Hardcover | eBook |
| Publisher Retail Price: $26 | Suggested Retail Price: $12.99 |
| Publisher Receives: $13 | Publisher Receives: $9.99 |
| Break Up of Production costs | |
| Print, Store, Ship: $3.25 | Nil |
| Design, Editing: 80 cents | 50 cents |
| Marketing : $1 | $78 cents |
| Author receives: $3.9 (@15% | $2.27-3.25 (@ 25% |
| *Publishers Net Profit: $4.5 | $4.46-5.54 |
*editors, managers, rentals to be further deducted
Apparently, there is marginal difference between net profits for publishers if they choose to publish low priced eBooks ( $4.46-5.54/ eBook) instead of printed Books ($4.5/ book ). It is also believed that seventy percent of books published will make no money.
The reality is that eBook pricing is dynamic and will stay low ($12-15) and economies like India and China will be leading markets.
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