Negroponte thinks that the e-book will kill the physical book within five years. Maybe kill isn’t the right word—printed books aren’t being eradicated. But clearly he thinks that five years from now the battle will be decided. I’d consider e-books selling more than print books (not just hardbacks), with e-book sales going up and physical book sales going down as “victory conditions.” And when I put it like that, it starts sounding a lot more reasonable.*

My own previous prediction made at the Montrose Christian Writers Conference: By 2012 e-books will be 25 percent of sales in the trade publishing market. Will e-book sales be 50 percent or more by 2015? It may very well happen—I’d say even likely to happen. So on that score, Negroponte is correct. But I don’t see print books going away any time soon—not even within 20 years. One thing is for sure: E-books are coming on strong, and are an extremely important new market for authors. Especially new and “unknown” authors.

*CrunchGear (Aug 7) – It’s Futurists Versus Consumers As The Death Of The Book Is Prophesied

Being a publicly traded company, B&N is constantly under pressure to try and make its stock performance attractive for investors. And it’s falling short. So one of the options is to put itself on the auction block. Possible buyers include the founder and chairman of the board Leonard Riggio who, it’s said, is looking at putting together an investment group to buy out the company and take it private.

Even though B&N still sells some 300 million books a year, we get these startling statistics about how the B&N behemoth as fallen from its high perch of just a few years ago:

Today, Barnes & Noble has a market capitalization of just under $950 million—even after a 25% run-up in after-hours trading Tuesday in the wake of the announcement. In comparison, chief competitor Amazon.com Inc. has a market cap of around $55 billion. In 2001, Barnes & Noble was worth $2.2 billion and Amazon $3.6 billion.*

Translation: Nine years ago B&N was worth $2.2B and Amazon was worth $3.6B. Today? B&N is worth $950M (less than half its previous value) and Amazon is worth, yikes, $55B! Need I say more? Sorry to be the bearer of bad news, but if you have a Nook, sell it on eBay now and buy a Kindle. If you haven’t yet purchased an e-reader, buy a new Kindle 3 for $139.

*Wall Street Journal (Aug 2) – Barnes & Noble on Block

PATRICIA, ON WHY SHE CHOSE SELF-PUBLISHING: If it’s already been traditionally published, as my books have, other traditional publishers aren’t generally interested in bringing them out again. E-publishers are, but when I looked into how long they keep the rights, what they’re paying, etc. etc., I decided self-publishing was the way to go, and it would appear I made the right decision. Lots of sales and blog buzz, and I didn’t do anything but send out an e-newsletter to my mailing list. Really, this is the wave of the future. Within the next year, I’m sure lots of authors will be publishing their backlist this way–which is good news for all us readers who love great books at cheap prices!

Read the full online exchange here: Established authors and the self-publishing backlist: an interview with Patricia Ryan, part 1

There was also this interesting question and answer on the topic of agency pricing and the price points for e-books in general:

CNET: Now that most publishers have shifted to the "agency model" and are setting their own [e-book] prices, how have the higher prices on many e-books impacted sales?

Freed: Happy to answer that. We have definitely seen a shift. We have data for the last 15 years on books. And since some of the publishers have decided to price their e-book above $9.99, we’ve definitely seen a shift of customers going to e-books that are $9.99 or less. The good news for them is that the selection of those books is very dramatic. We have about 630,000 books that are not public domain titles and of those 510,000 are sold for $9.99 or less. Of The New York Times best-sellers, 80 of them are $9.99 or less. So customers are voting with their pocketbook.*

*CNET Reviews (Aug 2) – Amazon: We have 70-80 percent of e-book market

The interesting bit of news from the article (for me) comes near the end of the story:

On Monday, Ian Freed, Amazon’s vice president for digital, told CNet that the number of e-books Amazon sold in the first quarter of 2010 had tripled compared to a year earlier.

Amazon also recently said that e-books have been outselling hardcover books for several months. And Apple said in early April that iPad owners were downloading hundreds of thousands of e-books from the iBookstore.*

E-books are now outselling hardcover books at Amazon—who woulda thunk? E-books are certainly no passing fad or trend. Authors need to pay attention to this very important market. In fact, e-books are a new market forming around us, and a golden opportunity for enterprising authors.

*New York Times (Aug 2) – No E-Books Allowed in This Establishment

“The transition within the book publishing industry from physical inventory stored in a warehouse and trucked to retailers to digital files stored in cyberspace and delivered almost anywhere on earth as quickly and cheaply as e-mail is now underway and irreversible. This historic shift will radically transform worldwide book publishing, the cultures it affects and on which it depends. Meanwhile, for quite different reasons, the genteel book business that I joined more than a half-century ago is already on edge, suffering from a gambler’s unbreakable addiction to risky, seasonal best sellers, many of which don’t recoup their costs, and the simultaneous deterioration of backlist, the vital annuity on which book publishers had in better days relied for year-to-year stability through bad times and good. The crisis of confidence reflects these intersecting shocks, an overspecialized marketplace dominated by high-risk ephemera and a technological shift orders of magnitude greater than the momentous evolution from monkish scriptoria to movable type launched in Gutenberg’s German city of Mainz six centuries ago.” (emphasis mine)

A couple of things to note here. First, why should we listen to Jason Epstein? Because in 1952 Jason is the man who launched the trade paperback book in the United States. If anyone is qualified to step back and look at where things are heading in the publishing world, it’s Jason.

So when he says first of all, a transition to e-books is now underway and irreversible, you have to stop and take notice. But second, did you catch what he said at the end? Jason says this “technological shift” from print to e-books is not only as big a deal as Gutenberg’s invention of movable type, he says it’s “orders of magnitude greater!” Wow.

I’ve worked in the publishing industry in one capacity or another (currently as vice president of marketing at www.A-TeamGroup.com) for the past 20-odd years. Some of those years were spent at a science and technical ebook publishing company (www.Knovel.com). So it’s no surprise I’ve had my eye on electronic books, or ebooks, for some time. Years ago I dabbled with reading ebooks on my Palm Zire, and more recently with my iPod Touch, but the screen is too small and changing pages too cumbersome on either device. I’ve tried reading ebooks on the computer, but who wants to spend more time at the computer when your professional life is parked in front of one! It’s hard to balance a laptop or netbook in bed at night for reading purposes. And running a power cord into the bed is also not a bright idea.

I’ve had my eye on the Amazon Kindle ebook reader for some time, but the price was too high at $359, and without seeing the screen and the E Ink technology used to display text, I wasn’t convinced I would like it. Early reviews of the Kindle were generally good, but mixed. Very recently Barnes & Noble, my favorite bookstore, started advertising their own soon-to-be-released ebook reader called the Nook, which also uses E Ink technology. I figure we’ve reached a tipping point and it’s now time to get a reader. So I started researching. The Nook will not be available widely until early 2010, not in time for my recent trip (nor in time for Christmas), which was a small consideration for me. In my research, I found that the Amazon Kindle is now second generation having corrected a lot of early design flaws. And Amazon has lowered the price of the Kindle from $359 to $259. Competition is a good thing!

Head-to-head and feature for feature the almost-here Nook is about equivalent to the Kindle 2 according to the reviews I’ve read. While toting the Nook to my local B&N for free download specials is appealing, a gut instinct said I ought to go with the Kindle, which is what I did. In the end, here’s my line of reasoning and a look at why I made the decision I made: In the early days of MP3 players, Apple came along and introduced the iPod and changed the game. Other MP3 players that were similar in features did well for a time. But ultimately, the iPod–the game changer–dominated the market and developed into the clearly superior choice and has remained so to this day. I can’t even find my early MP3 player now having owned iPods for years. In fact, we have iPods of various kinds for every member of the family (five in all).

In my humble opinion as a long-time participant in the publishing industry, we’re in the early stages of a major change away from print to electronic publishing and reading. The Amazon Kindle was the game-changing device, and now everyone, including the Nook, compares themselves to the standard set by the Kindle. The Kindle is like the early iPod. So why not buy the best, and the original, instead of a copy? That ultimately is why I chose the Kindle over the Nook. I expect Amazon to continue their innovation with both technology and business models. It is in their own best interests to do so. It is less in the interest of B&N to innovate because they have thousands of bricks and mortar locations where they like to sell books. Amazon’s DNA is online and electronic. B&N is not. Lest I get an email or comment from B&N, don’t worry, I still love you! And I’ll continue to frequent your stores. Not every book is available electronically by a long shot, so I’ll still be renewing my B&N membership and visiting to buy books. But I’ll be purchasing less and less in the bookstore as I purchase more and more on my Kindle.

So what’s next? Who knows! Apple is rumored to be launching a tablet style device that is something between a Kindle and a computer, with a full color screen (Kindle and Nook both have monochrome screens right now). And when Apple enters a space, like ebooks, you have to take it seriously. But so far it’s a rumor, and no one has any pictures of the device itself. So who knows what it’s really intended for? There are flexible display technologies coming along–screens that you can bend like a piece of heavy paper and it doesn’t break. And other very cool technologies coming down the pike in the near future. If you want to stay on top of it all, read this blog: http://ireaderreview.com. I love what this guy writes. By following that blog you’ll also be tuned in to the latest free ebooks out there that you can download to your computer, or your ebook reading device, if you read ebooks.

One thing is for sure: I won’t be using the Kindle 2 I just purchased in 3-4 years’ time–maybe sooner. Something better will come along to replace it. But I’m equally sure the vendor of that new device will be Amazon, and B&N (and maybe Borders with Sony and even Apple). So although I’ve just invested in technology that will be obsoleted in a few years, I’ll save money on my books in the meantime–ebooks are typically 30-50% cheaper than hard cover copies. And I won’t need a bigger house to store my books!

Now, back to Clive Cussler and his latest novel, The Wrecker, purchased for $11.98 on my Kindle, available at the local Sam’s club in hard cover for $16.67. I’ve already saved $4.69 on just one purchase!