The evidence is now irrefutable.
Global sales of eBooks rose by approximately 400% in 2010 reaching nearly $1 billion in sales according to Forrester. O’Reilly has revealed that 88 per cent of its unit sales in 2010 were ebooks. In addition, 79 per cent of its dollar revenue was generated by digital versions of its titles. Pearson reported in their 9 months interim statement last October that strong publishing and rapid growth in eBook sales offset tough physical retail markets for Penguin, increasing threefold. E-books are substituting physical books but there is good evidence that the growth of e-books is outpacing substitution and growing a new market.
Margins on ebooks are strong. Even after paying fees charged by Amazon and Apple, the publisher can enjoy a gross margin of more than 60%. Many publishers struggle to get better than 15% on physical books after discounts, commissions, printing and distribution cost are totted up. The important news is that the prices readers are prepared to pay for ebooks is not that dissimilar to the physical book.
The most commonly accepted format is ePub and there are some great advantages in the book industry having adopted this standard. Kindle uses their proprietary AZW format and Mobi pocket which have close similarities to ePub but they all have the same limitation when illustrations and complexity are added to the page. These e-reading formats are single files with no predefined page breaks so the reader can resize text to suit their needs. This reflowing of text moves headers, pictures, graphs and unless these are anchored to the relevant text, the book looses structure. Layouts that use multiple columns of text also need special treatment if the reader is to have a quality reading experience. The simple fact is that ePub was not designed for illustrated books or complex layouts and so the e-reading opportunity has not been able to be grasped as it has been done with plain text books.
Last October at the Frankfurt book fair we showcased our iPad App solution for illustrated books and we now have some great book apps live on the AppStore. However, many publishers wanted to offer their illustrated books on the Kindle and the Apple iBook Store to get greater exposure. The Kindle is, of course, a monocrome device which is not suited for quality images but Amazon has now made the Kindle store available on other platforms, particularly tablets, that can do justice to illustrated books. The excellent resolution of the iPad screen makes illustrated book reading a great experience and the growth of tablets opens up new opportunities. Over 50 million tablets are expected to be sold in 2011 of which 40 million are forecast to be iPads.
This is a great new market opportunity and with new techniques we can now deliver an illustrated book service to help publishers take full advantage. Our mission is to provide publishers a fast, cost effective and efficient service to place illustrated books onto the iBook Store and Kindle and to offer publishers specialist branded iPad apps using the YUDU tried and tested platform.
Our CEO Richard Stephenson will be speaking on this subject in a free webinar for book publishers on Monday, March 21 2011 3:00PM-4:00PM. The event, titled “eBooks: How illustrated book publishers can monetize their content with digital platforms” is free, and can be registered for here: https://www2.gotomeeting.com/register/770596034