Upstart E-readers Fade to Black as Tablets Gain Momentum

E-readers are far from dead but many are certainly gasping for breath. A shake-out in the e-reader market has put some smaller companies out of business, leaving the playing field clear for giants like Amazon, Barnes & Noble and Sony.

The list of e-reader makers running into trouble has grown in the past few weeks:

• Audiovox has canceled plans to introduce the RCA Lexi e-reader that it demonstrated at the Consumer Electronics Show this year.
• Last month, e-reader maker iRex filed for bankruptcy, citing disappointing sales of its product in the United States.
• Plastic Logic, which also debuted its large screen reader at CES in January, has canceled all pre-orders for its device and scrapped plans to ship the product.
• Cool-er, one of the earliest startups to launch a Sony look-alike e-reader, has listed all its products as “out of the stock” in the United States with no mention of when new devices will be available.

“Companies that had neither brand nor distribution have failed,” says Sarah Rotman Epps, an analyst for Forrester Research.

Price cuts by Amazon and Barnes & Noble, coupled with the shift in consumer interest toward more multi-purpose tablets, have also taken their toll on e-readers.

“You are seeing the same kind of proliferation and excitement in tablets now that you saw two years ago for e-readers,” says Epps.

After Amazon introduced the Kindle in 2007, e-readers became one of the hottest consumer products. The category attracted large companies such as Samsung and Barnes & Noble, even as lesser-known players such as Plastic Logic, Aluratek and iRiver jumped in.

Mostly Kindle clones, many of these e-readers were near-identical in how they looked and the features they offered. Almost all sourced their black-and-white screen from a single company: E Ink.

Meanwhile, Apple launched its iPad this year. At $500, it’s pricier than most e-readers, but offers relatively long battery life, a color screen and iBooks, an iTunes-like store for digital books. It may not be as ideally suited to reading as a dedicated e-reader, but many iPad customers are finding that it works well enough as a book reader, in addition to its many other functions.

Apple’s move sparked a price war in the e-reader market. Amazon dropped the price of its Kindle 2 to $190 from $260. Barnes & Noble released a Wi-Fi-only version of the Nook for $150, while a Nook with Wi-Fi and 3G capability now costs $200.

The price war put a squeeze on smaller e-reader manufacturers.

“As a result of the recent price drops in the market, our primary focus has shifted to international opportunities,” Audiovox told the Digital Reader website.

All this doesn’t mean consumers have completely fallen out of love with e-readers, says Epps. Tablets will outpace e-readers in overall sales, she says, but the shift toward digital books is here to stay. Forrester estimates 6.6 million e-readers will be sold in the United States this year. Approximately 29.4 million e-readers may be sold in the United States by 2016, compared to 59 million tablets.

Earlier this week, Amazon said for the first time sales of e-books are outstripping hardcovers. In June, Amazon sold 180 e-books for every 100 hardcovers. In the first six months of the year, the company sold three times as many e-books as it did in the first half of 2009.

“In the e-reader market, price is coming way down and that’s the major consideration for purchase,” says Epps. “If a company can do cheaper and better devices than Amazon, Sony or Barnes & Noble, they still have a chance — but no one’s been able to do that yet.”

Originally by Priya Ganapati and can be found here: http://www.wired.com/gadgetlab/2010/07/ereaders-consolidation/

In Price War, New Kindle Sells for $139

SEATTLE — Amazon.com will introduce two new versions of the Kindle e-reader on Thursday, one for $139, the lowest price yet for the device. 

Amazon is hoping to convince even casual readers that they need a digital reading device. By firing another shot in an e-reader price war leading up to the year-end holiday shopping season, the e-commerce giant turned consumer electronics manufacturer is also signaling it intends to do battle with Apple and its iPad as well as the other makers of e-readers like Sony and Barnes & Noble.  

Unlike previous Kindles, the $139 “Kindle Wi-Fi” will connect to the Internet using only Wi-Fi instead of a cellphone network as other Kindles do. Amazon is also introducing a model to replace the Kindle 2, which it will sell for the same price as that model, $189. Both new Kindles are smaller and lighter, with higher contrast screens and crisper text. 

“The hardware business for us has been so successful that we’re going to continue,” Jeffrey P. Bezos, Amazon’s chief executive, said in an interview at the company’s headquarters. “I predict there will be a 10th-generation and a 20th-generation Kindle. We’re well-situated to be experts in purpose-built reading devices.” 

When Amazon introduced the Kindle in 2007, Mr. Bezos described it as a must-have for frequent travelers and people who read “two, three, four books at the same time.” Now, Amazon hopes that at $10 less than the least expensive reading devices from Barnes & Noble and Sony, the new Kindle has broken the psychological price barrier for even occasional readers or a family wanting multiple Kindles. 

“At $139, if you’re going to read by the pool, some people might spend more than that on a swimsuit and sunglasses,” Mr. Bezos said. 

Some analysts are predicting that e-readers could become this year’s hot holiday gift. James L. McQuivey, a principal analyst specializing in consumer electronics at Forrester Research, said a price war could for the first time reduce at least the price of one e-reader to under $100, often the tipping point for impulse gadget purchases. 

Amazon has slashed the price of the Kindle at a speed that is unusual, even for electronic gadgets. By last year, the price of the device was to $259, down from its starting price of $399 in late 2007. In June, hours after Barnes & Noble dropped the price of its Nook e-reader to $199, Amazon dropped the price of the Kindle to $189. The Kindle DX, which has a larger, 9.7-inch screen, is $379.

With Amazon’s latest announcement, it is again waging a price war. Barnes & Noble offers a Wi-Fi version of the Nook for $149 and Sony offers the Reader Pocket Edition, which does not have Wi-Fi, for $150. 

Of course, price is just one factor people consider before making a purchase. The quality of the product, adequate inventory and appealing marketing are just as important, said Eric T. Anderson, a professor of marketing at Northwestern University’s Kellogg School of Management.

But as the e-reader marketplace has grown crowded “there are lots of substitutes out there so the only way they can create demand is by lowering the price,” he said. 

Still, the iPad’s $499-and-up price tag has not stifled demand for that device. Though the iPad does much more than display books, customers often choose between the two, and are willing to pay much more for the iPad because it is an Apple product, said Dale D. Achabal, executive director of the Retail Management Institute at Santa Clara University. “The price point Apple can go to is quite a bit higher than the price point other firms have to go to that don’t have the same ease of use, design and functionality,” he said. 

Apple says it has sold 3.3 million iPads since introducing it in April. Amazon does not release Kindle sales figures, but says that sales tripled in the month after its last price cut. 

Two of the most compelling aspects of the iPad — a color display and touch screen — are elements that some customers have been yearning for on the Kindle. Keep waiting, Mr. Bezos said. 

“There will never be a Kindle with a touch screen that inhibits reading. It has to be done in a different way. It can’t be a me-too touch screen,” he said. Earlier this year, Amazon bought Touchco, a start-up specializing in touch-screen technology, but current touch-screen technology adds reflections and glare and makes it hard to shift one’s hands while reading for long periods of time, he said. Color is also “not ready for prime time,” Mr. Bezos said. 

The new Kindles, which will ship Aug. 27, have the same six-inch reading area as earlier Kindles but weigh about 15 percent less and are 21 percent smaller. The Kindles have twice the storage, up to 3,500 books. 

Original post by CLAIRE CAIN MILLER and can be found here: http://tinyurl.com/2efqb3b

The Fast Company Guide to E-Readers

Although it seems that all we ever talk about these days is the tablet--how gorgeous the iPad is, how the tablet will kill off the netbook, a little bit more about the iPad--the more dynamic market of the moment is e-readers. Not a day goes by without the launch of a new model--latest being Asus's Lumibook, and with Marvell muscling in on the Chinese market--and, to be honest, it's all a bit confusing.

Apple has so blurred the boundaries between e-reader and tablet because of its iBook Store, that one could almost argue that the traditional, monochrome version (think Kindle) is almost obsolete. Almost--but that's down to the wondrousness of electrophorectic technology, the fancy (and un-trademarked) name for e-ink, that uses minimal power and is ace for reading in natural daylight. You can see the effects that the iPad has had on the market, however: Engadget uncovered a half-sized iPad simulacrum from Asus (it runs Android, so hints of the B&N Nook there) and, although Jeff Bezos recently claimed there's a color version of the Kindle lurking somewhere in Amazon's labs, it's E.T.A. is "some ways out."

So, when it comes to choosing the right e-reader for you, whatchoo gonna do, Willis? FastCompany.com has separated the wheat from the chaff, and please find, for your delectation, a selection of what we consider to be the most interesting upcoming (and already available) e-readers around. And not an iPad in sight. Well, almost.

Best browser: Bookworms among you may not even be aware that some of the models have Web-browsing capabilities, including the Kindle and the Nook. However, I'm going to blow the black-and-white thang out of the water and say, how about the Pandigital Novel? It's color, it's got Barnes & Noble's half-a-million-volume library, it browses, it's not out yet, but oh ho ho, expect this one to do well. At $200, it's less than the price of a--no, my lips are sealed.

Best book store: They're all pretty damn good, really--although you've got to wonder just how Google will sew up the market if they ever dare to dip their toes back into the hardware market, following their contretemps with the Nexus One. Sony has just announced it is to launch a content-distribution service in Japan, China, Australia, Spain, and Italy. I'll let both Nook and Kindle carry this one off jointly, as they've both got Gut--that's Gutenberg's 1.8 million free books on top of their 500,000 titles--and as I'm a nice girl.

Best for light travelers: As recommended by fellow FC-er, Dan Nosowitz (a more seasoned voyageur you will not meet) the $155 Sony Pocket Reader is, with a mere 5-inch screen and no bulky keyboard, significantly smaller than the competition (even pocket-sized, if you're not wearing skinny jeans). Its memory is beefy enough to allow you around 350 books on it, and it supports books lent from public libraries (any major city library should have an ebook lending system). It's a bit barebones--no search, no annotations, no wireless connection--but it's beautifully designed, absolutely teeny, and it can sometimes be found for $110, nearly impulse-buy territory. If you're not already in hock to the Kindle or Barnes & Noble stores, it's a great option.

Best for someone with a bag-carrier: Oh, without a doubt Plastic Logic's Que. They call it a ProReader, it looks just dreamy, and if ever you want to best someone with an iPad, then this is the e-reader to do it with. It's the business--I'm in no doubt that this is the kind of thing that Tom Ford's minions would be carrying for the great man himself. Price is a little sticky, however--$649 for the 4GB Wi-Fi version, rising to $799 for 8GB Wi-Fi and 3G. I asked, but it doesn't come in a cut-price 1GB version that you pedal yourself. Sigh.

Best apps: If apps is really the only reason you want to buy an e-reader, then why don't you just go to the Apple store and buy the--no, no, I won't say it. If, however, $500 is not the kind of wonga you're planning on shelling out, might I suggest the Nook? Although Android is not quite as hot on the app front as Apple, Barnes & Noble recently churned out a firmware update that lets you upload all kinds of fun and games on its second, color screen. Cost is, like the Kindle, $259.

Best value: If it's all about the money, then plump for the Libre Pro, Borders' riposte to Barnes & Noble's Nook. Costing $120, it comes with 100 free books and a Borders' desktop app. It reads the pretty universal e-book standard file, ePub, as well as .pdf files, has room (via an SD card slot) for 40,000 titles, syncs to your computer, and you can listen to pre-downloaded MP3s on it.

Best for bookworms: It's got to be the Lumiread, Acer's Kindle-esque e-reader, which should be out next month. Acer is staying schtumm about the price so far, but they're known for not beating too much money out of the consumer. Plus, it's got a dinky little scanner that you can use when you're in your local bookstore on a book's ISBN number and which links you to online sites where you can download the e-version of whatever tome it is caught your eye in the Macabre Horror section.

Best if you're not that into books: All right, I'm going to say it--the iPad.

Original piece by Addy Dugdale and can be read here: http://tinyurl.com/32av5rk

Will the iPad Undercut Digital Readers?

The electronic book market is looking increasingly hot, flat and crowded. A vicious price war has broken out among producers of digital readers because of Apple’s success with the iPad. Companies like Amazon hope that selling tomes across multiple devices will fill the profit gap. But competition in e-book distribution is heating up and could pressure margins there, too.

Apple has sold more than three million iPads in about two and a half months. While Amazon doesn’t give figures, analysts think it has sold a similar number of its Kindle e-readers over two and a half years. 

Investors haven’t missed the implications. Amazon’s stock has fallen 8 percent since the iPad arrived. That’s about the same as the market as a whole. The stock of Barnes & Noble, another e-reader seller, has fallen more sharply, losing a quarter of its value. Yet both are still richly priced compared with the market. Amazon trades at 40 times estimated earnings this financial year, and Barnes & Noble at 20 times. 

Meanwhile, Apple’s shares have risen 13 percent since the beginning of April, adding more than $30 billion to the company’s market capitalization. Of course, booming iPhone sales account for a large part of this rise. There’s a three-week waiting list for the latest version when you buy it online, despite some kinks with its antenna. But the iPad figures as well. Analysts’ expectations seem to be rising weekly. Several now predict Apple could sell more than 10 million this year. 

Devices like the Kindle, Barnes & Noble’s Nook and Sony’s Daily Edition e-reader are made specifically for reading, so they have gray screens that are easy on the eyes and batteries that last for days. The iPad, by contrast, has a bright color screen and a battery that drains more quickly. Its success suggests the perceived advantages of e-readers may turn out not to matter too much to consumers. 

After all, iPad users have already downloaded more than five million e-books. It may be that many people prefer a more versatile device that allows them to browse the Web, watch videos, read e-mail and download games and other applications — and act as an e-reader as well. That’s a potential nightmare for Amazon and other purveyors of e-readers. Think how jack-of-all-trades mobile phones have pushed out initially successful dedicated personal digital organizers.

Pricing trends seem to support the thesis. E-reader sellers slashed their prices this week, some by a quarter. But even corporate clients with giant orders for iPads can’t expect to score any discount. Basic e-readers now go for well under $200 and will almost certainly be offered for less than $100 by Christmas, according to Gartner. 

There’s a battle brewing over e-books, too. Before Apple’s iPad appeared, Amazon sold most Kindle books for $9.99 and lost about $3 a book, analysts reckon. That increased Kindle sales and helped establish both the e-book market and Amazon’s place within it.

The iPad has given publishers ammunition to demand higher prices for digitized books. The net result could be a wash, at least for Amazon. Citigroup estimates the Kindle and e-books combined will continue to account for about 5 percent of the company’s total sales and profit, in line with current levels. 

Apple’s bookselling rivals increasingly hope customers will buy e-books via applications that can be used on multiple devices, including iPads, the BlackBerry and computers. Moreover, e-readers’ ability to provide instant gratification via wireless downloads may mean the market for digital books will continue to grow. 

Since Amazon has a large stock of e-books, the Internet retailer’s reader app should have an advantage over some rivals, including Apple. It was the size of Amazon’s book collection that first established the company as a force to be reckoned with a decade ago.

But Barnes & Noble has an e-book app not so dissimilar to Amazon’s, and plenty of content. Google is preparing to open its digital bookstore this summer. And the talk is that technology companies like Dell and Nokia might see the opportunity, too. 

If most consumers aren’t locked into a specific device, they will presumably shop around for the best bargain. After all, it’s easy to download multiple apps. Electronic books may be gripping for those who buy them. But once competition sets in, the bottom lines of the companies hawking them may not make such a good read.

Originally posted by Robert Cyran of Reuters Breaking News, and can be found here: http://www.nytimes.com/2010/06/28/technology/28views.html?src=busln

E-books pave way for more blockbusters, serials

(Reuters) - Stieg Larsson copycats take note: The slow rise of electronic books is paving the way for more safe-bet fiction blockbusters and serial-type books, at least in the short term, according to some book experts.

With book sales stagnating in recent years, the nascent e-books market has thrown the industry into turmoil. In response, large publishers are taking fewer financial risks and betting more of their dollars on established authors, said Eileen Gittins of self-publishing company Blurb.com.
"In the face of these economics, publishers just cannot take the risk," said Gittins. "They need some sure wins."

Similar to movie studios' betting on well-known franchises to bring box office gold, Gittins said publishers want to market more blockbuster authors writing serial books featuring a distinctive leading character to lure repeat readers, as was seen with the success of prolific, late Swedish author Stieg Larsson, or crime fiction writers such as Michael Connelly.

With prices on the fledging e-book market still being battled over among larger publishers and makers of electronic readers, publishers still have yet to profit much from e-books, with the lower priced e-books eating into profit margins.

The e-book market has grown rapidly with wholesale revenue from e-book sales in the United States increasing to $91 million in the first quarter of 2010 from $55.9 million from the last quarter of 2009, according to International Digital Publishing Forum. But e-book sales still only account for 5-6 percent of overall U.S. book sales and less than 1 percent in Britain, The Financial Times reported this week.

Contrary to popular opinion, most of publishers' costs are developing and marketing authors, not the cost of printing and shipping books. Such costs don't lessen with e-books even though they sell for less than paper books, Gittins said.
That heightens pressure "to need to do blockbuster big titles because now there is even more pressure on them," said Gittins. "They are not really saving money with the e-book, all those costs are still there."

SAFE-BETS
Book experts predict in the e-book market, bestselling authors will remain popular in the short term. According to Amazon, all three of Stieg Larsson's books, which include sensation "The Girl with the Dragon Tattoo," sit in the top five best-selling books on Amazon's Kindle reader.
Customer favorites for e-books include "great Summer reads" such as Stephenie Meyer's new novella.

Daily Beast book editor Lucas Wittmann said in five years e-book sales could reach levels to make up for lost paper book sales, but for now publishers are feeling the pinch.
"There is a big squeeze right now," said Wittmann. "All the great predictions for e-books haven't quite been realized yet. E-books are growing at an astounding rate but they are not yet making up for the lost (book) sales."
When e-books first hit the market, some nonfiction economic and political books fared well, but now as the e-book audience had widened, more fiction is selling, he said.
"Publishers are still experimenting," Wittmann added.

Publishers Weekly Editorial Director Jim Milliot said online sites such as Amazon.com encourage readers to buy the same author, while smaller publishers were slow on e-books.
"A lot of the independent publishers have been slower to move to put their titles on, mainly because they don't have the resources to do it," he said. "Fiction seems to be winning out, at least in the early going."

As electronic readers improve, the type of e-books that sell well could change. Improving graphics could help genres like nonfiction and children's books become more popular.
"The possibilities seem to be opening up for more graphic work, incorporating multimedia and embedding links to audio when you are reading a biography of Bach or something," Wittmann said, predicting such advances in a year or two.

Wittmann said there will still be some "pain in the industry" but diversity and change was coming.
"Most publishers...are warming to e-books and thinking creatively about them," he said. "The only question is the time frame ... when we see a truly dramatic shift."

Original posted by Stieg Larsson and can be found here: http://www.reuters.com/article/idUSTRE65O4XG20100625 

Is the iPad Driving E-Book Piracy, and Does It Matter?

If you wanted to know how many pirated e-books are being downloaded, BitTorrent would be a good starting place. TorrentFreak, a blog that covers these speedy, P2P downloads, recently decided to check the numbers. The question: did e-book torrent downloading become more popular after the iPad’s launch?

The answer was a resounding “kinda.” While almost none of Amazon’s top ten appeared on public torrent trackers, six out of 10 books in the business category were available. When TorrentFreak checked the before and after numbers, it found that the number of BitTorrent book downloads grew by an average of 78 percent in the days after the iPad went on sale. Even so, the numbers were still tiny compared to the traffic in movies and music.

What does this mean? First, e-book piracy is still a small problem. Right now it’s a very geeky pastime, which is reflected in the skew of these titles (Getting Things Done, Freakonomics and The Tipping Point were on the TorrentFreak list). This matches up with the usual early adopter profile, the people who would have bought the iPad on its opening weekend.

But where geeks go first, the general public will follow. This happened with music. Now almost nobody I know buys CDs: They pirate, and even my most hardcore book-loving friend is now a Kindle convert. So will the iPad bring this attitude to books?

First, there is the problem of digitizing books. Right now, the best place to download e-books is via irc (Internet Relay Chat), online chatrooms that predate the web. The shared books are tiny text files. Storage and download speed are no problem, but the subject matter is heavily skewed toward popular trash and sci-fi. Original files come from those with enough time and patience to scan, OCR (optical character recognition) and proofread the resulting files, but the majority of what you find are duplicates of these. Contrast this to music, where you pop a CD into your computer and wait a few minutes while it rips the tracks and downloads the metadata.

It is unlikely that there will be a way to scan books so easily at home anytime soon, but what about sharing e-books themselves? If Apple makes its iBooks app available on the Mac or PC, then copying an entire book, even if protected by DRM, will be as simple as automating screenshots of pages and sending them to an OCR program. Only a single copy of a book will need to be pirated thusly and it will then be compromised forever.

Blaming the iPad is stupid, though. If it causes a rise in book piracy, it is only because it is driving demand. The book industry should embrace this and give us what we want: cheap books, published day-and-date with their paper equivalents, along with all back-catalog titles made available. And preferably DRM-free.

There is evidence that this is happening already. The iBooks Store will be rolling out with the iPad as it goes on sale across the world. The iTunes Music Store, by contrast, took years to negotiate itself into non-U.S. markets, and in many countries you still can’t get movies or TV shows. That these deals are in place mere months after the iPad was announced shows that the book industry is at least trying to move into the digital future.

The iPad is fast shaping up to be the go-to e-reading device. Between Apple’s iBooks, Amazon’s Kindle for iPad and the slew of other e-readers in the App Store (although curiously, our favorite Stanza is still absent on the iPad), you can buy and read almost any e-book out there. Blaming the iPad for kicking-off book piracy is foolish. It’s an opportunity, and if book publishers mess it up, they have already seen what happened to the recording industry.

This piece was written by Charlie Sorrel and can be found here: http://www.wired.com/gadgetlab/2010/05/is-the-ipad-driving-e-book-piracy-and-does-it-matter/

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Is iPad supercharging eBook piracy?

Here is the piece for your perusal:

Recently, Scott Turow, the best-selling author of legal thrillers, including "Innocent"--his just released sequel to "Presumed Innocent"--was named president of The Authors Guild. That Turow, a practicing lawyer, was named president is probably no coincidence, considering the myriad issues that authors and publishers now face as digital books and e-book readers not only disrupt the marketplace but leave it vulnerable to that nasty little vermin commonly known as piracy.

In an interview with Media Bistro's Galley Cat (see video below), Turow talked about how author royalty rates for e-books were too low, but the larger problems for authors and publishers involved piracy. "It has killed large parts of the music industry," he said. "Musicians make up for the copies of their songs that get pirated by performing live. I don't think there will be as many people showing up to hear me read as to hear Beyonce sing. We need to make sure piracy is dealt with effectively."

Why this suddenly more-alarming tone? Well, though Turow recognizes that the iPad has clearly taken the e-reader to a whole new level, he doesn't specifically single out the iPad as the No. 1 catalyst for pirating. But I am. 

To put it in the context of the music world, it goes something like this: You remember the first MP3 players to catch on? They were from a company called Rio and the early ones used SmartMedia memory cards as their storage medium. Then there were more Rios, and most of them were really pretty good (I still run with a Rio Chiba). I look at these players as the Kindles, Nooks, and Sony Readers of the e-reader world. 

But then the iPod showed up. Sure, there had been piracy ever since people started burning CDs, but the iPod was the big accelerant. You can say what you want about iTunes ruining the music industry with its 99-cent single-track downloads (why buy the whole album for $10, when you can buy just the two good songs on it for $2?), but the fact that so many millions of people were carrying around iPods that could store thousands of songs only fueled the transition to fully digital music, no discs attached.

As e-readers go, Amazon won't let us know exactly how many Kindles it has sold, but most estimates put it in the 2 million to 3 million range, give or take a few hundred thousand. Apple sold a million iPads in a month. And though sheer numbers and critical mass are important, what's more alarming is what the iPad can do. No, it can't support Flash, but it sure does a nice job with PDF files and a host of other document formats that can be easily imported to the device via the appropriate app, most of which cost less than $3. (GoodReader, which I use for PDF files, costs 99 cents; you transfer files to the app via iTunes.) 

A quick scope of Pirate Land reveals a hodgepodge of content in a variety of formats, and other bloggers have already touched upon this aspect of e-book piracy in other pieces. I particularly liked an article done earlier in the year by The Millions' C. Max Magee titled, "Confessions of a Book Pirate," in which MacGee does a Q&A with a BitTorrent uploader who goes by the handle The Real Caterpillar. My favorite Caterpillar quote:

"Perhaps if readers were more confident that the majority of the money went to the author, people would feel more guilty about depriving the author of payment. I think most of the filesharing community feels that the record industry is a vestigial organ that will slowly fall off and die--I don't know to what extent that feeling would extend to publishing houses since they are to some extent a different animal. In the end, I think that regular people will never feel very guilty 'stealing' from a faceless corporation, or to a lesser extent, a multimillionaire like [Stephen] King."

This guy, like most e-book pirates--or the ones uploading the files--tends to take the time to scan the physical books into a computer, obtains the text via OCR (optical character recognition), makes corrections, and converts them to a variety of file formats. The same goes for comic books, which are being rampantly shared on The Pirate Bay. As you might have guessed, a number of comic book reader apps are available for the iPad and its large high-resolution color screen, turning it into the perfect digital comic book reader. And let's not leave out magazines, which are also being scanned and uploaded to BitTorrent sites.

At the moment, book piracy is dwarfed by that of the music, movie, and game industries. But it is gradually growing. Shortly after the launch of the iPad, TorrentFreak took a look at a small group of popular business titles and calculated that unauthorized e-book downloads on BitTorrent grew by 78 percent on average--and that was when Apple had sold only about 300,000 iPads.

Ironically, though the early lack of standardization may have adversely fragmented the e-book market, it may have also slowed down piracy. The Kindle still has its own platform and file format for e-books, but most of the big e-reader players, including Apple, have now adopted the ePub format.

It seems that most of the EPUB files available are converted from PDF files (scans of books), but what's scary is how compact the files are (less than 1MB) and how easy they are to load into iBooks and other e-readers that support the EPUB format. Though the size of movies and games can easily exceed 1GB and take hours to download (just ask folks who own the PSP Go how they long they have to wait to download games they've legally purchased), e-books can be shared in a few seconds. It seems that it's only a matter of time before file sharers move from exploiting the "analog hole" (scanning a hardcopy book) to the digital world of cracking copy-protection schemes and stripping legally bought e-books of their DRM.

For now, readers who are upset with the rising price of e-books have taken to posting low ratings on books on Amazon. Turow's "Innocent," for instance, sells for $14.99 as an e-book, which is essentially what the hardcover costs, and certain readers have given the book one-star ratings to express their displeasure. Turow is quite aware of the situation, but still supports his publisher's pricing scheme, arguing that if you don't want to pay $15 for the e-book, buy the hardcover (or wait for the e-book to go down in price). He's right, but certain people get angry when they feel they're getting a raw deal, and, like the publishers who are free to price their e-books however they want, these protesters are free to rate books however they want. As an author, it is incredibly aggravating, because you have no control over pricing--only the publisher does.

Free markets and free speech aside, I have my doubts that higher pricing for e-books is a good long-term strategy. Alas, as we've learned from the music industry, keeping prices steady at around $10 to $12 an album has done nothing to help combat piracy and may have, in fact, contributed to it. Eventually, more people are going to go from leaving bad ratings on books at Amazon to doing something more vindictive, like uploading DRM-free EPUB files to file-sharing sites. And mega-bestselling writers like J.K. Rowling, author of the "Harry Potter" series, are finding out that readers also get angry when you don't make your book available as an e-book. "Harry Potter" books are among the most heavily pirated out there.

How much is pirating hurting the publishing industry? Well, in that same "Confessions of a Book Pirate" article, Magee cites a study done by Attributor, a "firm that specializes in monitoring content online," that claims that "book piracy costs the industry nearly $3 billion, or over 10 percent of total revenue." Most people think that figure is very inflated, but the point is there are some big numbers involved and they only stand to get bigger as powerful e-readers like the iPad become more prevalent and tempt people to acquire content without paying for it because, well, too many of them have become used to it.

If there's a silver lining, it's that people don't read anymore. At least that's what Steve Jobs said in January 2008 in The New York Times when the Kindle first appeared.

"It doesn't matter how good or bad the product is, the fact is that people don't read anymore," he said. "Forty percent of the people in the U.S. read one book or less last year. The whole conception is flawed at the top because people don't read anymore."

Of course, that was then, and this is now: Apple is now a full-fledged bookseller, going head to head with Amazon, Barnes & Noble, and Borders--not to mention any place else you can buy books, from Wal-Mart to your local drugstore. When the company announced that it had sold 1 million iPads in a month, it also bragged that iPad users had downloaded 1.5 million e-books from its iBooks Store. I assume the host of free public-domain e-books in Apple's catalog make up a large portion of that number (although it apparently doesn't include the freebie "Winnie the Pooh" that was offered with the iBooks app). So the appetite is there, particularly if the price is right.

What do you guys think?

This question-piece is from David Carnoy of CNET. You can read the original piece here: http://reviews.cnet.com/8301-18438_7-20005008-82.html.

eBook Piracy "Surges" after iPad Launch

This blog was written by Ernesto on TorrenFreak. Here is the original address: http://torrentfreak.com/ebook-piracy-surges-after-ipad-launch-100409/ 

Here is the blog: 

With 500.000 iPads sold in the first week, Apple’s new multi-gadget is already a force to be reckoned with. As book publishers see the iPad as a potential threat to their revenues, we take a look to find out what happened to eBook piracy in the last week. The results are surprising.

The introduction of Apple’s iPod marked a significant change in the music industry’s business. When it was first released in 2001 there were no digital music stores online. By the end of that decade the number of digital music sales had outgrown physical sales by far. 

This year the book industry may see the definite breakthrough for eBooks, and again an Apple device is expected to play a facilitating role. Having watched the changes in the music industry where piracy is often portrayed as a huge threat, some book publishers already fear the worst.

The million dollar question is whether or not these fears are justified. How big of a threat is eBook piracy for the book industry? Is there a noticeable iPad effect? We have some interesting numbers to share.

To determine if Apple’s iPad has had en affect on eBook piracy we looked at the number of downloaded titles before and after its introduction. We decided to focus our research on the 10 best selling eBooks on Amazon which seemed to be a good starting point. The problem, however, is that none of these books are available on public BitTorrent, nor could we find them on file-hosting services or Usenet.

This in itself is quite an interesting observation, and clearly a signal that eBook piracy is not (yet) as widespread as that of music and movies. In order to come up with some comparison material we decided to change our sample to the 10 best selling paperback books in the business category, which should also fit well with the demographics of iPad buyers.

From this list 6 of the 10 books were available on BitTorrent. Although we have to note that BitTorrent may not be the only source of eBook piracy, it should give us a good indication of the iPad effect, if there is any. To do so, we tracked the download numbers from Saturday till Thursday, a week before the iPad launch and the days after. 

By comparing the data from these two samples we found that the number of unauthorized eBook downloads on BitTorrent grew by 78% on average, a significant increase. It is worth noting that all of the six eBooks had more downloads after the iPad launch than before.

David Allen’s productivity guide ‘Getting Things Done’ was by far the most downloaded eBook with an average of 435 downloads a day, up from 277 before the introduction of the iPad. However, this 57% increase is relatively small compared to some of the other titles we tracked.

‘Freakonomics’, another classic in the business section, saw a 104% increase in downloads, going from 187 to 381. ‘How We Decide’ saw an even bigger surge in downloads – 140% – as downloads went from 56 to 134. 

The three remaining books from the list that we tracked on BitTorrent are ‘The Tipping Point’, ‘How Women Decide’ and ‘The 7 Habits Of Highly Effective People’. These three titles all saw an increase in downloads, 21%, 47% and 71% respectively, with absolute download numbers after the iPad launch of 192, 52 and 82. 

Interesting data, but what can we conclude from the statistics?

First of all, there seems to be a significant iPad effect if we assume that the increase in downloads is in part related to the iPad introduction. On the other hand it is clear that the absolute download numbers are relatively small compared to those of music and films, where popular releases can have more than a million downloads in one week. 

This low piracy figure can in part be explained by the fact that the number of people with an iPad or other eBook reader is still relatively low. Another key factor is that most books are simply not available in a pirated version, so buying a book through an online store is far more convenient and faster than trying to find an unauthorized copy.

The convenience factor and the overall user experience are going to be the key advantages for the book industry. When the iPod was launched there were no digital download stores, making file-sharing networks the only option to get music easily.

As a final note we have to stress that piracy does not equal lost sales. In the academic publications that looked into the link between piracy and (music) sales, there is still no consensus on this topic. For now, the book industry is best off putting all their efforts into making a great product for consumers and we’re sure that the iPad can be of assistance there. 

In the months to come we will keep en eye on how eBook piracy evolves.