The Emergence of Ebooks: Just Another Media Industry Joining the Converging Digital World? An Explorative Study on User Preferences and Industry Structure Changes

28 Pages Posted: 18 Jan 2012

See all articles by Claudia Loebbecke

Claudia Loebbecke

University of Cologne - Department of Media and Technology Management

Date Written: August 15, 2010

Abstract

Will the future of book reading be digital? Is the printed book dead?' Questions like these have been found in various newspapers reporting on the Frankfurt Book Fair 2009. eBooks have existed for more than 20 years; their emergence has been discussed for more than a decade. The Association of American Publishers (AAP 2010a) reports that eBook sales grew 163 percent in the month of May 2010 and 207 percent year-to-date through May. Amazon customers nowadays purchase more Kindle books than hardcover books (Amazon 2010). This is across Amazon's entire US book business and includes sales of hardcover books where there is no Kindle edition. Free Kindle books are excluded. Five authors - Charlaine Harris, Stieg Larsson, Stephenie Meyer, James Patterson, and Nora Roberts - have each sold more than 500,000 Kindle books (Amazon 2010).Nevertheless, eBooks are still far from substituting traditional books.

Recently, people have become more accustomed to reading texts on screen; they are more experienced with eCommerce, and new devices that offer an enhanced reading experience. Yet, n its efforts to increase distribution and generate profits with eBooks, the book industry faces a dilemma well known from its music peers: It tries to popularize eBooks and to develop the eBook market, but, at the same time, it needs to curb large scale unauthorized distribution and usage of eBooks.

The emergence of eBooks and eBook readers is likely to change the book industry structure and pose new opportunities and challenges for eBook publishers and vendors. Hardware manufacturers and Internet Service Providers (ISPs) have already entered the book industry and they may outpace the traditional industry players in the creation of new business models for digital content. Advertisers who could initially place advertisements in eBooks or completely sponsor them (Chang 2009) and search engines may also gain momentum.

The music industry has 'gone digital' almost a decade before their book counterparts; its situation is well known and has been discussed at length. Why should the basic trends in the book industry be different form the music ones? Does just another set of digital products and services suggest cross-industry 'convergence' of business models and revenue sharing structures? Or will varying usage preferences, different traditional industry structures, and specific regulatory backgrounds drive conceptually different developments?

In this paper, we undertake a multi-perspective effort to analyze the eBook industry putting it into perspective to the music industry. We borrow from the economic literature and its coverage of the music industry as the latter reacted to the beginning of peer-to-peer music availability. We build on the management innovation literature when we analyze the case of Amazon launching the Kindle 2 and entering the eBook scene based on an originally proprietary business model. We offer empirical data on user preferences concerning their attitude regarding copy right protected versus non-protected (not necessarily free) eBooks. We conclude with pulling the three pieces together. Overall, we find that the book industry is not all that different from the music one and that the traditional book players need to be careful not to falter on their inability to transform themselves in response to digitization.

Suggested Citation

Loebbecke, Claudia, The Emergence of Ebooks: Just Another Media Industry Joining the Converging Digital World? An Explorative Study on User Preferences and Industry Structure Changes (August 15, 2010). TPRC 2010. Available at SSRN: https://ssrn.com/abstract=1986386

Claudia Loebbecke (Contact Author)

University of Cologne - Department of Media and Technology Management ( email )

Pohligstr. 1
Cologne, 50969
Germany

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