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Vol. 27 No. 5 — Sep/Oct 2003

My failed forecasts dealt with individual e-books used in e-book readers, which I thought would be commonplace by now. I expected a price plunge in readers that would bring them into the mainstream, as occurred with VCRs and DVD players. I expected that e-books would supplant print in some applications. Instead, today's e-book readers may soon be seen in the Museum of Forgotten Technologies, and e-book sales have disappointed for the past few years.

Nevertheless, there are encouraging signs. E-book sales in recent months have been turning up. Next-generation readers, whether as dedicated devices or as part of handhelds or laptops, may break through. So maybe this prediction isn't wrong, but just a little early. And whenever I see some poor kid trudging along with a 30-pound book bag, I tell myself, "It's just got to happen!"

FOUR E-BOOK TRENDS

My predictions about e-book uses, on the other hand, were right on. I said that the e-book killer apps would be in texts, manuals, reference books, and professional books, and indeed that's what's happening. These kinds of publications are available in numerous e-book products from several STM and reference publishers. In fact, the market has evolved to the point where four clear trends can be spotted:

• Use, Not Read—Books that you consult or read in short sections are more suitable as e-books than those that you read at length. The technical limitations and inconveniences of e-books are tolerable when you're only reading a few pages. Thus texts, manuals, and reference books, which you use rather than read, work best as e-books.

• Aggregations, Not Single Works—In a reference collection, bigger is better; a collection of e-books, which can be searched as a single database, is far better for reference than one book.

• Institutional Customers, Not Individuals—As with other types of proprietary online content, most people obtain access to e-book collections through institutions, especially libraries. Several e-book products have subscriptions for individuals, but the real action is in selling to libraries and corporations, which can deliver big customer numbers.

• Subscription Pricing, Not Transactional—The growth of the previous trend owes much to flat-rate subscription pricing becoming the norm for e-books. Transactional pricing, in whatever form, is no longer acceptable in most institutional buying.

USE, NOT READ

In other words, "The more time you spend with a book at one sitting, the less attractive it is as an e-book." Thus novels and general nonfiction e-books aren't (yet) common—can you imagine the latest 750-page Harry Potter bestseller as an e-book—but works used for reference are. Some of the first commercial e-book sites, including Books24x7, ibooks.com, and ITKnowledge, were collections of computer and information technology texts and manuals. These remain classic "use, not read" books. Safari Tech Books Online continues this pattern.

This trend has broadened into other STM areas, with reference text collections from Knovel, Books@Ovid, and Wiley Interscience Online Books. All of these are of course of interest not only to students, but also to practicing professionals—physicians, engineers, scientists, and technicians.

As for general reference, in the past year, three important e-book collections have appeared: Oxford Reference Online, xreferPlus, and netLibrary Reference Center. Each has a large collection—100+ titles—covering a wide range of subjects from prominent, library-oriented reference publishers. Other leading reference publishers, including ABC-CLIO, Wilson, and Gale, also offer some important reference titles as e-books.

AGGREGATIONS, NOT SINGLE WORKS

All of the examples in the first trend are collections, which dovetails perfectly with the "Use, Not Read" concept. If you want to read a specific book, then only it will do; if you're seeking a specific bit of information, any number of reputable reference books will serve. And the more the better, because it increases the number and variety of your answers.

Information technology books have also shaped this trend. Computer and information technology reference publishing is dominated by a small number of publishers, including Microsoft, O'Reilly, Que, Sams, and Sybex. These houses have been active in distributing their lines as e-book collections, providing complete online reference libraries for computing and information technology.

Comprehensive professional literature aggregations are available in other STM fields, represented by collections from Knovel, Books@Ovid, and Wiley. Each contains a broad selection of texts and manuals in their respective STM disciplines.

The general-reference collections mentioned above—Oxford Reference Online, Xrefer Plus, and netLibrary Reference Collection—are comprehensive aggregations of short-entry, single-volume reference works, representing every major subject.

INSTITUTIONAL CUSTOMERS, NOT INDIVIDUALS

I'm not alone in having overestimated the potential of e-book sales to individuals. Several e-book sites began with subscriptions to individuals as the main element in their business models. Even netLibrary originally offered individual subscriptions. Questia, however, is the poster child for this. It started with a high-profile campaign targeting school and college students, but its disappointing performance is a cautionary tale for the individual sales business model.

E-book sellers have awakened to the value of sales to institutions, especially libraries. (Why this particular wheel had to be re-invented is a mystery, given the long-established and flourishing market for selling electronic content to institutions. Book publishers, it seems, are particularly slow to get it.) In contrast, netLibrary has always concentrated on institutional sales, despite its willingness to sell a subscription to an individual. All three of the general-reference collections sell to libraries. Lately, ebrary has been moving actively and successfully into library consortium sales. The STM text collections are intended for institutional customers.

Institutional sales are a win-win-win situation for all three parties: sellers get large, predictable customer groups; users get access to big collections without direct, out-of-pocket costs; and libraries provide yet another valuable and unique service to their constituents.

SUBSCRIPTION PRICING, NOT TRANSACTIONAL

The growth of institutional e-content markets has gone hand in hand with the spread of flat-rate subscription pricing, including consortium deals that greatly lower the cost to members. Subscription pricing is now the standard model for institutional buying. If you are an e-content seller and you don't offer it, don't expect a second look.

Most e-book sellers have subscription pricing. It's part of the reason for ebrary's recent prominence in the library consortium market. The STM text distributors typically offer subscription pricing. Oxford Reference Online and xreferPlus have it, but not netLibrary Reference Collection.

netLibrary's experience is suggestive. When I first reviewed netLibrary in 1999, I praised it generally, but hoped it would eventually move beyond its buy-the-book, check-out model. It hasn't, and I think this pricing model has held back an otherwise innovative and well-designed product.

Let's not blame netLibrary too much, since it is constrained by its publisher partners, who are, as I've noted, a little slow on the uptake. Oh well, let's not blame them, either. Just look how long it took the online industry to get away from connect-rate pricing. Content sellers do everything well except sell.

E-BOOKS COME AROUND

To summarize, e-books are finally beginning to act like other forms of proprietary online content. They are available in large comprehensive collections that support powerful reference applications; institutions provide access to for most users; subscription pricing is the rule. I've referred to e-books as the "last mile"—the last major form of publication to become widely available online. We've long had journals, magazines, newspapers, broadcasts, etc., etc.—it's about time we're getting books.

Finally, all of this reinforces—yet again—the powerful, even necessary role of the intermediary in the provision and dissemination of information. Whether that intermediary is an information center, a library, or an information broker, the principle is the same. The gap between content producers and users is just too wide. The intermediary partners with the producers on one side and with the users on the other, putting great amounts of added value in between. It's been that way for other kinds of information for about oh—3,000 years or so—now, it's e-book's turn.