In one of my previous posts, I had written about the rise of Google in the ebook market and its implications. But are ebooks as important an offering as the publishing industry is making out to be? Will ebooks be a one fit solution for publishers? Can a publisher ultimately sustain on revenues from ebooks?

So will ebooks address the  challenges faced by the industry today?

• Rise in costs  [YES]
  

Yes, ebooks have gone a long way in reducing costs for publishers. Printing overheads, at times, may account for up to 40% of book publishing costs . Plus, ebooks are not bound by the ‘need’ to print. Ebooks are the epitome of non-linear growth. One copy or a million, the cost to produce it is the same (digital distribution means costs are not as significant as with print).

• Change in consumption – from hard copy to soft copy [YES]
  

Yes, ebooks are addressing change in users’ consumption patterns. Publishers are now able to tap into the device market (e-readers, computers, smart phones and handhelds, etc.). Ebooks have also prompted publishers to target the social media segment by creating interactive applications and marketing campaigns.

• Drop in revenues [MAYBE]
  

Sure, the ebooks market is growing. In the US alone, ebooks have raked in close to USD 48 million (Q3 2009) – three times more than Q3 2008 . So the market does show promise…

But, will ebooks become a strong enough revenue source to sustain publishers?

I don’t think so. And here are some reasons why:

• Ebooks are still prone to high levels of piracy (like with other digital products). There isn’t a foolproof method to ensure copyrights (a feat even software biggies like Microsoft haven’t been able to pull off!). Print has always been difficult to pirate because someone has to re-print them! Ebooks, like all digital content (music, videos, software, etc.) just needs someone to crack it…and this means higher levels of control will be required. The down side is that measures to control piracy often deter reader experience.

• Lower pricing doesn’t always translate as demand. While the cost of producing ebooks is significantly lower, so is the price per copy. Sure, we can all argue about how lesser pricing means more volume. And how niche titles can also be sold easily. People will invariably mention the long tail, but finding the demand and satiating it is something else. Even if publishers are successful in creating a strong reader community (thereby satiating the demand), recouping the difference in pricing will eventually require multiple block buster titles (and if a publisher does make a complete transition to digital offerings only, it will be difficult to sustain with existing scale… this will likely result in publishers downsizing operations).

• The jury is still out on whether ebooks are better than print. I don’t see that debate coming to an end anytime soon. Why is this important? Numbers. The value of 100,000 readers still paying for print will always be more than the 200,000 that prefer ebooks.

• Ebooks are still being bundled as value additions. Ebooks are being offered in parallel, and not in isolation. For most publishers, ebooks are positioned at monetizing content they already have, through parallel or cross selling book titles in digital form. Big publishers will not be too keen on generating revenues from ebooks alone. And if they are, well… they would have to compete with the likes of Amazon and possibly Google.

Small and medium publishers, on the other hand, might just make the transition and do away with print completely. But naturally, this is easier said than done. How easy is it to go digital? Just ask the music industry…

So, in conclusion, can publishers sustain their current levels of operations through ebook sales only? No.