Stew: this article is from this week's issue of the Indianapolis Business Journal:
Big players banking
on future of e-books
By Ed Callahan
Special to IBJ
Imagine tucking 20 novels or dozens of magazines into a purse or pocket.
With the latest in technology, it’s possible.
Electronic-book readers, portable hand-held devices that let users download
and display thousands of pages of text, could be one of the next hot consumer
gadgets.
And while nobody is sure if they’ll catch on, major entertainment players,
including locally based Thomson Multimedia, are putting big money behind the
technology.
Thomson is scheduled to introduce two e-book models at the Sept. 24 “New
York is Book Country” book fair.
The models—REB1100, which is about the size of a paperback and has a
black-and-white screen; and the slightly larger, color, REB1200—are
second-generation follow-ups to current e-book readers.
Retail prices will be announced later this month.
Thomson’s new readers are hitting the market at a time of ever-increasing
activity in the e-book field.
Amazon.com announced Aug. 28 it will create a digital bookstore, using
Microsoft Corp.’s “Reader” software. Adobe Systems Inc. also announced
plans to ally with bookseller Barnes & Noble.com Inc. and Eastman Kodak
Co. to strengthen its presence in the new market.
Thomson’s new readers will be sold under Thomson’s RCA line. They are
aimed at bringing e-books into the mass market, according to Thomson
spokesman Dave Arland. Previous models were niche products and weren’t
easily available to the casual consumer, he said.
“You couldn’t go into a Best Buy and just buy one,” Arland said.
All this activity is taking place in a market that currently makes up a minuscule
part of the book business. Sasha Kostadinov, an industry analyst with
McDonald Investments in Cleveland, said the two major producers of e-book
readers, Softbook and NuvoMedia, had combined revenues for the last nine
months of 1999 of $5.3 million. The overall consumer book market is
between $16 billion and $18 billion annually.
Thomson’s REB1100 will have a 5-1/2-inch screen and weigh slightly more
than a pound. The REB1200 will have an 8-1/2-inch screen and weigh a little
more than two pounds. Both will have their own modem.
The REB1100 will have a memory capacity of about 8,000 pages and
illustrations. The REB1200 will have a capacity of about 5,000 color pages
and illustrations. Arland said consumers would be able to add memory to their
e-books if they wish. Battery life for both models will be about 40 hours.
In effect, an individual e-book will be able to hold up to 20 novels, Arland
noted.
The contents of these books will be obtained through the Internet via a server
operated by Gemstar-TV Guide International Inc. A book can be
downloaded into the e-book’s memory and read anytime.
“Anything you normally would go to a bookstore to buy can be downloaded
from the phone line,” Arland said.
The initial market is expected to be busy professionals and avid readers. The
e-book’s portability and convenience will be a tremendous advantage for
students, travelers and anyone else who would like to be able to carry more
than a dozen books in something roughly the size of a regular paperback.
Thomson, though, will face a challenge in changing people’s reading habits,
Kostadinov said.
“People like reading on paper,” he said. Altering that preference may not be
easy. He said the introduction of the personal computer two decades ago
brought predictions that eventually no one would use paper in America’s
workplaces. Of course, today’s offices use more paper than ever before.
While the new products are intended to have a wide appeal, Thomson
predicts there are some areas in particular where the e-books should do well,
Arland said. One is the college textbook market.
“We have a dream that someday a college freshman won’t have to go to the
college bookstore for used textbooks but, instead, can simply download his or
her entire syllabus into an e-book,” he said.
E-books will cost less than traditional textbooks and are easier to update, he
said. An e-book also will be easier to physically handle than seven or eight fat
college textbooks. “And you can take notes in them,” Arland said.
Mail-order catalog users also are a likely market for the e-books.
“Every September and October, you know what your mailbox is like when the
new catalogs come out,” Arland said. While he likes looking at holiday
catalogs as much as anyone else, he said, people would find it a lot simpler if
they could download the catalogs they want from the Internet.
Pricing for the models is still is being determined. Thomson’s goal is to keep in
the range of the earlier readers. Prices for those ranged from $200 to $600.
Thomson still is weighing whether to simply sell the e-book for a flat purchase
price or include a service fee. The second approach would be more like
getting cellular telephone service. The cell phone itself isn’t expensive, but the
service is paid for on a monthly basis.
Softbook took both approaches. Customers could buy their e-book for a flat
$599 or they could pay $299 for the reader while agreeing to buy at least
$19.95 in e-book content every month for two years.
Kostadinov said he thought those prices would be prohibitive for the average
consumer, noting the average paperback costs less than $10. “One thing’s for
sure, the price point’s got to come down,” he said.
Gemstar-TV Guide bought both Softbook and NuvoMedia late last year.
Thomson’s new e-books are the replacement for those companies’ readers.
Arland declined to discuss development costs or how many units Thomson
hopes to sell in the first year.
Regardless of the approach Thomson chooses, the firm said price shouldn’t be
a long-term hurdle.
“Since e-books are a consumer electronic product, typically prices will go no
place but down every year,” Arland said. “This is a new category of product
for most people. They’re familiar with laptops and palmtops, but this is
something in between. |
