The publishing industry ignored the potential of digital file-sharing in the mid-1990s. Even though publishing industry analysts predicted shifts in the market, early e-readers didn't pull in the sales. The evolution of digital devices and increases in digital downloads in the early 2000s, forced the industry to pay attention. While people may always want to physically turn pages and cuddle up with a print book, the adoption of digital reading habits can't be denied.
Albert Humphrey first introduced the concept of SWOT analysis at the Stanford Research Institute in the 1960s. He compiled market data, analysed it and showed Fortune 500 companies a system to capitalise on strengths, improve weaknesses, seize opportunities and avoid threats. The publishing industry began to use this system when the sales of e-readers such as Amazon's Kindle caught its attention, along with the dwindling sales in bookstores and the funding problems of library systems across the country.
Paper-and-ink costs money, kills trees and is dependent on crude oil. The cost to publish e-books is a fraction of what it costs to produce print books. A New Yorker article by Ken Auletta says that "profit margins are slim" as 15 per cent of cover price goes to authors, 70 per cent going to production, storage, market, etc. and the potential of 35 per cent of those books bought by bookstores being returne for a loss. Publishers can carry more titles at much lower expense, which will allow them to branch into niche markets instead of focusing on mainstream appeal. Because handheld reading devices enable readers to carry a portable personal library, the sales of e-books may eventually equal those of their print counterparts. In Korea IT Times, Chun Go-Eun and Song Kyu-Yeol say that "thousands of books can be stored in one device that is usually thinner and lighter than most textbooks."
The lack of a universal publishing formats could deter some readers. Every e-reader device has its own platform and often requires buyers to have an account, a particular operating system and specific software. The consumers may have to buy multiple e-readers to buy books from different publishers. Michael Mace, a tech industry veteran and consultant, writes in a blog post: "A lot of the investment in ebook devices today seems to be driven more by strategy than by user needs. The problem is, unless they solve a user problem, and communicate it to the users, the market won’t take off in the first place."
Once the format issues are sorted out, e-readers can revitalise the publishing industry by getting nonreaders engaged. For avid readers they are more convenient than trips to a library or bookstore, and they don't lead to late fees and lost-book fines. New writers can actually compete with large publishers. In "How to Approach the 'Base of the Pyramid,' " Peter Rave writes that digital publishing is "a business model that enables customers to become authors, and some of them can even generate income by doing so."
Rave warns that basing an entire industry on potential e-reader sales could alienate a large percentage of prospects. He says that "the usage of eBooks in developed markets with a satisfied book demand might be totally different compared to an underserved market with a non-reading culture." In "DRM Under Attack," Tobias Hauser and Christian Wenz warn that the biggest threat to the e-book market is hackers. The hacker "is only one person who uses the forbidden digital right for his own purposes. It gets more dangerous when he shares his knowledge of cracking with others." If hackers share e-books, writers and publishers lose revenue on sales they could have had otherwise.
- How to Approach the "Base of the Pyramid": A Business-strategy and Country; Peter Rave; 2010
- Ebook Market Watch: From Ebook to Print Book - Five Pitfalls
- "DRM Under Attack: Weaknesses in Existing Systems"; Tobias Hauser and Christian Wenz; 2003
- Korea IT Times: e-Book Revolution
- Business Insider: Why E-Books Failed in 2000, And What It Means for 2010