On the bus this morning, I read a bit about the Cheney Report (named after its author Orion Howard Cheney) that seemed very appropriate for this blog. The so-called Cheney Report was commissioned by the National Association of Book Publishers (NABP) after the stock market crash of 1929 to get a better handle on what was going on in the book industry at the time. I’ll let Striphas take it away:

After fifteen months of exhaustive research on Cheney’s part—and a comparable degree of nervous anticipation on the part of the NABP—the 150,000 word Economic Survey of the Book Industry, 1930-1931 (Cheney Report) was published in early January 1932. The eminent sociologist Robert Lynd assayed it in the Saturday Review of Literature, concluding that “it blows the lid off the book industry.” Indeed, the report was incisive and unrelenting in its criticisms of every aspect of the book industry and beyond. Cheney blasted publishers and booksellers for relying on intuition to guide important business, editorial, and purchasing decision rather than operating on a scientifically sound, statistically driven “fact basis.” He disparaged editors and publishers for their lack of creativity in developing the talents of first-time authors and scolded them for “murdering” potentially successful titles by releasing them into a field already so overcrowded that they simply “cannibalized” one another. Cheney was troubled by the lack of uniformity in the size and materials of printed books, which, he believed, drove up manufacturing costs unnecessarily. He chided advertisers adn book critics for generating insufficient interest in books and consequently for failing to help readers make informed decisions about what to buy. He condemned librarians for overstocking popular fiction and (like the booksellers) for making practically no effort at systematically studying the interests and reading habits of their clientele. Cheney even lambasted “uninspiring teachers” for their “unsound teaching methods,” which, he believed, resulted in their failure to stimulate adequate interest in reading among students ranging from preschool to college.

His big beef was with distribution methods, and the long-term impact of this study (creation of ISBNs and bar codes) is pretty impressive. Although I’m the first to object to business school people implementing their “economic science” on anything artistic (or even publishing), I do love this typical publisher response to the study:

Despite Cheney’s claim to have produced the report “in a spirit of objective sympathy,” his pedantry, harsh criticism, and acerbic tone seem to have gotten the better of him. The document generated what’s best described as a mixed yet largely defensive response from book industry insiders.

The situation is more complicated these days than it was in 1932 (pre-Internet, pre-superstore, pre-decline in newspaper book coverage), it’s curious how many of these problems still plague the industry today . . .

Entitled “How to package books for digital media,” this piece looks at what sort of “enhanced content” could go along with eBooks, and how best to create this.

There’s a bit of talk lately about Penguin’s enhanced e-books, which provides the inclusion of additional material as supplements to the book. But this still follows a very print-oriented model.

If I want to learn more about a classic text while using a computing device, then I would really prefer for the material to be presented in a way that leverages multimedia rather than simply reading more and more text. Sell me an e-book that includes extensive commentary in audio, video, and with superb graphic renderings related to the book’s content and I will gladly pay $20 or more (perhaps a lot more, depending upon content) for that title.

I completely agree with this. If the “enhanced content” for eBooks is nothing more than I really don’t see the point. Use the technology Silicon Valley has given you!

Aside from what the enhanced content should be, Jeff has some interesting ideas about how to create this content:

However, an option for publishers that don’t want to create this material in-house is to partner with universities to produce digital content. Universities are filled with academic specialists on every topic along with librarians, digital media specialists, and professionals who really understand how to use technology to enhance learning. And, after all, isn’t reading closely related to learning?

Publishers can provide grants to universities for producing the enhanced digital content. In turn, the enhanced e-books can be licensed for free use by academic institutions while publishers recoup the costs by selling the enhanced e-books to the public.

Of course, universities should already be developing such content as part of their own digital scholarship initiatives. When I was directing the digital library initiatives at the University of Miami, I formed a series of projects that provided funding to faculty for producing digital content. That was several years ago now, and things in academia move slowly (perhaps almost as slowly as in publishing!)

Again, I completely agree. Since publishers aren’t as savvy as they think they are when it comes to new technologies (simply visit any major publisher’s website—if they can’t get the basics right, I’m sure more complicated stuff is a complete mess), they should be enlisting the help and support of scholars and students who are more involved in this field. We have plans to do something like this, but more on that later . . .

According to – Citi’s Mark Mahaney has doubled his estimate of Kindle sales to 378,000 for this year. And if his projection that Amazon will sell 150,000 units in the fourth quarter comes true, that really could be the proverbial “tipping point” for ebooks and the Kindle.

Of course, Peter Kafka points out a couple of the obstacles for the Kindle to really take off:

But we still think that there’s a fundamental difference between the Kindle and the iPod that will slow adoption: iPod users immediately had access to thousands of songs they already owned the minute they synced their machines to their computers. And they could get anything else they wanted for free (if they chose to steal). Kindle users, however, are pretty much forced to pay $9.99 each time they want a new title. That’s a substantial discount to hardcover prices. But given that they have to lay out that much on top of buying a $350 machine, we think that makes it a different proposition.

The price point is interesting, since $10 seems reasonable to me. It’s still less than a paperback, and it’s the same as the cost of an album on iTunes, but Kassia Krozser brings this up as well at

This coincides with an email discussion about the price of ebooks. Nobody knows the optimal price, but then I wonder how much of the conversation is sheer academics versus real life experience. I loaded up the Kindle before my journey, and, as I browsed for a good variety of titles, found myself price shopping (for books! I know.). I mean, even I look at the relative value of bits and bytes versus a product I can’t, for lack of a better term, recycle. This is a conversation that needs to be had on a serious level, involving real readers. Anyone ever ask us about ebook prices?

Then she mentions a side-industry that is helping fuel the ebook market:

Here’s a truth: ebooks sell far better than numbers from traditional publishers indicate. This is because there’s a huge market for erotica out there. Women buy erotic ebooks instead of purchasing physical books because, well, if you’re female and over thirty, you’ve been taught that good girls don’t go there. Actually, good girls do. They just do it under the radar. This is good and bad for the ebook industry.

Which is funny, since something similar (at least according to a couple people I met in Tokyo) has been happening in Japan over the past few years with a lot of women reading erotica on their cellphones while riding the train.

Over at Edward Nawotka isn’t sold on the 240K number or its significance:

I read in today’s news TechCrunch as reporting 240,000 units have sold; and the number of customer reviews have passed 4,000 on Amazon.com’s Web site. And now I’m told that Amazon could sell 380,000 units in 2008.

Well, that just sounds like hyperbole to me and I’ll tell you why: I have not yet met a single person who owns one – and I live in a city of about six million people, regularly fraternize with book lovers, and travel frequently. I’ve seen more exotic cars in the past ten months — Ferraris, Bentleys, Lamborghinis — than Kindles.

This is a valid and interesting point—for a trend to really take off, people have to desire a particular product, and generally that includes seeing a peer group you respect/emulate with that product. Which makes me wonder who the main audience for the Kindle is/will be? Who is the hip literary crowd that could drive such a trend?

Based on the selections of books available via Amazon, I have a hard time imagining a lot of literary readers buying a Kindle. At least not now. In addition to making a device that’s way more sleek and sexy, Amazon should heavily recruit content providers. Otherwise some other outlet—such as Apple—could come along and win the ebook race so to speak, not just with a better device, but by providing the audience that could make this scene explode with the type of books they want to read.

Sony launched the Reader in October 2006 with quite a fanfare. It is a light, book-sized gadget with a screen made by a technology company called E-Ink that is easier and more restful to read than a computer’s and needs no backlight. You can download books to a computer from Sony’s eBook Store, which has 45,000 titles, and transfer them to the Reader.

Sony did a better job with the Reader than with the Walkman of linking the device to the content and it gained respectful reviews. Sir Howard singled out the Reader as the sort of device that the new Sony wanted to make: both innovative and well-connected.

Then, a year later, Amazon launched the Kindle. It looks quite similar and has an E-Ink screen but there are two differences.

First, the Kindle links to Amazon’s online store and there are now 145,000 titles available to download. As well as books, readers can subscribe to daily newspapers and even blogs, which makes the Kindle a more useful device in everyday life.

Second, Amazon came up with a clever way of linking the Kindle to its content. Each Kindle is connected to a 3G mobile network, so books and newspapers can be downloaded within a minute. If you subscribe to The New York Times, for example, it arrives wirelessly in the night, ready to read on the morning commute.

This enhances the usefulness of the Kindle. “The real change is that you can buy a book any time and anywhere. It is like having an airport book stall with you 24 hours a day,” says Mark Mahaney, a Citigroup internet analyst.

Poor Sony. According to this article, they’re “open” to developing a wireless component to the device, but man, that’s probably going to be too little too late. The other week E.J. posted the TechCrunch numbers that Amazon had sold 240,000 Kindles in the first nine months. Personally, I thought that seemed a bit low, and I still feel that something has to happen (a huge new group of books available for download? a second version that’s way sexier and allows some sort of note-taking? a upsurge in use by college students for textbooks?) to really make this “tip,” or whatever.

I’ve been reading Rob Walker’s fascinating book about and was somewhat surprised to find out how long it took the iPod to take off—something that FT references as well:

Anyway, it works. To the surprise of sceptics about e-book readers, the Kindle is a hit. Amazon has not released figures but TechCrunch, the technology website, reported last week that it has sold 240,000 units, putting it on track to match iPod first-year sales of 360,000 in 2001.

Meanwhile, Kindle sales make up 12 per cent of the total for book titles available both in digital and physical form on Amazon, which is far from trivial.

I’m still a firm believer that the physical book has a long life left to live, but the digital book future seems much closer than it did last summer . . . I’ve always felt that the distribution aspect was going to be the big draw to consumers—being able to download a book instantaneously after someone mentions it at dinner appeals to some base drive in my brain (and I suspect others). It’s why I like downloading audiobooks from the NYPL, and I can see myself buying into this idea if the type of books I read were all available in cheap Kindle versions. I still prefer the book itself, and the 145,000 titles available seem pretty mainstream, but if all New Directions books of NYRB books were available there, I’d be awfully tempted . . .

First off, HarperCollins did a special promotion for Neil Gaiman’s American Gods, in which you could, using HC’s Browse Inside program, read the whole book for free. (To the best of my knowledge, you couldn’t download the book, something readers complained about. Actually, it seems like readers weren’t all that keen on the entire HC Browse Inside program—56% of those surved said that they didn’t enjoy the process.) HC tracked the results, tried to correlate this with sales and came up with the following, which Neil Gaiman posted on his

The Indies [ie. independent booksellers — Neil] are the only sales channel where we have confidence that incremental sales were driven by this promotion. In the Bookscan data reported for Independents we see a marked increase in weekly sales across all of Neil’s books, not just American Gods during the time of the contest and promotion. Following the promotion, sales returned to pre-promotion levels.

This is what a lot of ebook advocates have argued for a long time. Although on the other hand, one could speculate that the fact that the majority of people didn’t like the HC Browse Inside process led to more people buying the actual book after getting frustrated with the web version. Regardless, more copies were sold during this promotion, which is good for the author, publisher, and bookstores.

On the same day, I came across about Tor’s free download program.

A few months ago Tobias Buckell noticed a trend in his book sales that most midlist novelists don’t typically see. His book Crystal Rain, which had been released in mass market paperback a year before, experienced a sudden spike in sales, more than doubling from the previous week. [. . .]

When Buckell opened a Bookscan account to track his sales he had to sign a nondisclosure agreement barring him from giving any specific numbers, but in a phone interview he asserted that the sales bump was significant enough not to have been a fluke.

But what caused this sudden increase?

Because of all the myriad factors that drive product buys, it’s incredibly hard to pinpoint specific triggers, but it just so happened that the jump occurred right after Crystal Rain’s publisher, Tor Books, had released a free e-book version of the novel online.

Tor began putting out free e-book titles earlier this year to pump up subscriptions to its email newsletter. It will use that newsletter to promote a new science fiction “super site” it’s reportedly launching on July 20 to coincide with the date Americans landed on the moon. Rather than posting the books at a specific URL where people can go to download them, only those who have joined the newsletter list are given access to the titles.

There have been other instances of publishers giving away free e-books—like the promo last year for Beautiful Children by Charles Boch, or the entire Wowio setup (which, you know, is offline right now)—but I suspect that more results like these will lead to even more experiments, hopefully from both large corporate publishers and indie presses.

, another new technology that is less visible to readers is already making itself felt. Print on Demand (POD), which allows books to be printed and bound to order, is making millions of books available even if they appeal to only a narrow readership. Here, too, academia leads the way. Stephen DeForge of Ames On-Demand says his POD business, which specialises in printing small runs of customised books for schools and universities, has been growing by 45% a year since 2001. Last year his firm printed more than 800,000 books in runs as small as ten copies at a time.

The opportunity has not been lost on Mr Bezos. In March Amazon announced that it would require all the POD books it sells to be printed by the company at its warehouses. Mr Bezos says that this enables Amazon to have a book ready to ship within two hours of an order being placed online. Between POD and the Kindle, Mr Bezos thinks he can sell “any book ever printed in any language”. But printers and distributors, like booksellers before them, fear the oncoming Amazon juggernaut.

Not a lot of details online about the actual survey, except what’s in Jim Milliot’s write-up:

Approximately two-thirds of trade publishing respondents said they believe experimentation is crucial to the future success of the industry, while more than 75% of educational and professional publishers believed innovation is critical to the future. Just over 81% of trade publishers said experiments have led to changes in their normal work practices, while 87% of nontrade publishers reported changes.

The most common experiments involve the Web, either through new marketing techniques or redesigns of corporate sites. Nearly 69% of trade publishers said experiments had resulted in new products, while 77% of nontrade publishers said they had created new products. The source of innovation comes from a number of places, ranging from top management to “literally anybody” at the company, the survey found.

The most interesting bit is about the Espresso Book Machine though:

Todd Anderson, director of the University of Alberta Bookstore, gave his unqualified support to the Espresso Book Machine, which the bookstore installed last November 1. The $144,000 machine allows the bookstore to print individual books from a variety of different files. “Our model is sell one, print one,” Anderson said. Through the early part of February, UAB had printed 2,364 books, totaling 537,754 pages, Anderson said. Since that time, the bookstore has printed another 1,500 books with the Espresso.

So they’ve printed almost 4,000 units, which, assuming an average list price of $15, comes out to $60,000 over the first 6 months . . . Looks like it could pay for itself in about a year . . . And I think we can assume these sales will increase with the new Lightening Source list of available titles.

Continuing their campaign to draw attention to the cost of textbooks, the Student Public Interest Research Groups celebrated Tuesday what they’re calling a major milestone — reaching 1,000 professors who’ve signed a statement supporting the use of free, online and open source textbooks.

Colleges and individual faculty members continue to experiment with putting course information and material online, and “open textbooks” typically are licensed to allow users to download, share and alter the content as they see fit, so long as their purposes aren’t commercial and they credit the author for the original material. This allows instructors to customize e-textbooks and offer them to students for free online or as low-cost printed versions. (via )

Penguin UK is set to be the first of the major UK trade publishers to put all its new black and white titles simultaneously into print and e-book format. From September new titles will be available in the .epub format from the company’s own websites and from digital retailers, at the same price as the print edition.

Pricing is going to be a huge issue as ebooks become more prominent. I’m not sure I’d pay full $27.95 hardcover price for an ebook. (Especially one that will probably be DRM protected.) And why should anyone? There are no printing costs for an ebook, so at least that amount can be eliminated from the pricing calculation . . .