Apple and the iPad: The Takeover of the Book Publishing Industry

Dec 22, 2011


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Book publishers are an endangered species. That's right. The producers of textbooks, romance novels, and cookbooks aren't long for this world. Their likely extinction is both predictable and preventable. Even if they put up a good fight, it's unlikely they'll survive in their current form for one reason: They are slow to evolve.

Case in point: Two years ago, while book publishers were busy conducting business as usual, an outsider invaded the industry and reshaped it in the publishers' image. The invading force was Apple, a fierce predator with a history of conducting well-orchestrated, highly publicized takeovers. And take over it did.

After conquering both the music and telecommunication industries, the technology maker applied the exact same strategy against book publishers. Step 1: Orchestrate immense expectations and generate amazing buzz. Step 2: Deliver a new experience that not only lives up to the hype but exceeds expectations. Step 3: Generate demand for the experience by delivering exceptional value that opponents are unable to duplicate. Step 4: Generate revenue. Step 5: Repeat Step 4, repeatedly.

With the introduction of the iPad, Apple redefined the entire book publishing industry. It created an immersive "experience platform" (iOS) to help publishers build the next generation of books. It even gave them access to a digitally savvy base of customers via iTunes and the iBookstore. In short, Apple provided an evolutionary path that would allow publishers to move from print to digital with little effort. All it asked of them is to "think different," something few purveyors of print have been willing or able to do.

The challenge Apple issued to publishers was clear: Go forth and create a new-and-improved book. Create exceptional experiences that are not possible in the print world. Develop innovative solutions that assist those with disabilities and who have other challenges with reading. Use the iOS platform and the wireless iPad to dazzle readers. Tap into the digital world and generate immense revenue from an audience and ecommerce platform we've provided for you. We'll even throw in a financial incentive-the elimination of printing, duplication, transportation, and sales expenses associated with producing printed books. And as an added bonus, we'll market your products directly to the consumers who will most likely be interested in buying them.

Instead of thinking differently and re-engineering old publishing processes to support the creation of a new breed of enhanced, interactive, accessible ebooks and apps, most publishers decided to create digital photocopies of existing books and charge top dollar for them. Big mistake.

A recent survey of book publishers conducted by digital publishing solutions provider Aptara, Inc. found that while 64% of publishers are creating ebooks, only 21% are producing enhanced ebooks. The majority of publishers are rushing half-baked ebooks to market, instead of taking the time to do ebooks right from the get-go. While this approach may yield short-term profits for publishers, it's a bad strategy.

First, it's less expensive to enhance ebooks during the conversion process. It's going to cost a lot more to retrofit first-generation ebooks with enhancements, offsetting short-term profits gained. That's bad news for all involved, especially investors.

Second, enhanced ebooks provide publishers with opportunities to capture entirely new markets. For instance, enhanced ebooks that follow accessibility standards can help publishers reach the 3.4 million Americans who are blind or visually impaired. By leveraging functionality that is native to devices such as the iPad, enhanced ebooks can help those with dyslexia (15% of U.S. population) and the nearly 44 million U.S. adults who want to read but don't have a mastery of the English language.

Third, enhanced ebooks can command higher prices. Consumers are willing to pay more for useful content experiences. Cookbooks, how-to manuals, textbooks, and other types of educational publications can provide new-and-improved learning opportunities. And the same enhancements can make ebooks from all genres more enjoyable. Once consumers experience enhanced, interactive ebooks that provide exceptional value beyond what digital photocopies can deliver, they'll gravitate toward publishers that provide them with the best experiences.

To avoid becoming irrelevant, traditional book publishers must evolve. They've got to start thinking differently about the business of publishing and realize that they're now in the experience business. There's a huge pool of profit waiting for those who get there first-and do it right. For others, well, only time will tell.