E is for book

The Kobo e-Reader is due in New Zealand this month, on sale at Whitcoulls. Photo / Brett Phibbs

Remember the paperless office? Oh, how wrong we were.

So what about the paperless book, then? And paperless newspapers and magazines?

Previous experience might teach us not to hold our breath, but if the world's biggest booksellers, technology companies and publishers are right, the days of giant forests being felled to feed our insatiable appetite for the written word may finally be ending.

Ebooks - electronic books that you read on a screen, not on paper - have actually been around for more than a decade, but after a false start in the early 90s, sales are suddenly taking off.

In just a couple of years, Amazon has snared up to 90 per cent of the market by cleverly locking customers into its own proprietary format. Until recently that was still a pretty small market, but with a raft of rivals now competing for the digital dollar, trade sales in the US have rocketed from US$56 million in the final quarter of last year to US$91 million in the first quarter of 2010.

The forecast most frequently mentioned is that digital books could account for up to 20 per cent of all book sales in the US by 2012. If the same trend hits New Zealand, digital book sales could eventually be worth more than $60 million here.

At the end of May, Whitcoulls and Borders, both currently owned by Australian private equity firm PEP, got things moving in New Zealand by launching the Kobo, a basic electronic reader about the size of a notepad that can store thousands of books.

Rival online retailer Fishpond believes Whitcoulls was too hasty, given that many digital publishing issues have yet to be resolved, such as which format will eventually emerge as the common standard.

Fishpond launched seven years ago and hopes to become the Amazon.com of the South Pacific. It sells several brands of ereaders but is not yet doing much to promote them.

"We've actually had ebooks for most of this year, but we haven't publicised it for the main reason that we're not all that happy with the user experience at the moment," says general manager Ben Powles. "There are still relatively few ebooks available in this part of the world, and the hardware is pretty expensive still. And consumers are pretty confused about what to buy. There are 50 to 60 ereaders being shown at the big electronic shows."

In a note to users last month, Kobo admitted many customers had experienced glitches, which it has addressed with a firmware update. A spokesman for Whitcoulls and Borders, Malcolm Neil, says the company is nevertheless delighted with sales. Unlike Borders in the US, it has no plans to sell other ereaders, but there will be Kobo applications for other devices such as the iPad.

"That was the reason we went ahead, even though we didn't have everything ready, because to be frank you'll never have everything ready," says Neil. "We went as soon as possible because customers were saying 'Why don't you have it?"'

One glaring hole in Whitcoulls range so far is the local branch of Penguin, which has a stable of around 50 New Zealand authors. Neil hopes that will soon be rectified.

"We launched to act as a lightning rod, and it's been that. We have some New Zealand content but there's more to come."

Aside from its space-saving qualities, why would you buy an ereader? Although ebooks are generally cheaper, you have to factor in the cost of the device itself.

One big advantage, for older people in particular, is the ability to choose a font and enlarge the type size. Some ereaders also allow you to write notes and highlight text; download digital newspapers, magazines, photos and documents; play music; receive emails; and look up Wikipedia.

Local publishers and technology buffs are frustrated more devices are not yet available here. While it is unlikely Barnes & Noble's Nook will arrive any time soon, Sony is believed to be interested in bringing its much-admired Reader here, and it plans to launch a digital bookstore in Australia later this year.

Amazon has also been rumoured for some time to be considering an Australian store, and already sells an international version of its Kindle across the Tasman.

One of the Kindle's selling points is that it doesn't need to be connected to a computer. Users can download their ebook from almost anywhere by using a wireless 3G telecommunications network, with the cost of the download built into the ebook's price.

In Australia, Kindle ebooks cost slightly more because they generally use AT&T's global wireless network. However, that network has poor coverage in New Zealand, and it is widely assumed Amazon has been trying to do a deal here with Vodafone.

Veteran technology publisher Martin Taylor believes Amazon has balked at our high mobile data rates. "No one has managed to get an answer out of [Vodafone], but they do need a rocket put under them," he says.

A Vodafone spokesman insists the local company is equally in the dark and points out that mobile data rates have recently come down.

Taylor, who is head of New Zealand's Digital Publishing Forum, is unimpressed.

"It's frustrating because Amazon has been a driver of the market, and while it's fantastic to see Whitcoulls making a move, Amazon is the one that everyone knows about ... our market would already be more developed if they had been here."

Taylor has his own reasons for being impatient - he is keen to set up New Zealand's first ebook wholesaler, which he hopes to have up and running by September. But others in the industry, such as Powles, are more relaxed and believe consumers are better off without the Kindle, because of its proprietary format.

"The publishers here are going through the same things as the music industry went through eight or so years ago - they really are struggling to work out how this model is going to work for them commercially," says Powles. "In this part of the world in particular, because a lot of the large publishers need to answer to their head offices in the UK or US, they've had to take a bit of a back seat and wait for those deals to be done."

HarperCollins managing director Tony Fisk is unconcerned that many issues - such as how the industry should handle digital rights management (DRM) - have yet to be sorted out. Ultimately, it is customers who will decide which format they want, he says.

"Our business is content, and it's how consumers want to consume that content which is our concern," says Fisk.

The other problem with the current generation of ereaders is that most still have some way to go before they will truly be a pleasure to use. One bugbear is the clever e-ink technology. Although it is much kinder on your eyes than a backlit screen, one feature of e-ink is a small delay as each page refreshes. And as yet, it only comes in one colour: shades of grey.

Colour e-ink is in development, but some believe it could be usurped by the ereaders' sexy cousins - tablet computers - or even the latest smartphones.

Apple's iPad tablet is expected to arrive in New Zealand this month, although there is not yet a firm launch date. While there are likely to be plenty of willing buyers, its initial price tag could be a deterrent for people who don't yet see the value.

Nevertheless, newspaper publishers believe the iPad could be a potential saviour by persuading at least some people to pay for content they currently get free.

In New Zealand, the iPad could solve the age-old newspaper problem of small type and wet newsprint. And urban commuters might finally get something easily readable on public transport.

For publishers, the key will be coming up with an iPad application that is superior to most news websites. But they will be buoyed by the fact that around 300,000 people downloaded the iPad app for the New York Times in its first month.

For those who prefer the printed layout of newspapers, there are already websites such as pressdisplay.com, which features more than 1400 newspapers from more than 80 countries, including more than 70 from New Zealand.

Although there have been rave reviews for PressDisplay's PressReader app for the iPhone and iPad, publishers appear to be getting nervous about its popularity. In Australia, where the iPad is already available, Fairfax has used a process called geotagging to block PressReader access to popular papers such as the Sydney Morning Herald and the Sun-Herald in their home states.

According to the Whirlpool blog, PressDisplay has sent messages to furious users that "the publisher reserves the right to restrict distribution of their digital editions via PressDisplay service in certain regions."

Given that PressDisplay charges no more than US$29.99 ($42.50) a month for unlimited access to all its content, it is understandable that newspapers would prefer readers to use their own iPad apps, for which they can charge their own subscription fees.

New Zealand newspaper publishers are staying tight-lipped about their plans, but across the Tasman the Australian already offers an iPad app and the Sydney Morning Herald and the Age are believed to be working on their own versions.

Rupert Murdoch is an iPad fan, which is interesting given that last month News Corp bought a company developing an ereader touted as one of the best models yet for newspapers and magazines. The Skiff is slightly larger than most ereaders, with a flexible display. But it appears to be Skiff's software rather than its hardware that Murdoch is interested in.

Another top-end ereader aimed at businesspeople will supposedly be launched in Australia this year. Plastic Logic's Que ProReader retains more of the formatting of a printed product. It also includes the original advertising, which makes it a particularly attractive proposition for publishers. However, it is already overdue in the US.

Meanwhile, News Corp has also acquired a minority stake in Journalism Online, launched in April last year with the goal of helping newspapers and magazines collect revenue from their online readers. The company claims more than 1500 publishers around the world have already signed letters of intent to use its "Press+" e-commerce platform.

Murdoch has made his views clear: quality journalism will not survive unless consumers are prepared to contribute to the salaries of those who help deliver it.

His brave - and ultimately foolish - decision to buy MySpace proves he is far from infallible. And it has to be said that as an ereader, the first-generation iPad has several major disadvantages: it is almost impossible to read in bright daylight; chews through power; its battery is not easily replaceable; and it cannot multitask, although that is likely to be fixed later this year.

Kiwis who have managed to get their hands on an iPad have, however, been impressed with its intuitive touchscreen technology. And it is hard to ignore that Apple sold 3 million iPads in its first 80 days on the market - by some estimates, more than double the number of ereaders sold in the past decade.

The iPad's popularity has sparked a price war among ereaders in the US, which has pushed down prices to as low as US$119. It has been reported that Microsoft has dumped plans for its own ereader, and some commentators argue we are entering a new digital era which will eventually be dominated by Google and/or Apple.

On May 26, Apple surpassed Microsoft's market capitalisation - an event some see as an inevitable milestone as the world slowly moves towards "cloud computing". The theory is that we will increasingly wean ourselves off PCs and use the internet instead to store all our information.

In the US, Google's Android software has already snared a significant share of the smartphone market, and there has been speculation both Dell and HP have dropped Microsoft in favour of Google for their new tablet computers.

In April, Apple revealed its new mobile advertising platform, iAd, to compete with Google's remarkably successful AdWords. Meanwhile, Google is rumoured to be close to launching its own music download service to rival Apple's iTunes.

Whether the Android Market ever becomes as successful as Apple's App Store remains to be seen - but at least it will provide competition for what will almost certainly become known as the iStore.

Behind the scenes, Google has been working hard to persuade publishers it is not the enemy. Although Murdoch has accused Google News of freeloading on newspaper websites, Google denies that's the case and points out that its own future depends on reputable news services continuing to provide content people want to read.

In December Google CEO Eric Schmidt claimed in Murdoch's Wall Street Journal that the company was going out of its way to devise systems that would direct more money towards struggling news organisations.

It has been reported that Google is talking to publishers about a system called Newspass, which would allow users to buy access to content with just one click. The system is said to work for various devices, including PCs, mobiles and tablets.

According to the Atlantic, Google's other press-friendly initiatives include Living Stories, which is basically a way to rig its search results to favour in-depth reporting; Fast Flip, which enables readers to quickly flip through magazine pages online; and YouTube Direct, which allows any online publication to set up a YouTube feed for video reports.

It is even working on ways to improve the management of online ads to enable publishers to maximise their revenue.

Most newspapers actually make a loss on the cover price, making their profits particularly sensitive to fluctuations in advertising. So being able to cut printing and distribution costs could be a boon for the industry - provided it can establish new forms of revenue, or at least maintain most of the old ones.

Schmidt claims to be convinced digital ads will soon become just as lucrative for newspapers as display ads have been in the past - possibly even more so - as more sophisticated models are developed. And some advertisers are already paying significant premiums for ads on the iPad.

One idea being considered by US newspapers is offering readers a discount coupon towards a new iPad, provided they are willing to drop the print edition and sign up for a long-term subscription.

The New York Times has already offered readers deals on a Samsung netbook. With the Washington Post and Boston Globe, it has also offered a discount on Amazon's new supersized Kindle in areas where it doesn't deliver the paper, and to long-term subscribers.

However publishers have been unhappy about the huge cut that Amazon takes, and have been trying to negotiate more competitive deals from Apple.

In New Zealand there is speculation the iPad could prompt our two main newspaper publishers, Fairfax and APN News & Media, to launch national editions. Across the Tasman, Fairfax has already launched the National Times, an online-only compilation of the Sydney Morning Herald, the Age, WA Today and the Brisbane Times.

According to Martin Taylor, New Zealand magazines are also gearing up for the iPad, and he believes several may have iPad apps ready to go as soon as it goes on sale here.

New Zealand's libraries are also getting ready to experiment with ebooks, and a pilot programme is to be launched later this year.

Naturally, Google is also moving ahead with its own plans for ebooks. Several ereaders have already been developed to use its Android platform, and it is expected to launch its own digital book service, Google Editions, any day now.

Google's ebooks are likely be stored in the "cloud", meaning users won't be tied to any particular device or operating system, and Google claims to have clinched the support of almost all publishers in the US for the service.

Ultimately, Google Editions will probably include millions of scanned titles from its controversial Google Books project, but not until the legal wrangling over that venture is wrapped up.

Given the success of the iPod, it may be that the iPhone, iPad, or their Android equivalents, will eventually become the default device for most people, as we gradually progress towards the "evernet" - the ultimate, available-anywhere-anytime version of the internet.

It certainly seems inevitable that in the future, ebooks and enewspapers will not only have interactive 3D content, but maybe holographic images as well, and moving images at that, which will be particularly useful for educational purposes.

There are already several Kiwi companies leading the way in developing this sort of software. And even now, today's basic ereaders seem to have a lot in common with the first black-and-white televisions - remember those fiddly knobs, fuzzy pictures, and remote controls connected with curly cords?

But in the meantime, the bulky shortcomings of printed books and newspapers are hardly deterring people from spending at least some of their spare time in the analogue universe.

Even though sales of ebooks are taking off, only 9 per cent of Americans are estimated to have bought one in the past year, and for many they will remain an answer looking for a question.

Taylor's best guess is that ebooks will eventually account for 20 per cent of the market here. But as for newspapers and magazines - who knows?

"I think this is definitely the point of no return," he suggests.

There are many reasons why it might be good idea to keep on biding your time before spending several hundred dollars - or maybe more - on an electronic book reader.

But for early adopters in New Zealand, the future remains frustratingly out of reach, for a little bit longer anyway.