HolidayBuyer's Guide

E-books, has your time come?

Seemingly moribund market gets fresh ink. But analysts remain cautious.

Recent announcements regarding electronic books have breathed fresh life into a seemingly moribund market. But some experts say e-books need to do more than move ink onto digital displays to go mainstream.

Sony announced on Monday that its Sony Reader will be sold at Borders bookstores for between $300 and $400 and texts will be available for download from the Sony Connect online store this summer.

And on Tuesday, Harry Potter publisher Bloomsbury began offering titles for download off the Internet, presumably for reading on PCs. "Although it's not a big area now, it will be in the future," Bloomsbury Chairman Nigel Newton told Reuters. "We want to stake out our territory."

The news raises a question: Is there suddenly a market for what so far has been a novelty act? E-books, which can be downloaded to a special reading device or a traditional PC, got a major push in 2000 when Microsoft partnered with Barnes & Noble on an e-book store for Microsoft Reader software. Three years later, Barnes & Noble discontinued its e-book efforts, citing slow sales.

"Expectations were way out of line with the evolution of these new forms of reading," said Steve Potash, chief executive of Overdrive, a digital media clearinghouse that hosts about 150,000 digital books, music and video titles. "A few years ago we didn't have quite the selection" that's available now. However, major publishers, schools and universities, and public libraries have come around and are jumping on the bandwagon, he said.

But the relative sparsity of selections still vexes, as do other criticisms. Five years ago, in addition to the lack of titles, some customers complained about restrictions in e-book readers on printing, copying, exporting to other types of devices and sharing with other companies' e-book readers. Price, too, has been a factor.

"We don't see a lot of resistance to electronic books per se," said Gregory Newby, director of Project Gutenberg, the first electronic library, which offers 20,000 titles for free. "What we see are limiting factors in specialized readers and difficulty in finding good stuff to read." Plus, "publishers are charging the same amount for an electronic book as for a paper book."

There are other challenges too. With e-book readers, people may be able to store numerous texts in one small device and do things to make reading easier, such as changing type size, something that's impossible with print. But people also like to share books with others, resell them and hand them down to their children, he said.

"When you buy a book, you have it forever," Newby said. "With these electronic books, you often are prevented from doing those things that you can do with regular books. What happens when my device breaks?...Books aren't just words on a page. They are things you can trade, share and store for later."

To be compelling enough to trigger any kind of mass migration away from paper books, e-books will need to have compelling characteristics regular books don't, such as interactivity and mixed-media capabilities, Newby and others said.

Authors could write books that let people read alternate endings or that contain moving pictures and characters that speak aloud, he said. "This would be a pretty exciting change from plain old paper. People like interactive stuff online. Why wouldn't we see that in a book?"

David Bass, senior vice president of sales and marketing at Ebrary, which supplies e-books to academic institutions and public and corporate libraries, had a similar vision.

In the future, e-book readers "will be experience-oriented, not device-oriented. It has to be more than a book," he said. "That's why e-books in 1999 and 2000 were really a failure in the consumer market, because all you were getting was printed text."

E-book readers also face stiff competition from devices like iPods, personal digital assistants and even smart phones--gadgets that let users do more than just read text, said Jean Bedord, a senior analyst at research and consulting firm Shore Communications.

"Reading books electronically will take off, but I think a higher proportion will be read on a handheld device" that offers multiple functions, she said. This is particularly so in light of book-scanning projects from Google, Yahoo, Amazon.com and others, which promise to make it easy to search for and within books, she said.

Right now, there are niches where electronic books have seen greater growth than the general consumer market, such as academic sales, experts said. And public libraries across the country have been big adopters, offering free downloads to anyone with a library card.

Ebrary saw the number of its institutional customers grow from 400 to 900 last year, and the number of its users double to about 6 million, according to Bass.

"Consumers really like taking a paperback or hardcover on the plane with them or to the beach," he said. "Whereas students and professors are in front of the computer all day long."

Students on about 100 campuses in the U.S. have the option of using digital textbooks on laptops, which cost 25 percent to 35 percent less than paper textbooks, said Overdrive's Potash, who is also president of the International Digital Publishing Forum. "One-third of dental students in the country have notebook computers with their entire curriculum on them," he added.

But even Potash says that for everyone else, the user experience of digital books has to change to really see the market take off.

"We are again trying to keep expectations in check," said Potash. "We are still a few years away (from) taking an electronic book into the bathtub or into the sand."

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