December 9, 1999
Racing to Convert Books to Bytes
Evolving Market for E-Titles
By DOREEN CARVAJAL
arely does anything between covers
astonish a librarian like Dennis Dillon,
but he says he is shocked when he
examines the latest reports about reading patterns of students at the University of Texas at Austin.
Circulation is down. Turnstiles are
moving at a slower pace at the most
populous campus in the United States.
But with a bare minimum of promotion,
the university's newly purchased electronic books, like "From Barbie to Mortal Kombat" or "Euthanasia: A Reference Handbook," are suddenly circulating like freshly published Grisham novels.
Frank Curry for The New York Times
Dennis Dillon, head of collections and information resources at the
library of the University of Texas in Austin, says he is surprised at the
popularity of the university's newly purchased electronic books.
"No one was sure whether anyone
was going to read any digital books,"
said Dillon, the university's head of
collections and information resources.
"We were somewhat skeptical. Usually
a book has a one-third chance of being
checked out. So to have some title
checked out 25 times in two months --
With a $1 million budget for digital
materials, the University of Texas is
preparing to increase its 6,000-title collection of digital books. It is investing in
the evolving electronic frontier of the
book market, which is preparing for
rapid change despite widespread skepticism that the vast majority of readers
are truly ready to cuddle up to a good
New players like netLibrary -- which
sells collections of digital books to libraries -- are engaged in a frantic
international race to convert paper
books to bytes with the ultimate goal of
dominating the evolving market.
And traditional publishers are cautiously preparing for an uncharted future, digitizing thousands of old backlist
titles in preparation for an e-new world
where books can live forever because
they will never go out of print.
Yet some publishing experts doubt
that changes will come rapidly, given
the demographics of the American
book market. The most reliable and
free-spending group of book purchasers
was raised on paper and they are edging into their mid-40's and up.
Nevertheless, a number of major
publishers here and in Europe are preparing for the possibility of a surge in
demand for electronic books that many
believe could be driven by the same
type of readers that powered the paperback revolution: the young.
As the market develops, the definition of a book is evolving into an exotic
collection of literary hybrids -- electronic titles that can be read as e-mail,
retrieved by a portable electronic reading device, downloaded on a computer
or converted quickly from digital
versions into bound copies that can
be printed in less than 30 seconds.
And in the very near future, readers will be able to mince these digital
versions into customized titles available by the chapter or page. For
example, in the next six months,
readers of IDG's Arthur Frommer's
travel guides will be able to create
am electronic book so narrow in
scope that it explores restaurants in
the Loire Valley in France with reservation links to recommended hotels or airlines.
With the immediacy of electronic
books, digital titles can be published
at greater speed and at greater peril
for unchecked information. The
forms of writing in electronic versions are shifting, allowing authors
to create never-ending electronic
books with constant revisions or expanded titles that include the literary
flotsam of notes, diary entries,
memos, images and maps.
Not everyone agrees as to when
this new future will take hold. Technology giants are boldly promising
swift change, with Microsoft predicting that many e-titles will outsell
their paper cousins within a decade.
Random House, the nation's largest publisher, is not making the same
boasts, but the company, part of Bertelsmann, has embarked on a two-year project to digitize all of the
books on its entire backlist of 20,000
titles, with 5,000 already converted.
Simon & Schuster, part of Viacom, is
formatting all of its new books in
digital form and is preparing to digitize at least 4,000 of its 20,000 backlist
titles next year.
But because of security and piracy
concerns, Simon & Schuster is still
reluctant to allow Microsoft access
to its titles for use with new digital
display software that will be available next year for reading, searching
and annotating books on a computer.
"We're trying to create a strategy
for the future that is not totally clear
because it's evolving and changing
and converging at the same time,"
said Jack Romanos, the head of Simon & Schuster's consumer trade
division, where electronic book sales
at this point have totaled less than
one-tenth of one percent of isales.
Still, he added, "We believe there is
an electronic future."
preparing for an
In Europe, the French publisher
Havas and the Italian publisher Mondadori announced agreements in October to publish electronic books that
can be read on the coming Microsoft
Reader software and downloaded
from Web sites. Major European
publishers of science, technical and
medical books have joined with
American publishers like John Wiley
& Sons to electronically link citations
listed in their journals -- a network
that ultimately could lead to links
between electronic textbooks.
And last month, the nation's leading bookseller, Barnes & Noble, purchased a 49 percent stake in iUniverse.com, a new electronic vanity publisher in Campbell, Calif., that
charges a modest fee to would-be
authors to post manuscripts in electronic versions.
Such newcomers to the book industry are spread far from the traditional capital of publishing in New York.
To a certain extent, these companies are caught up in a classic chicken-and-egg quandary. To attract
readers, they must offer a wide variety of titles. But to persuade publishers to sell titles, they have to demonstrate that there is a market and that
the technology is secure from piracy.
As a result, many of the companies
are expanding their collections with
public domain titles.
NetLibrary, for instance, has outposts in China, India and the Philippines where workers are converting
books to electronic copies by typing
the text into computers. Scanning the
material directly into a computer
posed too much potential for errors,
according to the company. And so
now the digital versions are copied in
other parts of the world and then
edited and refined by "book builders" at netLibrary's rapidly expanding headquarters in Boulder, Colo.,
where two shifts of employees work,
from 7 a.m. to midnight. The company is converting about 50 books a
day, but by December, the rate will
rise to 200, said David Melancon, the
company's marketing director.
A start-up, with $105 million in new
financing, netLibrary is aggressively
pursuing major libraries to buy electronic collections so that library users will have 24-hour access to titles,
with full-text searches. Since August,
it has sold more than $1.5 million in
electronic books to libraries like the
one at the University of Texas, which
bought 1,000 copies and acquired
5,000 more titles through consortium
purchases. At this point, netLibrary's digital collection is dominated by reference and scholarly titles
from academic presses, but the company intends to offer popular trade
book titles that could also be offered
to individual users by subscription.
"Everybody realizes how quickly
the business is going to change,"
Melancon said. "And once it starts,
having first-mover advantage is
huge. The key to grabbing the market is having the most content."
Other Internet start-ups are expanding their offerings by making
publishing as democratic as possible.
Fatbrain.com is an online bookseller of computer and technical books
that started a few years ago in a
Silicon Valley garage. Last month it
announced an infusion of $20 million
in venture capital to support a publishing program that allows authors
to sell their works online for a 50
Nico Toutenhoof for The New York Times
Eileen Despain edits a book at netLibrary's headquarters in Boulder, Colo.
The result has been the appearance of such works as Richard
Bach's "Air Ferrets Aloft." A Fatbrain.com summary describes the
title as "the first widely published
disclosure of the remarkable activities of the world's domesticated ferret community, told through the
stories of outstanding individual animals."
Soon to come: "Philosopher Ferrets in the Wilderness."
Already there is some restiveness
about whether this new technology
will produce wider selection or simply digital slush.
Netlibrary, for instance, will not
accept any self-published titles on its
site. The company's view is that
books have more credibility when
they are screened and filtered by
"We're not allowing people to post
their titles," Melancon said.
you do, it devalues the other books
because it doesn't have credibility.
Say I go to a Web site and I look up
books on low birth weight and prenatal care in developing countries. I
pull up a book by Sam Jones and I
have no idea who Sam Jones is."
The price of netLibrary's books
are the same as print versions, but
other companies are already starting to experiment with e-book price
discounts because of reduced costs
for storage, inventory and paper.
Zéro Heure, a French publisher
founded two years ago, is able to
offer discounts for electronic titles
that the Bertelsmann-owned online
bookseller, Bol.Fr, cannot match for
printed versions because of European rules regulating cover prices
for conventional books.
A minute after an order is placed,
the electronic publisher will e-mail
some of the latest French best sellers at one third off the list price to
American customers with no access
to print versions in stores here.
Zéro Heure is buying the electronic rights for print books, but is also
publishing its own original titles.
Next month, for instance, the company intends to publish "Ici Kaboul," a
continuing book about an Afghan
woman's experiences in Kabul that
will be updated quarterly with new
electronic chapters. "She's writing a
chronicle of her life and this could
continue as long as she wants," said
Jean-Pierre Arbon, one of the company's founders and the former managing director of the French publisher Flammarion.
This experimentation with literary
forms has spread to new companies
with no publishing experience like
CyberGold, an e-commerce company
that offers an array of digital products.
This month, CyberGold featured
its first electronic title, "Dark
Again," a thriller by David Saperstein, the author of the book, "Cocoon," which inspired the movie. It is
available for $7.50 for the entire book
or 50 cents a chapter. Each chapter
includes additional material -- from
the assassin's corporate memos to
One very basic question that all
these companies must confront is
whether readers will warm to the
Some companies, like netFind, are
counting on a generation of young
readers, weaned on computers, that
is ready to read on screens. But as
skeptics have pointed out, for years
to come companies will also have to
reach the much larger group of older
readers to make the market viable.
"I'm 48, and for me I can't do it,"
confessed Dillon, who is still in
charge of amassing electronic titles
for the University of Texas. "But my
kids are in high school and they read
books from beginning to end on the
Despite his own personal misgivings, he is still betting on a generational shift that will raise the popularity of e-books. He noted, for example, that the library had expected
that readers would only be interested
in electronic versions exploring computer topics. But the taste in digital
fare is far more eclectic, with readers checking out titles from "Art,
Ideology and Economics in Nazi Germany" to "100 Years of Tomorrow:
Brazilian Women's Fiction."
"We're willing to put the money
there because we're guessing that's
what will happen," he said of student
demand. 'It's getting harder and
harder to get them to go into their
car to come to the library."