I’ve gotten in the habit over the last few years of answering some questions about ebooks and related matters on Quora. Looking back over some of the answers I’ve posted, it occurred to me that this is one of my better ones.
The question was:
And my answer:
They had no idea they needed to.
Understand that the major publishers evolved in a certain way, and adopted a certain specialized function. They’re a manufacturer, a wholesaler. They sell to distributors, who sell to retailers. Indeed, as publishing moved more and more to ownership by major corporate conglomerates, and big bookstores like Barnes & Noble came on the scene, the distribution chains by and large contracted.
Hard as it is to believe, there used to be hundreds or more of small distributors whose job was to keep the shelves on grocery stores, drugstores, and so on stocked. Some of the major publishers (Doubleday, Scribner) even used to own their own bookstore outlets, but that’s all gone too. Publishers sell to distributors, who sell to bookstores. That’s just how it works. It’s how they’ve always done things; why change?
Ebooks had a really long early adopter period. Apart from Project Gutenberg, nobody even wanted them at all until the Palm Pilot came along. Then you had ebook companies like Peanut Reader (later Palm Digital Media, then eReader), Fictionwise (which eventually bought eReader before itself being bought by Barnes & Noble), and Mobipocket (bought by Amazon) come on the scene. They were just another kind of bookstore as far as the publishers were concerned, so they distributed ebooks to them on the same wholesale terms.
The publishers didn’t really care about ebooks anyway. So few people wanted to bother with them that they only made up a fraction of a percent of trade sales. They couldn’t even be bothered to make sure ebook prices kept parity with the paper versions, so you could often find the ebook selling at hardcover price months or years after the print book had gone into its paperback edition. They didn’t care. They didn’t have to care. Print books were still selling, and that’s where they put all their attention.
There were exceptions, of course. Jim Baen of Baen Books was far-sighted enough to recognize that sooner or later ebooks might just take off—and in the meantime, since the marginal cost of cranking them out was so low, they could be used as cheap marketing material for Baen’s paper books. So he gave lots of them away on the Baen website, sold them cheaply in monthly subscription bundles, and even packaged them in CD-ROMs for binding into hardcover books with permission granted for free redistribution.
And Baen sold more paper books than ever because of that, because most people still didn’t want ebooks, but they’d pick up a freebie or even buy a cheap one to see if they liked it well enough to shell out for the paper version to actually read. But even Baen made no bones about the fact that it saw ebooks as merely a sideline, a way to market its printed books. After the Kindle came out, when people actually started buying ebooks for real, even Baen made significant changes to its program in order to get those books into the Kindle store where more people would buy them.
And so the publishers watched the small ebook stores piddle along, and watched one manufacturer after another try and fail to make an e-reader that would set the world on fire. The thing was that most consumers didn’t want to read their books off a tiny little smartphone screen. Even the new, more paper-like e-ink readers didn’t appeal. If huge manufacturers like Sony, inventor of the VCR, the Walkman, the PlayStation, and more, failed to catch consumers’ interest with their e-reader offerings, then who could? Amazon? Yeah, sure, right. In fact, both Amazon and B&N had tried selling ebooks (as PDFs and Microsoft Reader documents) in the early 2000s. Barnes & Noble had given it up as unfeasible, but Amazon continued to tinker with them even though there wasn’t that much demand.
And then Amazon decided it wanted to try again. Bear in mind, in the days before the Kindle, publishers didn’t have anywhere near the hate on for Amazon that they do now. It was one of their biggest bookstores, it moved a lot of books, and it aggressively discounted, but it wasn’t a threat to the industry or anything. At least no more so than Borders or Barnes & Noble. And at the time, the publishers were all focused on Google’s plan to violate copyright extensively by scanning all their books into a search engine. So when Amazon said, “Hey guys, we want to try doing that ebook thing too,” the publishers were all, “Yeah, sure, whatever, kid. We’ve got standard wholesale rates and such. Sign on the dotted line, and be sure you put DRM on them. Now don’t joggle our arm while we sue Google.” Boy were they in for a surprise as the entire nature of publishing changed around them.
All this is a pretty long-winded way of saying that they didn’t launch their own ebook stores because they didn’t care about ebooks. That’s not what publishers did in the ’90s and ’00s. They made books. Paper books. Someone else distributed the books. And someone else sold the books. Anyway ebook readers had flopped so many times, they couldn’t imagine any ebook store could ever pose a serious threat to their print business, which was what kept the bookstores in operation.
From their point of view, trying to do anything with ebooks would be a waste of money, and worse—if it succeeded, why it could threaten their print business, which would threaten the bookstores, which the publishers considered their most important way of exposing readers to their new books.
And that (in part) is why they’re so mad at Amazon. In dominating the ebook market, and indeed effectively creating the modern ebook market, Amazon poses a threat to print bookstores. Borders has already gone down the tubes, and Barnes & Noble is shaky. By the time they realized they should care about ebooks, and the Internet gave them the power to sell direct to consumers, it was already too late. Most consumers were already with Amazon.
Another issue that prevents publishers from selling ebooks (and, for that matter, paper books) direct to consumers is that they have some concern that their distributors and bookstores wouldn’t like the publisher to be in competition with them. (I suppose Baen got in under the radar by starting its sales so early.) It’s not clear just how serious a problem this actually is.