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Can publishers of traditional books (such as textbooks) make profits in
the digital age - explain how they might attempt this? What are the challenges
to protecting property rights?
Introduction to problem of Traditional Books
Nowadays, technological advancement has shaped our reading patterns also. Market analysis indicates that in developing countries e-books sales are more than the sales of traditional books because of the advantages provided by e-books. As a result of the business of this technological and behavioural change of traditional bookselling and publishing companies is getting influence in a negative way. E-books came as an innovative form of books and surpassed traditional books. Here comes a question that is the main concerning point of this report.
Can publishers of traditional books
(such as textbooks) make profits in the digital age? Moreover, the report will
discuss this question in other dimensions also to reach the generalizable
conclusion. In this report, we will discuss what are the factors that still
encourage readers to buy traditional books rather than e-books? How a traditional
publisher might attempt opportunities and competition to win the market? What
are the challenges to protecting property rights? Addressing these area and key
questions report will include a statistical overview of sales and trend of
buying e-books and traditional books
Background of Traditional Books
E-books are new in the market. In
the past, hard binding books were quite common in the society, or in fact the
only option available to the readers. Somehow, the situation is changed now. Currently, readers have two
options whether to buy a hard traditional book or purchase an e-book (a soft
form of books)
Digital Economy of Traditional Books
Considering the increasing trends
and sales several research studies have to find e-books a threat to traditional
books. Somehow, traditional books business is not decreased too much. Changes
in the present and the past total number of sales are evidence of changes
caused by technology
Other than e-books overall digital
economy is also getting advancement and importance with the passage of time
Market Situation of Traditional Books
Source: https://projectebooks.wordpress.com/2015/05/18/e-books-in-the-shadow-of-print/
As the e-book reading market is growing fast, new e-book
publisher and seller companies are getting entrance in the market. As mentioned
earlier readers prefer e-books because of ease of and quick availability. The
key reason behind this ease is the availability of many platform and e-book
seller publishers
Thus concluding the whole market
situation analysis, we can say that the current market of e-books and print
books are fluctuating continuously. E-books are new in the market, but still,
traditional market profitability is not going to face loss in business
operations
Traditional books and e-books have
several types of advantages and disadvantages for readers that can influence
the sales and adoption trend in the market. Advantages e-book is threats for
traditional books as an increase in the advantages of e-books will encourage the
selected audience to buy e-books rather than wasting their money on the
purchase of traditional books. When both contain the same content then why not
to prefer low prices
·
Advantages
and Disadvantages of Traditional Books
|
Advantages |
Disadvantages |
|
·
Tangible and easy to carry |
·
Inconvenience |
|
·
No batteries needed |
·
Space consuming |
|
·
No need for any extra reading device |
·
Hard to carry around |
In light of the table mentioned
above, we can say that traditional books are the best and preferable option for
readers as these are tangible that one can easily carry. Classic books don't
depend upon batteries. Readers can enjoy reading anytime without any fear of
battery-related issues. Moreover, traditional books also don't require extra
reading devices or electronic devices to assist in reading
·
Advantages
and Disadvantages of e-Books
|
Advantages |
Disadvantages |
|
·
Speed |
·
Difficulty in reading |
|
·
Easy to Access |
·
Battery life |
|
·
Fonts adjustment options |
·
Cannot borrow |
|
·
Cheaper |
|
|
·
No limit for storage |
|
Moreover, a unique feature that
takes e-books at an advanced level and develops competitive edge is that
readers can also access their e-books from any other locations. For instance,
if the e-book is stored in the personal computer at readers home even then the
reader can access it while sitting in his/her office. Traditional books cannot
provide this kind of advantages. Somehow, we cannot distinguish e-books as the
best option because e-books have some disadvantages also. For instance, readers
cannot use e-books if they don't have an e-reader. Battery low is also a
problem that can make readers unable to read these books.
Key Concepts of Traditional Books
Switching Cost of Traditional Books
Switching cost is an economic term that represents the cost incurred by an individual or a group of customers while switching from one product or service to the product or service. Supplier changes their product line to the products that have a good reputation and high chances of sales. If we implement this concept in e-books business, it will help us know that suppliers are highly concerned about hard or traditional books rather than e-books. Maybe a significant factor behind this has differed in the marginal cost and net profit generated by the operations. Somehow, if we talk about the price, we can say that the minimal costs of digital and electronic books (e-books) are almost 0. The critical factor behind this 0 marginal cost is that digital information is relatively expensive to create for the publishers somehow low-cost availability and distribution generate the distinction between e-books and traditional books marginal cost.
Moreover other than suppliers readers
are also highly concerned with this concept. Readers also do not switch to a
new book type if they are engaged with this type of books. In such a situation,
we can say that the switching cost is high. The cost is because of customers substantial
equity towards the product. If customers are once engaged with the traditional
book, then it will be a hard job to switch these customers or readers to the
new form as eBooks. In case we insist on switching them to a new product then
it will require high costs. Readers are familiar and habitual of reading
traditional style books without using any devices. Therefore, when e-books
require them to learn the use of new devices to read e-books, they will
definitely find it difficult. Thus concluding the whole discussion, we can say
that switching cost is high for both customers and suppliers.
·
Network
Externalities
Research studies concluded that
Social network and peer group could influence perception and buying decision.
Readers as a customer also get influence from their network and peer group
while deciding on buying an e-book or traditional book. The network can have
both types of impact positive and negative as it all depends upon the system of
readers. For instance, students are encouraged by their teachers to read
traditional books will prefer to buy a conventional book even e-books provide
them with attractive discount offers. Network externalities and an increase in
the total number of readers in a network has a positive impact on overall
profitability. Term network externalities represent the change in the surplus
and benefit derived by the agents. According to the research network
externalities emphasis that Somehow artificially created, network externalities
can also benefit a business group. As an example, we can say that if publishers
of traditional books artificially create network externalities, then it can
cause to increase their business.
Lock in Traditional Books
Lock in is like bounding customers with the offered products. Companies usually try to lock in their customers to avoid customer churn. Customers interests in substitutes and available alternative options can work as a threat to a business. Therefore publisher also ever try to engage their customer at maximum with their products such as a traditional book. Customers lock-in is also possible through secure positioning and continuous promotion of products. Lock in benefit publishers as because of this readers usually assume switching to a new product relatively tricky job.
Bundling Traditional Books
As discussed earlier in this
report publishers has marginal cost meagre because of the high prices required
to be spent on books selling and publishing process. In such a situation, they
are paying emphasis on the increase of their books in such a way that reduces
their total cost or increase their profit margin. The best strategies in such a
situation are to get leverage from fixed cost reduction and to offer their
books in bundles. For instance, introducing a package for 1st-year
students to buy all books in the solid form (traditional books) and get a
discount. Bulk sales will increase the profit margin. Therefore, publishers
will easily afford discounted prices.
·
Solution
of Traditional Books
Bundling was the best solution to
the problems faced by traditional publishers. Somehow another essential
solution available to publishers is to increase their sales through involving
social media platforms for the promotion. Social media platform provide an
opportunity for the businessman to communicate and interact with their targeted
customers. Other than using marketing strategies traditional books publishers
can also compete e-books through changing their pricing strategies and targeted
markets.
· Challenges to face Traditional Books
Key challenges available to print
and traditional books publishers are related to ignorance, risk, uncertainties
patents, and copyrights. Many times traditional publishers publish a book and
another book publish copy their content because of the inefficient copyright
system. Copyrights can prevent such risk factor and protect the publishers from
data breaches and copies without permission. Patents and legal documents also
support traditional and e-book publishers to avoid negative consequences. Ignorance
is also a significant challenge. Customers or reader are also not well aware of
the possible benefits that they can earn by using offered products. There are many challenges related to
copyright in the digital age. It is important not to include other writer’s
work without its consent in the books. The copy writes laws however can help
such writers who think there work have been stolen or used without their permission.
·
Findings of Traditional Books
Research findings project the
importance of traditional books and e-books. According to research studies,
both types of books have different kinds of advantages and disadvantages. How
publishers can get maximum benefit and how customers can get maximum benefits
is a concerning question. Somehow it all depends upon the right selection of
books
Moreover, the market situation
also indicated that print books and traditional books market is at a declining
trend because of advancement in technology. Therefore, areas in which
technology and the internet are not advanced, classic books business is still
growing. While on the other hand, countries have developed techniques and a
large number of internet users has a declining trend for traditional books and
the growing trend for electronic publications
The presented below graph present statistical results of
printed and e-books in the year 2014 and 2018 to show the difference in the
worth of print and electronic books. By this graph, we can say that in 2014 the
print books market was leading as electronic books and e-readers were not quite
common in the world
Source: https://www.statista.com/chart/2823/book-market-development-forecast/
The following graph presents the demographic details of
e-book readers in the United States. The statistics of 2018, indicate that 34%
of e-book readers are between the ages of 18-29. Readers of this age usually
read e-books such as novels, story books, and academic books
Source: https://www.statista.com/statistics/249767/e-book-readers-in-the-us-by-age/
Analysing the current market situation of e-books we also
collect information about the total number of e-books units purchased in the US
market during the last two years. By the presented below graph the total number
of e-books purchased in 2016 was 180 million that declined to 162 million in
2017
Source: https://www.statista.com/statistics/191992/sales-of-e-books-in-the-us-since-2006/
A more detailed analysis of printed book and e-book
statistics is presented below in the bar chart. By the given below results, we
can say that readers usually prefer e-books because of ease of availability
Moreover, research findings also
concluded that publishers of traditional books (such as textbooks) make profits
in the digital age also as all market shares of books are not covered by the
online books and e-books still they have high customer demand as an opportunity
to grow.
·
Conclusion
on Traditional Books
The whole discussion concludes that traditional and e-book publisher has fierce competition in the market that encouraged them to bring efficiencies and changes in their strategies to remain sustainable in the market. Traditional books publisher are facing a decline in popular books demand, but still, their business is in a practical situation as it has enough business to generate operating income. Legal rights and copyright protections challenges can influence the activity of publishers if not appropriately managed.
References of Traditional Books
Bergström, A., 2015. E-books in the shadow of
print. [Online]
Available at: https://projectebooks.wordpress.com/2015/05/18/e-books-in-the-shadow-of-print/
Korwitts, K., 2019. Print
books vs E-books: What’s the future of reading?. [Online]
Available at: https://www.surveymonkey.com/curiosity/print-books-vs-e-books-whats-the-future-of-reading/
Lavergne, C., 2017. Book
publishing in the digital age. [Online]
Available at: https://techcrunch.com/2017/04/10/book-publishing-in-the-digital-age/?guccounter=1&guce_referrer_us=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_cs=uuZl8rVEH7DqIKtwKzNFFw
Schwab, P.-N., 2017. Amazon’s
new business move will lock customers further. [Online]
Available at: https://www.intotheminds.com/blog/en/amazons-new-business-move-will-lock-customers-further/
Statista.com, 2014. E-Books
Set to Surpass Print in the U.S. [Online]
Available at: https://www.statista.com/chart/2823/book-market-development-forecast/
statista.com, 2017. E-books:
unit sales in the U.S. in 2017. [Online]
Available at: https://www.statista.com/statistics/191992/sales-of-e-books-in-the-us-since-2006/
Statista.com, 2018. E-book
readers in the U.S. 2018, by age. [Online]
Available at: https://www.statista.com/statistics/249767/e-book-readers-in-the-us-by-age/
Zhang, Y. &
Kudva, S., 2014. E-books Versus Print Books: Readers’ Choices and Preferences
Across Contexts. JOURNAL OF THE ASSOCIATION FOR INFORMATION SCIENCE AND
TECHNOLOGY, 65(8), pp. 1695-1706.
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