Why is Europe lagging behind?
I think most of you have heard the news from Amazon who announced earlier this year how they are selling more e-books than hard covers. Of course it is still small potatoes in the big picture, but I think the trend has been set in a pace that surprised most of us. When reading these kind of news in a country like Finland I feel that we are lagging so much behind. If you look the sales statistics from the Finnish Book Publishers Association, digital products (including audio books) represent only around five percent of the total sales of 260 million euros.
There are many reasons for this situation. First of all if somebody asked me six months ago about buying an e-ink based reading device, I would say no unless the person was consuming a lot of books written in english. We are a small language group with only around 5 million people, so the big sales potential is lacking. The amount of titles is finally gotten to the point where it is actually justified to buy a reading device purely for reading books. I think the situation around the variety and amount of titles has gone way better, but I think this is still an issue to be tackled. I think the idea of producing e-books aside with the printed versions is now generally accepted in most major publishing houses.
Second most important thing is the lack of key players like Amazon and Barnes & Noble back in the States. They have huge R&D resources to develop stuff from the reading devices to a complete ecosystem around it. My hats of to Wernel Vogels (CTO of Amazon), who is said to be the man behind the cloud services. Here in Finland we waited and waited to see what were the results of the reader and format wars. Now that the dust is settled, we are just starting to build things when others are already sipping their ice tea in the porch. I think everybody acknowledges that in the European businesses are more likely to play it more safely than their oversea counterparts where risk taking and possible failing is generally more accepted. Small players in Europe should have the edge on being innovative and flexible, but that is not actually happening. Instead we see big players dominating the publishing business.
Also one peculiar thing has happened in Finland. Major mobile and broadband operators (Sonera and Elisa) who used to provide just the infrastructure are now very keen also selling content which is delivered through their wired and wireless connections. Elisa for example has set up an online service which sells only digital audio and e-books. I think it is an interesting concept, but I wonder how sustainable it is. But at least they have the guts to build the infrastructure and applications to support the sales of digital products. Of course this is upsetting some old players in the value chain, like traditional brick and mortar chains.
To sum it up, there are still lot of unanswered questions and the whole publishing industry is struggling how to monetize digital content. I have been following the publishing industry for such a short time, that even I do not have a clear vision who is going to be the winner here. But what comes to books in general, I do not see them struggling with the same problems as other content types like news and magazines. Books have managed to obtain a steady state in the consumers media usage starting all the way from the Gutenberg days. I think e-books just a different format aside with hard covers, paperbacks and audio books. Just enable readers to find relevant and interesting books and let them choose in what format they want to consume them.