With the advent of the e-book, many predicted the death of print books.
Now, after a page-turning year of mounting hype, some are forecasting the death of e-books.
Maybe, maybe not.
While e-book sales will slide, digital textbooks and print-on-demand publishing will thrive, according to a recent study by Forrester Research.
Digital delivery of custom-printed books, textbooks and e-books will account for $7.8 billion in revenues -- 17.5 percent of publishing industry revenues -- in five years, the report said.
E-books and accompanying devices will reap only a small slice of that total figure, with dedicated devices generating only $251 million in 2005.
With limited content, inadequate reading screen resolution and differing formats, e-book devices will fail to find a mass audience, O'Brien said.
"The retail consumer market is not quite ready for e-books yet," agreed E. Yegin Chen, senior analyst for Eduventures.com. "E-book vendors need to improve the reading experience to obtain significant adoption rates."
Others believe that e-books will flourish, it's only a question of when.
"Ultimately e-books will eclipse paper books," said Roland Laplant, chief marketing officer for Xlibris. "It's just not convenient now.... There needs to be a lot of change in actual consumer behavior for that shift to occur."
But other industry insiders decried Forrester's forecast, insisting e-books will fare well in the next five years.
"Those numbers are ridiculously low," said Louis Lenzi, vice president of global business development and new ventures for Thomson Multimedia.
"The industry is going to get into the millions by year three," Lenzi said. "I'm sure we'll be past $250 million by year three by a long shot."
Thomson's foray into e-book devices indicates the multimedia firm's conviction that e-books will attract a mass-market audience, rather than a niche following.
"RCA/Thomson is not a boutique manufacturer," Lenzi said. "We're only interested in the tens of thousands. We think this market will succeed."
Other analysts are more bullish. Andersen Consulting (now Accenture) forecast last June that the market for consumer e-book content will reach $2.3 billion by 2005, with 28 million people likely to adopt dedicated e-book devices.
"We expect that in 2005, 10 percent of the market will be in electronic form on the trade side," said Andres Sadler, partner in Accenture's media and entertainment practice.
Andersen researchers asked consumers how likely they would be to adopt an e-book device if features improve. Two out of three said they would buy a device.
"If there is enough content available and some of the basic features are available ... consumers will be adopting the device," Sadler said.
While analysts diverge over the future of trade e-books, many are betting that digital textbooks will succeed.
Forrester predicts that digital textbooks will sell approximately 147 million units and net $3.2 billion in 2005, while trade e-books (including PC/PDA downloads and dedicated devices) will sell only 73 million units and net $674 million.
"Digital textbooks will be many times larger in five years than trade e-books," said Dan O'Brien, senior analyst for Forrester Research.
"By 2005, a quarter of textbook sales will be digital," O'Brien said. "It's not that digital textbooks will replace physical textbooks, but the opportunities there are much greater for this change to happen."
Instead of lugging heavy textbooks to class, students can download individual chapters or entire digital textbooks to their personal computers and print them out.
While most consumers may be reluctant to peruse an electronic edition of War and Peace, many believe that students will readily pick up a digitally enhanced textbook to highlight, search and take notes.
"Digital textbooks don't have the same hurdles as e-books," O'Brien said. "You're not reading a textbook for long periods. It's not an immersive experience. It's a reference experience."
"Digital textbooks for education offer a much better value proposition compared to e-books," agreed Eduventure's Chen.
In a separate survey conducted by e-publisher Versaware, 62 percent of students said they would choose an electronic textbook over a new print book.
With custom digital textbooks, publishers can make backlist titles available indefinitely, compete with the used book market and reach students directly.
"This gives publishers a direct digital link with students which they've never had before," O'Brien said.
What's more, custom electronic printing will allow teachers to mix and match different course materials.
"No professor could resist that," said Xlibris' Laplant.
E-publishers like Versaware and WizeUp are already striking deals with major educational publishers like Thomson Learning, McGraw-Hill and Houghton Mifflin to offer customizable digital content.
Despite their obvious advantages, experts say that it will take much longer for digital textbooks to penetrate the K-12 market.
"It will take longer to get to the elementary school level because kids aren't as wired," O'Brien said.
Digital textbooks and digital coursepacks will take years to reach their full potential at the K-12 level, according to a recent Eduventures report.
"Digital textbooks will be important in higher education," Chen said. "But there are different dynamics in the K-12 market."
Unlike college students, who primarily use digital textbooks outside the classroom, K-12 students would primarily use digital textbooks inside the classroom.
Since very few K-12 schools provide PC access to each and every student, it's unlikely that many schools will adopt digital textbooks in the near future.
"For current digital textbooks to become prevalent, there needs to be greater Internet penetration into K-12 schools, particularly at the desktop level," Chen said.
Textbook buying decisions at the K-12 level are also highly centralized, making it difficult for primary school teachers to customize digital materials. Since K-12 schools are slow to adopt new textbooks, educators can't always take advantage of immediate digital delivery.
"The education sector also needs to streamline the lengthy textbook procurement process to react more quickly to rapid improvements in digital publishing," Chen said.
Despite hurdles, many believe that e-books and digital textbooks are worth the wait.
"We realize that the education side of the business may experience a faster adoption than the consumer side," Sadler said. "But we see e-books as a better proposition for both sides."
"Forecasts may vary, but everything points to a very attractive and growing market that's a mix of print and electronic formats existing with each other," Sadler said. "Over time, e-books will be a great value proposition."
