Growing e-book industry discusses challenges at MediaBistro event

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The paradigm shift in digital reading is happening, according to Steve Haber, president of Sony's digital reading business division, on a panel at the MediaBistro eBook Reader conference in New York today.

“We are looking at how to maximize the experience going from traditional to digital readers,” he said. “Reading on an LCD screen is not cozy. The back light is challenging on the eyes. So we have focused on the black and white design for reading text, which is more enjoyable.”

This holiday season has seen an explosion in the marketing of new e-readers. Amazon is aggressively marketing the Kindle as a holiday gift, Haber said Sony's third E-Reader will ship by Christmas of this year, and Barnes and Noble has released the Nook, its less expensive e-reader. Best Buy, Costco, Target, and Wal-Mart have all been offering deals on these products as well.

Forrester predicts that this will be the breakout year for the devices, anticipating a sell-through in 2009 of 3 million units. The analysts also expect sales in 2010 to double, bringing cumulative sales of e-readers to 10 million by the end of 2010.

“The lower prices, more content, better distribution, and lots of media hype are contributing to faster-than-expected adoption of e-reader devices in 2009,” said Sarah Rotman Epps, in Forrester's eReader Holiday Outlook 2009 report.

One of the challenges to e-reader adoption is customer overload with personal electronic devices.

“You've got your iPhone, your laptop, your MP3 player and so on, so adding a Kindle is just another thing you have to carry around,” said Bob Livolsi, founder/CEO of Books on Board, an e-commerce site that sells more than 400,000 e-book titles.

Livolsi, who also spoke on a panel at the MediaBistro event, said that many of his customers read books on laptops and phones, and prefer backlit screens to black and white ink screens. But the industry is aware that consumers want choice.

On Monday, Amazon released the Kindle app for the iPhone. Another challenge is that e-readers are relatively expensive for their functionality — they're specifically devoted to books. Barnes and Noble's Nook costs $259, Sony's Pocket device is $199, and the Kindle is $259 but the new Sony Daily Edition reaches $399 and the Kindle DX is $489. This cost is incurred before buying any books.

"Buying a device that you then have to purchase digital books for can be a challenge when traditional print books are very affordable,” said Andrew Weinstein, VP and GM for Ingram Digital's retail solutions division, at the MediaBistro event. “Some people will just buy the book, since it is affordable and offers a better reading experience.”

To address this issue, Amazon has tried to push consumer adoption by setting the industry's competitive price point for e-books at $9.99 each. But publishers are concerned that this cost is not profitable and runs the risk of hurting the choice of books that will be able to be published.

“Amazon is selling e-books below cost and it is hurting the industry,” said Livolsi.

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