So e-books are taking over the world. Depending on who you ask, that’s either a good thing (readers who travel) or a very bad thing (publishers). Either way, the genie is out of the bottle for good. The big challenge is how to tap into the gift market.

If I purchase a p-book (you know, the traditional paper kind), I can read it myself, lend it to others, or give it away. There’s a lot of value in all three of those options. When I purchase an e-book, leaving aside the problem of being trapped on one type of e-reader, I can mainly just read it myself. That’s pretty limiting to the expansion of the market.

Barnes and Noble have tackled the lending issue with the Nook, which lets you lend an e-book to another Nook owner. While the book is out on loan, you get locked out of reading it yourself. But the loan feature has some major flaws, including the fact that you can only lend an e-book title once and there’s a two-week limit to the loan period. Who reads a loaned book in 2 weeks?

So far, no one has created a legal way for the general public to give e-books as gifts. There are ways to cheat to provide free copies to your friends, but that certainly isn’t happy news for either authors or publishers.

The illicit trading of music files is one of the ways that MP3s permanently transformed the music industry. In response, Apple started iTunes and legitimized the buying of music in single tracks. Now a whole “good” portion of the population is comfortable buying music online. Unfortunately, Apple hasn’t solved the issue of giving music as a gift, other than offering the ubiquitous gift card. E-books suffer the same fate.

Trouble is, gift cards don’t create emotional connections to a personally selected item, like a particular book can. With books being a popular gift (and my favorite), this is a big issue to solve. Wish I knew how to crack this one. I’d be sitting pretty on the royalties.

UPDATE - July 13, 2010 - Well, it’s happened already. Sony just broke the $100 e-reader barrier. Looks like there will be e-readers for everyone this holiday season! - R.S.

May 1st was a big day for the e-reader market. That’s when the Kobo, at $149, became the cheapest and most stripped down e-reader you could buy. Soon after, Borders started selling a competitive but cheaper reader, the Aluratek Libre for only $119.99. Now Barnes & Noble has a version of the Nook at $149, and Amazon Kindle promptly slashed its price to $189. Sony, not to be left out of the fun, has also dropped their prices. What’s really going on here? Is it simply competitive pricing, or something more?

Let’s look to the printer and toner pricing structure for a possible answer. Each day, printers are sold with more features, and at lower prices. The catch is the toner: It continues to be ridiculously expensive. I break out in hives when I have to buy toner cartridges for my colour printer. I even purchased a new printer once because it was cheaper than buying the toner! Don’t worry, I found the old one a new home at a recycling charity. Seems e-books are the new toner, and e-readers the new printers.

The first e-readers were expensive ($359 for the first Kindle), and e-books were cheap (typically about $9.99 per book). The publishers didn’t like it, but they had to live within a model where the retailer set the price. When Apple’s iPad launched this spring they forced a change that swept the industry, and now retailers have less discount wiggle room. Not surprisingly, e-books prices have shot up to the $12 range today.

The only lever left to support the rapid rise of digital book sales (and save the publishing industry) is for e-reader prices to continue to drop. Cheaper means much more accessible, and the number of people who own an e-reader will explode. Back to my printer and toner analogy, almost anyone can buy a colour printer these days, but the toner is a whole other story. We need to keep an eye on e-book pricing, and take bets on which e-readers will survive the price wars (the iRex has already filed for bankruptcy protection in the USA), and which ones will go down with last year’s colour printer models.

As Bette Davis/Margo Channing said in the movie, All About Eve, “Fasten your seatbelts. It’s going to be a bumpy night!”

The e-book self-publishing world is about to get a little more crowded. With the launch of Pubit! this summer, Barnes & Noble (B&N) has inserted itself directly into the publishing process, joining other retailers like Amazon and Sony. Pubit! is a DIY option for independent publishers and authors to deliver their works digitally through B&N’s site and e-book store.

While this may on the surface seem like great news for the indie publishing crowd, there are definite issues. For example, B&N has been noncommittal up to this point about royalty information, which makes it difficult to know if Pubit! can offer a more attractive deal or not. Another challenge authors and publishers face with an ever growing list of retailers offering self-publishing is how to choose. Which retailer might offer the best audience and reach? Does it make sense to manually publish with every major retailer, one by one, to make sure the playing field is covered despite the time and effort?

In order to make this really work, and work well, we’re going to have to see some consolidation happen. A company that is already running ahead with this is Smashwords. Publish with them and they do the distribution for you to their own site, as well as Kobo, Apple, Amazon, Sony, and even B&N. One site, one process, and one revenue payment makes it simple and transparent. What a concept! Big book retailers like B&N should consider taking a page out of Smashwords success manual.

One of the challenges publishers and authors face with e-books is that no one knows what anyone’s reading. Without eye-catching book jackets displaying the author’s name prominently, the potential for word-of-mouth marketing is virtually lost.

GelaSkins, a company that makes covers for every imaginable mobile device and all the major e-readers, could offer a solution to the branding dilemma of e-books. You can currently buy ready-made GelaSkins for devices, or custom design something unique; the options for design are endless.

An author could create a GelaSkins cover of her latest book and offer it as a giveaway to readers. Or publishers could host a contest, like an iPad draw, and cover the prize with a custom-designed book skin. Authors could also sell skins alongside their books to generate extra revenue. With any of these scenarios, the consumer gets a visual cue as well as protection for their e-reader, and the author and publisher get their names displayed for the world to see.

At about $20 per skin this isn’t exactly an inexpensive option, particularly since e-books still come in below that price. But if e-reading continues to grow like it has, authors and publishers will be looking for creative ways to brand their books. GelaSkins might be a product to do it.

Give us your take: Would you pay $20 for a skin that looks like your favourite book cover?

Image credit: Bookshelf design for Kindle 2 by Colin Thompson

My Kobo Reader arrived this weekend.  And wow, it’s a very nice light reader — almost Star Trek:TNG-like. It makes my Sony PRS-505 Reader seem heavy and cumbersome. The contrast reminds me of the difference between Mac and PC. And at only $150, it’s a great entry-level reader for people new to e-reading technology. It’s not the golden $99 price point yet, but getting there.

The Kobo doesn’t have the wireless capability that comes with a Kindle, but then my Sony doesn’t have wireless either. Plug and load is still a great way to get what you want to have on the go. The Kobo interface is simple and easy to use, with the only disappointment that I can’t load ePubs that I’ve purchased from other stores.

Then the “a-ha” moment arrived. The Kobo isn’t really competing with Sony or any of the other readers on the market. Kobo is going after Amazon. The Kindle reader isn’t really the “thing” that Amazon is interested in selling. Amazon wants to be the source for content — much like iTunes is the source for music and video and Apple happens to sell the device you can play them on. Kobo wants to play too.

Kobo has focused its efforts on content delivery over multiple platforms. You can read your Kobo books on your Blackberry or iPhone, on your desktop computer, on other readers (including the Sony), or now on its own portable reader. So the hardware solution doesn’t need to be perfect; it just needs to be cheap, cheerful, and easy to come by. (Though the Kobo is very cute, with the soft blue rubber navigation button on front and grey quilted back. Plus the 100 pre-loaded free books sure help the open-the-box, get-started ease.)

No, the real money for Kobo will come from selling content that can be used anywhere a consumer wants it. With multiple platforms available for reading what I buy, I’m going to do all my e-book purchasing at Kobo from now on. And that’s just what they want to happen.

P.S. It makes a wonderful Mother’s Day gift.  My 68-year-old mother LOVED it as soon as she touched it. Not sure what she’ll do with her collection of fabric book cover protectors and bookmarks, but she’ll surely find some way to make the Kobo even more homey than it already is.

No question, e-reading recently got a whole lot sexier. Apple’s iPad, the latest e-book reader, is sleek and shiny, and has definitely upped the ante. Not only can you read your favourite book (in colour), you can surf the web, play games, keep up with social networks, display photos, and so much more.

It’s estimated there are some 10 million downloadable book titles available and a dizzying array of readers to enjoy them on. On the first day of its launch, Apple’s iBookstore saw 250,000 downloads alone. Before the iPad, Amazon’s Kindle was the sweetheart of the industry with a whopping 90% of the market share. Sales of the iPad show it’s looking for a takeover, and many wonder if it will sink the Kindle altogether and leave all other readers in its dust.

But if the iPad is being used specifically as a reader, word on the street is that the Kindle, or other single-purpose reader, may be a better option. There’s the matter of eInk, the technology that makes the Kindle screen delightfully easy to read in any light. Take an iPad to the beach on a sunny day and good luck reading the screen. Then there’s the battery. The Kindle has enough juice for up to two weeks of reading. The iPad? Ten hours.

If the iPad hype and sales have shown us anything, it’s that e-books are teetering on the edge of becoming mainstream, and consumers want digital content and are willing to shell out for it. From that perspective, the iPad could become the tipping point for the e-book market, and publishers and authors need to focus on the implications and opportunities that will bring.

Amazon has recently announced two changes to its Kindle publishing program that will be of interest to self-published authors.

1] International authors now have access to Kindle publishing.

Up until last week, only US publishers were able to create and sell Kindle versions of their e-books through the Amazon site. Now the Kindle publishing option is available to publishers worldwide. Payment to all international publishers is made by cheque, direct deposit still being available only to those in the United States.

2] Amazon will soon offer publishers royalties of 70% on e-books.

Yesterday Amazon announced a new program that would allow publishers and authors to earn 70% of their e-book’s list price, net of Amazon’s delivery costs. Currently, publishers earn 35% of list on Kindle books. At first blush, the new program seems generous — which it is — but it’s also Amazon’s way of enticing publishers to play by its rules about pricing and availability. To qualify for the new royalty rate, the e-book must meet certain criteria:

• Have a list price between $2.99 and $9.99
• Be priced 20% below the lowest physical book price
• Be made available for sale “in all geographies for which the author or publisher has rights”
• Participate in a bundle of features, including text-to-speech
• “Be offered at or below price parity with competition”

Both the old and new royalty programs will exist side-by-side and publishers will be able to choose which one they wish to participate in. The new program comes into effect on June 30, 2010. Note: the 70% royalty option will initially be available to US publishers only.

Bowker, the agency that administer ISBNs in the United States, has cut its prices on ISBNs blocks. A block of 10 ISBNs is now $250 instead of $400.

The Bowker website states that the price cut was made in response to publishers requiring so many more ISBNs because of multiple formats and editions. Many books are now published not only in hard cover and soft cover, but in a wide variety of e-book formats as well.

Bowker recommends a different identifier for each e-book format, so that your Kindle edition, for example, would have a different ISBN than the Sony Reader edition. There has been heated debate about this practice in the industry. Many small and independent publishers say they simply can’t afford to use so many ISBNs for each title, and that a single ISBN for all e-book formats is appropriate.

Others remain firm in their opinion that different numbers for each format is the best way to help sales channels and consumers know what they’re getting. Industry consultant Laura Dawson, who runs a weekly Twitter chat about ISBNs, states it succinctly:

ISBNs are for saying “this one is not that one”.

So which way should a self-published author go? We recommend giving each format a different number. A block of 10 ISBNs, which now costs just $250, should be enough to handle all the different versions of a single first edition title. It’s a worthwhile investment to keep confusion to a minimum.

Amazon today unveiled a new addition to its Kindle line of e-reading devices, the Kindle DX. The most notable feature of the DX is its larger screen size — nearly 10″ on the diagonal versus the Kindle’s 6″ screen.

Amazon is touting the device as a comfortable reader for newspapers and text books, as well as e-books. Three major US newspapers — the New York Times, the Boston Globe and the Washington Post — have signed on to offer subscriptions at reduced prices.

The Kindle DX is priced at $489, $130 more than the Kindle. And yet, apart from the larger screen size, there’s not much more to love. It’s still a black-and-white display. There’s still no ePub or WiFi support.

Early reactions to the release of the DX has been lukewarm at best. Here’s at peek at some of the commentary from the publishing world circulating on Twitter this morning:

SmartBitches: Dear Amazon: please, keep it coming. I’m enjoying this way too much. I can has moar fail plz? Kthxbye!” #dud #amazonfail

paperhaus: Wondering why Amazon bothered with Kindle 2 at all. It’s not like they cooked up a 8.5×11 screen in 2 months.

ljndawson: $489 Kindle with 16 shades of grey and no discounts on subscriptions if you’re in the paper’s area = lead balloon. #dud

wmacphail: The Kindle needs to be WAY cheaper. Apple is going to kick this thing’s ass.

sarahw: Not getting over the $489 price tag. In a recession. Two months after Kindle 2 unveiled. Like reissuing bare-bones DVD w/ one or 2 extras.

kirkbiglione: No ePub, no WiFi. Kindle closed system continues and it won’t hurt Amazon one bit.

Only time will tell whether consumers agree and bypass the DX, or whether the large screen size will prove an enticement.

Following this week’s announcement that Amazon had acquired Lexcycle, makers of the Stanza e-reader app, industry watchers have weighed in with their perspectives. Here are three good commentaries on what the acquisition means for publishing:

Kassia Krozser remarks that the Lexcycle acquisition is not “the end of the world as we know it,” but neither is it great news for publishers and readers.

Consumers are slowly being locked into a single vendor. Publishers are being backed into Amazon’s corner. Yet, yet, yet, I ask again: where are the publishing initiatives, the fresh thinking, to protect the free market?

BookNet Canada offers a Canadian perspective on the deal and suggest three actions publishers can take to keep Amazon from a market stranglehold.

This market is developing at a fevered rate. If you want to help shape the forces that are going to in turn, influence the way you create, sell and acquire books in the future, then now is the time.

Mike Shatzkin believes the real issues brought to light by the deal are pricing and making books discoverable by readers. He calls for the big publishers to come together to develop an online bookstore of their own.

The current effort by several general trade publishers to drive traffic to their own house-branded web sites is misguided and doomed. But Amazon (and Shelfari, GoodReads, LibraryThing, and our new entrant, Filedby.com) have demonstrated that sites with information across the trade book spectrum have real consumer appeal.