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New media formats often compete with established forms and formats for a share of the audience's attention. For example, the printed word was once seen—and perhaps in some quarters still is seen—as an affront to knowledge and the oral tradition of storytelling and teaching. The invention of television forever changed the role of the radio broadcast in modern society. In this sense, the introduction of a new medium or form of communication is often accompanied by a dynamic tension between old and new—between the desire to sustain an established form of meaning and our natural interest in the promise of something different.
This conflict often expresses itself as confusion and as fear that the "new" thing will mean the demise of the old. In practice, and as we will see over the course of this paper, this is generally not the case. The more common pattern throughout history is that established forms adapt and change—or at least the role they play and the way in which we use them adapts and changes—to account for the new.
History also tells us that the adoption of a new form of communication or technology often proceeds in entirely unpredictable and unexpected ways. The complex web of related technology, culture, politics, and economics that accompanies the introduction of a new technology can only be truly observed and understood from the secure, retrospective vantage point of the future.
These ideas underpin the discussion that follows. This study aims to contribute to our understanding of the publishing industry by presenting a comprehensive overview of audio and digital book publishing in Canada, and by exploring current issues and market trends related to the production, distribution, and use of a range of non-print formats.
The study encompasses both English and French-language markets in Canada. All major categories of book publishing, including educational texts, are considered but the focus throughout is largely on trade publishing—that is, books that are published for a general audience and sold mainly through bookstores or circulated in public libraries.
We address two broad categories in terms of format: (1) audiobooks and (2) eBooks. For our purposes, an audiobook is a spoken word recording based on a print edition of a book. This may be a complete unabridged audio edition of the original work or an abridged recording. We include in this definition works read by the author, by volunteer or professional narrators, or by multiple performers. We also include any recordings based on a print edition that were originally made for television or radio broadcast and subsequently published as a distinct audio edition.
We apply a similarly broad definition for the eBook category. For our purposes, eBooks are any text-based, book-length digital editions (whether based on an equivalent print edition or not). This definition anticipates a range of business-to-business and business-to-consumer formats for adapting, distributing, and delivering digital book content. It also allows for the possibility of both fixed-page formats, such as Adobe's ubiquitous Portable Document Format (PDF), and reflowable file formats, such as XML or HTML-based files. Finally, our eBook definition includes both full-length digital editions (with or without additional indexing, media, or other incremental features) along with smaller, discrete units of the original work, whether published individually or aggregated within a larger anthology or database.
In making general references to these broad categories, we use the terms "digital editions," "digital publishing," "alternate formats," and "non-print formats" interchangeably throughout the paper.
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The study was commissioned by the Initiative for Equitable Library Access (IELA) at Library and Archives Canada (LAC) and conducted from August through October 2008.
IELA has a mandate to develop a national strategy for equitable library access for Canadians with print disabilities—that is, to expand the range and availability of content within public libraries that can be accessed by someone with a print disability.
Within the IELA framework, the term "print disability" describes a fairly broad spectrum of visual, perceptual, and physical disabilities, including sight impairments, learning disabilities, and any other cognitive or physical disability that prevents a person from reading a standard print edition of a book. Estimates of the population of print-disabled readers in Canada run as high as three million people—roughly 10% of the total population of the country.
Over the course of this study, we will explore issues that pertain both to a mainstream reading audience and to print-disabled readers. This will allow us to identify overlapping trends where developments in the mainstream book market may be relevant to the print-disabled community, or vice versa. This approach also allows us to consider the accessibility of current and emerging commercial formats in relation to specialized formats and technologies developed explicitly for print-disabled readers.
As we will see, mainstream and print-disabled audiences tend to blend naturally—to a degree—within the digital content marketplace. An increasing selection of digital book content presents new opportunities for print-disabled readers, especially when these digital formats are twinned with specialized assistive technologies for readers with disabilities. Similarly, the print-disabled community has spurred innovation and digitization efforts in other major book markets, and we should be alert to this possibility in Canada as well.
Our research process for the study began with an extensive discovery phase that identified and examined existing data and analysis regarding audio and digital publishing in Canada and in select foreign markets, particularly those that are heavy exporters of cultural product to Canada.
This initial research phase was complemented with a wide-ranging interview series with industry professionals in Canada and the US. The interview panel comprised publishers, industry associations, librarians, retailers, specialized service providers, technical experts, and industry consultants. Without exception, these interview respondents were incredibly generous with their insights and assistance and we are pleased to recognize their contribution here.
We should note at the outset that there is not a great deal of publicly available data on the publication of audiobooks or other types of digital editions in Canada. This paper draws on data from Statistics Canada and other published studies for its statistical foundations. We expand on this with observations and insights gathered through the interview panel as well as additional proprietary data contributed by individual firms or organizations and other secondary sources. For this, we would particularly like to recognize the generous contributions of specialized data and other research materials from BookNet Canada, Bowker, the Department of Canadian Heritage, Library and Archives Canada, l'Observatoire de la Culture et des communications du Québec, la Société de développement des entreprises culturelles, la Banque de titres de langue française, and Bibliothèque et Archives nationales du Québec.
Our findings and observations are summarized throughout the paper and organized in the following chapters:
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For roughly ten years now, publishers and consumers have been exposed to dramatic predictions about the emergence of electronic books and the decline of print editions. A 2000 PriceWaterhouseCoopers study forecasted that eBooks would account for 26% of the unit sales for books by 2004. Also in 2000, Anderson Consulting predicted that one out of every ten books would be published electronically by 2005.
With the benefit of hindsight, these projections seem wildly optimistic. These early forecasts (and many others like them) have encouraged a fair degree of caution—even skepticism—throughout the book trade. Industry observers have cried wolf about the imminent digital future so many times that many publishers have simply learned to pay less attention over the years.
We have to acknowledge this skepticism even as we observe that we are writing this report at a time of rapid change in the book business. The widespread adoption of broadband Internet has created a new mass medium—one that supports a host of related technologies and that has triggered important changes in how we read and write. The Internet is sometimes politely referred to as a disruptive technology, in that it can reshape both behaviour and markets. The publishing industry has already realized some of the opportunities and challenges of an Internet-enabled marketplace, and experience tells us that in this environment change can be fast and far-reaching.
In short, the book market is rearranging itself as we speak, and there is little doubt that there is something important happening in the world of digital publishing.
First, consumer and institutional markets for digital book content are growing quickly. Anyone younger than 30 years old today (that is, in 2008) has grown up using computers, and only the oldest in this group can remember a time when the Internet was not a mainstream medium for everyday communication, entertainment, schoolwork, or shopping. These "digital natives" are ready consumers of non-print formats and are much more at ease with living off a screen, as opposed to the printed page, then those of us who are...older.
The Economist recently observed that while predictions of the "paperless office" have been with us since the 1960s, "What actually happened was that global consumption of office paper more than doubled in the last two decades of the 20th century, as digital technology made printing cheaper and easier than ever before.1"
The article continues to observe that in 2008, "[The prediction of a paperless office] seems to be coming true at last. American office workers' use of paper has actually been in decline since 2001...The explanation seems to be sociological rather than technological. A new generation of workers, who have grown up with e-mail, word processing and the Internet, feel less of a need to print documents out than their older colleagues did. Offices are still far from paperless, but the trend is clear."
At the other end of the demographic spectrum, Canada's aging population means that a growing number of consumers will prefer or require non-print formats to help counter sight disabilities or other print-reading challenges that inhibit their ability to use conventional print editions.
To take a broader view of accessibility for a moment, we have seen cases, notably in the US, where the introduction of standards and supporting legislation for accessible materials has been an important driver for digitization in book publishing. For example, the NIMAS2 standard has been nationally adopted in the US, and was passed into law in 2004. Within the NIMAS framework, K-12 schools throughout the country follow a formal XML-based standard for accessible learning materials. The related legislation for NIMAS requires publishers selling print materials to US schools to also provide digital source files to a national repository for conversion to various braille, eBook, and audio formats and circulation to print-disabled students.
Beyond the effect of standards or legislation for the print-disabled population, the mass market's adoption of a new generation of Internet-enabled portable devices has accelerated consumption of digital content, both online and via download. These cell phones, smart phones, and PDAs—most notably Research in Motion's Blackberry and the Apple iPhone—support electronic reading with new degrees of ease of use, portability, and quality of reading experience. Similarly, the rapid adoption of purpose-built reading devices, especially the Sony Reader and the Amazon Kindle3, has given eBooks real traction in consumer markets for the first time.
At the same time, thanks to their increasingly digital production workflows, virtually all publishers can easily generate some level of eBook file from their native production files. Year over year, the volume of digitized backlist titles (i.e., older titles for which suitable digital production files no longer exist) is also growing exponentially. As we will see below, Canadian publishers have begun to assemble the first major collection of digital Canadian content and are poised to add significantly to this archive.
Finally, the digital marketplace has given rise to new sales channels and new types of trading partners that present publishers with additional opportunities to bring their digital editions to market. There are now major consumer platforms for digital book content online, including Amazon for eBooks and Audible for audiobooks. These consumer-facing platforms are aggregating tens of thousands of titles in one convenient location and introducing totally different pricing and distribution models in the process.
Similarly, the institutional market—including both academic and public libraries—is now widely served by a group of specialized library service providers that are also aggregating large digital collections on behalf of their library clients. These service providers, such as OverDrive and NetLibrary, have introduced new collection models and sophisticated tools for both librarians and library patrons that support the circulation of digital books within libraries.
While the degree and pace of change remains uncertain, there is therefore little doubt that the landscape for writing, publishing, and reading is changing around us. This report adopts the following viewpoints with regard to this emerging marketplace.
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The following developments have been categorized as key findings due to the frequency with which they occurred in the study, the weight given them by our research sources and respondents, and the degree of their actual or potential effect on the book trade in Canada.
The digitization of book content is increasing rapidly. As publishers accumulate a growing archive of digital production files, and as older backlist titles are scanned or otherwise converted into usable digital source files, the commercial output of digital books has naturally increased. To date, this has mainly been in the form of eBooks of various formats—especially PDF—and large multinational publishers have accounted for the majority of commercial releases.
eBooks are variously sold to consumers, aggregated into different kinds of digital collections, or even given away for free as reading copies. Because of the variety of formats and the ways in which these digital editions are circulated, it is difficult to be precise about commercial output in this area.
However, the expanded selection of eBooks within major consumer platforms, such as Amazon or the Sony Reader, and the large eBook collections gathered by library service providers, such as OverDrive or NetLibrary, provide a clear indication of growing eBook output. As a single example, the Amazon Kindle reader was initially launched in November 2007 with a catalogue of 90,000 eBook titles. Within less than a year (as of October 2008), the inventory available for the Kindle platform had more than doubled to 185,000 titles.
Aside from the pursuit of more efficient production workflows and the delivery of digital files to printers, there are basically three major factors that are encouraging publishers to expand their digitization efforts:
These factors suggest that it is the changing book marketplace—rather than book publishers themselves—that is driving change in digitization and distribution of digital book content. In October 2008, the organizers of the Frankfurt Book Fair conducted a global survey of more than 1,000 publishing executives. Twenty-two percent of the survey respondents felt that consumer demand was driving digitization in the book industry. Twenty-one percent felt that online retailers, notably Amazon, were leading the industry toward digitization, and 20% felt that other major gatekeepers, such as Google, were the main cause of increasing digitization in the book trade.
With all of these factors in mind, we expect that publishers of all sizes will continue to expand their commercial output of digital book editions in the years ahead.
The audiobook market is growing quickly but title output has remained relatively stable over the past decade. Fuelled by new formats and an increasing shift to online distribution, the market for audiobooks is growing quickly—an average of 8–10% per year over the last four years—and at a pace that significantly outstrips the overall growth in the book market.
However, whereas virtually any new title published today could be converted into one or more eBook formats at little or no cost, the creation of an audiobook comes with a significant incremental cost attached (i.e., the cost of recording the master file). At full market rates for studio time and voice talent, a commercial audiobook can cost as much as $10,000–$15,000 to record. Partnering arrangements—between book publishers and recording studios, for example—can reduce this cost by about half. Meanwhile, non-commercial producers, including those that produce audiobooks for print-disabled readers, can record an audio title for roughly $1,500–$2,000 through the use of in-house recording facilities and volunteer voice talent.
At the same time, most audiobook titles will have fairly modest unit sales in Canada. A small number of top-selling titles may sell as many as 5,000 copies, but publishers report that unit sales of 2,000 copies or fewer are more the norm.
In terms of commercial output, Bowker's Books In Print® reports that an average of 10,900 new audiobooks were published in each year between 2000 and 2005. While this output dipped slightly in 2006 with 8,970 new titles that year, it rebounded with 13,437 new audiobook titles in 2007. To put this in perspective, the number of new audiobooks released in 2007 represented slightly more than 3% of the total title output recorded by Bowker that year5.
There is some indication that publishers and authors are moving to reduce the cost of audiobook production through expanded partnering arrangements or even through the use of home studio equipment to produce podcasts or other promotional samples of an author's work. Nevertheless, we expect that the additional investment required to produce a commercial audiobook will prevent a major expansion of output in this area in the foreseeable future.
There is relatively little Canadian content in sales channels for digital editions. The Canadian market for digital book content is largely shaped by major multinational publishers. Prices are effectively set by imported book product, and the title selection is mainly determined by global rights arrangements and working relationships between large trading partners in New York, London, and Paris.
At the same time, the Canadian-owned publishing firms that account for the majority of Canadian-authored titles published each year6 have been relatively slow to publish digital editions of their books. Canadian-owned firms are small compared to their multinational competitors and generally have more limited staff and/or budget resources to invest in digitization programs. There are exceptions of course, and Canadian eBook output will expand in the years ahead as increasing numbers of Canadian publishers invest in this area and contribute titles to some of the early digital collections in Canada.
However, commercial audiobook production in Canada is very limited with only three established audio programs among commercial publishers in English Canada, and nine in French Canada. This appears to be largely a function of the limited economies of scale in audiobook publishing in Canada. It is expensive to produce an audiobook, and, as a niche format in the smaller Canadian market, the average unit sales per title are modest (meaning that recovering those initial production costs can be a challenging proposition).
Partly due to the absence of significant commercial production, non-commercial producers—especially those that produce titles for the print-disabled community, such as CNIB or La Magnétothèque in Québec—continue to play a significant role in producing Canadian audiobooks for restricted library circulation7.
"Digital does not equal accessible"8. eBooks offer certain advantages over printed books to individuals living with a loss of vision or other print disabilities. The benefits include the possibility of changing the size or style of type and the automatic conversion of eBooks to talking books with speech synthesizing software. However, accessing and handling the plurality of formats in which eBooks are available requires a fairly advanced level of computer skill, and the required equipment can be expensive. Therefore, ease of use and accessibility for all readers remains an issue, even with a growing inventory of digital book content.
As noted above, eBook production has been the focus of most publishers' digitization efforts to date. Broadly speaking, the current inventory of eBooks is composed of a variety of proprietary and other formats, with varying degrees of accessibility associated with each. For example, a large percentage of the current eBook catalogue is available only in PDF format, and not all PDF files can be easily or reliably read by text-to-speech applications, such as JAWS9, at least not without some additional manipulation or conversion by the user (e.g., such as stripping the text from the file and re-saving it as a plain-text or Microsoft Word document).
All this considered, we can say that a growing inventory of eBooks does create some new opportunities for print-disabled readers, especially for those with some level of sightedness as well as the computer skills to manipulate these files and the financial means to acquire the required equipment and software.
However, there are some notable challenges still. First, only some of the total number of books available are published in any sort of digital format, and as yet there is very limited Canadian content in the digital marketplace.
Further, a large percentage of Canada's print-disabled population is composed of elderly readers who do not necessarily have the skills, means, or inclination to manipulate eBook content in the ways we have described above. Largely because of this, the audiobook—especially some highly accessible audio formats as we will explore below—is the preferred format for print-disabled readers.
This is a significant issue as only a very small percentage of books will also be published as audiobooks, and there is therefore a sizable gap between the available audio catalogue and the demand from print-disabled readers.
One of our study respondents—a librarian—noted that, "It's unrealistic to expect that we can acquire materials only from commercial publishers. There is virtually no Canadian content, and many of the [audiobook titles] are bestselling commercial fiction. We want to have the books that are in the [Globe & Mail bestseller list] but they are not available."
Libraries, retailers, and publishers are managing multiple formats. Audiobooks have seen the introduction of a number of new formats in recent years, even as legacy formats have remained in retailer inventories and library collections. Cassette tapes have led to CD editions and then MP3-CDs10, downloadable audio files in various formats, and even preloaded portable players. Interestingly, none of these formats have fully displaced any of the others as yet.
Due to consumer preference, the installed base of cassette and CD players in homes and automobiles, and the cumulative library investment across this range of formats, most libraries, retailers, and publishers handling audiobooks feel they have to accommodate most of these format options.
The collections of many public libraries are accordingly mixed across these different types of audiobooks. The Outreach Services Branch at the Vancouver Public Library (VPL), for example, has a collection of 9,768 audiobooks on cassette, another 300 on CD and another 1,200 again that are either MP3 or DAISY-format11 CDs. In addition, VPL provides its patrons with access to several thousand downloadable audio and eBooks through its "Library to Go" service (provided by OverDrive).
The situation is similar with respect to eBooks in that downloadable editions have been and continue to be published in a wide range of formats. In the absence of a broad industry standard for eBooks, publishers have produced—and retailers and librarians have adopted—a variety of digital formats including PDF files and various formats with DRM (Digital Rights Management12) protections built in. Publishers serving files to multiple retailers or other aggregators therefore typically have to provide the same title in several different file formats.
Having to handle this range of audio and electronic book formats places an additional adoption burden on consumers and on trading partners throughout the book supply chain.
New platforms are emerging to aggregate, manage, and distribute digital content. These service providers are important channels to market in themselves, and in many respects, they constitute a new type of trading partner in the book supply chain. They include:
Digital asset distributors (DADs)—for example, Ingram Digital—that store and manage the publisher's digital assets; convert them into various formats; serve them to recipients of all types (who then deliver them to end user/consumer); and provide digital rights management and transactional services.
Library service providers, such as NetLibrary, which aggregate digital titles for licensing or sale to libraries. These specialist firms tend to offer flexible collections development options to their library clients as well as sophisticated services for librarians and library patrons alike. Most importantly, they offer large collections of rights-managed audiobooks and eBooks for use in libraries.
Online retailers, whether general bookstores, such as Amazon, or specialty retail, such as Simply Audiobooks or Tonality, which sell digital content to consumers. These retailers emphasize extensive title selection, and often feature attractive discount pricing, bundled pricing (where the electronic edition is packaged with a print edition, for example), or subscription pricing options.
As these examples and categories indicate, many of the major market channels and sales platforms for digital content are online. This makes abundant sense given that for the most part they are handling and delivering downloadable digital editions, and in true long-tail fashion, an online platform allows each aggregator to assemble the largest possible inventory of titles.
The management of rights and copyright is a major market shaper. There are a couple of key aspects to rights management for audiobooks and eBooks. First, the ability to acquire electronic and/or audio rights is a prerequisite for digital publishing. Many book publishers will have audio rights for their titles—which will often go unexercised as we observed earlier—but relatively few have historically acquired electronic rights (fewer still have done so in a way that would hold up to a court challenge today).
Therefore, a decision to publish electronic editions of one's books is often accompanied by the need to revise contract language for new titles and to clear or acquire electronic rights for previously published work. This can be a time-consuming process that in itself encourages the publisher to be selective about which digital editions it brings to market.
In acquiring electronic rights for editions that will be available for download, the publisher will be most interested in global rights so it can sell via the Internet without being constrained by national boundaries or competing rights holders in different jurisdictions. This is perhaps less of an issue for audiobooks, where national editions (reflecting national accents) may be more relevant, but a title with global rights attached will often be a more attractive proposition for the publisher when it comes to producing an eBook edition. Conversely, titles for which the publisher holds only national rights for a given territory may be less attractive to major retailers or other aggregators in the digital supply chain as they will necessarily have a more limited virtual marketplace.
The application of Digital Rights Management protections (DRM) is the other key rights issue in digital publishing. The Internet has been described as the world's biggest copy machine. Once digitized and made available online, book content can be easily copied and widely circulated beyond the control of the publisher or an authorized distributor. The example of the music industry—where increased digitization led to a corresponding increase in copyright violations—is often cited as an illustration of how copyright protections can break down in the digital marketplace. Publishers are therefore naturally concerned about protecting their publishing rights from piracy or other inappropriate use. To date, this concern has mainly expressed itself both in a reluctance to publish digital editions at all, and in a commitment to publishing titles with appropriate copyright protections in place.
DRM measures typically restrict the use of digital content to a specified number of copies or formats or playback options. The goal is to limit piracy of copyrighted work, but these measures often also have the effect of locking content into a given sales channel.
For example, Audible, the market's leading audiobook retailer, has an exclusive distribution arrangement with Apple's iTunes store. Audible provides audiobooks for sale on iTunes, with the proviso that the audiobook files incorporate Apple's proprietary "FairPlay" DRM system. This not only gives Audible access to the iTunes customer base, it means that Audible's files will be compatible with Apple's hugely successful iPod player. In other words, the only DRM files that can play on iPods are files protected with Apple's DRM measures. The Apple-Audible deal ensures that, when it comes to audiobooks, the only files that meet this requirement are Audible files.
In this sense, DRM is not only a protection against piracy, but also a way of locking digital content to a specific platform or channel to market—and locking other competitors out.
In recent years, consumer resistance to DRM restrictions on digital content, combined with publishers' interest in breaking down platform monopolies, has led to a weakening (or even abandoning) of DRM protections on an expanding range of digital titles.
Since early-2008, some major publishers, notably Random House, Penguin, and Simon & Schuster, have opted to forgo DRM protection in order to attract consumers with more flexible usage of their digital editions. These companies are essentially betting that the absence of DRM protection will result in greater sales.
At the same time, this DRM-free strategy allows publishers to step around proprietary bottlenecks on major platforms. For example, while only files that carry Apple's proprietary DRM protection can be played on an iPod, any DRM-free files can also be played on iPods. This iPod compatibility is important enough to audiobook publishers that some are content to trade DRM protection for access to the large installed base of iPod users.
1 "Not dead, just resting," The Economist, October 11–17, 2008.
2 National Instructional Materials Accessibility Standard.
3 As of October 2008, the Sony Reader is available in a number of markets, including Canada. However, the Amazon Kindle is only available in the US.
4 Impact of eBooks and Digital Delivery on the Canadian Book Industry, BookNet Canada
5 These statistics include titles from a number of countries, including the UK and Canada. However, the majority of titles in the Bowker system originate in the US.
6 Statistics Canada figures indicate a high correlation between ownership and publication of Canadian authors, with Canadian-owned publishers accounting for roughly 77% of new Canadian-authored titles published each year.
7 Restricted in the sense that such titles produced by non-commercial publishers are published and distributed under a copyright exemption that permits the creation of an audiobook edition of a copyrighted work for circulation to readers with perceptual disabilities (i.e., a vision or learning disability that limits their access to the print edition of the work).
8 Council on Access to Information for Print-Disabled Canadians, Response to Draft Canadian Digital Information Strategy from Library and Archives Canada, December 5, 2007.
9 JAWS (Job Access With Speech) is a screen-reading, text-to-speech software program for visually impaired users. It is compatible with PCs running Microsoft Windows.
10 MPEG-1 Audio Layer 3, or MP3, is a compressed digital audio format. It is a de facto standard for transfer and playback on digital audio players.
11 Digital Accessible Information System, or DAISY, is a standards-based audio format that enables navigation within a structure consisting of marked-up text synchronized with audio.
12 The term "Digital Rights Management" is used to describe any technology that constrains the unauthorized use of media, including book content. DRM technology attempts to control use of copyrighted material by limiting access and by preventing copying or conversion to other formats.