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Is Monetizing the Used E-book Market the Next Big Opportunity?

e-book and print books

By Edward Nawotka

A little more than ten years ago a furor arose in the book world when Amazon.com announced that it planned to sell both new and used editions of the same book on the same Web page. Publisher vehemently opposed what they saw as a move that could cannibalize new book sales and benefit the retailer. Previously, you could find used editions, but you had to troll for them on specialty sites or E-bay. Today, the practice of selling new and used together no longer raises eyebrows.

E-book readers would love to be able to buy and sell “used” e-books, but publishers and retailers may never let that happen.

Interestingly, Amazon sells many new editions at a lower price than the used ones. This may have to do with clever algorithmic computer calculations or simply the fact that used booksellers, overwhelmed with supply, simply post a book for sale once at a given price and — considering the vast amount of effort it might take — never adjust the price in line with the market.

Of course, used books exist are a tangible asset that one has in their possession. What of e-books — can they be sold on once they’ve been read? Not currently, no. Amazon, which is by far the dominant e-book retailer, has made it clear that the reader merely licenses the books, rather than owns them outright. This is, presumably the case for all the largest e-book distributors. Smaller distributors and publishers — some of whom offer DRM free e-books — will likely set their own terms and may in fact allow for the trade and frictionless dissemination of their e-books.

But what of turning this into a commercial transaction, of creating a secondary buy/sell market for used e-books? As outlined in our lead editorial today, BookSwim is moving in this direction with the launch of EBookFling, by offering a platform for trading e-books (and it is by no means the only platform — some have done it formally, such as ebooklendinglibrary.com and others informally on Facebook and elsewhere).

So tell us, is monetizing the used e-book market the next big opportunity . . . or no opportunity at all, since publishers and retailers will never allow it?

Let us know what you think in the comments.

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10 Comments

  1. Posted February 14, 2011 at 11:27 am | Permalink

    This feeds into argument that purchaser “owns” the content that is NOTHING but content. No, the user merely licenses it or rents it. The user is NOT the writer. Besides, a new ebook should be as cheap as a used one, anyway. Quit creating an entitled class of cheapskates when authors are already lowering prices to meet audience demands. You’ll get to the point where no writer will hit the keyboard ever again, and who wins in that scenario? No one.

    Scott Nicholson

  2. Posted February 14, 2011 at 1:26 pm | Permalink

    I agree with Scott, but I’d like to point out that there is no such thing as a “used” ebook. Once the content is up for sale, it is considered “forever new”, as there is no wear and tear on the data unless it somehow degrades on the user’s ereader. One cannot transfer the data without violating the terms of the ereader supplier, which is the company which makes the ereader. Amazon allows the use of “lending” of its Kindle ebooks because it recognizes that a user may want to share the ebook with ONE or TWO friends, but the sales price of the content is really a leasing fee in their case. So “ownership” of the content comes into question as regards the individual user, and he/she cannot resell. We authors already take that into account when setting the ebook’s price. However, if we are all forced to charge 90% LESS than the price of the printed books, we can then question whether it is profitable to do so, and if the sales of the ebooks match our expectations as working authors, they only serve as a means to justify keeping the printed books on hand. My next book may be offered ONLY as an ebook, as sales of the physical books have dropped off dramatically.

  3. Alan Wolfson
    Posted February 14, 2011 at 3:09 pm | Permalink

    I completely agree that authors should be paid for their creative works. I also believe that as a consumer of written material of many different types, I should also have the right/ability to share my reading material purchases with whoever I choose. As this and related articles point out, humankind has shared many things with each other for many hundreds of years. I do not recall any author ever complaining about the existence of public libraries. That is not to say that there have been no complaints, but I have not ever heard of them.
    I think there is plenty of middle ground here. If we treat eMaterials the same way we treat dead tree versions, then everyone should be happy. If I lend out my copy of a physical book, CD, or DVD, then I do not have it available to me until it is returned. If I lend it out to an irresponsible person, and I really want to use it again, then I would have to buy another copy. With non-eItems, I have the option of purchasing a new copy, borrowing one from a library (or friend!), or buying a used copy from a used-book store, flea market, or yard sale.
    I also think that eBook publishers are gouging their readers. Again, with the proviso that the authors should be paid fairly for their creative works, there is no reason that an eBook should cost the same as a dead tree copy. There is very little cost associated with “manufacturing”, or maintaining an “inventory” of eBooks, and the “shipping” cost is also nearly non-existent. Why then does it cost me $10 to get a copy of an eBook?
    It will be interesting to see how the marketplace works this out.

  4. Pat B.
    Posted February 14, 2011 at 3:27 pm | Permalink

    I will not buy ebooks until I am able to own the book. Sorry. Every single author I love and cherish I discovered when a friend gave me a book. A friend gave me a copy of the first book in David Eddings “The Belgariad.” I devoured it and loved it. I borrowed the rest of the series from that same friend and read with feverish delight. Since then, I have purchased over a dozen David & Leigh Eddings books. Another friend lent me his copy of Ender’s Game. Since then I have purchased at least 10 books by Orson Scott Card. Without the ability to “lend” a book, I would never have discovered either of those authors, and would never have had to opportunity to purchase additional books from them.

    Fans purchase books. DRM does not stop thieves, it only serves to annoy people who have legitimately purchased your product. Stop putting barriers in front of people who want to pay you money. It doesn’t stop those who aren’t going to pay you, and it drives away those who would like to.

    Until ebook publishers, stop treating customers like criminals, I will avoid ebooks at all costs. Scott Nicholson illustrates this point perfectly when he says “This feeds into argument that purchaser “owns” the content that is NOTHING but content. No, the user merely licenses it or rents it.” I will not “lease” or “rent” or “license” books, music, movies, etc. Once I purchase it, it is mine. You do not have a “right” to limit what I can do with it. I bought an MP3 album wtih DRM build in once. I will never do so again. I also took that DRM’d MP3 album and make “illegal” copies for several people. Every single person I gave a copy to has since purchased additional content by that artist.

    DRM serves no purpose but to annoy legitimate customers. If you insist on putting artificial barriers in front of customers who want to give you money, you will find the market continues to shrink. You can blame piracy, but you would be wrong. Don’t believe me, listen to Neil Gaiman http://www.techdirt.com/articles/20110211/00384413053/how-neil-gaiman-went-fearing-piracy-to-believing-its-incredibly-good-thing.shtml

  5. James C
    Posted February 14, 2011 at 3:44 pm | Permalink

    used e-books will never happen.

    Just like you can’t download an app to your iPhone and resell it when you’re tired of it, you can’t download an book and resell it.

    This hasn’t worked for ANY digital content. Doesn’t work for music, doesn’t work for games, doesn’t work for movies, doesn’t work for photos (example: stockphotos).

    Seeing how you can not resell digital movies, digital music, digital games or digital photos, I don’t see how ebooks will be any different.

  6. Posted February 14, 2011 at 4:00 pm | Permalink

    Alan, to respond to your point about why ebooks cost so much: the publishers-and-authors share of the price of an ebook ($9.99?) tends to be about 40-50% of the list price. And while there aren’t the same production or transportation costs to replicate an ebook or distribute it, there ARE significant costs associated with transforming a rough manuscript into the brilliant novel or useful non-fiction book that a reader will want. Publishers still need to edit the book, do the layout, get a proofreader to check for errors, and pay relevant conversion costs, not to mention any marketing or publicity we do for the book so we can connect it to its potential readers.

    Creating one copy of an ebook does not have the same incremental cost that producing a print copy does, but if the price of a product does not take into account the cost to produce the item, that industry won’t be sustainable. Over the long term, if we see a lot more readers shifting to ebooks instead of print books, unless the volume of books sold is astronomically higher or the seller (Amazon/B&N/Sony) is willing to take a smaller bite of the price, most publishers probably won’t be able to afford to produce high quality ebooks for much lower than what you’re seeing now. For a small publisher that does small print runs, the pre-production costs can account for half the cost of creating a book. Selling one $25 hardcover copy is still much more profitable than one $9.99 ebook copy, even though we don’t have to create a physical book for the latter.

  7. Sean
    Posted February 14, 2011 at 7:56 pm | Permalink

    It’s not the incremental cost of producing another copy that’s squeezing publishers (and therefore writers), it’s the incremental cost of _storing_ another copy. For some years now, writers have been experiencing the compression of the midlist — authors who sell steadily but not fast getting smaller advances, smaller print runs of their books, and a lower chance of getting additional print runs when the first run sells out. Books that sell quickly ship out of warehouses rapidly; books that don’t sell get remaindered and shipped out. Midlist books stack up in the warehouse and impose a longer-term burden on the publisher for storage space. E-books turn that on its head — a terabyte hard drive can store the entire catalog of a publisher, taking up only a few cents a month for electricity. There’s no longer a disincentive to publish midlist writers — in fact, it’s a benefit, because the steady sales will help smooth out the swings from the ‘star’ writers. E-books have not been around as a market influence long enough to see whether publishers are going to recognize that the ‘old’ e-books can contribute to their bottom line as readers pick up an author’s latest, and people who buy and read it come back and want the rest of a series or other books by the same author.

  8. Julia J
    Posted February 17, 2011 at 5:32 am | Permalink

    Margot Atwell is absolutely right. Also, not all publishers by any means have the technical set-up to create e-books so are faced with paying for this to be done by a third party. The third party can charge what they like, and at the moment we (a small publisher) are looking at our distributor charging a further 9% to convert our paper books to various e-formats ON TOP OF the 45% of the retail price that they already take. That’s before we even start paying our authors their royalties, the copy-editors and proof-readers their fees and, I almost forgot, our own salaries.

  9. Posted February 21, 2011 at 10:43 am | Permalink

    Monetizing E – books is quite a good option but you must take a permission from author ofE – Booksor you can use public domain books.

  10. RichardA
    Posted March 16, 2012 at 5:44 pm | Permalink

    Amazon and the other publishers/sellers can blather all they want about “You are only buying a license”, and claim that you can’t legally resell your ebooks, but they are wrong, and know it.

    The software market has, for years, worked on the same licensing business model. When people started selling their old software after buying a new version, or simply tiring of it, the makers claimed this was illegal. The courts disagreed. Even though what you buy is a license, you OWN that license, and can legally sell it.

    So long as you do not keep a copy of the ebook when you sell it, you are in compliance with the law. What the sellers are doing is putting DRM restrictions on that make it impractical, for most people, to do something that they have a legal right to do. Until this practice is challenged in court, and I’m sure it will be, reselling an ebook is a somewhat complicated process – and one that also has no way to tell whether the seller kept a copy or not, or sold the book to more than one buyer.

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