Electronic publishing is much like traditional publishing, the main difference being the medium by which an author's work is delivered to readers. In place of the print sources typically used with traditional publishing, electronic publishing uses an online medium, most often the Internet, to present works to readers. In some cases, electronic publications—such as books, magazines, newspapers, or newsletters—are posted on Web sites. In other cases, they might be delivered to a reader's e-mail address. Despite many predictions in the late 1990s that electronic publishing would render print publishing obsolete, demand for electronic publications thus far has failed to meet expectations. In fact, by 2001 only a handful of publishers had figured out how to turn electronic publishing into a viable business.
Electronic books, also known as e-books, became available at the retail level in 1998. That year, e-book readers—the lightweight, paperback book-sized electronic devices used to display e-books—were released by NuvoMedia Inc. and Softbook Press Inc. Both readers allowed users to highlight, bookmark, and annotate specific passages, and to search an entire document. Many e-books also were accessible via a standard personal computer (PC). NuvoMedia and Softbook sold a total of roughly 10,000 e-book readers in 1999. At the time, less than 5,000 titles were available electronically. Hoping to use advertising campaigns and licensing agreements to generate more of an interest in e-book readers, Gemstar International Group Ltd. paid $400 million for both NuvoMedia and Softbook Press in January of 2000.
At roughly the same time, Barnesandnoble.com and Microsoft began working on their own e-book reader for PCs, and another e-book hardware manufacturer, Glassbook, disclosed similar plans. Via an agreement with publisher Simon & Schuster, celebrated author Stephen King released a new novella as an e-book that spring. Several security glitches allowed Internet users who had paid for the book to download multiple unauthorized copies. However, despite concerns over copyright infringement issues such as this, a few publishers persisted with various e-book trials. For example, Simon & Schuster released e-book versions of Mary Higgins Clark novels in May. The following month, the first Spanish language e-book was published. In July, Stephen King bypassed traditional publishers by selling chapters of his new novel, Ride the Bullet, on the Internet for $1 apiece. Within 15 hours of its release, more than 40,000 readers had downloaded the first chapter.
By the end of the year, only 25,000 e-book reading devices had been sold, and e-book sales were less than $5 million. Along with sluggish demand, the e-book industry was also forced to deal with limited supplies. E-book availability was growing at a much slower pace than e-book reading device makers had anticipated. In March of 2001, the number of e-books compatible with Gemstar's RocketBook—the indus-try's leading platform—had reached only a few thousand. Concerned that e-book sales might undermine print sales, particularly on new releases likely to make the bestseller lists, many publishers were only willing to offer electronic versions of classics like Moby Dick and Romeo and Juliet.
Incompatible formats posed another problem for the e-book industry. By the end of 2000, each of the three e-book industry leaders—Gemstar, Adobe, and Microsoft—was working to position its format as the industry standard. According to a November 2000 article in The Atlantic Online, "the future of reading is presently being held hostage in a computer 'standards war' where competing companies try to ensure that their proprietary technology becomes the toll-taker at the gate. Most publishers and retailers now offer every e-book title in at least two incompatible formats, sometimes three, and it may not stop there." This left many publishers leery about committing to any single format, and many decided to wait and see which format proved dominant before investing in the e-book industry. For the same reason, consumers resisted spending money on e-book reading devices, most of which could read only one format.
Copyright issues also proved daunting to many publishers. Despite legislation like the Digital Millennium Copyright Act—which made the manufacture or sale of products designed to dodge copyright laws illegal—many publishers were unsure how to go about protecting copyrighted books offered electronically. At the same time, publishers unwilling to release electronic versions of their copyrighted books also worked to prohibit other companies from doing so. For example, although authors like Kurt Vonnegut and Robert Parker granted RosettaBooks permission to publish electronic versions of their books, questions arose as to whether or not RosettaBooks needed to gain permission from Random House, the copyright holder of the traditional print books written by those authors. In February of 2001, Random House filed a copyright infringement lawsuit, the outcome of which is liable to have a considerable impact on the electronic publishing industry.
Although the e-book market has grown much more slowly than anticipated, some major publishers continue to pursue new e-book ventures. Many industry experts believe that the future of e-books is in niche markets, such as children's books, textbooks, and reference publications. According to a July 2001 article in PC Magazine, "the Electronic Document Systems Foundation predicts that the likelihood of people reading novels or even magazines digitally in the future is low. The chance that they will read digital reference materials, professional journals, and reports, however, is good."
Electronic newsletters, also known as online newsletters, gained in popularity during the late 1990s. As consumers began using the Internet regularly for things like gathering information and purchasing goods and services, many businesses began using online newsletters to provide information about their company and Web site, and to promote their products and services. Quite often, online newsletters serve the same purpose as their print counterparts. According to the February 2000 issue of BusinessWeek Online, "they remind customers you're there, spark repeat business, and help attract new clients."
While many companies make online newsletters available on their Web site, the most popular online newsletter delivery method is e-mail. Web surfers can sign up to receive newsletters, both free and fee-based, which are sent directly to their e-mail accounts. For example, CNET.com, a site covering the computer and technology industries, has more than 40 free online newsletters, all of which are sent to subscribers via e-mail. The Motley Fool, known for its witty investment advice, also offers members free newsletters including FoolWatch Weekly and Investing Basics. Both of these investment newsletters are sent to each subscriber's e-mail address on a weekly basis. In June of 2001, Japanese Prime Minister Junichiro Koizumi launched an online newsletter covering political and technological issues. Within two weeks, nearly 2 million readers had subscribed.
While some online newsletters are published simply to convey information, many are published to generate additional sales for the publisher. In fact, a 2001 study conducted by Opt-in News revealed that one out of three online newsletter publishers uses newsletters to generate advertising revenue. Advertising in online newsletters is growing in popularity, mainly because it is often more effective than placing a banner ad on a Web site. According to Forrester Research, ads in e-mailed newsletters had an average response rate of 18 percent in 2000, compared to a Web site banner ad response rate of less than one percent. As Internet use continues to rise, the number of online newsletters—including those offering information, as well as those containing advertising—will likely continue to grow. Forrester Research predicts that by 2002, businesses will transmit a total of 250 billion e-mail newsletters.
ELECTRONIC MAGAZINES AND NEWSPAPERS
Electronic magazines, or e-zines, are magazines published electronically, most often on the Web. Similarly, electronic newspapers, also known as online newspapers, are newspapers published on the Web. In addition to online content, most e-zines and online newspapers offer interactive features, such as the ability to search current and archived articles for a particular topic or keyword. Many also operate message boards, allowing readers to comment on articles. Some e-zines and online newspapers rely on advertising to make money, others charge subscription fees, and many rely on both revenues sources.
Online newspapers have been offered to readers in some form since the early 1990s. In 1994, the News and Observer, based in Raleigh, North Carolina, became the first daily newspaper to publish its full contents on the Internet. By 2000, the online versions of the New York Times, USA Today, the Wall Street Journal, and the Washington Post had established themselves as the online newspaper industry leaders.
The only publisher to actually make money from an online newspaper was WSJ.com, the online version of the Wall Street Journal. When online advertising revenues began their drastic downturn in 2000, WSJ.com was able to rely on its base of nearly 600,000 paying subscribers for revenue. In fact, by early 2001 subscription sales had begun to account for more than advertising revenues. A major contender to WSJ.com, the online version of the New York Times (NYTimes.com), dealt with the online advertising industry slump in a different manner. According to an August 2001 article in Business Journal-Portland, "Like WSJ.com, NYTimes.com is seeing significant declines in advertising revenue. However, the online edition of the paper is not moving to a subscription model like WSJ's. Like many online publications, NYTimes.com is leery of charging for what has already been offered for free. Instead, New York Times Digital is charging for 'premium content' such as archive searches, and some wireless delivery of content."
One of the earliest well-known e-zines, Slate, was first published by Microsoft Corp. in 1996. To run the news, politics, and culture e-zine, Microsoft hired Michael Kinsley, formerly a senior editor for the New Republic and a co-host of Crossfire, CNN's political commentary program. Initially, access to Slate cost $19.95 per month. A MySlate feature allowed readers to customize the site. A discussion forum, dubbed The Fray, permitted readers to comment on articles and interact with one another. In 1999, the ezine's managers realized that they were spending more money trying to secure paying subscribers than they were actually generating in subscription fees. According to Slate publisher Scott Moore, as quoted in a September 2001 EContent article, "I projected what would happen to our audience if we made Slate free, given that we could take advantage of the distribution power of MSN. I modeled what that would do for our advertising potential, and it looked like there was a lot more upside with that strategy than continuing to slug along selling subscriptions, so that's what we did and it has paid off." By 2001, roughly 2.5 million unique readers logged on to Slate every month.
One of Slate's major rivals, Salon was created in 1995 to cover political and cultural issues. The ezine's initial public offering in 1999 raised $35.6 million in capital. Access to the site was free, which meant Salon had to rely on advertising to generate revenues. Consequently, the site was particularly susceptible to the online advertising slowdown that started in 2000. That year, Salon lost roughly $19 million on only $8 million in revenue. To reduce its dependence on advertising, Salon began working on a fee-based site with expanded content and no advertising. Cost cutting measures included layoffs and a 15-percent pay cut in 2001. According to BusinessWeek Online writer Thane Peterson, Salon's reliance on advertising was not the only reason the firm found itself struggling; it also lacked the name recognition of industry giants like Newsweek and Time. "Established print magazines can constantly remind readers to log onto their Web sites, so, like Slate, they require far less marketing expense than an independent like Salon ."
Analysts disagree over which business model will prove the best choice for online books, newsletters, newsletters, and magazines. Advances in technology certainly will impact online publishing, as will new legislation. Business models not yet conceived may well emerge as online publishers continue working to attain profitability.
Brady, Diane. "Six Parties a Night? It's a Living." BusinessWeek Online. April 3, 2000. Available from www.businessweek.com.
Earnshaw, Aliza. "Making Money's the Big Challenge Online." Business Journal-Portland. August 3, 2001.
Garber, Joseph R. "Publish and Perish." Forbes. October 16,2000.
Kafka, Peter. "Horror Story." Forbes. August 21, 2000.
Lindorff, Dave. "Draw More Business With an Online Newsletter." BusinessWeek Online. February 18, 2000. Available from www.businessweek.com.
Lombreglia, Ralph. "Exit Gutenberg?" The Atlantic Online. November 16, 2000. Available from www.theatlantic.com.
Luskin, Donald L. "Walk It Like You Talk It." The Industry Standard. June 14, 2001. Available from www.thestandard.com.
Manes, Stephen. "Electronic Page-Turners." Forbes. May 28,2001.
Olsen, Stefanie. "Newsletter Authors Reap Banner Profits." CNET News. March 30, 2000. Available from news.cnet.com.
Owens, Jennifer. "Study: E-Newsletters Drive Site Traffic." Adweek. April 2, 2001. Available from www.adweek.com.
Peek, Robin. "Jump-Starting Electronic Books." Information Today. March 2000.
Peterson, Thane. "The Wolf at Salon's Door." BusinessWeek Online. August 7, 2001. Available from www.businessweek.com.
Pike, George H. "A Book Is a Book Is E-Book." Information Today. July 2001.
Runne, Jen. "Why eBooks are Sputtering." eMarketer. March 14, 2001. Available from www.emarketer.com.
Wimpsett, Kim. "Newsletter Know-How." CNET News. December 1, 2000. Available from news.cnet.com.
Wood, Christina. "The Myth of E-Books." PC Magazine. July 1, 2001.
SEE ALSO: Barnesandnoble.com; E-book; E-Zines
The law of copyright gives authors and/or publishers control over the use of their work, and applies both to paper and electronic media. Computers make the copying of information very easy, and if a computer is connected to a network then publications can be copied to multiple sites. Practical approaches to providing protection against copyright infringement are under constant investigation.