The publishing industry used to be afraid of e-books. In 2010 it embraced them.
Publishers expanded their digital divisions, experimented with video-enhanced e-books, worked on digitizing their older titles and made sure that new books were available simultaneously in e-book and hardcover editions.
Now, having laid the tracks for digital growth, they are waiting to see what their efforts will bring in 2011.
"Is it going to be cause for celebration because it takes us to another level and makes books accessible and popular in new ways?" said Anne Messitte, publisher of Vintage/Anchor, a division of Random House. "Or will the story be different?"
E-books now make up 9 percent to 10 percent of trade-book sales, a rate that grew hugely this year, after accounting for less than half that percentage by the end of last year. Publishers are predicting that digital sales will be 50 percent higher or even double in 2011 what they were in 2010.
January could be the biggest month ever for e-book sales, as possibly hundreds of thousands of people download books on the e-readers that they receive as Christmas gifts.
The anticipation of that jump in sales, and a feeling that the recession may have loosened its grip, has dissipated some of the death-of-print malaise that has lingered in the book publishing industry for years—and helped soften the blow of a significant drop in hardcover sales this year.
"There’s definitely less doom and gloom," said Peter Ginna, publisher and editorial director for Bloomsbury Press, an imprint of Bloomsbury USA, which published "The Finkler Question," the winner of this year’s Man Booker Prize. "Most of us publishers have seen big gains from electronic books this year. We’ve seen some tailing off of the print sales, but for most companies, the growth of e-books has been so great that there’s a lot of revenue coming from that side that’s sort of gravy for us. So we’re all feeling pretty good."
In a year-end letter to employees, the chairman and chief executive of Random House, Markus Dohle, cited the company’s growth in e-book sales among its "remarkable accomplishments."
"For some of our U.S. fall publication titles, nearly half of the overall first-week sales have been in the e-book format," Dohle wrote. "Led by this upsurge, our worldwide digital sales for 2010 are projected to grow by 250 percent over 2009’s."
For example George W. Bush’s memoir, "Decision Points," has sold more than 1.8 million hardcover copies and 200,000 e-books since it was published last month, said David Drake, a spokesman for the Crown Publishing Group, part of Random House.
David Shanks, chief executive of Penguin Group USA, said that when e-books first began to take off two years ago, "the state of publishing at the time was getting rather grim."
In 2010 "the picture is really dramatically better," he said. "For the first time in a long time, there are many more places for people to buy books. Some of the limitations of the great brick-and-mortar bookstore is that they only have space to display X amount of books. Now if you find an author you love, you can find all of their books immediately at your fingertips."
Last year the e-book marketplace was overwhelmingly dominated by Amazon and its Kindle device, but since then competitors like Barnes & Noble, Apple and Google have jumped in.
But even with widespread access to e-books, publishers have not yet figured out how to sell them more effectively to consumers. Debut fiction and so-called midlist titles—books that are not large commercial successes—are particularly tough sells in digital form, said Peter Hildick-Smith, president of the Codex Group, a book market research company.
"You can have all the availability in the world, but if people don’t know the book exists, it doesn’t matter," Hildick-Smith said.
A look at the Kindle best-seller list on Amazon shows that it is typically stocked with titles that are also on the print best-seller list—this week, for instance, new novels by John Grisham, Tom Clancy, Patricia Cornwell and David Baldacci. Early next year The New York Times will begin publishing e-book best-seller lists in its book review section.
"We’ve certainly learned the technology of creating e-books and distributing them," said Laurence J. Kirshbaum, a literary agent. "But the marketing side is still the Wild West. There’s a lot of digital availability now, but we still haven’t turned the key and opened the lock on how to sell e-books."
That said, Kirshbaum added: "Digital books have at least put publishing back into a sense of momentum. I think we’re going to come out of Christmas stronger than we did a year ago." Some surveys have indicated that people who purchase e-reading devices subsequently increase the number of books they buy.
And the tastes of e-book buyers has broadened somewhat in recent months, said David Young, chief executive of the Hachette Book Group. Nonfiction books like "Life," the Keith Richards memoir, and "Cleopatra," a biography by Stacy Schiff, have sold rapidly in digital form.
"I’m excited by the fact that we’re seeing quality nonfiction selling through in e-books," Young said. "Clearly there are buyers of all persuasions now in that market. That’s really good news."
Even as the spread of e-reading could expand the universe of book buyers, hardcover sales have suffered—perhaps in part cannibalized by the e-book sales. According to the Association of American Publishers, adult hardcover sales were down nearly 8 percent in the first 10 months of 2010, compared with the same period in 2009. Since e-books are typically closer in price to a paperback edition than a hardcover (Amazon now sells a hardcover edition of a new Stephen King novel for $14.64 but $12.99 for the e-book version), they could eat away at profits in the long run.
And there remain urgent concerns about the health of the brick-and-mortar retail environment. Many independent booksellers are still struggling in the face of Amazon, big-box retail rivals and e-books. Borders, the chain bookseller, has suffered from declining sales, and a dismal earnings report in early December sent alarm through the industry.
"My No.1 concern is the survival of the physical bookstore," said Carolyn Reidy, chief executive of Simon & Schuster. "We need that physical environment because it’s still the place of discovery. People need to see books that they didn’t know they wanted."
Shanks of Penguin said that even as his company builds its digital business, he is still focused on old-fashioned print publishing.
"People are so caught up in e, e, e," he said, using the industry shorthand for e-books. "But no company can afford to look askance at 90 percent of its revenues."