An example of wishful thinking – some predictions for 2011

Have you read the post by Phillip Ruppel, President of  Mcgraw-Hill, over at Mashable? In that post he makes 5 predictions on the future of ebooks and digital content. I think he's wrong on at least 4 of his predictions. The one that I'm not commenting on is his first, and it covers the rise of enhanced ebooks. I don't feel I know enough about that art of the market to make a prediction.

The Device War Is Nearly Over

You can only make that prediction if you ignore the proliferation of basic ereaders in the past 4 months. If the war is nearly over, then what about the Literati, Lookbook, Next2, and the Slick? And heck, that's just some of the US models. I could list all the new ereaders released in the past year in the world but who's got a week to spare?

The $9.99 E-Book Won’t Last Forever

I agree. Competition will drive the price will even lower. Demand far exceeds supply. If he doesn't want to compete that's his business.

Okay, Phillip is arguing prices will go up, but frankly I don't see that happening. It's a buyer's market, not seller's.There are simply too many people jumping into the fiction market for the price to stay as high as $10.

Also, he can set ebook prices however he wishes, but if he sets them to high his ebook sales will be crippled by (comparatively) cheap paper copies. I'll never buy an ebook for more than the paper copy. If I can get a used copy for a fraction of retail, there went your ebook sale.

For professional and technical publishers like McGraw-Hill, our e-books cannot stand the low, mass market pricing some consumers think should be applied to every e-book. Our costs are invested in extensive product and editorial development of sophisticated and technical content; the cost of paper, printing, and binding are a fraction of the real expense. And for some very specific and technical subject areas, our markets are much smaller. We simply couldn’t afford to publish the work if it must be priced at the everyday low, low price of $9.99.

I'm also somewhat puzzled that he thinks the $9.99 price point applied to his technical books. I always thought that applied to fiction. Either he's using a strawman argument or one of us is misinformed (it could be me).

The Contextual Upsell Will be a Business Model to Watch

E-books allow publishers to interact with their customers in new ways. Imagine customers who are trying to learn statistics and get stuck on a particular formula. They ask friends but no one can explain it well. They’re stuck.

When you work your way through his idea here you'll either love it or hate it. One way to look at his proposal is that he wants to sell a crippled product and charge people extra to fix it. He doesn't want to provide all the content in the initial sale; instead he want to get more money out of the customer after the sale. Needless to say I'm a little pissed off.

The other problem with this idea is that the extras he wants to sell are currently being given away online. There's no market.

Publishers Will Be More Important Than Ever

He's both right and wrong on this point.

At McGraw-Hill, the average technical and reference book engages teams of editors, copy editors, proofreaders and designers to produce a single boo

A team witha broad skill set is required for technical manuals, yes. That is indisputable. But what makes you think that team has to come together inside a publisher? There's no reason why the team can't form from an ad-hoc organization. Okay, that ad-hoc might grow into being a publisher, but there's no reason why it has to start as one.

P.S. I'd love to here what you think.

About Nate Hoffelder (11469 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader: "I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

5 Comments on An example of wishful thinking – some predictions for 2011

  1. The article doesn’t apply to fiction.

    Otherwise, he’s right on all points in the context of nonfiction, textbooks, reference books, the like.


    E-books allow publishers to interact with their customers in new ways. Imagine customers who are trying to learn statistics and get stuck on a particular formula. They ask friends but no one can explain it well. They’re stuck.

    They click a help button, which points them to the publisher site where they can download relevant tutorials about specific formulas for $2.99.

    Could mean a “tutorial provider” (Cliffs-notes-like) that the publisher couldn’t get rights to publish its contents, but perhaps
    the tutorial provider will pay a fee to be listed as an adjunct, then get their money back in “help fees.”

    What I’m thinking of here is teaching methods. If the teacher can’t do it for you, your tutor can’t do it for you, the textbook you’re using is crap… SOMEBODY out there can explain it to you via embedded video–

    I never used Cliff’s notes. I either read the book or bullshitted my way through the class on the strength of the lectures and other students’ pontifications.

    But you can’t do that with stats, calculus, and (my downfall) discrete math. Yeah, BTDT. I’d pay for that.

  2. I’m also puzzled about his point about $9.99 ebooks. Technical books and textbooks are whole different animals. Unlike technical books and textbooks, leisure readers (generally) don’t need specific editions, or to have the most updated version. Also, many fictional books don’t have pictures or diagrams, or other forms of multimedia.

    I think textbook publishers, though, do have a lot of potential to change from being ‘book’ publishers into being multimedia/software-as-service ones. There are courses, for example, where students can do problems online on the publisher’s website (as part of a paid package), receiving feedback and corrections immediately.

  3. Nate, as Moriah notes, you are replying to apples when Ruppel was addressing the issue of oranges.

    I do a lot of work for McGraw-Hill Professional and I can tell you that a $9.99 or lower price point for the books I work on is never going to occur. It can’t based on the production costs (forget printing of pbooks and distribution) alone. My company just finished a major project that took a team of my editors nearly a year to fully edit. You and many authors blanche when an editor quotes a price of $750, claiming it is too high; you would have had multiple heart attacks had you been handed the bill for the work we did on just this one title.

    I could go on, but I think Rupple’s predictions are valid. As to the device war, I think he is simply misspeaking. I believe he means the format war, not the device war; note he referred to Betamax and not to VCR devices. In this light, I think he is right. With the exception of the two greediest people — Jobs and Bezos — everyone else has settled on ePub with a relatively benign DRM system.

    • That could be true, Rich, but it’s not clear from his article.

      And I don’t know why you bother to shoot down the $10 price point; everyone agrees that it would never work for McGraw-Hill’s books. I still don’t understand why he raised the issue.

      BTW, I wouldn’t blanch at that bill. Having done some editing myself I appreciate the time involved.

  4. $9.99 doesn’t exist like it did anyways. Most new bestsellers are now more than that.

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