Turning Page, E-Books Start to Take Hold

(NY Times, 12/24/08, By BRAD STONE and MOTOKO RICH)

Could book lovers finally be willing to switch from paper to pixels?

For a decade, consumers mostly ignored electronic book devices, which were often hard to use and offered few popular items to read. But this year, in part because of the popularity of Amazon.com’s wireless Kindle device, the e-book has started to take hold.

The $359 Kindle, which is slim, white and about the size of a trade paperback, was introduced a year ago. Although Amazon will not disclose sales figures, the Kindle has at least lived up to its name by creating broad interest in electronic books. Now it is out of stock and unavailable until February. Analysts credit Oprah Winfrey, who praised the Kindle on her show in October, and blame Amazon for poor holiday planning.

The shortage is providing an opening for Sony, which embarked on an intense publicity campaign for its Reader device during the gift-buying season. The stepped-up competition may represent a coming of age for the entire idea of reading longer texts on a portable digital device.

“The perception is that e-books have been around for 10 years and haven’t done anything,” said Steve Haber, president of Sony’s digital reading division. “But it’s happening now. This is really starting to take off.”

Sony’s efforts have been overshadowed by Amazon’s. But this month it began a promotional blitz in airports, train stations and bookstores, with the ambitious goal of personally demonstrating the Reader to two million people by the end of the year.

The company’s latest model, the Reader 700, is a $400 device with a reading light and a touch screen that allows users to annotate what they are reading. Mr. Haber said Sony’s sales had tripled this holiday season over last, in part because the device is now available in the Target, Borders and Sam’s Club chains. He said Sony had sold more than 300,000 devices since the debut of the original Reader in 2006.

It is difficult to quantify the success of the Kindle, since Amazon will not disclose how many it has sold and analysts’ estimates vary widely. Peter Hildick-Smith, president of the Codex Group, a book market research company, said he believed Amazon had sold as many as 260,000 units through the beginning of October, before Ms. Winfrey’s endorsement. Others say the number could be as high as a million.

Many Kindle buyers appear to be outside the usual gadget-hound demographic. Almost as many women as men are buying it, Mr. Hildick-Smith said, and the device is most popular among 55- to 64-year-olds.

So far, publishers like HarperCollins, Random House and Simon & Schuster say that sales of e-books for any device — including simple laptop downloads — constitute less than 1 percent of total book sales. But there are signs of momentum. The publishers say sales of e-books have tripled or quadrupled in the last year.

Amazon’s Kindle version of “The Story of Edgar Sawtelle” by David Wroblewski, a best seller recommended by Ms. Winfrey’s book club, now represents 20 percent of total Amazon sales of the book, according to Brian Murray, chief executive of HarperCollins Publishers Worldwide.

The Kindle version of the book, which can be downloaded by the device itself through its wireless modem, costs $9.99 in the Amazon Kindle store. The Reader version costs $11.99 from Sony’s e-book library, accessible from an Internet-connected computer.

Even authors who were once wary of selling their work in bits and bytes are coming around. After some initial hesitation, authors like Danielle Steel and John Grisham are soon expected to add their titles to the e-book catalog, their agents say.

“E-books will become the go-to-first format for an ever-expanding group of readers who are newly discovering how much they enjoy reading books on a screen,” said Markus Dohle, chief executive of Random House, the world’s largest publisher of consumer books.

Nobody knows how much consumer habits will shift. Some of the most committed bibliophiles maintain an almost fetishistic devotion to the physical book. But the technology may have more appeal for particular kinds of people, like those who are the heaviest readers.

At Harlequin Enterprises, the Toronto-based publisher of bodice-ripping romances, Malle Vallik, director for digital content and interactivity, said she expected sales of digital versions of the company’s books someday to match or potentially outstrip sales in print.

Harlequin, which publishes 120 books a month, makes all of its new titles available digitally, and has even started publishing digital-only short stories that it sells for $2.99 each, including an erotica collection called Spice Briefs.

Perhaps the most overlooked boost to e-books this year — and a challenge to some of the standard thinking about them — came from Apple’s do-it-all gadget, the iPhone.

Several e-book-reading programs have been created for the device, and at least two of them, Stanza from LexCycle and the eReader from Fictionwise, have been downloaded more than 600,000 times. Another company, Scroll Motion, announced this week that it would begin selling e-books for the iPhone from major publishers like Simon & Schuster, Random House and Penguin.

All of these companies say they are now tailoring their software for other kinds of smartphones, including BlackBerrys.

Publishers say these iPhone applications are already starting to generate nearly as many digital book sales as the Sony Reader, though they still trail sales of books in the Kindle format.

Meanwhile, the quest to build the perfect e-book reader continues. Amazon and Sony are expected to introduce new versions of their readers in 2009. Adherents expect the new Kindle will have a sleeker design and a better microprocessor, allowing snappier page-turning.

Mr. Haber of Sony said future versions of the Reader will have wireless capability, a feature that has helped make the Kindle so appealing. This means that the device does not have to be plugged into a computer to download books, newspapers and magazines.

Other competitors are on the way. Investors have put more than $200 million into Plastic Logic, a company in Mountain View, Calif. The company says that next year it will begin testing a flexible 8.5-by-11-inch reading device that is thinner and lighter than existing ones. Plastic Logic plans to begin selling it in 2010.

Along the same lines, Polymer Vision, based in the Netherlands, demonstrated a device the size of a BlackBerry that has a five-inch rolled-up screen that can be unfurled for reading. There are also less ambitious but cheaper readers on the market or expected soon, including the eSlick Reader from Foxit Software, arriving next month at an introductory price of $230.

E Ink, the company in Cambridge, Mass., that has developed the screen technology for many of these companies, says it is testing color screens and hopes to introduce them by 2010.

Many book lovers are quite happy with today’s devices. MaryAnn van Hengel, 51, a graphic designer in Croton-on-Hudson, N.Y., once railed against e-readers at a meeting of her book club. But she embraced the Kindle her husband gave her this fall shortly after Ms. Winfrey endorsed it.

Ms. Van Hengel now has several books on the device, including a Nora Roberts novel and Doris Kearns Goodwin’s “Team of Rivals.” She said the Kindle had spurred her to buy more books than she normally would in print.

“I may be shy bringing the Kindle to the book club because so many of the women were so against the technology, and I said I was too,” Ms. Van Hengel said. “And here I am in love with it.”