E-Book Story Fails To Unfold

Internet Analysts Back-Pedaling On Hopes For Success Of E-Books

(REUTERS)  Some say it is the publishing industry's greatest work of fiction yet: the suggestion that anybody actually reads e-books.

They were billed as a hip alternative to paperbacks made of actual paper. But who has ever witnessed anyone relaxing with an e-book in a cafe or a commuter train?

Never mind the beach.

They were supposed to correct the injustices in the New York publishing world, enabling anyone to self-publish and attract their own audience in a Napster-like fashion.

But a few success stories from two years ago remain virtually the industry's only high points, and most serious writers still want to work with a traditional publishing house that produces bound volumes.

At one point, Internet industry analysts issued bold growth forecasts for electronic books, which can be downloaded from the Internet onto portable reading devices, read right from the computer, or printed out.

But today, most of those analysts have distanced themselves from those forecasts, and are uncharacteristically blunt about their utter lack of hope for the industry.

"We haven't issued forecasts for the industry in two years, because the market's going nowhere," said David Card, an analyst with Jupiter Media Metrix. "E-books were a dumb idea. I am very negative on this market."

Still, there is another side to this story that makes the whole matter read a bit like a mystery novel. Rather than swallowing their losses and moving on, the companies like Adobe Systems Inc. and Microsoft Corp. that make e-book software are standing firmly behind the business, insisting growth rates are strong and getting stronger.

And just recently, some big offline publishers have taken their boldest steps yet into the e-book industry. Viacom Inc.'s Simon & Schuster division put one of the best-selling authors of all time behind its electronic publishing effort last week when it announced it would make all 23 of its Ernest Hemingway titles available electronically. [Viacom is the parent company of CBS and this Web site.]

"The e-book industry may not have taken off yet, but we firmly believe in it as a part of our business," said Kate Tetler, vice president of Simon & Schuster's online division.

Tetler suggests that the only thing wrong with the e-book industry is the unrealistic forecasts for growth that were put forth back in the dot-com boom years.

"The truth of this matter is that everyone who works in this industry did not really think that was what the future held," she said of some of the most aggressive forecasts. "But we are seeing good sales."

Part of the e-book mystery comes from the failure of big advocates like Simon & Schuster to disclose actual sales data. The company has more than 1,200 titles available in e-book form, in categories ranging from fiction to textbooks.

It maintains that sales are meeting its internal forecasts, with year-over-year growth in the double-digit percent range.

A few other signs of encouragement: AOL Time Warner Inc., which recently abandoned its own e-book publishing effort, has entered a partnership with an outside e-book publisher.

And when former Nixon White House counsel John Dean decided to go public with his new theory on the identity of deep-throat, he opted for an e-book format. Dean plans to publish an e-book called "The Deep Throat Brief" next month on the http://www.salon.com Web site.

It is this ability of the Internet to reach vast numbers of readers that makes e-book backers so confident in the format's eventual success. Nicholas Bogaty, director of the Open eBook Forum, which helps promote e-books, says the industry still has a way to go on developing consistent standards and more user-friendly technology.

But he says several categories such as religious books and travel and reference books are already selling well in electronic format. Even electronically published fiction, often considered one of the toughest sells for the beach, is more popular than one would think, he said.

"Weirdly, I think one of the problems was simply (inflated) expectations," he said. "This industry has been growing since it started."

Adobe Systems, which publishes one of the most popular e-book software formats, concurs. It estimates between 10,000 and 20,000 titles have been published in its software alone.

But the question remains. Where are all these e-books that people are supposedly buying? Even writer M.J. Rose, whose electronically self-published novel "Lip Service," made her the de facto spokeswoman for the format three years ago, this month said she found just a few dozen e-book exhibitors among the 2,000 companies at the Book Expo America conference.

And if Stanford University, located in technology-rich Silicon Valley, is any indication, students are not adopting e-books either. A clerk at the Stanford campus bookstore said that a recent inventory count showed paper textbooks selling as briskly as ever.