The widespread literacy resulting from the European invention of movable type half a millennium ago humbled priests and tyrants, revived classical learning, spawned the Enlightenment, and inspired the modern world with all its wonders and woes. Yet the abrupt death of Gutenberg’s epochal technology midway through the final decade of the twentieth century was ignored as the world welcomed with great expectations its exponentially more powerful electronic successor.

New technologies change everything in their path, topple kings and empires, create new gods, new goods, and new ways of living in the world. They do not erase the past or change human nature, but they do replace previous forms of production. Like the technology of movable type from which the modern publishing business arose, many traditional publishing functions related to this abandoned technology are irrelevant to an electronic future.

Buying paper, setting type, making plates and ordering copies from a printer, storing books and managing inventories, shipping to wholesalers and retailers, taking returns of unsold copies, staging ever more elaborate and ritualized sales conferences to entice an ever more concentrated, diffident, and inefficient retail marketplace: these traditional book-publishing functions and their complex infrastructures, which absorb perhaps half or more of publishing revenues and thus represent an expense to readers and a burden upon the potential earnings of authors as well as upon the viability of publishers, will not abruptly vanish, as movable type itself has done. But they will become increasingly marginal to the extent that books are delivered electronically directly to readers by various means, some already at hand in primitive versions, others yet to be developed. Should digital publication become dominant, as I suspect it will within a decade or less, these traditional functions will increasingly be contracted out to specialized firms serving residual markets, while publishers concentrate on essential editorial, publicity, and promotional services, the financial support of work in progress, and the refinement of their website strategies.

These new technologies will alter the way books are transmitted, but the author’s task will remain essentially the same as when Homer sang the Odyssey and Dickens presented his novels, chapter by chapter, before enchanted listeners. So too will the experience of readers remain essentially the same as they flip their electronic pages or order their books from neighborhood kiosks where machines may soon print one copy at a time on demand, indistinguishable from a factory-made paperback book and not much more expensive to produce, as efficiently as ATM machines dispense cash today. The number of such readers, however, will increase greatly as new technologies deliver the contents of books instantaneously and at negligible transportation cost to remote corners of the earth, awakening the desire and imparting the skills to read them. The revolutionary technology of movable type opened the cloistered libraries of the fifteenth century to all of Europe and gave birth to a new world and its dream of reason. The far greater political and cultural consequences, for better and worse, of emerging electronic technologies as they extend the range of today’s vast libraries can hardly be imagined.1

In recent months Time/Warner Books, Random House, and Simon and Schuster have established experimental websites from which to promote and sell new titles directly to consumers on line, to be read either on their computer screens or on portable electronic devices or printed on demand in publishers’ warehouses by the presumptive ancestors of tomorrow’s fully automated and less expensive neighborhood machines. Books published on these experimental websites will not be the important work of established authors, work for which it would be rash at this early stage of development to forego the security of traditional retail distribution. To the extent that these experiments succeed despite this handicap, the marketing of books will be transformed as publishers and authors acquire the confidence to expand their digital lists, bypassing the various middlemen—paper dealers, printers, truckers, warehousemen, wholesalers, and retailers—to whose functions much of traditional publishing infrastructure has been devoted.

Though the second of Stephen King’s two attempts to market digitized versions of his own books seems to be faltering, the thousands of readers who have nevertheless responded to his experiment, despite today’s rudimentary and sparsely distributed handheld reading devices, suggests the potential strength of the digital marketplace.2 But King is a famous writer with an assured audience. His case is exceptional. Only when many books in a variety of categories are routinely published in digital form will book publishers confidently shed their increasingly vestigial traditional functions, as the inevitable competition for customers and authors forces traditional publishers to conform to the greater efficiency of independent Web rivals or abandon the field, an instance of the truism that innovations are less likely to arise from within a traditional industry than from agile outsiders not beholden to old facilities and accumulated tradition. Whoever prevails in tomorrow’s digital marketplace, today’s baffled and lumbering conglomerates in their current configuration face certain extinction.

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In the case of a traditionally published book the publisher pays the author an advance against royalties, provides editorial, production, design, and publicity services, orders an edition from a printer, solicits orders in turn from wholesalers and retailers, arranges for promotion and advertising, attempts to sell whatever subsidiary rights are not retained by the author, and takes back unsold copies for full credit. These activities and the attendant risk are the value added by the traditional publisher to the author’s work. In the case of books published electronically, however, the share of value and the publisher’s risk attributed to many of these functions is eliminated. The publisher’s contributed value to a digitized publication will then consist of a royalty advance, editorial and publicity services, and the cost of marketing a digitized and encrypted text from a website linked to other websites of related interest. Since there will be no retail markup and, in the case of books downloaded to be read electronically, no printed copy, the cost to consumers will be much less than for books published conventionally and the share of revenues allocated to the author will be much greater, reflecting the author’s proportionately greater share of contributed value, a reapportionment of revenues enforced by competition among websites for authors and customers.

This division of revenues will also hold true for backlist books that are digitized and sold electronically. Authors’ contracts provide that rights not specifically granted the publisher are retained by the author. Since publishers have demanded digital rights only to books published after electronic publication became an issue in 1994, digital rights to backlist titles published before that date are retained by their authors. Authors, however, routinely agree not to publish competing editions of their work. Thus neither authors nor publishers are currently free to sell the majority of backlist books in digital form, a standoff whose negotiated outcome will probably reflect the proportionate value contributed by each party as well as each party’s bargaining power. As in the case of new books, the bargaining is likely to favor authors and the cost to consumers is likely to fall while publishers’ revenues, if not their actual profits, decline accordingly.

Traditionally publishers offer royalties of between 7.5 and 10 percent of the retail price for paperbound books and 10 to 15 percent of the retail price for hardbound editions. Since books are sold to booksellers at an average discount of slightly less than 50 percent, the author’s share of publishers’ proceeds ranges from about 15 to 30 percent. Another 35 to 50 percent of publishers’ revenues is consumed by manufacturing and sales expenses including advertising. Of the rest, a part offsets fixed costs and the remainder becomes profit, assuming the book is a success and the advance paid to the author against royalties is earned back.

For books published digitally and distributed electronically the retailer’s approximately 100 percent markup is eliminated, or in the case of books printed on demand at nearby kiosks, likely to be no more than a small service fee. From the $10 received by the publisher of a conventionally marketed $20 paperback, the author typically earns $2.00, or 10 percent of the retail price, and the publisher spends between $3.50 and $5.00 on manufacturing, shipping, sales expense, advertising, and so on. Part of what remains covers fixed costs, and whatever is left over becomes profit. But for a book sold electronically, the publisher’s cost of manufacturing, selling, and so on is eliminated and the savings can be shared with the author and with the reader in the form of a lower price.

These calculations, however, presuppose that traditional publishers will have shed the burden of their nondigital infrastructure, or to put it differently, will have reduced their operations to the scale of their independent website competitors, a daunting prospect for publishers both functionally and psychologically, which partly explains the tentative way in which they have approached their digital experiments so far. But the digital future is not a matter of choice for publishers. To the extent that they forego this future, independent website proprietors will claim it for themselves.

It is impossible to predict in detail the various forms in which new technologies take hold. From the Wright brothers’ motorized box kite no one could have foreseen jet travel and its related paraphernalia. But from the dunes at Kitty Hawk it might not have been impossible to foresee transoceanic air travel and its impact upon cultures, commerce, and politics. In the case of digital publishing it is possible, if one chooses to be optimistic, to foresee within a decade or so a vast, responsibly annotated, continuously refreshed catalog consisting of linked databases in innumerable categories and languages from which readers at their computers can download and browse whatever interests them and order it either in printed form to be collected at a nearby kiosk or eventually from high-speed laser printers and binders within their own homes, or to be read electronically on handheld readers and similar devices.

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Today publishers distribute their new titles to retailers with no assurance in most cases that clerks will be able to identify the readers for whom particular titles are intended. It is this hit-or-miss distribution, especially to the chain bookstores with their centralized buying and inexperienced clerks, that results in the large numbers of books that are returned unsold to publishers’ warehouses and in the frustration of book buyers who cannot find the titles they want and of authors whose books go unsold. But in the electronic future publishers will promote their titles on the Web to appropriate readers by means of linked sites devoted to aspects of a given subject. Stephen King, Tom Clancy, and other best-selling writers as well as such writers as Toni Morrison, John Updike, and E.L. Doctorow, with narrower but still substantial followings, may sell their digitized editions largely on their own popular websites. But authors of more specialized titles will sell their work through linked sites to precisely targeted audiences.

The present amorphous market with its concentration on books of broad general interest will thus be augmented, and eventually replaced, by a highly articulated marketplace reflecting a multitude of specific interests. For example, a book on the transformation in the second and third centuries of Christianity from a loose assortment of separate sects, each communicating with its own version of the deity, to a politically centralized church under a single authority might be offered not only on its author’s own site but through links to numerous other sites concerned with such topics as Christian and Roman history, New Testament studies, gnosticism, and so on. An Italian recipe book might be linked to sites devoted to appropriate ingredients, Italian regions, travel, wines, customs, landscape, specialized techniques and utensils. This highly segmented electronic marketplace, where books can be kept in print, so to speak, indefinitely, will be far more efficient than its predecessor. It will also restore some of the intimacy that once prevailed between writer and reader as networks of linked websites expand and become established over time.

The World Wide Web will destroy the filters that have traditionally separated publishable work from the surrounding chaos. But the profound human instinct by which people have always created order, distinguished value, and sustained markets amid multitudinous babble will create new filters. Distinguished and useful websites will prevail over inferior competitors and readers will find their way to desirable goods as they have always done. New technologies alter the forms of production but they do not annihilate human nature.

A world without retail booksellers, devoted to their inventories, their customers, and their craft, is hideous to contemplate, but the inevitability of electronic technologies forces the issue. The Internet, with its unmediated and instantaneous transactions, its indifference to time and distance, and its negligible cost per unit of transmission, abhors middlemen. The price of an electronic book can be as much or as little as the author and publisher care to charge for it, or in practice whatever the consensus of authors and Web publishers decide it should be: in any case, far less than the price of a conventionally published edition, and the transaction will be swift and sure.

Moreover, the World Wide Web provides a venue for the recommendation of books with which the advice of even the most astute booksellers can hardly compare. Stories were, of course, told long before publishers and booksellers existed and they will continue to be told should publishers and booksellers disappear in a distant electronic future. But today’s readers may be unprepared for such a world and will cling to bookstores despite the greater convenience and lower prices of their digital competitors, as they patronize bookstores today despite the greater convenience and consumer discounts offered by on-line retailers, or as they attend theaters, churches, lectures, and other communal venues despite the greater economy and convenience of television. Some books do not lend themselves to electronic publication: books in fine bindings, or in conventional hard bindings, or with complex illustrations, or unusual dimensions, but these are not enough to sustain a bookseller, no matter how devoted to his craft.

Perhaps booksellers will install screens from which readers can browse and select books to be printed on the bookseller’s own machines, but these will not be true bookstores and they will offer no advantage over other locations—Kinko’s or Staples or Starbucks—where machines are likely to be installed. Or perhaps booksellers will download and stock their shelves with single copies of books printed on their own one-at-a-time book machines at competitive prices, for their computer-shy customers. However they manage to sustain themselves, bookstores of the future will have to offer what electronic distribution cannot provide: actual human contact, shared wisdom, and the other facilities of a shrine, perhaps with coffee and sandwiches, as the current generations of readers slowly and perhaps reluctantly adapt to an electronic future.

This Issue

November 2, 2000