Predictions for 2012

And here are a few thoughts on what we might see in the coming year...

1. EPUB 3 will fail to heal the digital format fracture

As much as authors and publishers would love to see a standard one-size-fits-all ebook format, that’s just never gonna happen, because the business interests of ebook retailers can overrule it via proprietary e-readers. Even ePub based fixed-layout books are already fractured into multiple formats with their own unique specifics, and that trend will continue for a good long while so long as Apple, Amazon and B&N hold the cards. The high ideal of a single universal standard for all ebooks is unrealistic, if only because it is simply too constraining for the pace of today’s artistic exploration. By the time EPUB3 is fully integrated into the next generation e-readers, technical advances will have rendered it outdated. The pace of universal adoption is just too slow to keep up with individual discovery and invention. My prediction is that the ebook market will fragment even further as the power players move to consolidate their hold on their segment of the market and others move in to claim their share.

2. Conversion services flourish as pubs embrace fixed layouts

Graphic designers and art departments have been cringing since the advent of reflowable text, which removes their ability to determine the final look of an ebook page. This is fine for prose works and basic textbooks, but leaves much to be desired for true art book aficionados and typographers. A well crafted book layout can be a work of art, a thing of beauty, or just functionally efficient. With fixed layout formats all those book designers can now rest easy knowing their art departments are no longer in danger of disappearing or being downsized. Not only that, but there is a new burgeoning market just now opening up (exploding might be a more descriptive adjective) that didn't even exist four years ago, and that is the service of converting authors' manuscripts into digital editions. The advent of fixed layout - and its requisite set of unique skills - is creating a new market for artistically inclined code writers and graphic designers with web building skills. The major trades are in the midst of building (or revamping) in-house departments, but all those millions of independent self-pubs need somewhere to go that does more than just grind their document into e-burgers.

3. The Kindle 5 will have a color Mirasol/eInk screen

The Kindle 4/Touch will be the last black and white eInk reader we'll see from Amazon. Color reflective technology is good enough now to be acceptable to ebook readers, both in terms of speed and image quality...or at least it will be by the end of 2012 when the next Kindle line is due. Grayscale screens are the black and white televisions of today, and they'll all be junk tomorrow (or at least by next year anyway, since a lot of people tend to keep their old TVs around awhile). Consequently, there will be a smaller lineup of models next time, with a low-end color touchscreen reader and a mid-ground Fire 2 update. Buttons will be gone for good (and good riddance to them, too).

4. 10" Kindle Tablet will debut at $399

Amazon will also introduce a new high-end full size tablet this year to compete directly with the iPad. The Kindle Fire is a nice mid-size sedan, but the iPad is a Hummer. With a growing app store and a full complement of multimedia content, the color Kindle Fire just cries out for more legroom. It's a nice one-handed reading device and suited better to small kid's hands for games and movies than a full size tablet, but it's just too small to do much else with comfortably for any length of time (and woefully poor at doing some thing altogether, although it will improve with updates). In addition to which, illustrated books and magazines simply demand a larger screen to fully appreciate and enjoy their page layouts, and since Amazon is first and foremost a book retailer, they would be remiss in addressing this segment of the market. The price point is a reasonable guess as a competitive price that's low enough to be a good deal and high enough to be conceivable.

5. Publishers will come on board for library lending

The public is just too demanding to ignore, and they want to borrow ebooks plain and simple. Being able to gift or resell your used ebooks is still a few years off so I'll reserve those predictions for another day, but library lending is an issue that needs to be dealt with now. 2011 was a watershed year for libraries as they finally came to grips with the changing landscape and began to confront the many problems it presents. But publishers have not been helping and so their hands are tied. But as print becomes less cost effective publishers will begin to see the light. Why print an expensive hardcover for a few thousand libraries when a digital file beamed out will cost you almost nothing and net you just as much? Libraries don't get ebook licenses for free, so it's just a matter of time before the major trades realize they're sitting on a cash cow here. Surveys show consistently that readers increase consumption as access becomes easier. More loans = more licenses = more good word of mouth from happy readers = more potential sales. It's really not a hard equation.

6. Ebook prices will increase, stabilizing into three pricing tiers

As print book sales decline ebooks will simply have to fill the void, so ebook prices will go up. More and more of the overall production costs (i.e. editorial, layout, marketing, etc.) will be laid on the shoulders of the digital editions, making their effective costs increase. Ultimately ebooks must pull their weight and pay their fair share. But those costs are not the same for every title or publisher across the board, so they will fall into three main categories and be priced accordingly:

1. .99 / $2.99 - These are your self-pubs and independents looking to gain entry and build or maintain their following, as well as daily specials and discount backlist titles and classics
2. $7.99 / $9.99 - Mid-list authors and backlist titles by top authors, as well as a handful of the top selling independents; successful self-pubs will start to move up into this category
3. $12.99 / $14.99 - Bestselling titles by top authors and new releases by trade pubs, as well as major author catalog and new enhanced ebooks

There will still be ebooks listed at every other imaginable price - particularly in the $4.99-$5.99 range for overzealous self-pubs - but few of these will sell more than a handful. The major trades just can't afford to go much lower than $7.99 and hope to support their massive infrastructure, and they don't want to drop new titles below ten bucks. But readers have shown they won't buy books much over that by anyone but the top draws, so eventually $12.99 will become the go-to price for new releases, with mid-list coming in just under ten. It may take another year for this to solidify, but that's the direction it will be heading in due time.

7. A self-pubbed author will reach the N.Y.T. Top 10 with a $9.99+ title

While several self-published authors have achieved Top 10 status this year on one list or another, they have mainly been for bottom-tier price point titles, with a few $4.99 or so oddities thrown in. Nearly all top selling self-pubbed titles go for .99 cents, with a reasonable amount at $2.99. But for the first time a self-pubbed author will climb the New York Times bestseller list on the back on a top tier price this year, and I'm not talking about someone who's jumped ship from traditional publishing to go it alone on the strength of their name - I'm talking about a full-fledged independent up-by-their-bootstraps kind of author who did all the work themselves and has not yet found success. And it may very well be someone who's all but unknown today. They will make beaucoup bucks and trigger an exodus of mid-list trade pub authors to independent publishing.

8. Ebooks will account for 50% of the trade book market by year's end

This is almost a no-brainer. We hit 20% a year ago (23.5% in January), and given the continuing trend of exponential growth throughout the year, coupled with rapidly declining print sales, when 2011's final figures come in it's almost certain to be close to double that. I'm guessing 35% to be conservative. Of course, it depends on if you're counting units or dollars (ebook dollars add up much slower due to their lower average retail price), but either way we're fast approaching market dominance for digital, which will occur within the next two years, if not this year.

9. Major trade publisher files for bankruptcy

This is just a wild throw that I'm tossing out there on a lark. It's bound to happen eventually given the volatile and wildly unpredictable nature of book successes and failures, and the unstable nature of the market. The digital transformation is certain to unhinge the stability of at least one of the more conservative major trade publishers, who will flounder under badly outdated leadership and get left behind as they cling to a broken business model. The trigger for this might be the departure of a star author (or three) who goes solo when better ebook terms cannot be met, or just the failure of several expected hits. Don't laugh. No one thought Borders would go belly up (or Circuit City or CompUSA, for that matter). Yes, publishers are huge. They have tons of money. But it takes a lot to keep them going, too. Of course, it would take years to get to the bankruptcy stage, but the seeds are already planted and things are moving swiftly. A few missteps in business and things can turn from bad to worse right fast if you're not careful. Unlike banks, publishers are not too big to fail. And you know the saying, the bigger they are...

10. An all-new breed of e-book emerges

This is actually something I'm very excited about, as regular readers of this blog should know. The fact that ebooks are in fact an entirely different medium from print books will stimulate creative minds to find altogether new and unexpected ways to present content. Authors will begin to look at ebooks as the starting point, rather than something a book is turned into. And when you start with the digital format as your palette, all manner of possibilities present themselves. New forms will evolve that are neither book nor game nor social media, but all of them combined with something more to take us places that we've never been in ways we've never got there. I can't tell you what it will look like, because no one knows what it will be yet - but when it gets here we'll all know, because everyone will want one and everyone else will try to copy it.

These are just some thoughts on the direction things are going. Some are more plausible than others. Some are wild hypothesis and others almost certain. Many of them are certain to be horribly off their mark, as the target just keeps shifting every day, bringing an endless stream of surprises. But then, that's what makes predictions so much fun. If they were certainties, this would be a news report instead. Come back next year and we'll see what the world really looks like.