Eric Flint's "Salvoes against Big Brother" columns in Jim Baen's Universe are always must reads, and usually the sorts of thing that have me nodding in agreement as I read them. His latest one, where he questions ebooks will mean the death of paper books is, for the most part a case in point. The critical question that he asks is, I believe, this one:
Will the relationship between traditional paper publishing and electronic publishing be one of replacement? Or will it, instead, be a supplemental one? And, within that range, what are the most likely outcomes? Should we use as a past historical model the relationship between:
a) typewriters and computers—complete substitution;
b) manual transmissions and automatic transmissions—a division of the market;
c) ground personal transport and air personal transport—supplemental, with both old and new technologies used by almost everyone;
d) kitchen knives and home food processors—the old technology remains dominant, with the new one purely supplemental and used by relatively few people.
I agree with him that, for the most part, we are not going to see a) or even b). In general ebooks will complement paper because of all the advantages that paper has in terms of reliability, ease of use, price, compatibility etc. As he writes, people who argue that ebooks are going to replace paper typically argue from analogy and, for the most part, an assumption that technology always prevails.
What he doesn't seem to say (so I'm going to) is that most ebook analogies comapre ebooks to music or movies. There is of course one stonking difference between a book and CDs, DVD, vinyl 45s, video cassettes, audio cassettes, celluloid film and all the other ways that we store music and movies. To wit that the book doesn't need a playback device. This is a key differentiator and is why comparing books to these other things is idiotic. To read a book you need the book. To play recorded music/video you need a player. In other words while a new digital MP3 player is indeed a substitution for an old gramophone player, an eBook reader is a new thing that is not replacing anything.
I suspect that the best item/market to compare with is the games market. Like books, the basics of the traditional games market: cards, dice, chess-boards etc. do not need any additional equipment to use. Also like books, but unlike music, video, cars, electrical gadgets etc., games have a very long history - longer in fact than reading/writing since even illiterates get worked up about gambling and your average caveman / mesopotamian peasant has had periods of the day/year when there isn't much to do and playing a game sounds like a good idea. So have traditional games died out because of video games? no. But on the other hand they have probably declined in usage. People play chess on a computer now instead of against some fellow in the park or club. Children (and adults) play single and multiplayer video games instead of solitaire or board games like monopoly. But there are still plenty of times and places where people play traditional games the traditional way. It seems to me that what we are seeing in the games world is a mixture of Eric's B) and C) categories - i.e. substitution in some parts but not all and supplementing by adding new customers. I suspect that as the generations that grew up without video games as a child (I put myself pretty much on the cusp here, in that I grew up with the first generation pong/space invaders, donkey kong etc.) we'll see a lot more substitution but I doubt we will see the sort of overwhelming replacement we have seen with typewriters vs word processors as there are always going to be significant parts of the market where we want regular non-electronic games (the electronic ones still show a distressing inability to handle jammy fingers, spillages of drinks and other activities that don't do as catastrophic damage to their traditional rivals). I see no reason why the same does not apply to books and eBooks - namely a mixture of supplement and substitute with a gradual increase in the percentage substituted.
Something related that Eric doesn't touch on is that it seems clear to me that the book market is not a single entity. Even in a single English speaking country, the readers of books divide into a number of categories (and of course there are overlaps). The first category are the non-readers. The people who basically don't read for pleasure and probably read no more than one or two books a year - probably a holy book such as the bible. In the US this appears to be about 33% of the population. We can and should ignore these people when we look at ebooks because they don't buy paper books so why would they buy a reader to buy ebooks?
[A major market for religious books are the prayer are hymn books used in churches. I can't imagine any church dumping its prayer books for electronic readers, not without these readers becoming massively cheaper]
The second category is the occasional reader. Aggregated together these probably buy the most books by volume but they buy the fewest different titles. This is the market of the best-seller, the purchasers of Harry Potter, Tom Clancy and the top end of the genres such as Jerry Pournelle and Nora Roberts. These people probably buy at most one book a month on average and usually - HP being an exception - they buy the mass market paperback version on sale in supermarket, airport shops and so on. For these people a book has to cost $7.99 or less because it is effectively competing with $4.95 magazines, a beer in the bar or chips in front of the TV or the internet. For these people their book purchase habits are such that they spend less than $100 on books each year split over multiple $8 purchases.
The third category is the frequent reader. The frequent reader reads between a book a week and a book a month. He or she does read the bestsellers but also tends to visit places with a wider selection of books and read midlist writers. These people are the ones that keep midlist writers and genre publishers (Baen, Harlequin...) going.
Finally there are the bibliophiles. These people read multiple books a week, frequently read more than one book at a time (a book in the bedroom, a book in the purse, a book on the coffee-table) and have more books than they have bookshelves for despite having more shelving that any five of their neighbours combined. These people may have already moved to eBooks because they don't have the space for anything but beloved favourites. Even though they borrow library books and find other ways to read stuff for free these people probably spend $50-$100 a month on new books and are always in danger of blowing additional money in used book shops.
The bibliophiles are going to buy ebook readers, probably more than one each because they want the eInk screeen of one, the ease of use of another and so on. Unfortunately for the ebook makers (and for that matter the publishers) these people are a tiny minority of the population. They are of course the classic early adopters and since they tend to blog about books and generally make a lot of noise they can be very influential. I am one of this group. I can justify the $400 cost of a dedicated reader like the Cybook or Kindle because I spend a minumum of $180 a year on Baen webscriptions (for c. 50 new books that I don't currently own), at least $50 on ebooks from other publishers and another $200 or more on new paper books (and then there's my 2nd hand book habit...). On the other hand as Eric points out, the bibliophile is likely to buy ebooks in addition to printed ones. Ebooks will likely replace the books they buy that they tend to read once and then donate or resell.
The question is whether the frequent readers and the occasional readers will want to make the move to electronic. For frequent readers - who spend maybe $200-$300 a year on books - ebooks are going to be a hard sell because the price of the reader today is more than they pay for a year of books. It's also another gadget to lose. However they might switch over if the reader is a multifunction device and they might well switch over if the price is right. If a reader buys two $10 books a month (to make the sums easy) then that is $240 a year spent on around 20 books. Assuming said reader is interested in Baen-like F&SF then a year's webscription (giving 72 titles and an average of 4 a month that are new) for $180 is clearly a bargain so long as the reader is not too expensive and is usable. Many people find LCDs and CRTs hard to read from so the reader needs to have a good screen and decent battery life - I think the eee is acceptably bright and big but it is probably close to the low end of the acceptability curve for most people and its 3 hour battery life is also at the same low side of the curve.
Current eInk readers are, everyone assures me (and when NAEB get me my Cybook I'll be able to confirm) massively better in terms of display quality and they also tend to have much better battery life (days of use rather than hours). Unfortunately e-ink is currently too expensive to meet the price point for the frequent reader. If we work on the example above then the reader save $60 a year on ebooks vs paper (yes he gets more but he may not read more) so if the reader costs $300 (and that is cheaper than any current eInk reader) then his ROI is 5 years. This is not a fast enough payback period. Adding the equivalent of an iTunes music player is not really going to make much difference (cheap MP3 players cost what $25? these days). If the eInk device drops to $150-$200 then the ROI is 2-3 years then that is more reasonable and once we get down to the sub $100 range then we may indeed see the dedicated ebook reader suit the frequent reader.
This is not the case for a product like the eee since it is a multiuse product and if you decide to buy an eee (or are given one by your employer). In other words a frequent reader who also needs a portable computer thingy like the eee for something else is going to have the reading device already. In that case the switching cost would be very low. The same (a non-dedicated reading device) also makes sense for the occasional reader and this is where the ebook market might well complement the existing paper market, as long as the ebook prices are reasonable ($5 is about right IMO) and you don't have to jump through hoops to download and read them. DRM is probably the major hoop and in my own experience (and I'm a computer guy) it can get so annoying that I don't buy the books. This is not the long term worry of "will I still be able to read my book 5 years from now" it's the short term "how many dedicated tools and websites do I have to pass through to be allowed to download a damn book?" and it is exacerbated by the fact that many ebook websites seem to cater solely for the MS windoze + Internet Exploder crowd. [This is one reason why I'm not taking advantage of Eos' free ebook offer (the other is that you have to be a US resident).]
So to sum up. Ebooks can certainly complement paper books but in order to do so they have to be easy and cheap to buy. For the most part they aren't either (with the honourable exception of Baen). Hence the only people who will bother to buy them are at the bibliophile end of the book buying spectrum and hence they are indeed going to be substitutes for paper.