Reimagining the Page: The False Dawn of Digital Reading (Part 2 of 3)
Before Apple's success, however, there was the Xerox PARC's Alto, developed in 1973. The Alto was a pioneering effort in personal computing, featuring groundbreaking technologies that would later influence the entire industry, including the Apple II. Yet despite its innovative features, the Alto never reached the commercial market. Xerox, holding the blueprint for what could have revolutionized computing, opted not to pursue widespread marketing of the Alto. Additionally, Apple faced its own set of challenges when it sought partnerships with established firms; both Atari and Hewlett-Packard turned down the opportunity to manufacture the Apple computer, decisions that, in retrospect, may seem short-sighted but were considered prudent based on the business climate and market predictions of the time.
This pattern of hesitation to embrace new technology was not unique to the personal computing industry. A similar scenario unfolded with ebooks before 2006. Established publishers, much like the major computer firms of the earlier era, were not the pioneers in disrupting the book market. Instead, it was technology companies that led the charge, capitalizing on the digital shift while traditional publishers lagged behind, cautious and slow to adopt the emerging ebook technology even as the signs of industry transformation became increasingly apparent.
Both instances highlight a common theme in the evolution of technology markets: established players often resist innovation due to perceived risks and the comfort of existing business models, while new entrants or outside firms are freer to innovate and disrupt.
Before 2006, the publishing industry had been exploring digital formats since the early 1990s, initially with CD-ROMs and later through online publishing. While online publishing found a niche in areas like journals and professional publications, it was the interest of major technology companies that truly transformed the consumer publishing landscape. Sony, known for revolutionizing the music industry with the Walkman, introduced an e-reader in 2006, heralding it with the tagline: 'Finally, the digital book has come of age.' Although this e-reader did not significantly penetrate the market due to insufficient content to meet consumer expectations, it played a crucial role in familiarizing the public with the concept of reading books on a screen.
Google entered the digital market in 2004 with its book digitization program, initially focusing on out-of-copyright works. However, the program also included the more controversial digitization of works with untraceable copyright holders. In collaboration with publishers, Google began displaying excerpts or entire texts of in-print books to facilitate sales. Today, Google has expanded its offerings to sell books and other media through its Google Play store, positioning itself as a competitor in the device market alongside giants like Apple and Amazon.
In 2005, Microsoft launched a book digitization initiative that seemed to mirror Google's earlier efforts. The primary goal was to enhance online search capabilities by digitizing content, starting with public domain books. However, by 2008, Microsoft had ceased the project, citing the need to focus on developing a sustainable business model for their search technology. This decision stirred some curiosity in 2012 when Microsoft revealed a new collaboration with U.S. bookstore giant Barnes & Noble, aimed at forging a strategic partnership in the digital reading sector.
Apple unexpectedly became a significant player in the book market, despite Steve Jobs' skepticism about the Kindle in 2008 when he remarked, "It doesn’t matter how good or bad the product is, the fact is that people don’t read anymore. Forty percent of the people in the US read one book or less last year. The whole conception is flawed at the top because people don’t read anymore." Yet contrary to Jobs' statement, advertising for the iPad frequently highlighted its utility as a reading device. The iPad turned out to be immensely popular, selling 3 million units within its first eighty days. By the launch of the iPad 2 in March 2011, over 15 million iPads had been sold globally.
It's hardly surprising that Amazon emerged as a dominant force in the book market, initially with print books and later with ebooks. Jeff Bezos launched Amazon in 1995, capitalizing on the potential of internet retail to enhance customer experience by offering an extensive selection of titles, more than any physical superstore could hold; round-the-clock availability and convenience, especially beneficial for those without nearby bookstores; and a personalized shopping experience tailored to individual customer interests.
The ebook sector really took off for Amazon once they perfected the device—the Kindle. This e-reader delivered a superior reading experience, combining the benefits of portability, affordability, and immediate access to a vast library (over 1.3 million titles by 2012). Jeff Bezos famously called the book the ‘last bastion of analog.’ True to form, he ensured that the Kindle excelled not just as a product but as a service, providing seamless access to an extensive range of content and competitive pricing on individual titles.
Why did it take external players to shake up book publishing? The hesitancy of traditional publishers and booksellers to embrace ebooks and a digital future can be attributed to several factors. Firstly, the established business model revolving around printed books was both secure and successful, presenting little incentive for change. The traditional system of physical distribution, despite its inefficiencies, generally functioned effectively. Physical bookstores provided a unique browsing experience that was difficult to replicate online, and the internet itself helped mitigate distribution limitations by enabling sales of niche titles that physical stores seldom stocked.
Although there were initial experiments with ebooks, these did not gain significant traction until the advent of a suitable reading device. Early attempts to popularize ebooks faltered as potential customers were reluctant to read extensive texts on PCs, which were seen as unsuitable for long-form reading. Similarly, ventures into the CD-ROM market in the 1990s, which attempted to integrate multimedia elements with text, often resulted in financial losses due to high production costs that rarely met sufficient sales to justify the investment.
Moreover, many industry observers and commentators believed in the enduring superiority of the printed book—a technology that had effectively stood the test of time and was widely regarded as unlikely to be significantly improved upon with digital alternatives. This deeply ingrained perception contributed to a conservative approach toward digital innovations in publishing, leading to a cautious and sometimes resistant attitude toward embracing a digital transformation until external players demonstrated its viability and profitability.
As e-reading devices improved in quality and decreased in price, and as more titles became available, consumers began to recognize the advantages of e-readers. They not only purchased these devices for themselves but also started gifting them to others. By 2012, ebook sales soared to over $1.5 billion, marking a 22-fold increase within just four years. For major US trade publishers, this rapid increase meant that a significant portion of their revenues started to come from ebooks rather than traditional print formats, such as hardcovers or paperbacks. The share of ebook revenue grew impressively over the years: from about 0.1% of total revenue in 2006 to 0.5% in 2007, reaching around 1% in 2008, climbing to approximately 3% in 2009, jumping to about 8% in 2010, surging to around 17% in 2011, and eventually hitting between 20% and 25% by 2012, varying by publisher and the type of books they published. This growth was extraordinary.
As the publishing market experienced a dramatic surge in ebook popularity, it seemed likely that the traditional format of the book—typically a work of set length divided into chapters—would evolve significantly with the removal of print constraints. Many publishers embarked on experimental ventures with ebooks, modifying content to take advantage of digital features. Yet despite these efforts, the majority of these initiatives did not catch on. The ebooks that eventually came to dominate the market largely retained the content and structural elements of traditional print books.
Digital Short Stories
In 2011, a major UK trade publisher's commercial divisions started crafting strategies to launch digital-only short stories by some of their top-selling fiction authors. The plan involved approaching brand-name authors, such as those known for bestselling crime thrillers, and requesting them to write short stories of 7,500 to 10,000 words. These stories were ideally prequels or spin-offs linked to the themes of their upcoming books, accompanied by a preview of the new book and a link for pre-orders. These short stories were scheduled for release a few months before the new novels and were priced attractively between 99p and £1.99. Aimed at existing fans, this strategy was used to drum up anticipation for the upcoming titles.
Similar initiatives were undertaken by other publishing houses during the early 2010s, yielding comparable outcomes. There was clearly a demand for these economically priced, digital-only short books—works that likely would not have been feasible in print due to their length. This success raised the question: Could this model pave the way for a new type of publishing venture centered around the digital short?
The idea had been percolating in John Tayman's mind since late 2006 and early 2007. As a writer, John found the traditional process of researching and writing a nonfiction book—often a multi-year endeavor—increasingly frustrating. His background as a magazine editor had accustomed him to compiling folders of interesting ideas for potential development. However, many of these concepts were too intricate for a short magazine article yet did not warrant the extensive time and commitment required for a full-length book.
Additionally, as an avid reader, John accumulated stacks of books that he never got around to reading, as each book demanded a commitment of seven to ten days—time he didn’t have. This led him to crave a reading experience akin to watching a movie: a story that could be fully absorbed in one sitting, from start to finish. It was from this desire that the foundational idea for Byliner began to take shape.
In the late 2006 and early 2007 period, John Tayman's idea for distributing short stories digitally was ahead of its time. The Kindle hadn't yet been released and the iPad was still three years away, meaning the necessary systems for discovery and distribution weren't in place. Consequently, John shelved the idea to focus on other projects. In November 2007, when the Kindle was released, it presented a closed ecosystem that didn’t align with John's vision. It wasn't until the iPad debuted in early 2010 that he felt the timing was right to revisit his concept.
John began to develop a prototype, engaging with authors, friends, and investors, eventually securing almost $11 million in venture capital funding. During these discussions, one writer expressed dissatisfaction with traditional publishing outlets for a particular project, which he felt would fit perfectly into the niche John was targeting. This led to the publication of their first book, Jon Krakauer’s Three Cups of Deceit — a critical 22,000-word exposé on the inaccuracies in Greg Mortenson’s memoir Three Cups of Tea.
In the late 2006 and early 2007 period, John Tayman's idea for distributing short stories digitally was ahead of its time. The Kindle hadn't yet been released and the iPad was still three years away, meaning the necessary systems for discovery and distribution weren't in place. Consequently, John shelved the idea to focus on other projects. In November 2007, when the Kindle was released, it presented a closed ecosystem that didn’t align with John's vision. It wasn't until the iPad debuted in early 2010 that he felt the timing was right to revisit his concept.
John began to develop a prototype, engaging with authors, friends, and investors, eventually securing almost $11 million in venture capital funding. During these discussions, one writer expressed dissatisfaction with traditional publishing outlets for a particular project, which he felt would fit perfectly into the niche John was targeting. This led to the publication of their first book, Jon Krakauer’s Three Cups of Deceit — a critical 22,000-word exposé on the inaccuracies in Greg Mortenson’s memoir Three Cups of Tea.
The ebook's release was impeccably timed, launching just a day after a critical 60 Minutes documentary about Mortenson aired on April 17, 2011. To maximize impact, the ebook was offered as a free download for the first 72 hours, during which it was downloaded 75,000 times — far surpassing John’s expectations and signaling a promising start for Byliner. This success indicated that Byliner could indeed become a significant player in the publishing industry.
Over the following year, John and his team diligently worked to increase Byliner's production and ensure their titles were accessible through major ebook retailers like Amazon, Apple, Barnes & Noble, and Kobo. These platforms even created special sections for short ebooks, ideal for reading in one sitting. Byliner was at the forefront of what John termed ‘e-singles’—ebooks only, ranging from 5,000 to 30,000 words, designed to be written and read swiftly.
The initial goal was to release a new book weekly, but this pace proved overly ambitious, and they adjusted to publishing a new title every ten days to two weeks. Byliner offered authors a 50:50 split on net receipts, after the vendors took their 30% cut. Additionally, they paid authors an ‘assignment fee,’ which they preferred to calling an ‘advance’ to avoid traditional publishing terms, ranging from $0 to $3–5,000; in rare cases, up to $20,000. Their roster featured renowned authors like Margaret Atwood, Nick Hornby, Ann Patchett, Jodi Picoult, Chuck Palahniuk, Richard Russo, and Amy Tan. Notably, they sold 160,000 copies of Three Cups of Deceit and had several titles that even outsold it.
In 2011, this innovative venture in digital publishing looked promising. Tech reporter Laura Owen praised e-singles as “the format of our time,” perfect for the "curl-up-with-your-iPad" phenomenon—long enough to offer substantial reading but short enough to finish in under an hour. However, just three years after its impressive debut, Byliner faced significant challenges. Sales had plateaued, profit margins were tightening, and management was exploring cost-cutting measures. The initial dream was unraveling. What had gone wrong?
John identified two primary factors that contributed to Byliner’s struggles. Firstly, the market became saturated with e-singles. Although Byliner had pioneered this format, it was quickly adopted by numerous others, leading to a massive increase in the quantity available. Unfortunately, much of this burgeoning content was of variable quality. John noted that the "signal-to-noise ratio moved in the wrong direction," leading consumers to shy away from the e-singles sections at ebook retailers.
Secondly, there was significant downward pressure on prices. Byliner initially set their e-book prices between $2.99 and $4.99, aiming to signal quality and respect the value of the authors' work. However, Amazon exerted strong market pressure to lower prices, establishing a pricing bracket from 99¢ to $4.99. John explained, "When Amazon set these price limits, we were continually pushed into lowering our prices to compete, despite our desire to maintain higher price points to reflect the quality of our offerings. It became increasingly difficult to maintain our pricing strategy against the widespread tendency to price e-singles at 99¢." This situation led to financial unsustainability as the revenue from selling at 99¢, after accounting for a 30% vendor fee, proved inadequate.
Confronted with these challenges, Byliner explored alternative revenue streams and trialed a subscription model. They offered unlimited access to their content through their website and mobile apps for a monthly fee of $5.99. Unfortunately, this model failed to attract a sufficient number of subscribers. Reflecting on this, John speculated, "It might have been too early for such a subscription model, or perhaps consumers weren't ready to pay for reading material in this manner. I'm still not convinced there's a viable business model for subscription at that level, but if there is, it might still be a few years away." As a result, Byliner’s growth stalled.
By early 2014, Byliner found itself at a crossroads. The company needed to generate more revenue to sustain its operations at the existing staffing levels, and the prospects of securing additional venture capital were dim due to its growth trajectory. Scaling down operations, reducing staff, and transforming into a small, boutique publisher specializing in e-singles might have been feasible. Yet, such a path did not align with the expectations for a venture capital-funded enterprise. Investors typically look for significant returns, not a scaled-back operation. Furthermore, John, having invested four years into this venture, was not inclined to manage what he saw as the decline of his dream. Retaining staff, particularly software engineers, was becoming increasingly challenging.
In September 2014, Byliner's journey came to an end when it was acquired by Vook, a New York-based digital publishing service company. The three-year trajectory of Byliner highlighted a critical insight: although there is a market for short books published exclusively as ebooks, more is needed to support a standalone publishing business. The market saturation with low-cost content and the pervasive pricing pressure that established 99¢ as the standard price point made it difficult to grow revenue and achieve profitability solely through publishing e-singles. Despite being a pioneer in the e-singles market with venture capital backing, Byliner could not reach a scale or level of profitability that resonated in the venture capital world. While Byliner did publish several notable and successful titles, the business model ultimately proved unsustainable in the long term.
Conclusion
In his analysis, John B. Thompson speculates whether Byliner's approach might have been too cautious. He suggests that a more radical approach to digital publishing could have been more successful—not just creating shorter ebooks but reimagining the book's form by integrating digital technology's multimedia capabilities. Could a venture that dared to be more innovative stand a better chance?
Over the following year, John and his team diligently worked to increase Byliner's production and ensure their titles were accessible through major ebook retailers like Amazon, Apple, Barnes & Noble, and Kobo. These platforms even created special sections for short ebooks, ideal for reading in one sitting. Byliner was at the forefront of what John termed ‘e-singles’—ebooks only, ranging from 5,000 to 30,000 words, designed to be written and read swiftly.
The initial goal was to release a new book weekly, but this pace proved overly ambitious, and they adjusted to publishing a new title every ten days to two weeks. Byliner offered authors a 50:50 split on net receipts, after the vendors took their 30% cut. Additionally, they paid authors an ‘assignment fee,’ which they preferred to calling an ‘advance’ to avoid traditional publishing terms, ranging from $0 to $3–5,000; in rare cases, up to $20,000. Their roster featured renowned authors like Margaret Atwood, Nick Hornby, Ann Patchett, Jodi Picoult, Chuck Palahniuk, Richard Russo, and Amy Tan. Notably, they sold 160,000 copies of Three Cups of Deceit and had several titles that even outsold it.
In 2011, this innovative venture in digital publishing looked promising. Tech reporter Laura Owen praised e-singles as “the format of our time,” perfect for the "curl-up-with-your-iPad" phenomenon—long enough to offer substantial reading but short enough to finish in under an hour. However, just three years after its impressive debut, Byliner faced significant challenges. Sales had plateaued, profit margins were tightening, and management was exploring cost-cutting measures. The initial dream was unraveling. What had gone wrong?
John identified two primary factors that contributed to Byliner’s struggles. Firstly, the market became saturated with e-singles. Although Byliner had pioneered this format, it was quickly adopted by numerous others, leading to a massive increase in the quantity available. Unfortunately, much of this burgeoning content was of variable quality. John noted that the "signal-to-noise ratio moved in the wrong direction," leading consumers to shy away from the e-singles sections at ebook retailers.
Secondly, there was significant downward pressure on prices. Byliner initially set their e-book prices between $2.99 and $4.99, aiming to signal quality and respect the value of the authors' work. However, Amazon exerted strong market pressure to lower prices, establishing a pricing bracket from 99¢ to $4.99. John explained, "When Amazon set these price limits, we were continually pushed into lowering our prices to compete, despite our desire to maintain higher price points to reflect the quality of our offerings. It became increasingly difficult to maintain our pricing strategy against the widespread tendency to price e-singles at 99¢." This situation led to financial unsustainability as the revenue from selling at 99¢, after accounting for a 30% vendor fee, proved inadequate.
Confronted with these challenges, Byliner explored alternative revenue streams and trialed a subscription model. They offered unlimited access to their content through their website and mobile apps for a monthly fee of $5.99. Unfortunately, this model failed to attract a sufficient number of subscribers. Reflecting on this, John speculated, "It might have been too early for such a subscription model, or perhaps consumers weren't ready to pay for reading material in this manner. I'm still not convinced there's a viable business model for subscription at that level, but if there is, it might still be a few years away." As a result, Byliner’s growth stalled.
By early 2014, Byliner found itself at a crossroads. The company needed to generate more revenue to sustain its operations at the existing staffing levels, and the prospects of securing additional venture capital were dim due to its growth trajectory. Scaling down operations, reducing staff, and transforming into a small, boutique publisher specializing in e-singles might have been feasible. Yet, such a path did not align with the expectations for a venture capital-funded enterprise. Investors typically look for significant returns, not a scaled-back operation. Furthermore, John, having invested four years into this venture, was not inclined to manage what he saw as the decline of his dream. Retaining staff, particularly software engineers, was becoming increasingly challenging.
In September 2014, Byliner's journey came to an end when it was acquired by Vook, a New York-based digital publishing service company. The three-year trajectory of Byliner highlighted a critical insight: although there is a market for short books published exclusively as ebooks, more is needed to support a standalone publishing business. The market saturation with low-cost content and the pervasive pricing pressure that established 99¢ as the standard price point made it difficult to grow revenue and achieve profitability solely through publishing e-singles. Despite being a pioneer in the e-singles market with venture capital backing, Byliner could not reach a scale or level of profitability that resonated in the venture capital world. While Byliner did publish several notable and successful titles, the business model ultimately proved unsustainable in the long term.
Conclusion
In his analysis, John B. Thompson speculates whether Byliner's approach might have been too cautious. He suggests that a more radical approach to digital publishing could have been more successful—not just creating shorter ebooks but reimagining the book's form by integrating digital technology's multimedia capabilities. Could a venture that dared to be more innovative stand a better chance?
We'll approach this and other ventures in our next and final segment.
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