Gemstar's e-books bet could pay off

Published: Dec 1, 2000 5:39 p.m. ET

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When technology improves and content is comprehensive

By

DavidB. Wilkerson

LOS ANGELES (CBS.MW) - Luddites beware - e-books just might make more sense than you think.

Though we try to stay on top of the latest innovations here at Media Report, we must admit that the idea of phasing out the tactile, traditional, yellowing-prone, dust-gathering, space-hogging book struck us as blasphemous.

Come on - what about the joys of leafing through them in bookstores and libraries? Admiring older typefaces. Knowing that somebody else handled the same books 50 years ago, 100 years ago, and so on.

And what about newspapers? Trying to unfurl them on crowded subways, or fishing them out of the bushes?

Printed media are perfectly mobile. You can take books anywhere. Why would you need an expensive computer device to supplant them, a device that needs batteries?

"Today, paper is, on the one hand, easy and portable, and there's random access, and all those good things," said Pete Boylan, co-chief operating officer of Gemstar-TV Guide, which is best known for its interactive programming guides and TV Guide Magazine. See related story.

"But by the same token," Boylan went on, "you chop down a lot of trees, you use a lot of ink, you have inventory delivery, all kinds of costs. So we think, over time, people would welcome a lightweight, portable, easy to use device that can allow them to read their favorite book, get their favorite newspaper, read their favorite magazine (etc.)."

Gemstar GMST is rapidly ramping up its e-books division, which has thousands of titles available from publishers such as Random House, Simon & Schuster, St. Martin's Press, Harlequin and Warner Books. A number of periodicals are available, including The New York Times, Newsweek, Time, Fortune, The Christian Science Monitor and many others. Gemstar-licensed devices sell in a price range from around $300 to $700.

The company is looking to expand its profile with some kind of alliance with Barnes & Noble BKS, +3.57% a top bookseller. There had been speculation that the companies might merge, but they quashed that notion this week.

To be sure, a lot of paper is recycled. But the production costs are significant, and it is hard to make a practical case for accumulating stacks of magazines when every issue can be stored electronically. Eventually, e-books will be able to deliver pictures as clear and dynamic as those in a magazine, and will incorporate sound and motion.

"As battery life improves, as memory gets less expensive, as you can hold more books, as the display gets better, the picture gets sharper...the multimedia experience for learning, we think, is going to be extraordinary," Boylan said, "as well as the simple consumption of newspapers, periodicals, books."

The commerce opportunity is immense, too, the executive said. One example involves the direct mail catalog. "Companies are spending a lot of money printing the catalog, mailing it, hoping that I'm going to buy something," said Boylan. "With an e-book, we have the ability to go to a Sharper Image, put the catalog down in an e-book, and instead of that incredibly aggravating experience of seeing something I want to buy, dialing an 800 number and waiting in a line to get answered by somebody who's inexperienced, they'll be able to go to the catalog, see what they want, touch on it, get additional information, press 'Enter,' and order it. Never have to talk to anybody."

The key to the viability of the e-book is pretty simple. When we get to a point at which most, if not all, of the material now available in print becomes available electronically, that's when the purchase of such a device makes sense. That's going to take some time, though Boylan says progress is being made quickly.

"Everything being done today is digitized. All new work is going to be digitized. Then when you look back, there's a lot of content, great content, whether its John Grisham, Patricia Cornwell, etc., a lot of their books have been digitized."

Ultimately, says Boylan, all of the "classics" will be available as e-book downloads for as low as 49 to 99 cents, as opposed to the $20-plus prices many consumers now pay for traditional books.

Obviously, there will always be lovers of traditional books, for all kinds of reasons. But when e-books eventually do what they're supposed to do, those reasons will be strictly sentimental.

Quote References

  • BKS
    +0.25 +3.57%

David B. Wilkerson is a reporter for MarketWatch in Chicago. Follow him on Twitter @dbwilkerson.

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David B. Wilkerson is a reporter for MarketWatch in Chicago. Follow him on Twitter @dbwilkerson.

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