| Electronic Publishing: A Primer
Benjamin M. Compaine, Senior Research Professor Copyright ©1992, 1996, 1998 Benjamin M. Compaine. Permission is granted for noncommercial copying or re-distributing for individual or educational purposes. All other rights reserved. Electronic publishing is a term that covers a wide gradient of meanings. This article will provide examples of the range of these meanings, a portrait of some actual electronic publishing products and services available in the mid-1990s, and a description of the forces and trends that have shaped and will continue to shape the form of electronic publishing in the United States. First, however, we need to define some terms for the context of this article. "Information" is used in a very broad sense. It includes anything that might be read or viewed today in a newspaper, magazine, book, newsletter, or other printed product. That means news, classified advertisements, crossword puzzles, pictures and comics, features, fiction, and so on. "Publishing" means the process by which an information provider assembles, formats, and distributes a content-intensive product. Publishers (whether individuals or organizations) have two roles. The first is to bring together writers, photographers, advertising sales representatives, designers, artists, editors, who together create some information. The second concerns distribution. Publishers have traditionally put that information into a printed format, and arranged for its distribution via mail to homes and offices, or trucks and trains to stores. "Electronic publishing" refers to the second part of the publishing process, distribution. It means taking the content created by the writers, artists, photographers, etc. and getting it to the end user in a digital rather than printed format. "Online" refers to an active connection between a terminal or a personal computer and another computer. Usually this is via a telephone line of some sort. But it could be by a wireless process or a cable TV wire. "Information provider" is a term that has come to mean publisher in the online electronic publishing domain. Although electronic publishing and online information services are not synonymous there is a strong relationship between them. Just a few years ago information providers relied on third party services to actually provide the connection to the user. An online service provider aggregates the data bases of many information providers. Users therefore need access only a single source which then provides menus or command processes to get users to the information source they want. For example, the "Newsstand" section of America Online at one time included access to online version of The New York Times, the Chicago Tribune, The Atlantic Monthly, and Disney Adventures Magazine, among dozens of others. The Los Angeles Times and the Atlanta newspapers were initially available to Prodigy subscribers. This model is similar to that of a newsstand or book store which provides the printed publications from many publishers. Since 1994, the growth of the ease of accessing and navigating the World Wide Web portion of the Internet has made it more reliable for information providers to use their own servers and promote a service directly to consumers. Thus, thousands of newspapers and magazines have set up Web sites with some or all of their print content. In addition, nontraditional publishers, ranging from individuals to Microsoft, are taking advantage of the economies of online publishing to provide content. In its purest form, then, electronic publishing is the creation, storage, transmission and reception of text, sound and graphics by digital means. Computers are involved throughout the process. Thus, an article such as this may be created at a keyboard of a personal computer using a word processing program. It is stored in computer code on the computer's non-volatile storage device (usually a hard disk drive). At some point it may be transmitted over telephone lines or an internal network to a more powerful computer called a server. Editors may view the article on their own computer terminals, make changes, and store the completed article. There it may be integrated with a large data base. Users of the data base can then access the information from their own keyboards and video screens. The most important part of this description to note is that the publishing process takes place without generating a scrap of paper. Even photographs and graphics may be provided digitally. Graphics can be created using computers and made part of the article. Photographs can now be snapped with familiar looking cameras, but the image is stored on magnetic media and "developed" by placing the disk in a special reader that shows the image on the video screen. Although this pure model of electronic publishing does exist, in most cases the publishing process still involves paper at one or more points. Just as credit cards and checks have been unable to move us to a cashless society, so the ability to be totally electronic has not yet evolved into the paperless office or home. This has as much to do with culture as with economics and technology, as will be discussed later in this article. Most publishing today is still a hybrid process. Much of it is in the digital world. But despite some very successful services identified below, most information is still put onto paper. Even the purest of electronic publishing activities have found that they must give users an option for printing the output as a hard copy for convenient off-line access. Economic Forces and Trends Incentives to move toward electronic publishing arise from economic as well as technological factors. In 1959 IBM had a computer that, if anyone had wanted to take the time, could have been programmed to perform word processing in much the same way a desktop system does today. The problem was that the computer cost about $3 million and filled up two air conditioned rooms. Much of what is happening today could have been done many years ago, but at prohibitive cost. The technological key to the ferment today is summed up in one word: DIGITAL. But the economic reality is summed up by four: Smaller, Faster, Cheaper, Better. Thus, the merging of video, text, and sound is all made possible by the capability to convert any of these into the zeroes and ones that make up the binary language of computers. We have known how to do this for many years. In the past 40 years, however, the cost of going digital has fallen dramatically. Computer processing power is cheaper, mass storage (such as hard disk drives) is cheaper. Transmission via wires or over-the-air is cheaper. Traditional publishing is both labor and energy intensive. Labor is used of course in the creative process of writing, editing, drawing, photographing and so on. It is used as well in the production and distribution process. Energy is critical in the manufacturing of paper, even if recycled. More energy is required to deliver billions of magazines and newspapers to homes and offices. Labor and energy are two resources that have increased more than the general level of costs since the 1970s. On the other hand, anything associated with computers and telecommunications has been getting cheaper. The cost of computer processing has been dropping at the rate of about 25% per year for the past four decades. Today's $2000 desktop computer has greater power than the IBM mainframes of the 1980s. And anything that is associated with computers and digital has benefited. One of the largest beneficiaries has been the telephone network. Operators switching calls gave way to mechanical crossbar switches, which have given way to electronic switching. Today, a modern switched telephone network is essentially a powerful computer. Electronic publishing takes advantage of these trends. It reduces labor and energy costs. Writing and editing on terminals, with output directly to plates for a printing press is more productive than the old process that involved typewriters, paper, retyping, and keyboarding for typesetters. Electronic delivery via telephone lines or even on a diskette is far less energy intensive than producing tons of paper that need to be transported by train and truck and physically delivered. So the technology associated with computers and telecommunications has been pushing down the costs of publishing electronically. Some of the key technologies that have emerged at lost cost are:
Business vs Consumer Products and Services As is often the case, businesses and institutions became customers of electronic information services before home consumers. This was due to several factors.
For example, an individual who owns some shares of stock may have no need to learn of the price of the stock minute by minute. Getting the closing prices in the evening (or next morning's) newspaper may be sufficient. A stock trader, on the other hand, may have millions of dollars at stake. The trader is likely to find the several hundred dollar a month for real time access to securities information a very good value. Similarly, law firms were quick to embrace the online services that provided instantaneous searching of vast legal libraries in seconds. Even at $80 or $90 per hour of connect time, the productivity over sending an assistant to the library for hours of looking through references was considerable. (At that, they could still pass the cost on to their clients. Information specialists in corporate and university libraries also were earlier adopters of electronic data base searching. The speed and costs of computers that stored the data bases meant that searching techniques (usually Boolean) was best left to full time professionals. The first wave of nonprofessionals to get an interest in the output of electronic data bases were computer "hackers" and others called "early adopters" of technology. Services such as The Source and CompuServe started up in the early 1980s. Services were priced per minute of connect time, but by historical standards were within many consumer budgets. Databases included weather, sports, stock prices, film reviews, and technical "forums", usually about computer technology. Electronic banking was tried but did not catch on for many years. Shopping online had modest success. Types of Consumer Electronic Publishing in the mid-1990s Electronic publishing continues to take many forms. It is still a speculative and entrepreneurial activity for most players. . Many of the pioneering ventures have cost their corporate sponsors much money. There is no proven business model. It is uncertain if and how much they will pay for online information. Advertisers are still trying to get a feel for the value of the small "billboards" and links they are trying at various sites. Transaction-based services are very much untested. Still, it is useful to take a snapshot of the state of electronic publishing in 1998. In the early 1980s the crystal ball gazers were predicting the form of the electronic newspaper. "You would call up your local newspaper and get all the news" was a typical description. The vision brought by the Internet was that everyone could have access to everything -- raw data -- without the need for gatekeepers. Reality will most likely be somewhere in between. The Internet will indeed give small firms, individuals and all sorts of organizations the network they need to distribute whatever they want without the blessing of some gatekeeper. On the other hand, established players have a "brand equity" or credibility that the mass audience is likely to desire. There is a comfort in finding the name of a familiar information provider, whether it is the local newspaper, a broadcaster or other publisher. It is perhaps why motorists away from home will stop on the highway to eat at a national food chain that they would ignore close to home. On the information highway, will we trust an article from someone known as "whoopy@unknown.com or even from "Whoopy's News Page" over one from USA Today? Pure electronic publishing, that is, from producer to consumer without paper, is emerging via two process: online and CD-ROM (or successor off-line media). Online Online publishing requires the user to have a telecommunications link with the publisher's data base. Typically this has been through a telephone line. But increasingly it might be via the same cable connection that goes to the television. Or even over a wireless cellular or microwave connection. Most online connections are on a dial-up basis. That is, users have a modem dial the information service's computer when they want to access information. They disconnect when they are finished. The advantage of online services is that the information that is retrieved can very current. Securities and commodity prices may be updated continuously. News, weather and sports may be updated by the information provider several times daily. Other sorts of information, such as school lunches or movie reviews may be refreshed less often. There are drawbacks to online access. First, it is generally still not portable. Users must be at a location where they can plug their terminal into the phone or cable system. Viewing on a plane or at the beach is not feasible. Although wireless communications may change this, cellular connections are likely to remain too expensive for extended access, except for value-added business applications. Second, depending on the nature and timeliness of the information, users may be required to pay a per-minute, per use, or other on-going subscription fee to access online data, including a fee for connection to an Internet Service Provider (ISP) or proprietary online service. At one level this is like a subscription a daily newspaper or a weekly magazine. But it is very different from purchasing a book or record, where users have unlimited and free access once they pay a flat fee. CD-ROM CD-ROM (or similar technologies) is an alternative for many electronic publishing applications. This too has its pluses and minuses. In general these are a mirror image to online. One advantage of CD-ROM is the large amount of data that is available on a single disk. Several multiple-volume encyclopedias, such as Compton and Grolier, are available on CD-ROM, complete with illustrations, photographs, plus sound and motion. Second, unlike an online service, users of CD-ROM publications can access it as often and as long as they like without incurring charges beyond the purchase price. For libraries, that also means a fixed cost rather than open-ended costs. The major disadvantage for users, of course, is that, like its printed forbear, a CD-ROM is a manufactured product. Its information is static and cannot be updated constantly as can an online service. Thus the CD-ROM format is currently most useful for many book-like entertainment and information products. Typical of some CD-ROM titles are "Atlas of U.S. President," "A Survey of Western Art" and "Interactive Storytime." Publishers may find opportunity in the inherent limitation of the CD-ROM format by offering periodic updates of some titles. Much as sales of world atlases were affected by the new boundaries drawn after the break-up of the Soviet Union and Eastern Europe, so CD-ROM publishers could take advantage of a need for updated electronic publications. CD-ROM is likely to have its most visible first effects in the college textbook area, where rapid changes in natural sciences are more easily accommodated in revisions to a CD-ROM than print titles. Simulations using videos and sound go beyond the limitations of print. Even social sciences can benefit in the format. Instead of just reading about the assassination of President John Kennedy, for example, a history "book" on CD could include video excerpts of the shooting and the contemporaneous television coverage, among other possibilities. The future may hold a merging of the best features of online real time service delivered via telecommunications and the fixed cost advantage of a storage mechanism such as CD-ROM. (There are other technologies that have the same advantages and disadvantages as CD-ROM). This involves an erasable medium (similar in function to floppy and hard disk drives) that is combined with delivery of data by wire or over-the-air. For example, a publisher could transmit a daily, weekly, or other regularly timed data base over telephone or cable to a device that saves the data on a CD at the user's PC. The types of consumer electronic publishing activities that were available in 1998 have evolved rapidly from the model of only one or two years previously. The original closed consumer online services, CompuServe, America Online and Prodigy as well as the newer Microsoft Network, have embraced or been pushed into incorporating access to the World Wide Web. They are trying to make the content of their proprietary services seamless with the material obtainable on the Web. The cost of these services varies. Initially they charged per minute of connect time: 10 cents or 20 cents per minute was typical. Electronic online publishers were faced with telecommunications charges that were time sensitive. And the response time of the computer system was in part a factor of how many subscribers were logged on at one time. But flat rate pricing ultimately took hold. The business model found that consumers preferred a known fixed cost to an open ended approach where the meter was always running. The result for a time in the early 1990s was a mixed rate card: most of the services offered a flat monthly rate. However, that was good for up to a limited amount of total access time each month. Access to some services or data bases then incurred a per search or per minute surcharge. These charges were often determined by the information provider. ISPs also offered service with a basic flat rate charge, plus per minute for incremental time. The typical monthly rate for the proprietary services , such as leader AOL, was about $9.95 for five hours, thereafter $2.95 per hour. However, in March 1996, AT&T broke the mold by offered an unlimited time flat rate for Internet access at $19.95 per month. Most others fell in step. America Online switched to an "all-you-can-eat" pricing in December, greatly increasing its usage and jamming many of its access points. The cost and pricing structure of online electronic publishing is still evolving. To the extent that computer and telecommunications costs continue to decline and competition increases, online pricing may go down. But information providers are still learning how they need to price their offerings. Publishers who still derive most of their revenue from their printed product initially viewed their electronic offering as both marginal cost and revenue. However, the more successful electronic publishing becomes, the less of the cost of assembling the content can be attributed to the print product. In the arcane world of cost accounting, publishers may find they need to allocate more of their publishing costs to their electronic ventures. Countering this is the greater volume -- that is larger audience -- that the electronic product may create. Thus, the revenue needed from each subscribers or user may decrease, resulting in gradually lower prices for electronically delivered publications. Factors Affecting Acceptance of Electronic Publishing The aggregate number of subscribers to the online electronic information services is sizable. The largest, America Online, claims to have about 11 million subscribers. CompuServe claimed about four million worldwide before being merged with AOL in 1997. Business oriented services such as Dialog or Lexis have fewer users but higher revenue per user. It is more helpful to talk about online "users," however, than subscribers. That is because some number of users subscribe to multiple services (such as AOL as well as to an ISP). Most university students, faculty and staff have "free" access to the Internet, as do millions of office workers. But he number of publishers on the WWW is so great that it is hard for any one to aggregate a sizeable number of regular "subscribers" (in quotes because of the ambiguous nature of what they means today in the online world.). These may be substantial numbers given the brief history of WWW. But they are far short of the numbers that still make up conventional publishing. The Wall Street Journal's interactive site, the only newspaper site on the Web charging a subscription for basic access, had about 100,000 subscribers at the end of 1997, about 5% of their 2 million print paper circulation. Individual newspapers such as USA Today and The New York Times sell one million or more copies every day. Some magazines, such as TV Guide, Time, and Reader's Digest sell two or 10 or even 15 million copies each week or month. Some popular books sells millions of copies per title in hardbound and paperbound editions. Thus there is a long way to go until electronic publishing is truly a mass medium in the sense it is applied to traditional media. Several factors affect the reach of electronic publishing: 1) cost of hardware; 2) pricing of electronic editions; 3) government policy and regulation, and 4) social and cultural patterns of media use. Cost of Hardware Although lower costs have indeed expanded the number of desktops that can access the wares of electronic information publishers, costs are still considerable. The minimum configuration for a personal computer with modem, CD-ROM and color monitor fell to less than $1000 in 1998. Specialized devices, such as WebTV, were available for under $200. By 1998 more than 40% of households in the United States had a personal computer equipped with a modem. This is a substantial number, but is far short of the households with television sets (98%) or cable service (67%). Televisions, which cost as much or more than a well equipped PC at a similar stage in their lifecycle, gave access to content that was free. In electronic publishing, the hardware is just the cost of entry. Users must then pay for access to the content, and in some cases for the content itself. Pricing of electronic editions Whether on CD-ROM or online, publishers have still not settled on the pricing of electronic editions, especially for the consumer market. They also have not been able to find a satisfactory way to duplicate one of the two models of print publishing. Traditional publishers of books and newsletters have depended on purchasers for all of their revenue. Thus the entire cost of publishing a book is reflected in the price of the book. But newspaper and magazine publishers have two revenue streams: circulation and advertising. In general they receive 50 percent or more of their revenue from advertisers. Publishers via electronic distribution have found several mechanisms for charging subscribers: by online time, by a monthly fee, or like books, a flat charge for a self-contained disk. They have had far more difficulty convincing advertisers that their electronic editions are an efficient way of promoting their goods and services. Online service Prodigy was the innovator in this regard. The bottom fifth of each screen of content included a promotion from an advertiser. Users who were interested in learning more were asked to select an option that will give then one or more screens of advertiser-paid information about their product or service. Although Prodigy did not release specific information about their advertising revenue, it was not likely that this revenue stream was ever a substantial portion of their revenue. Many Web publishers are looking to advertising to carry all or most of the freight. Several sites, such as Time's "Pathfinder" and Wired's "Hotwired," claim revenue at the rate of millions of dollars annually. But total revenue is still less than expenses and, in total, is small compared to the revenue of moderately successful print products. This indicates that publishers and users are going to have to continue to pick up the cost for electronic information for some time. Government Policy and Regulation Governments can have some effect in encouraging or slowing down the implementation of the technology and acceptance of electronic publishing. But it has a limited role that cannot stop it nor push it faster than social acceptance will permit. Government activities include 1) direct roles in promoting electronic publishing, 2) indirect roles, 3) telecommunications policy, 4) copyright, and 5) privacy issues. Direct roles. The first attempt to create a mass appeal electronic information service was that of the British Post Office. In the late 1970s it controlled the telephone system as well. Using technology it developed it introduced a service called Prestel, offering news and other information. It relied on a computer-like box added to a conventional television set and used telephone lines for the online connection. Despite hundreds of millions of dollars for development, promotion, and operations it failed. In France, the government-owned telephone company tried to overcome one of the ingredients in Prestel's failure by giving away the terminals that connected to a national electronic information service it ran. They installed millions of these Minitels. The plan was that telephone subscribers could use Minitel for directory assistance, therefore eliminating the considerable cost of publishing and distributing millions of telephone directories. On top of that, users would pay for access to many information services. The outcome has not been what was expected. Too many households refused to use the electronic directories, so the traditional ones were still printed. And they found that while newly connected users were avid browsers through the many Minitel services, usage dropped off rapidly after several months. This was partly due to the waning of the novelty -- and partly to the $50 or $100 charges users found added to their monthly phone bills. The most popular part of the service was not traditional information but adult "chat" services where users paid by the minute to have slightly x-rated online exchanges with service providers. Today, Minitel users are stuck with an outdated technology that cannot provide the graphics that has made the Web so attractive. Indirect roles. Short of such direct activities as these, governments may play other roles. In the United States, many of the technologies involved in making the digital world smaller, faster, better and cheaper has been the fall-out from expenditures in military and space technology. Tax policies that encourage or discourage high risk investment as well as policies that encourage or discourage taxation of Internet services play a role. Expenditures by schools and libraries for computers, online services, and student training play some role in general acceptance. The position of federal and local governments in policing the content of online communications, such as the discredited Communications Decency Act and any successors will promote or stunt the rate of acceptance and utilization. Telecommunications Policy. Telecommunications policy has been an important factor in the mix between online and CD-ROM-like distribution. Decisions by the courts and ruling by the Federal Communications Commission in the 1970s began to open the door to competition in long distance telephone service. An antitrust case that resulted in the break-up of AT&T in 1984 opened the floodgates to long distance competition. The price of telecommunications started falling rapidly. This in turn made online access more attractive. More recently, the Congress and the FCC have been trying to set the conditions for similar competition and price reductions for local telephone service. The Clinton Administration placed development of an "information superhighway" into a very visible position on its agenda. The Telecommunications Act of 1996 included language that was intended to encourage the FCC to promote enhanced telecommunications services. Copyright. Policies address the protection of copyright in an electronic era. For example, while photocopying a book from a friend or associate is a violation of copyright, it is also a time consuming process and the product is degraded from the original. On the other hand, copying a file stored on disk is quick, easy and results in a perfect replica with no degradation. Publishers have great concern over protecting their intellectual property that is digitally stored and transmitted. Congressional direction in the U.S. is minimal and Court decisions have been floundering. International differences worry publishers about what rights they have in a medium -- the Internet -- that defies political boundaries and jurisdictions. Privacy. Publishers of books or magazines know very little about the individuals who buy their products. CD-ROM based publications are likely to have the anonymity for purchasers as print. But online electronic publishing creates a new set of privacy concerns. The same computer that responds to the user's request also keeps track of every information request. There are implications for commercial privacy as well as political privacy. There is a tension between the basic anonymity provided on the Web and the need for information on users for advertisers and marketers. At the commercial level, publishers know the name and address and phone number of every user. They can then use this to compile data bases for themselves or to sell to others. Did you make an inquiry about the availability of cost of flights to Paris for next month. The information provider can sell that data to airlines, travel agents, hotel and car rental firms for their use for mailing or phone calls. Did a user view an article placed on the information service by a fringe political organization? Perhaps a crusading district attorney will try to get that list from the electronic publishing service. As more people use online electronic publishing the more likely concerns about copyright and privacy will be raised. Safeguards for the public sometimes conflict with the legitimate needs of law enforcement or the recognized commercial rights of information providers. Social and Cultural Patterns of Media Use In 1982, an editor at a symposium on the future of the book scoffed at the notion of electronic publishing. "Who would want to curl up in front of the fire to read War and Peace on a video tube?" She was accurate in characterization for that moment. But she failed to take into account two factors. One is the rapid changes in display technology. Fifteen years later instead of a video tube, the text could be on a very portable and lightweight screen. By 2002 it will be a high resolution screen that will be much lighter than the printed version of Tolstoy's tome. But more important, she was projecting the current values about the printed page onto the values of a future generation. Even by 1982 a generation of 10 year-olds was being transfixed (for better or worse) by interactive games played on the video tube. They were also being exposed to keyboards and the random access nature of computers almost simultaneously with learning to read. By the 1990s, this generation was going off to college. There they were expected to use the online version of the old card catalog and make appointments with professors using an online electronic mail system. University libraries were quickly diverting funds from book and journal acquisitions to online and CD-ROM information services. Indeed, while an older generation was slow to make use of automatic teller machines and had trouble getting their VCRs to record a show, their children were both uninhibited and enthusiastic when it came to interactive mechanisms. Conclusion Electronic publishing is still in its toddler years. But it is a business, generating billions of dollars in revenue, most of it directly from users. Only a small portion is from advertisers. In this sense electronic publishing is closer to the book/journal/newsletter model of publishing than the newspaper/magazine model. This may change in the future. Electronic publishing is being driven by a combination of factors: technology, economics, government policy and regulation and culture. Digital technology is the force behind the ability to blend text, photographs, sound, graphics and movie images into a single electronic data base. The size of anything associated with integrated circuits keeps getting smaller. Performance is faster. The technology behind the digital revolution has been on a steep downward cost trend for decades. And the products are more reliable. On the other hand, many of the costs behind traditional print continue to increase. This is particularly true for the costs of raw materials -- paper and oil-based ink. The cost of distribution of all this paper is also influenced by the cost and availability of energy and labor. Meanwhile, the first generation exposed to personal computers and interactive video are reaching adulthood. They are moving into the workplace and are establishing new households. Their attitude toward electronic information products and services may be very different than those of their parents and grandparents. Permission is granted for noncommercial copying or re-distributing for individual or educational purposes. All other rights reserved. |
Electronic Publishing rev796.1; rev297.1; rev31798