eBook Industry To Lose $1.5 Billion By 2005

Digital Rights Management (DRM) software and companies basing their business model around collecting revenues through this technology will fail to collect sustainable revenues over the coming few years. According to a new report by Forrester Research these companies "must create compelling services with the content consumers want, in the formats they want, using the business models they want."

Forrester Research also commented that, "as piracy increases and artists and authors break away from publishers to go independent, record labels and book publishers will lose $3.1 billion and $1.5 billion, respectively, by 2005." It goes on to say that, "collapse of control won't destroy the music and publishing industries, but it will cause a major shift in their power structures."

To succeed publishers must "create compelling services with the content consumers want, in the formats they want, using the business models they want." Because of the "collapse of control" Forrester expects to occur for publishers, they believe there will be a transfer of revenues away from publishers and towards authors, musicians and third-party service companies.

Arguably the prediction that made the least amount of sense was Forrester's prediction that "the danger of collapse is much less acute for companies in the movie and videogame industries. According to the report, consumer demand for movies, television, and videogame content is different in important ways from the demand for music and books." It is unclear why the danger is less acute for this kind of content, and why they consider ebooks to be so similar to music (MP3s) -- this may be elaborated on in the full report however Planet eBook is already aware of the widespread, illegal distribution of movies, TV and games.