Penguin betting big on interactive eBook content for Apple's iPad

According to a report by PaidContent UK, the London-based publishing company expects ebooks to grow from 4% of its sales to 10% next year, thanks in large part to the market Apple is creating with the iPad.

John Makinson, the company's chief executive, said "the iPad represents the first real opportunity to create a paid distribution model that will be attractive to consumers."

Thinking outside the book

Thinking beyond the simple ability to just view the text of conventional books electronically as the Amazon Kindle does, Makinson said, "We will be embedding and streaming audio, video and gaming into everything we do. This will present us and the platform owners with technology challenges.

"The .epub format, which is the standard for ebooks at the present, is designed to support traditional narrative text, but not this cool stuff that we’re now talking about. So for the time being at least we’ll be creating a lot of our digital content as applications, to sell on app stores in HTML, rather than as ebooks.

"The definition of the book itself is up for grabs. We don’t know understand at the moment what the consumer is prepared to pay for […] We will only find answers to these questions by trial and error.”

Apple's iBook Store vs the traditional book store

Asked whether his company was chafing at Apple's iTunes business model that takes a 30% cut of all sales, Makinson said that this is actually better for publishers than the existing agency model for books, where retailers take 50% of sales.

"There is an argument," Makinson said, "for saying Apple needs the content; that they should be paying us for our content." That argument hasn’t worked however.

"We'll have to become more innovative and take some risks," Makinson said. "We'll need above all to listen to our readers, to understand what they want and what they'll pay for. But if we can do all that, which is a big task, I agree, we'll have a great and varying digital business."