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AUDIE CORNISH, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Audie Cornish.

One of the central tensions in publishing can be summed up in this online book trailer.

(SOUNDBITE OF "IT'S A BOOK")

UNIDENTIFIED MAN #1: What do you have there?

CORNISH: It's for a kids' story by Lane Smith.

UNIDENTIFIED MAN #2: It's a book.

UNIDENTIFIED MAN #1: Do you scroll down?

UNIDENTIFIED MAN #2: Nope. I turn the page. It's a book.

UNIDENTIFIED MAN #1: Can you blog with it?

UNIDENTIFIED MAN #2: No. It's a book.

CORNISH: What is a book anymore in a world of Kindles, Nooks and iPads, and eager talk about new platforms and distribution methods? Put simply, traditional publishers are traveling a long and confusing road into the digital future. We're going to spend some time this hour strolling down that road, exploring this time of transition, what it means for publishers, for readers and providers too.

MARGARET ATWOOD: About three years ago, we were told by a lot of people that paper books were going away. That has not happened.

CORNISH: And yet, author Margaret Atwood is dabbling in the brave, new world of digital publishing. We'll hear more from her soon. To begin, here is the conventional wisdom about publishing: E-books are destroying the business model. People expect them to be cheaper than physical books, and that drives down prices. But as we hear from Zoe Chace of NPR's PLANET MONEY, the story is not so simple.

ZOE CHACE, BYLINE: There is a big problem with digital books for publishers, the same problem that exists for the record labels. People steal digital content. And there's not the same stigma to pirating an e-book as there is to holding up a Barnes & Noble. So that's a big issue. It turns out, though, that even with that, some publishers are doing great.

DOMINIQUE RACCAH: We've had an incredible year. Last year was the best year in the company's history. This year was - we beat that, which I didn't think was even possible.

CHACE: Dominique Raccah is CEO of Sourcebooks. She says it's because of digital publishing, not in spite of it, that they're doing so well.

RACCAH: It's been an amazing ride.

CHACE: It turns out there are a bunch of huge advantages for publishers. A big one: the price isn't fixed the way it is with physical books.

RACCAH: The challenging thing about physical book is that we price once.

CHACE: So 10 years ago, a publisher sends out their books to the bookstore with the price stamped on the cover. After that, they were done. They couldn't put it on sale to sell more books.

RACCAH: The exciting thing about digital books is that we actually get to test and price differently. We can even price on a weekly basis.

CHACE: Once you have this tool of price that can be adjusted in an instant, you can do whatever you want with that tool. You can use it, say, to get publicity. That's what Little, Brown did with the title "An Unfinished Life," a Kennedy biography.

In the middle of November, Little, Brown dropped the price from 9.99 to 2.99 for 24 hours, the digital equivalent of a one-day-only sale.

TERRY ADAMS: That sparks sales. It gets people talking about it, and you've just expanded the market.

CHACE: Terry Adams is a publisher at Little, Brown. Dropping the price of "An Unfinished Life" got people's attention.

ADAMS: Here, we had an opportunity to increase the audience.

CHACE: To goose sales. In this case, the book launched on to the bestseller list. And because you can jack it back up again, you're not stuck there, losing money. This kind of promotion leads to discovery, something that used to just happen in bookstores. But with fewer of those around, publishers are using price to create discovery. It's like making music available for streaming so that someone will discover an artist and then buy a record.

Speaking of...

(SOUNDBITE OF SONG, "UNDER PRESSURE")

CHACE: ...if you read the new iBook, "40 Years of Queen," you'd find it's got links in it to iTunes, where you could buy this.

(SOUNDBITE OF SONG, "UNDER PRESSURE")

QUEEN: (Singing) Pressure pushing down on me, pressing down on you, no man ask for...

CHACE: Another huge advantage of e-books, publishers can sell you things inside your book. It's still quite rare, but that's where digital publishing is headed. Enough with the good news. There's still one downside of e-books putting pressure on publishers - besides thieves - that you may have noticed, actually, just in the past day or so.

RACCAH: We actually don't have a good gifting tradition yet for e-books.

CHACE: Physical books are still the Christmas presents. Zoe Chace, NPR News.

(SOUNDBITE OF SONG, "UNDER PRESSURE")

QUEEN: (Singing) Pressure.

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