BooksMuch like when iTunes set a new standard for the music industry in 2001, book publishers have been reeling as the digital revolution continues to alter the way we consume media.

The industry has had a particularly difficult 2011, as the art of the paperback heads for its demise in favor of e-books. As a result, power is slowly transferring to internet retailers like Amazon, who catalyzed the market four years ago with its Kindle and e-book store.

But rather than fight against the change, publishers are beginning to embrace the shift, hoping that the digital world will open up new revenue streams and lead to lowered costs. And unlike the music industry, publishers have won the battle to keep pricing control over its titles.

Speaking with Reuters this week, Penguin Chief Executive John Makinson said the publisher is determined to turn a profit with e-books and hopes the new technology will allow them to reach a wider audience. Currently, e-books account for almost 25 percent of the industry’s book sales by volume and 20 percent by revenue, Reuters added.

The trick is figuring out how to get consumers interested by incorporating digital extras. As an example, Makinson said its enhanced version of Jane Austen’s Pride and Prejudice, complete with clips from the Hollywood movie of the same name, wasn’t a hit among consumers. (One can argue that wasn’t a particularly engrossing book (or film) to begin with).

On the flip side, however, extras have been well received by children, especially on the iPad thanks to the device’s immersive touch screen experience. Most recently, an interactive digital storybook of A Charlie Brown Christmas, which was originally a TV special that first aired in 1965, has been rejuvenated through Apple’s iOS App Store.

While the digital book market is still in early days, a pressing concern within the industry is the ever-present threat of piracy. Online users who know a thing or two about creative Googling can easily find digital versions of books. In addition, Amazon’s new book lending policy has lead to industry discontent because the Big Six – Hachette, HarperCollins, MacMillan, Penguin, Random House and Simon & Schuster – feel it devalues books.

“Amazon is embarking on new initiatives that could put file security at risk and that would be not good for anyone,” Makinson said.

Business models are still being negotiated, and the digital book industry is still being fleshed out. Bottom line: publishers don’t want to make the same mistakes made by the music industry. While that’s happening, can someone please start working on an enhanced interactive version of Cormac McCarthy’s No Country For Old Men?