It is fascinating to watch product/sales categories emerge and die, especially if you're a marketer. One story is playing out daily - the e-reader and eBook category. It dominated the book world over the holidays. It is redefining all the accepted norms of product life cycles. As a voracious reader, I find it compelling. I don't want hard cover books to die, but I might not have a choice!
This year, the Kindle was Amazon's most popular gift. EBook sales totaled $323 million in 2008 and are forecast to grow to $9 billion in 2013, according to an In-Stat forecast. In five years, the estimate for eBook sales is $29 billion. On Christmas Day, sales of eBooks to fill empty Kindles outsold paper copies.
The e-reader is in the brand infancy stage, having come on the scene in 2007. Not surprisingly, Amazon's Kindle, the first offering, holds an overwhelming 60% market share as reported by Forrester. (Amazon does not release Kindle sales figures.) Sony's Reader is the distant second, even with a price point of $200 which is $50 less than the Kindle. Barnes & Noble has entered the fray with the Nook, available at 700 retail outlets, with an offering of over one million eBooks. The Nook dwarfs the 390,000 that Amazon offers its consumers. There is real money to be made. EBooks are handsomely profitable ventures. At $9.99 or less, it has the very real potential to cannibalize book sales. It sure beats paying $25-plus for a hard cover.
It is all doom and gloom for book publishers? At first glance, yes; but the facts don't entirely bear this out. The Lost Symbol by Dan Brown sold a staggering two million copies in the first week of release. Only 100,000 copies were electronic versions which equates to 5%. The industry average for eBook sales ranges from 3% to 5%. It's a small fraction of total sales, but enough to get marketers to take notice.
You would think that things would be rosy for Jeff Bezos and the folks at Amazon. After all, the e-reader/eBook category is only a few years old. This is supposed to be the growth cycle when profits flow. Coming out of CES in Las Vegas is the marketing heading that Apple's new tablet product is being touted as the "Kindle Killer." I caught a glimpse of it on TV and I was absolutely mesmerized by the quality of the graphics which featured Sports Illustrated in electronic format. It was better than the print edition with graphics clarity that jumped off the page. I was sold. The profile was sleek and elegant and replicated the physical reading experience of a book or newspaper. It may cause me to rethink my mindset about never wanting to curl up in my favorite chair with an e-reader!
Market dominance in the technology segment is fleeting at best. The product life cycle is often a very sharp rise followed by a precipitous fall. Nowhere is that better exhibited than in the e-reader niche. With their tablet entry, Apple has the potential to wreak havoc much like they did in the music industry with iTunes. It is the eat or be eaten mentality. Who wins this war? It's too soon to tell. The e-reader/eBook category is exploding with lots of great brand names going head to head in an emerging market. It's certainly worth following. We'll probably even see it covered in business schools in the years to come. Marketing history is being played out in real time.
As a fellow lover of books - and the owner of a Sony e-Reader - I've learned to like both. For different reasons.
The e-reader is cool - it fits in my purse or laptop bag easily and is handy to take on vacation when I'd typically bring along multiple titles to enjoy. Less weight in the suitcase... and no matter where I am, if I have the e-reader out, someone will ALWAYS stop and comment on it, or ask me about it...
Also the number of books available in e-book form have increased exponentially over the past 2 years (which is when I got mine). And the prices are very good. I can pick up the latest Greg Iles hardcover for around $12 vs. the $24+/-.
One downside to the e-reader is battery life. The reader touts 7500 page turns on a full battery - and to be honest - I've never tried it. And they DO last for a good while... BUT... if you don't bring your A/C charger - and your battery kicks - it's game over 'til you can recharge. Not fun if you're on a plane when it decides to choke - I can tell you this from personal experience!
Even with the coolness of my e-reader - I still buy books in addition to e-books - so they haven't made me a total e-book convert (nor do I think they ever will completely). I can still spend HOURS in a bookstore browsing. And as a devout reader will attest, there is nothing like the experience of cracking open a brand new book to read.
What's interesting is that Barnes & Noble is two years behind in entering the fray. And what will be interesting to see is how this offering cuts into their own sales. Or are they just thinking sales are sales and they need to keep up with the others in order to remain competitive?
With Amazon - there are no brick & mortar stores to take away sales from...and selling the e-books eliminates their need for boxes, packing materials, labels, shipping costs, etc. which makes e-books a higher profit margin for them.
And while Sony sells their e-readers through Borders (as well as through their Sony retail site), the e-books are sold through their own e-book store on their Sony website - and I'm not totally sure, but I don't think you can order e-books directly from Borders.
I agree it will be interesting to see what happens when the Apple Tablet hits the market ... guess we'll just have to wait and see how big of a stir they will make. I'm sure it'll be a good sized one!
In my opinion - while e-books will definitely continue to affect the sales of hardcovers and paperbacks alike; and with increasing percentages - I can't imagine they will ever completely take over. At least not in our lifetime. Now who KNOWS what will be happening in the world of books by the time my 1 year old niece is in her 40's! :o)
It would be an extremely sad day to see books go. There is something so comforting about curling up with a good book (even the smell is nostalgic). I can't imagine it actually happening but then again I never thought music would be (almost) completely digital either. The Tablet is sure creating more buzz around this - will be interesting to follow.
On another note, the environmentalist in me is thinking, that would be a heck of a lot of saved trees.
Would the Beatles have ever written a song titled "Ebook writer"? I think not. And what about artists like Ben Shahn who made their living illustrating book covers. Will pixels be their only outlet? I hope not. However, for a different point of view of what is perhaps the inevitable future, check out @carr2n. A man who sees a potential savior coming down from the mount with a tablet.