E-Book Era: Will Digital Best Sellers Force End of Print - TIME

(Source: Andrea Sachs of Time Magazine)

Two years? Three years? Five years? It's a parlor game in publishing circles to speculate how long it will take before e-books constitute a majority of the industry's sales in the U.S. But the tipping point aside, no one doubts that that is where the market is headed. Amazon, the industry leader, already sells three times as many Kindle e-books as hardcovers. Other book sellers aren't far behind. Last week, the Association of American Publishers announced that in January, for the first time, monthly e-book sales had overtaken hardcovers. Paperbacks remain in the lead, for now.

E-books are by far the fastest-growing segment of the otherwise sluggish, recession-plagued publishing business. In 2010 e-book sales jumped 164%, to $441 million. "The acceleration has been quick and dramatic, and in some ways the uptake may get faster if physical outlets for books, like Borders stores, disappear faster than expected," says Michael Cader, founder and editor of trade e-newsletter Publishers Lunch.

After Borders, the second largest bookstore chain in the country, declared bankruptcy last month, the question arose as to whether the popularity of e-books had caused its demise. While industry experts say it was only part of the reason for the Ann Arbor, Mich.-based chain's collapse, its poor showing in the e-book arena certainly accelerated the former retailing powerhouse's fall. "They didn't get it," says Publishers Weekly business editor Jim Milliot. "They were way late to the game. They only started to develop a digital strategy last year."

One of Borders' main problems, according to Michael Norris, a senior trade analyst at Simba, was that the chain sold a dizzying seven types of e-readers, which confused consumers. Another issue was that for many years, Borders didn't maintain its own website, instead selling through Amazon. In contrast, rival Barnes & Noble sells its own popular e-reader, the Nook, and has long maintained B&N.com, which features a vibrant store that has seen its e-book sales take off. Still, both chains are light-years behind Amazon, creator of the Kindle, by far the best-selling e-reader in the market.

Despite the growing popularity of e-books, they pose a challenge for publishers. The industry still makes over 90% of its revenue from print. That means major publishers like Random House have had to maintain their print business while at the same time growing their digital side. "The trick is not that the digital isn't profitable," says Cader. "Digital at its current level makes few or none of the costs of running a print business go away." That means big warehouses, broad sales forces and extensive systems. The hope, of course, is that in time, digital will be cheaper to produce, but currently, publishers face a big expense in converting to digital. What's more, publishing has always been based on economies of scale, and with a reduction of the number of paper books, printing is becoming more expensive. "Once people catch the e-book reading bug, they rapidly shift a large portion of the books they read to digital," James McQuivey, a media-technology analyst at Forrester, wrote in a November report.

So are print books going to disappear? That's not in the cards — at least not yet, say experts. "Formats to which lots of people are attached often take a longer time to go away," says Cader. He compares publishing to the music business, in which CD sales have dropped significantly but not ended. And books were around a long time before CDs. Also, certain genres aren't practical as e-books. "It doesn't make sense yet for digital cookbooks, travel books, information books and textbooks," says McQuivey.

Publishers Weekly's Milliot agrees that print books will continue to exist, despite the popularity of all things digital. The fact that a consumer can order and download a book instantly, he believes, is not enough to make print books disappear. "Some people just like to have books in their house," he says. "Basically, if you just want to read a book, a print book is still a pretty good deal."

Great Holiday Expectations for E-Readers

Source: The New York Times

This could be the holiday season that American shoppers and e-readers are properly introduced.

E-readers will be widely available at stores like Target, Best Buy and Wal-Mart, the nation’s largest retailer, and offered at prices that make sense for Christmas gifts — less than $150.

Publishers and booksellers are expecting that instead of giving your mother a new Nicholas Sparks novel or your father a David Baldacci thriller in the hardcovers that traditionally fly off the shelves and into wrapping paper at this time of year, you might elect to convert them to e-reading.

“This is the tipping-point season for e-readers, there’s no question,” said Peter Hildick-Smith, president of the Codex Group, a book market research company. “A lot more books are going to be sold in e-book format. It also means that a lot fewer people are going to be shopping in bookstores.”

Only a small slice of the book-buying public has bought an e-reader. About nine million devices are in circulation in the United States, according to Forrester Research.

That could jump in the coming weeks as consumers begin their holiday shopping, analysts predict. According to Forrester, at least 10.3 million e-readers could be in circulation by the end of the year.

And many of them will be bought for other people. Research from Simba Information, which provides data and advice to publishers, has shown that 1 in 5 of those who own a Kindle, Amazon’s dedicated e-reader, received it as a gift.

In a recent Consumer Reports poll, 10 percent of the adults surveyed said they planned to give an e-reader as a gift this year, up from 4 percent in 2009.

That has corresponded with an increase in e-book sales. Two years ago, publishers said that sales of e-books constituted 1 percent of total book sales, but the figure is now closer to 9 or 10 percent.

A year ago, the Kindle was the dominant force in e-readers, and it remains so. But since then, the Nook from Barnes & Noble and the iPad from Apple have emerged as major competitors.

Last month, Barnes & Noble introduced a color version of the Nook for $249; there is also the Kobo, which is sold at Borders and Wal-Mart, and dozens of other e-readers, including a $100 tablet offered on Walgreens.com.

“Last year, when you think of the e-reader category, it was Nook and Kindle and Sony, but primarily Nook and Kindle if you look at the sales,” said William Lynch, chief executive of Barnes & Noble. “The difference this year is, there’s a whole lot more choice.”

Maybe too much, said Michael Norris, a senior analyst for Simba Information. “I don’t think that the U.S. market can support 50 or 60 e-readers,” he said, adding that he had lost count of all the current models.

James McQuivey, an analyst for Forrester Research, predicted that the glut of e-readers would confuse consumers.

“The range of choices is actually going to be perplexing,” Mr. McQuivey said. “And when that happens, consumers go back to the tried-and-true brands that have trust and good word of mouth.”

Weeks before the holiday season officially begins, the promotional blitz by retailers has already begun. On Amazon.com, a prominent homepage ad informs shoppers about the latest versions of the Kindle, for $139 and $189.

At the Borders Store at Columbus Circle in Manhattan, a bright red table near the front entrance features an assortment of readers, among them the Aluratek Libre e-reader ($100) and the Cruz Reader from Velocity Micro ($170).

Barnes & Noble has added sleek white “boutiques” in its stores, dedicated to showcasing the Nook. A Barnes & Noble in Greenwich Village has featured an enormous freestanding poster above the store entrance, with window displays full of brochures for the Nook Color and protective cases for the device, in hot pink, black and turquoise.

Inside the store on a recent evening, Jonathan Goodman, a writer in a gray trench coat, inspected a Nook e-reader and peppered a saleswoman with questions about price, book selection and service, in case the device broke down.

“There are just so many to choose from,” Mr. Goodman said, sounding weary. “But at this point, buying one feels inevitable.”

Amazon, which is planning a television advertising campaign throughout the holiday season, has expanded its reach to brick-and-mortar stores as well. During the holiday season last year, the Kindle was available only on Amazon.com; now it is sold at several national chains.

“Customers can walk into a Target, into a Best Buy, into a Staples, and touch and feel the screen for themselves,” said Jay Marine, director of product management for the Kindle.

All the emphasis on e-readers could take away from sales of the hardcover book, a traditional holiday gift, and that is a prospect that has some booksellers worried.

“There’s no question that this is the year of the gadget, and this year’s gadget is the e-reader,” said Geoffrey Jennings, the owner of Rainy Day Books, an independent bookstore in Fairway, Kan.

But Mr. Jennings said that sales of print books at his store were even stronger than last year, and that he believed the e-reading craze could be limited.

“A lot of people are going to get these things and they’re going to go, ‘This isn’t like reading a book,’” he said. “Then again, you’ll have people who get them and then say, this is a fun gadget. But people get sick of gadgets after a while.”

Publishers insisted that they were not worried about the spread of e-readers. “We’ll see a lot of reading devices under the tree, which means we’ll sell a lot of e-books,” said Tim McCall, the director of online sales for Penguin Group USA.

Carolyn Reidy, president and chief executive of Simon & Schuster, said she expected e-book sales to shoot up on Christmas Day, when people open up their e-readers and immediately start buying books.

“The digital will be an added plus to what looks like we’re starting to pull out of — a very lackluster market,” Ms. Reidy said. “That will make for a very happy year after two Christmases that have not been very happy.”

The News (As I See It)

As expected, Mockingjay (the conclusion to Suzanne Collins's Hunger Games trilogy) did exceedingly well in terms of sales. More specifically, Mockingjay sold more than 450,000 copies in its first week, meaning it sold over 200,000 more copies than the third Twilight book did in the same timeframe. Still think publishing is dead?

In the e-reader wars, the Kindle 3 continues to earn glowing reviews and is being hailed as the "best e-ink reader". But Sony isn't out of the game just yet; they're bringing out redesigned digital readers with brand new capabilities. My prediction? The pricetag is still too high, and Sony will never achieve a market readership like Amazon. Even as a fan of Sony, I must say, Sony, you will not win this war. When this newest ploy fails to topple the Kindle, duck out of the game and save your money. Or better yet, reinvest it into the PS4. Make me happy?

On other fronts, who doesn't enjoy a good list about the world of agenting? Well here's a collection of 5 Myths You Shouldn't Believe About Agents. Missing from the list is their ability to sustain themselves with small animal sacrifices and the bucket of tears shed by aspiring authors that they keep underneath their desk to quench their thirst. Perhaps we'll see a part two to this story? ;)

For a laugh, head on over to Stir Your Tea for the 100 step process of writing a "fiction novel". How many blunders did you make in your early days? I certainly recognize a few.

But I think my favourite read of the day is over at Writer's Digest -- 8 Basic Writing Blunders. The title pretty much sums up the content. You owe it to yourself to check this list, if only to exonerate yourself of these literary crimes.

Question for my readers: I'm debating making these news updates a recurring topic for my blog. Would you like to see more posts like this? Let me know!

Also, have anything to say about the news you've just read? Leave it in the comments below!

Toodles!