Three Implications for the Rise of E-Readers

For the first time ever, Amazon.com sold more electronic than printed books. In other news, Kindle e-readers are flying off the shelves and one article suggests Barnes and Noble’s saving grace will be their Nook reader.  What gives with this sudden transition to e-books and what are the implications of this e-reading trend?

An Economist article titled “Great Digital Expectations” highlights the rapid rise of e-books. And “rapid” is exactly the right word, as it was just in 2006 e-reader sales were a measly 100,000, whereas 25 million unitsare expected to be sold in 2011.

The Economist article mentions some startling ramifications of this trend towards electronic reading and publishing (paraphrased):

  • E-Books have higher profit margins
  • E-Romance novels are selling like hot-cakes
  • Digital piracy is a threat
  • Pricing is all over the map

As more people switch to e-readers, and the tablet craze really takes off, there are certainly some implications.

First, the Long Tail, will be much more of a selling force. In the past, publishers would rely on big box stores such as Borders or the like to prominently display their wares. In addition, publishers would expect discount stores and warehouse firms such as Costco, to move book volumes.  With digital publishing, it’s conceivable that more players will have a “fair shot” at publishing success as clustering algorithms on Amazon andBN.com suggest books based on our browsing history or past purchases.   For sure, blockbuster titles will continue to have a conspicuous display on Kindle and Nook homepage screens, but readers will discover more book options as expert recommendation engines suggest likely interests that can be purchased in seconds.

Second, pricing will take on added importance. Today, print publishers wrestle with initial price setting as they must deliver books to stores that will sell and also create profits. Pricing must be decided before printing, because each book has a printed list price on the back cover.

However with digital publishing, there is essentially no need to establish a “set in stone” price. In a virtual world, publishers (and online retailers) can experiment with pricing every day, perhaps setting different rates by country, discounting “on the fly” based on daily e-book sales, or offering deals to Amazon Kindle customers through their “Special Offers” Kindle. Amazon shoppers know it’s not uncommon to view a book, say “Harry Potter and the Deathly Hallows” one day at $21.24, and then come back to the site tomorrow and see it listed for $22.09.  Pricing experimentation will happen instantaneously based on near real time data analysis—without the need to change store signage and update retail POS systems.

Third, as e-readers take over the market, there is danger of increasing the digital knowledge divide between “haves” and “have not’s”. If a person requires a $100 e-reader to check out a digital library book, will this create a knowledge gap between socio-economic groups?

These are just three implications for rising e-reader ownership and there are certainly dozens more. Can you think of other implications for the rise of e-books?

2 thoughts on “Three Implications for the Rise of E-Readers

  1. implication 4 – we save trees by not creating as many paper books.
    implication 5 – writers are not rewarded as well for their skills as the publishers still will take their percentage leaving the writer with less due to the cheaper price of the online book
    implication 6 – readers will no longer have used books to donate to friends and libraries
    which goes into something I was thinking about: Your third comment is interesting, having gone to the library as a child to get “free” books, will the people without an electronic reader be left in the dust? Perhaps it actually opens the door for many who do not have access to great libraries and can share the reader? Just as mobile phones have opened information to many, this could be a way to reach an untapped market. Especially as libraries suffer in this electronic age and many close their doors or have limited hours.

    .

    • Cindy, I will say that I’m concerned about the rise of e-readers in relation to point #3 and libraries. Not everyone can afford and e-reader and while it’s not an issue today, we need to make sure knowledge is easily dispensible and in some cases (free) to those without means. Maybe make digital books available for free reading on library computer terminals?

      Ah, sometimes nothing like having a book in the hand! Thank you for commenting!

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