eBrandz Blog

E-books from Amazon, Google and Apple rewrite reading and retailing rules

The e-book wave is fast sweeping bricks & mortar book retailing industry. Advent of e-bookstores helping readers access millions of popular titles from their e-reader devices is evaporating the competitive advantage the world’s biggest book chains have enjoyed over the years.

The digital revolution hits bookstores, literally!

Barnes & Noble, which offers a wide selection of over 150,000 titles, is a classic example of this phenomenon. The book chain is facing severe pressure from innovative online booksellers. The company has continued to dominate bookstore-retailing format since it revolutionized publishing business by offering discount hardcover bestsellers in the 1970s. Today it has close to 1,400 stores, comprising more than 700 superstores. Things are changing fast, though!

This is not an isolated case. Many of music, book, and video retailers are struggling to run their businesses profitably at a time when music, movies and other content can easily be downloaded to digital devices directly.

The digital revolution, which has already shaken the media world, is now clearly rewriting the rules of the book selling business. It is fast upending the niche players that have dominated the scene for decades.

Some believe that bookstores will follow the way of several music stores that shut shop en masse once users could download music of their choice digitally. Mapping the trend, Jeffrey Trachtenberg writes in The Wall Street Journal: 

“Electronic books are still in their infancy, comprising an estimated 3% to 5% of the market today. But they are fast accelerating the decline of physical books, forcing retailers, publishers, authors and agents to reinvent their business models or be painfully crippled.”

Internet throws a big challenge to brick & mortar retailers

According to market observers, digital books will soon consume roughly 25% of total unit sales, on the conservative side. If one adds another 20% to 25% of units bought online, nearly half of the unit sales will be happening on the Internet.

In essence, rapid decrease in physical sales of books is becoming a problematic scenario for today’s established brick & mortar retailers. Why is it so? The reasons are obvious. 

Essentially, e-books don’t need paper, printing facilities, large storage space, or logistics services. They cost less than half the price of any hardcover book.

Google jumps onto the e-book bandwagon

Incidentally, the leading trade publishers thought that e-books had ‘no economic life in them’. The success of e-reader of Amazon.com Inc. changed the equation, giving a hint to publishers that the burgeoning e-books market was real. The arrival of iPad from Apple Inc. with its claim of tapping over 125 million iTunes customers one day indicated the e-book market’s enormous potential. The iPad also championed a different approach to existing e-book pricing. 

Google is set to jump into the fray with its own e-books, promising to take digital books revolution to an entirely new level. To sum up, the good old days for bookstores of filling their shelves and opening the doors are clearly gone.

E-books are turning the whole economics of book reading and retailing upside down…