For one:

According to new data from Bowker and the Book Industry Study Group, the number of book buyers who also purchased an e-book increased by 17 percent in 2011, compared to 9 percent in 2010 – well below the 25 to 30 percent growth that some had hoped for.

When I read this as ‘the number of book buyers who also bought a book rose from 9% to 17%’ it looks like an 89% increase in book buyers who also bought ebooks. Sure it wasn’t the 175% or 250% increase (as would be the case if the figure reached 25% or 30%) as some people seemed to expect, but it is still reasonable. For the record, I read it that way following a Twitter exchange with the author Laura Hazard Owen (who has been writing some great pieces on the publishing and digital change):

@eoinpurcell it's from 9% to 17%. I will fix piece if that's not clear!

—
Laura Hazard Owen (@laurahazardowen) January 25, 2012

Then there is the section that says:

Seventy-four percent of book buyers have never bought an e-book (and 14 percent of those actually own an e-reader or tablet but choose not to use it to read e-books).

Parse that for a moment. 26% of book buyers HAVE bought ebooks and 14% of 76% (10.5%) also  HAVE ereaders but don’t use them. Which means that circa 36.5% of book buyers have ereaders though they may or may not use them. Meaning, that while ebook purchasing might not have spread as widely as we thought, ownership of devices seems to be spreading pretty well.

Finally there is this startling statistic:

There’s a bright spot for e-book growth: Around 7 to 12 months after buying their first e-book, 72 percent of power buyers switch over to e-books exclusively.

Which reinforces the idea I’ve been pondering for a little bit, that this current phase of ebook development is about making heavy readers, heavy ereaders.

It is the reason why B&N needs to keep Nook locked into its stores and indeed why B&N has been so successful at gaining market share, because it was converting exactly the right people BOOK BUYERS into ebook buyers. It is why Amazon’s efforts are targeted at converting their best book buyers into digital readers hence their seemingly crazy popularization of the $9.99 price point (which I might add I liked, but hey) and why a broader strategy for converting light readers might not make sense just yet.

Getting ereaders into the hands of medium and heavy readers and encouraging them to use them EVENTUALLY is the key for now. There’s a whole different battle to come once that happens. Won’t that be fun?
Eoin 

By which I mean if the ebook market is worth $1 million then to double it need only increase by $1 million however when the market is $100 million it needs to increase by $100 million to double and when it is a $1 billion it must grow by a full $1 billion in order to double. Needless to say whereas $1 million in increased sales is hard to find, $1 billion is considerably harder.

On top of that, there is a real need to break analysis into markets to account for different market conditions. The UK is not the US and Ireland is not the UK. What’s more a UK publisher must react to UK market conditions. This has echoes of some of my thoughts about different rates of digital change from 2010. For instance, the UK is in the midst of a huge shift to digital BUT that shift has really happened over the last few months. 1.3 million ereaders were sold over the Christmas period and the UK market has as a consequence flourished since December.

Which makes the Quercus numbers all the more interesting. In 2011 digital sales accounted for 11% of their revenue, but grew 270% in December 2011 when compared to December 2010 promising a nice digital year in 2012.

We continue to benefit from our significant investments in digital publishing and marketing, website development and social networking. For the year as a whole, Quercus generated approximately 11% of its income from digital revenues, while the growth in ownership of eReading devices over the Christmas period contributed to an increase in eBook sales of 270% in comparison with the previous December.

via Quercus Christmas trading update | Quercus Books.

It’s entirely possible that many of those ereaders will remain idle, many will fall out of use, but enough will remain active to shift yet more readers who were once print dedicated into either digital dedicated reading or hybrid print/digital status. If those readers are heavy readers (as I suspect they will primarily be, after all why give someone who reads one book a year an ereader?) that will shift considerable numbers of digital units in 2012.

So the UK situation is very different to the US situation. We should avoid blanket statements.
Eoin 

In one room, a virtual wallpaper of Nook color devices hangs in rows neat as a checkerboard. A common area holds a foosball table and a cooler of VitaminWater. Some of the walls are made of silver-colored mesh. Some of the cubicles are lime green.

via Barnes & Noble, Taking On Amazon in the Fight of Its Life – NYTimes.com.

Sounds like Google or Facebook or a dozen other tech start ups no?

The one rolling in tomorrow has generated considerable coverage and is variously supposed to involve new authoring tools for ebooks, a revolution in the text-book industry or new distribution routes for self publishers.

Of course that is all fine except that there are some pretty good authoring tools for ebooks, not to mention many fine companies supplying such services. There are already several companies pursing the text-book market with a view towards radical change. Apple’s ebook distribution platform is frankly lacking (how many companies could get away with providing direct access to their self-publishing services ONLY to those who have a MAC*) so I hope personally that they decide to improve that side of their operation. Looking at their marketing image and text, I reckon I’ll be disappointed.

It is possible that Apple will launch something revolutionary tomorrow but I doubt it. I can’t help but feel though that Apple seems to be seen as a white knight by commentators inside and outside of the book publishing industry.

This is almost completely unlike Amazon, a company that has TRULY revolutionized the book publishing industry (or rather rode the wave of the changes revolutionizing the book publishing industry like no-one else), but is becoming the favourite target for attacks.

Don’t get me wrong, I’m no Amazon apologist (In fact I pointed to their long game fairly early on) I just think we need to keep our heads and a fairly hefty dollop of skepticism in hand when we discuss Apple. It has an impressive track record of being right, but its victories are Apple’s and rarely (except as a handy by-product) anyone else’s.

Keep that in mind tomorrow,
Eoin

* Yes, I know you can use an aggregator, but please, why is this a restriction?

When unexpected things happen, Amazon, unlike most companies, does not immediately respond with knee-jerk PR damage control. As Bezos said during an interview a while back, the company is willing to be misunderstood and endure temporary PR blowback. The larger gameplan is too important.

Which is why the current furor over the price comparison app, and the related #OccupyAmazon reaction, is unlikely to elicit any dramatic responses from Amazon. Where other companies might respond with overwrought displays of contrition and dramatic conciliatory gestures, Amazon will likely do the minimum necessary, wait out the storm, and move on.  Amazon dealing with its market is the corporate equivalent of a patient, low-reactor parent dealing with a child throwing a tantrum.

More than any other corporation of the Internet age, Amazon embodies the emerging culture of business strategy. It is the General Electric of our times, and Bezos is the Jack Welch. When the definitive book on corporate strategy for the early Internet era is written, Amazon will be the main example, not Google, Apple, Microsoft or Facebook. Those are great companies too, but their greatness lies in other departments. As far as corporate strategy goes, they are mediocre players, not grandmasters.

via Why Amazon Is The Best Strategic Player In Tech – Forbes.

As some authors have pointed out, even if you take advantage of Amazon’s self-publishing options to avoid having to get a traditional publishing deal, you’ve really just exchanged one corporate overlord for another. For most writers, the ideal would be an industry with multiple players — but unfortunately, their own publishers have helped make that even less of a possibility. And Amazon is the major beneficiary.

via How publishers gave Amazon a stick to beat them with — Tech News and Analysis.

The Office of Fair Trading has cleared Amazon to take over The Book Depository, ruling the merger would not lead to a lessening of competition within the UK book industry.The OFT decided there was limited pre-merger competition between the two companies and found that competition within Amazon Marketplace would continue to be strong after the takeover. It said The Book Depository only accounted for between 2-4% of the online market for physical books, and that TBD had most of its growth in overseas markets rather than the UK.

via OFT gives go-ahead for Amazon/TBD merger | The Bookseller.

Publishers, agents, authors, wholesalers and many others all need to respond and some have already made significant efforts to do so, but it is clear that bookshops are the facing the full thrust of this change right now.

The way I see it bookshops have three choices:

1) Bet On Digital
Betting on digital means much less emphasis on real bricks and mortar locations. In order to win in this space you’ll be taking a leaf out of Barnes & Noble‘s book and building a real platform for content that provides self-publishing access AND access for traditional publishers direct to your platform and be shifting readers to your platform in your store(s).

Waterstone’s looks like it is about to embark on this strategy by launching its own device next year, I fear it will be too late. Barnes & Noble is two years into this strategy and is well on the way to building a convincing platform with a significant share of the US ebook market. They could still fail, which only goes to emphasize the importance of acting quickly.

Make no mistake about this choice, it means closing bookshops and shedding staff and soon. It’s a hard choice for chains because up until recently floor space devoted to print books were hallmarks of success. That is no longer true.

Smaller chains and independent book stores are faced with an impossibly high barrier to entry here, their own device is an excessive cost, as is creating their own platform and I don’t see a real way for them to pursue this strategy unless they can develop a loyal customer base for a curated ebook offering. It’s not an impossible prospect, but it will be damn hard for them to take this option.

2) Bet On Retail
This is perhaps the hardest decision for a bookseller to make because in essence it involves admitting that the product that to date has defined your business, books, is no longer the most important aspect of your business.

It seems to me that WH Smith has decided that its focus should be on retail, that its retail space can be best used to sell anything and perhaps over time that means fewer books and more of the other things it sells. If that is the case, then being in the digital book business is a distraction not an essential element in its future, hence the Kobo Deal.

By working with Kobo, Smiths leverages the book portion of its business to gain revenue and to sell devices while shifting its actual in-store focus towards products that deliver more revenue and profits. The company may feel some regret about that but as a retailer it will have to be unsentimental and profit driven. The flip side of not developing its own platform and device is a significant investment saved for another opportunity.

On balance, I think it’s probably the right decision. Either ebooks take off and WH Smith must replace a large section of their product line up OR ebooks plateau and what has the company lost?

I suspect that here in Ireland Eason is following this strategy, but the signs could point either way.

3) Bet On Print
By betting on print, bookshops will be making the assessment that they cannot compete in another retail space (or that they choose not to) and, as I suggest above in 1, they simply don’t have the resources to compete in digital.

Nothing about betting on print prevents a bookshop or a chain from doing a deal with an ebook platform to sell a device and provide access to an ebook library. That will bring some revenue but it won’t  (in all likelihood) be enough to replace the revenue lost to most bookshops of falling print sales.

The bet here is that YOUR bookshop or chain will the lucky one. The one with just enough customer loyalty, just the right location, just the right level of population density, just the right amount of print loving readers, just the right range of books in the right formats and at the right prices, just the right amount of business nous and just the right amount of marketing know-how to rise above the other bookshops hoping the same thing.

Sadly, some bookstores probably most of them will lose this gamble. Many will lose because of bad luck or poor location, nothing to do with how good a bookstore or a bookseller they are which is a slightly depressing reality, but one we should face.

The winners may well do pretty well because although the overall market for print books shrinks, they will have an increased share of that market and also because the market for print will change most likely towards higher value books.

There’s a final choice of course, which is to do nothing and keep on rocking. I don’t hold out much hope for survival for those who make that choice.

All other things being equal, I can see a global ebook marketplace that some years from now is 90-95% controlled by Amazon, Apple, Kobo, and a local player in each country, with Google getting most of the rest. Google may punch above its weight on the long tail because discovery of the obscure or highly niched content might be their forte; one scholarly publisher told me at Frankfurt that he is already seeing some real growth in his Google sales, which no trade publisher has said in my earshot yet.

via Kobo’s new deals propel them into the top tier of global ebook competitors – The Shatzkin Files.

Yesterday Google brought its UK ebook store online. Last week, iBooks launched in over two dozen countries around Europe. And this only six months since Amazon launched Kindle in Germany.

It is clear now that the pace of adoption of ebooks will rise in Europe if only because availability of ereaders AND ebooks is increasing rapidly here.

What’s more the price for the new Kindle, at JUST sub-€100 is very attractive. I can see many Kindle boxes under the tree this Christmas.

That means the luxury of waiting is no longer an option for booksellers. Waterstone’s may not have time to wait for the perfect ereader. To my mind it NEEDS to launch one pre-Christmas.

In short, the game is afoot and who wins is by no means clear!
Eoin