State of the eBook world at the end of 2010
Kindle: It’s impossible not to include the Kindle on this list. Amazon has hung onto their marketshare and expanded onto Mac OS X, Blackberries and Android devices. Not to mention their existing iOS and Windows programs! Adding to their success, analysts now believe Amazon sold a whopping 8 MILLION kindles this year. And Amazon themselves have said the Kindle 3 is their best-selling item of all time (beyond even Harry Potter)! So much for the iPad hurting Kindle sales!
B&N/NOOKbooks: A year ago B&N was just getting rolling in the eBook world, and now they’ve gathered almost 20% of the market. Very, very impressive début and they’re working hard to bridge the eBook and paper book businesses. NOOKcolor is an excellent device, and B&N is going strong with apps on several platforms. Plus they were just out announcing the NOOK line as their bestselling product ever, and that NOOKbooks outsold physical books over Christmas! Big news!
Publishers: I hate to include them on this list, but it’s impossible to not acknowledge that the agency model is quite the coup and a symbol of how much power publishers still have. Even with more authors pursuing their own methods of distribution, publishers have enough influence that they single-handedly changed how eBook distribution and pricing was done. That’s a win for them, even if it’s not for consumers.
Sony: Despite the positive reviews they’ve been getting for their latest line of devices, this has been a lousy year for Sony in the ebook world. They came in late to the connected reader game, and they’re losing valuable retail contacts. Target. Wal-Mart, Borders and Best Buy all started carrying competitor’s products, meaning shelf space and display time for Sony Readers disappeared. They may have been the company that kicked off modern ebook readers, but it looks like the market is leaving them behind.
Fictionwise/eReader: Just because they’re still around doesn’t mean they’re getting much love.
Consumers: Where to start? The agency model may be a win for publishers, but it’s a big loss for consumers. We’re left without price competition, coupons, or flexibility. Plus there’s the other publisher shenanigans like holding back new releases in ebook form to boost hardcover sales. Overall, not a win for buyers. In addition, the continued fracturing of the DRM schemes used by each bookstore makes everything that much more uncertain for ebook fans. No matter how much you love the store you buy from, we’re all at the mercy of B&N, Adobe, Amazon, and Apple to keep the servers going and the lights on…so overall we’re losing to the whims/desires of publisher and store interests.
Google Books: It’s tough to slam Google Books as a total failure since it’s only been available for a few weeks. It’s boring, but failure is harsh. So, for now, it’s a “wild card”; it could land as a winner or a loser, but until there’s some clarity (and a chance for some needed updates), it’s too early to make a call.
Smaller manufacturers: You can’t really measure the value of a smaller manufacturer or eBook store on the same scale as Amazon and B&N. For example, the Jetbook Lite is a great device. But Ectaco is a small company, so for them, a success might be only 10% of what Amazon might consider to be a winner. And it’s not like Ectaco, Pocketbook, Aluratek, etc are releasing their sales numbers. So the best we can tell is this-if they’re still releasing updates and supporting devices, then the lights are still on somewhere in the company, and that’s a win.
Kobo: This is a weird one. They’re a scrappy company, and feature for feature they can compete nicely against Amazon and B&N, but at best they are a very distant third. They’ve partnered with Borders and Indigo, but Borders is bleeding cash, so the value of any partnership there is questionable at best. Kobo is pre-installed on the many Android devices and has a similar deal with Blackberry for the Playbook, so they’re getting in consumer’s hands…but they simply don’t seem to have everyday name brand recognition. And they have a line of eBook readers that’s very nice but aren’t terribly price-competitive with their more well-known rivals. Essentially for every positive, there seems to be a negative; hopefully, they’ll tip the scales in a positive direction next year!
Refreshed hardware: Here’s a few easy predictions; we’ll see updated Kindles and NOOKs in 2011. More than likely B&N will refresh the NOOK line with Pearl eInk screens, and I don’t think anyone would be shocked if Amazon tried to match B&N with a color Kindle. If Amazon does wade into the color reader market, we will probably see some minor price drops across the Kindle line, and similar drops at B&N. One wildcard: whether or not Amazon really tries to one-up the competition with a Pixel Qi or Mirasol screen.
eBook Pricing/Agency Model/Delayed releases: Amazon (and to a far lesser extent Kobo) are probably going to push harder for pricing flexibility than B&N. Both Amazon and Kobo were more aggressive pre-agency model, and my guess is that they will still seize every opportunity they can to re-assert some control. Kobo is big on coupons, and Amazon has long offered download credits on their other digital media products. If both had the opportunity to do so, they would. B&N, on the other hand, walks a fine line between growing the eBook business and taking too much from their struggling brick and mortar retail side. Amazon benefits equally, if not more so, from ebook sales (no shipping and warehouse costs), and Kobo is purely an eBook business. Both of them have far more to gain from fighting for less restrictive ebook models, better pricing, and of course dropping the insipid delayed release plan for new books. With eBook sales skyrocketing over the holiday season, this gives Amazon and Kobo some leverage against publishers. They aren’t just retailers, they’re the gatekeepers to buyers, and this gives them some negotiating power.
Retailer marketshare: Amazon will probably see some marketshare erosion from competition from B&N, Kobo, iBooks, etc. I still think they’ll remain on top, but we might see them give some ground to competitors. I think we’ll see more explosive growth from Feedbooks, Smashwords, etc. Their offerings are cross-platform and tend to be cheaper, as well as catering to self-published, public domain, etc titles. They’re more niche, but since they cater to every platform possible, plus they appeal to price-conscious readers, they’re going to benefit from increased eReader and tablet sales.
Publisher/author relations: I see more mid-list authors going the J.A. Konrath route, and either self-publishing or breaking free of their traditional publishers with a more direct sales contract. Publishers have played games with pricing and releases, and authors are getting hit with one-star reviews and other nasty-grams by consumers. And authors don’t live in bubbles; they have blogs, they’re on twitter, and they know the major impediment to making their readers happy are the tricks the publishers are playing and not the actual books. Combine that with the increased publicity and success that self-publishing/retailer publishing has received over the last year, and you have a potent mix and a real chance that the publishing landscape may see some major shakeups.
eBook/Paper book proportions: It’s only a matter of time before eBook sales overtake paper book sales for a more extended period of time (as in, not the holiday season). Hardcovers are an easy target, but the real news is when quality paperbacks are overtaken by eBooks. I don’t know if it will be 2011, but when you hear QP sales have fallen to eBooks, that’s a huge blow to paper books. Quality paperbacks are the ones that run you around ~$15, bigger than mass markets but cheaper than paperbacks. They are the bread and butter of the paper book world. Before eBooks, if you wanted a book but didn’t want to pay hardcover prices, you snapped up the quality paperback. Now eBooks have eaten hardcovers, and when they eat QPs it’s time to check B&N and Borders for a pulse!
Digital Rights Management: Sadly, not going away anytime soon. Barring something really crazy like one of the big publishers dropping it, nothing will change in the next year.
iBooks: Apple has been extremely lax about iBooks so far. It’s clearly the red-headed stepchild of the iOS universe. The big question is whether they intend to change that and if so how. More aggressive pricing, managing to get Random House on board, and pushing for exclusive deals with authors are possibilities, but the real body check will be if they make a move against the other eBookstores in the app store. I don’t see them blocking Kindle and NOOK from the iPhone, but Apple could certainly make life more difficult for them in little ways (delaying update approvals, leveraging the iBooks/iTunes connection, etc.) Apple has more than enough money in the bank to make iBooks go from a minor hobby to a major powerhouse, and the big unknown is whether they will or not.
Publisher games: This year we saw the agency model and delayed eBook releases. I don’t know what we’ll see next year, but I’m sure there will be more “strangle the eBook growth to maintain the paper book model” type shenanigans. One thought that crossed my mind: if publishers dropped the MSRP of hardcovers slightly, and kept the higher agency pricing intact on eBooks, it would lower the price gap. It might be a way to offer a perceived value and stem the bleeding from hardcover sales at the same time. In any case, I have no doubts there’s something up their sleeves.
Hardware/supply issues: eInk screens are made by PVI, Inc. Mirasol is coming from Qualcomm, Pixel Qi is trickling into devices. All these are great screens, but they’re hinging on each company manufacturing them in quantity and quality. It’s always an unknown, especially when you are wading into new technology. A high-publicity release could be derailed with hardware failures or parts being out of stock.
Borders bankruptcy: Borders is in very, very, very bad financial shape. Like, the Doomsday clock is one minute to midnight bad. Whether they merge with B&N, go private, or simply implode one day, it’s going to shake up the book world. Not only will it have an impact on B&N, but Borders is a big investor in Kobo. So whether B&N and Borders join forces or Borders just slips away, it has the potential to harm Kobo deeply and seriously shake up the eBook and paper book industries.
New players: A year ago the iPad was just a fevered rumor, and the NOOK had just debuted. Four years ago the Kindle wasn’t even rumored. In the last year, we’ve seen two new NOOKs, new Kindles, Sony Readers and Kobo eReaders, not to mention piles of less well-known eBook readers and tablets. Who’s next to enter the market, and what new innovations will they bring?
What are your predictions for 2011? I’ve shared my thoughts, and now it’s your turn to share yours below!