How the Kindle and Its Kin Will Reduce Book Sales
Posted: October 21st, 2008, by Joseph J. Esposito
The Kindle is a watershed event in electronic publishing. It is not the first ebook device, and it may not ultimately be the one that will prevail (it could of course be one of several). But its appearance marks the point where ebooks move from theory to actuality. Whether the leading device is the Kindle, the Sony electronic book, a cell phone platform, or some variant on an iPod, ebooks are here to stay. In discussing the Kindle, then, I am thinking about ebooks in general.
Not a few people have been waiting for “the ebook moment” for years. The arguments in favor of ebooks are many and include: efficiency in the supply chain (because there are no atoms to move around); the ability to store multiple titles on one device (a boon to travelers); and the added value of links, bookmarks, and adjustable text size. We should add to this a very important aspect of ebooks: the coolness factor. I read a post recently by a woman who extolled the virtues of the Kindle, which she took to bed with her. She could have taken a print book to bed, of course–she could have dragged into bed the entire Oxford English Dictionary (think of all the dirty words!)–but that would not have been as cool. We love some gadgets precisely because they are gadgets.
One of the unintended consequences of the Kindle and its brethren (desirable for readers, more woe for publishers) is that it will reduce the number of books that are actually sold. This will happen not because of piracy (with the proprietary Kindle, piracy may be a small problem, though ebooks built with open standards may pose larger problems for publishers), but because the architecture and business model for the Kindle support a “buy only when you need it” frame of mind, aka “just in time” inventory management. In the hardcopy world, where many books (no one knows how many) are bought “just in case,” the number of books purchased exceeds the number of books read. The Kindle will remove the excess, adding to the legions of misfortunes of publishers and authors.
Let’s back up to the bricks-and-mortar world to see why this will be so. When John Doe steps into a bookstore, he browses a bit. He may buy a specific title that brought him to the store in the first place, but he also may buy something that happened to grab his attention. He buys that second book with the intention of reading it after book #1 is completed or perhaps for some future time–that upcoming vacation in Aruba–where, blessed with time, he will immerse himself in a book. Book #1 is just in time, #2 is just in case.
Prior to departing on that trip, however, something may have come up. A friend recommended another book (worse: a friend wrote a book, signaling a requirement to read it), or something broke in the news that demanded attention in the form of a book, or Doe’s mood has changed, or any of dozens of other reasons. The result: Doe now has in his hands book #3. This is also just-in-case. If Doe is compulsive, the number of just-in-case books grows and grows; if Doe’s house is like mine, the number of not-yet-read books greatly exceeds one’s life expectancy.
With ebooks you don’t purchase a title to have it waiting for you when you get time to read it. You purchase at the very moment you are going to read it. There is no reason to purchase it sooner, because it is always available: there, in the Cloud, living 24/7 on Amazon’s servers. What the Kindle does is introduce digital accountability to book publishing and purchasing. It saves consumers money, but it does so at the expense of publishers, whose income statements for decades have been propped up with the sale of things that ultimately do not get used.
Digital accountability has already reached into many corners of the publishing industry; in this respect, the nefarious implications (from a publisher’s point of view) of ebooks are nothing new. Retailers have computerized inventory systems that, when they are working well and are properly managed, help to cull slow-selling stock. Librarians review Web statistics for online journals, canceling those that are not used. And publishers have always reviewed their own sales records in order to help determine what new properties to invest in. What’s different about the digital accountability brought about by ebooks is that it does not simply result in one title being chosen over another; it results in the wholesale reduction of the total number of books sold. It is an industry-killer–or, if that language overstates the case, an industry-diminisher.
What’s at issue here is that publishers who look to ebooks for grand sales opportunities are in fact taking steps that reduce the overall market. There are exceptions to this, however. College textbooks will likely sell more copies in electronic form, since many students currently fail to purchase expensive hardcopies at all. And in the developing world, it is possible that digital texts may find markets that print never could (assuming the digital infrastructure can be put in place). But for consumer books in the developed world, ebooks shrink the market.
Not that publishers have any choice. If consumers want their books in digital form, a publisher would be foolish not to satisfy the demand. After all, if HarperCollins decided to be print-only, it would lose sales to Simon & Schuster, if S&S decided to be both print and digital. This is a fight for market share, however, not a strategy for growth. Publishers who have hoped that ebooks could be a vehicle for growth will have to look elsewhere.
October 22nd, 2008 at 7:22 am
Anecdotally, at least, Kindle users report that the number of books they purchase goes up, not down, after acquiring the device. Without hard numbers on user behavior I’m not sure it’s possible to say either way what effect ereaders have on purchasing decisions.
October 22nd, 2008 at 8:48 am
I’m reading more since I bought my Kindle. Lots more. And I’m buying just as many books. I tried a new book yesterday and loved it so much, I immediately logged on and bought the rest of the books in the series. I download samples of books as my “just in case” and dip into those samples when I’m waiting in line somewhere. If I like the sample, I immediately buy the book and it is promptly delivered to my Kindle by whispernet. When my eyes get tired, I can up the font. If I finish a book while I’m out somewhere, I can immediately start another. I love my Kindle.
October 22nd, 2008 at 9:14 am
This argument also assumes that the vast majority of books are bought in brick and mortar stores. That’s not my experience. I have been buying 99% of my books from Amazon for a decade. All that has changed for me is that I am now buying ebooks instead of paper books.
LHN
October 22nd, 2008 at 10:41 am
joe, this post is silly. just plain silly.
but it does show us, however, just how
_desperate_ the publishing industry is…
they think they _depend_ on selling us
books we’ll never read. think about it!
-bowerbird
October 22nd, 2008 at 11:57 am
I too find myself purchasing entire series for my Kindle. The problem I find is that titles from many popular authors have yet to be released in e-book format. Also, instead of browsing store isles, I now scan book review articles searching for new titles to add to my growing e-book collection.
October 22nd, 2008 at 1:28 pm
Interesting conjecture, but it will be a long time before we know whether it works out that way. I, for one, always have a couple of unread books on my Kindle ahead of what I’m reading now. I also read more books since I have it than I did before. It IS true that physical books, whether bought in a bookstore OR online (you shouldn’t have made it strictly a brick-and-mortar example; it doesn’t have to be) can’t be obtained instantly when you finish the one you have at home in the middle of the night. How well or frequently people plan for that is as open a question as what the buying habits of the Kindle buyer will be.
PS: Kindle is definitely NOT the last word on ebooks. There will be others. There will probably be device fragmentation even when there is a pretty big market. Different devices are preferred by different people for different reasons, and there’s no particular reason for that to change.
October 22nd, 2008 at 1:51 pm
I find that I’m reading more since I bought my Kindle and I’m still buying books that I don’t necessarily get around to reading. I travel so I make sure I always have a variety of books available to read depending on my mood. Like some other commenters, I find a new author I like and end up buying the whole series.
The major change in my behavior is that if an author doesn’t make books available in an e-format, I probably won’t read their books. I prefer reading on the kindle.
October 22nd, 2008 at 3:54 pm
Pure conjecture, and pure hogwash. Upon what are you basing this notion? You appear to be making it up out of whole cloth — simply imagining what MIGHT occur.
Have you used an ebook reader, specifically a Kindle?
October 22nd, 2008 at 7:45 pm
[...] Joseph Esposito posits that fewer books will be purchased in a digital world because… the architecture and business model for the Kindle support a “buy only when you need it” frame of mind, aka “just in time” inventory management. In the hardcopy world, where many books (no one knows how many) are bought “just in case,” the number of books purchased exceeds the number of books read. [...]
October 23rd, 2008 at 7:12 am
Sorry, Joe, but I’d have to say you are 100% wrong on this one.
Anecdotal evidence: Take a gander at my own Kindle. Lots of books on there that I got for free or very cheap and intend to read…eventually. They take up no space and are available with a couple of clicks anytime.
Broader evidence: E-books sales reported by the AAP have grown over 50% for the first nine months of 2008 compared to same period in 2007 (and that’s only for AAP’s 78 member publishers, a small fraction of the total). But overall print book sales remain more-or-less flat, only significant decreases in specific niches.
All available evidence, including anecdotal from e-book reader users and more significant data from Amazon itself, demonstrate that e-book sales are additive to, and not replacements for, print book sales.
As I have been saying in my blog for quite some time now, publishers need to drop the idea that they are in the book business and realize that they are in the information business. Those that do will adapt and survive. Those that don’t will wither away.
We need to provide our information content in whatever format our customers want and need.
Walt Shiel
Publisher, Slipdown Mountain Publications LLC
October 24th, 2008 at 1:52 am
[...] How the Kindle and Its Kin Will Reduce Book Sales - Publishing Frontier [...]
October 24th, 2008 at 8:27 am
[...] J. Esposito, in Publishing Frontier, says: One of the unintended consequences of the Kindle and its brethren (desirable for readers, [...]
October 24th, 2008 at 3:56 pm
[...] 24, 2008 by hindesite In Publishing Frontier, Joseph J Esposito predicts that ebooks are going to kill publishing. What a crock - this [...]
October 25th, 2008 at 1:00 pm
I think its all about how the product is managed.
Technology is moving extremely fast and at the end of the day you have to see who is winning.
When music and movies became freely available on the internet to download, both those industries suffered.
Today less movies are made, large studios have hung onto fanchises, Batman did well this year, so there no way Warner Bros will not do another one and another one, Spiderman 4 and 5 are both coming out from Sony. Can you think of anything Sony pictures have made this year?
The music industry has had very low sales and people just say, people are not into music anymore. I doubt that is true, I think its because people will download it for free and not buy the actual album in a record store. From this many people have seen record stores close down over the years.
I think with ebooks if not managed correctly, large amounts of books will become free and no one will win. Imagine all of John Grishams books become available for free online ( like they not already ) and random house tells him he cant write anymore books and they do not sell. The reader looses out on new and excellent reading material.
I think Sandra’s above comment that if the author is not available on Kindle she not reading them is lame. I think its more your lose to the great author or novels then to ebook readers.
I think the saving of the trees, transport and other costs in using the ebooks and kindle will help the earth and money. I think bookstores will have to change and adapt. I think if managed correctly, publishers will have markets for published books and electronic books. I myself prefer the printed book. I have downloaded alot of ebooks - ie the full chronicles of narnia series for free and read it. So I think publishers must be very careful how they promote ebooks, as so much can be lost before they know it.
Lets see what happens in the future
October 26th, 2008 at 1:00 am
[...] week: My rebuttal to Joe Esposito’s post. Email me your thoughts on that topic via jane @ dearauthor.com. Tagged as: Amazon, ebook-reader, [...]
October 27th, 2008 at 11:25 am
I think you left a big hole in the article there, Joe. For every book John Doe buys “just in case” there are three that don’t get sold at all (average rate of returns on physical books is somewhere in the 35% range, so ten copies of stock on the shelf means three of them won’t get sold for whatever reason). The bookstore then returns or remainders them (or at least, the covers) for full credit, which means the publisher takes a loss on them (production, warehousing, and shipping for a non-sale that generates no income). The ebook is not subject to returns or remainders, so for every one ebook John Doe doesn’t buy for his kindle, there are three copies that don’t get returned to the publisher and written off as a loss, that don’t require warehouse space or shipping expenses, and that don’t use additional physical resources to produce. Your lack of “just in case” purchase is offset by lack of cost of physical stock (among many other things, not the least of which is online impulse buying, too).
November 2nd, 2008 at 1:00 am
[...] a very smart mind in the publishing and epublishing world, argued a week or so ago that the Kindle and its “kin” would reduce overall book sales. I admire Esposito and his thoughts about publishing but in this case, I find [...]
November 2nd, 2008 at 10:38 am
I have nine e-books waiting for me to read. I don’t buy books when I NEED them. I buy them when I WANT them. That hasn’t changed with e-books.
I estimate that my spending on books has doubled since I started to buy e-books.
I buy the same number of hard copy books as I have in the past. After all, I only like to read novels as e-books. For everything else, I want hard copies.
I agree with Walt that my e-book purchases are additional and rarely replace my hard copy purchases.
November 3rd, 2008 at 6:02 am
I say hogwash. I have three books from Jonh Ringo, two from Laurell K. Hamilton (soon to be three), one or two from Raymond E. Feist, and at least several others I purchased when they came out in eBook format, but just have not made it to the top of my reading list.
I’ve been reading almost exclusively in eBook formats for several years now (about 98%), and I find that I actually buy more books in advance than I did before, as I can have several to many choices for when I finish a book, especially when I’m reading a series that I am catching up on. This way, if I finish up a book halfway through my lunch hour, I can start reading the next in the series right away! Or, if I feel like something else, I’ve got plenty to choose from as well.
I can see the point a bit as the Amazon Kindle (and yes, I have one) has built in data-connectivity and a functional store portal on the device, but even so, I still find I do the same thing with books in the Kindle format: Buy them when convenient, not when needed.
November 3rd, 2008 at 6:36 am
[...] I read this piece on SF Signal the other day wondering if e-books (as currently exemplified by the Kindle) would end up killing or at least diminishing the publishing industry. It links to this article which suggests that it certainly will. [...]
November 5th, 2008 at 4:44 am
[...] Will Amazon’s Kindle reduce book sales or won’t it? Experts disagree, but in any case, reader should begin to benefit from the availability of their favorite titles in inexpensive electronic formats. [...]
November 17th, 2008 at 1:27 am
This article reached the right conclusion for the wrong reasons.
eBooks will reduce book sales, but not for the reasons you state.
First, you’re underestimating piracy. Pirates are clever. They’ll get around DRM just like they’ve gotten around it in the music and movie industry. It’s not hard. They’re already doing it.
Second, you’re confusing sales dollar volume with sales unit volume. As all the comments prove, eBook readers encourage people to buy more books, not less.
However, the price of eBooks are 1/2 to 1/3 of the price of physical books. Therefore, eBook readers will have to buy 2x to 3x more books so that the industry doesn’t see any revenue loss. That’s unlikely to happen.
The same thing happened with music. Volume has soared thanks to iTunes, but revenue has crashed. DRM hasn’t saved the music industry, nor will it save the book industry.
Francis Tapon