Watching Bezos: The future of books can be traced in acquisitions

Yesterday fellow blogger Ron Shevlin published an open letter to Jeff Bezos, proposing that Amazon should start giving away Kindles. He proposed that giving away their ebook device would be offset by the incremental ebooks they’d then sell, in a similar way to giving away razors as a way to sell high-margin blades.

I’m of the opinion that, unlink razors, ebooks are too much of a niche product to take off in any scalable way. It was author and blogger Nick Hornby who helped me see the light, when he pointed out that an ebook is a high-tech solution solving problems for a largely low-tech market segment.

Social Networks for Book Lovers

Instead, I think the future of publishing — regardless of whether the ink is real or virtual — will be better advanced through social networks designed for those passionate about books. Notably, I’ve been tracking Goodreads, and the 18-month-old Shelfari.

Jeff Bezos has been watching as well. Today we learn that Amazon just acquired Shelfari, three weeks after acquiring another competitor in the space, AbeBooks.

It’s a shrewd move for Amazon to shift more marketing dollars toward online social networks. If only for this reason: As true book lovers become more of a rarity, the urge for them to congregate will grow.

Long before the day when book lovers warm to a digital book, they will welcome a digital way to connect with other readers.

9 Replies to “Watching Bezos: The future of books can be traced in acquisitions”

  1. How did you conclude that book lovers will become “more of a rarity”? That’s like concluding that the number of music lovers declined because vinyl albums went out of style.

  2. the Kindle is reputed to have an adoption curve similar to the iPod. Considering Kindle is a first generation device with some noticeable flaws, it’s remarkable how well they’re doing already. Citigroup predicts $1 billion in Kindle revenues by 2010. Books will not go away anytime soon, but being able to tote around hundreds of books, as well as newspaper, magazines and blogs on a device about the size of a paperback that displays type easily visible in bright daylight could do for books what the iPod did for music. And the potential for epaper extends far beyond books.

  3. Thanks, Chuck,

    I do agree with your last point, that the potential for epaper extends way beyond books. But there are some differences between the iPod and the ebook reader. To quote Nick Hornby (see the link in the post above), “E-book readers have a couple of disadvantages, when compared to mp3 players: When we bought our iPods, we already owned the music to put on it; none of us own e-books.”

    I walked down your logical path myself once, Chuck, with the podcast. I thought it would be embraced because its so much better than radio. I forgot that radio stations are perceived as more available to play than podcasts. Thus their weak adoption.

  4. Jeff,
    I was speaking to E Ink, which makes the epaper upon which the Kindle (as well as sony’s ereader and several other ereaders are based) and theytold me that in the past couple of months, Kindle downloads have gone from 6% of book sales to 12%, which is quite a bit, given Amazon’s volume in book sales. I think the iPod analogy is illustrative insofar as the device (kindle/ipod) and the service (amazon kindle books/iTunes) are intertwined. It’s a no-brainer to download an ebook on a whim, since the transaction and the download combined only take about a minute, just as you can impulsively download a song or album on iTunes. And like with iPod/iTunes, you have an almost unlimited amount of information you can store on your device. Unlike with OLEDs and LCDs, you can read a Kindle in bright sunlight without suffering the eye fatigue you get from reading on a computer screen, for instance. Moreover, and perhaps most importantly, the economics make a great deal of sense for the publisher, the author, the reader and the planet. Without the need to pulp paper, publishers can save about $44 billion a year in costs (revenues from book sales are about $88B) and make even more money while charging the reader less and compensating the author equally well. Newspapers spend about 35% of operating costs on printing and delivery, for a product that’s garbage the next day. Usng epaper, we don’t end up chopping down trees and trucking pulp to printers and finished books to bookstores. Moreover, the reader doesn’t even have to leave his chair to buy the book; he just clicks a button. It seems to me to be a win all the way around. And consider that the Kindle is just a 1st generation device; the next generation, due in October or thereabouts (amazon won’t say) is said to have an improved interface and be much easier to use. There are already devices available in Europe, like the Readius, which combines a cell phone with a 5 inch epaper screen that rolls out. Maybe, as Nick Hornsby implies, we can’t simply download our books to a device like the Kindle the way we can add our tunes to our iPods, but people are still buying lots of books, both new and old, and being able to store them, as well as newspapers and magazines, on a portable well designed device might be as much a difference maker in publishing as Guttenberg’s press was. And I haven’t even touched on the interactive component implicit in epaper that could allow publishers to better suit the needs of their readers and make suggestions electronically, the way people can on Amazon books.

  5. Your link claims an increase in book sales versus the previous year. Couple this with the “1 in 4 Americans Read No Books” stat, and my conclusion is that passionate readers are numerous. It’s the passive or non-interested reader that is fading away. Am I wrong?

  6. I think this subject has become oversimplified with all of the hype surrounding the modest success of the Kindle. As we say about new technologies: if they solve a problem, or provide better quality at a lower price, they will likely succeed. Giving away the Kindle, combined with the lower price of eBooks addresses two of those points, but do we in fact have a problem: do people dislike reading books as they are offered today? Not to my knowledge. Book sales are trailing off very slightly (certainly by comparison to other media). For more data see:

  7. Chuck, thank you for the interesting stats on the Kindle, and reminders of why there are many conveniences and environmental benefits to going digital with our reading.

    And Thad, I appreciate the terrific link. Your “elevator pitch for the future of books,” is an excellent collection of statistics from reliable sources, and also, I think, a skillful analysis of those stats.

    The sobering statistic that “average annual household spending on books dropped 14% between 1985 and 2005 when adjusted for inflation,” is exactly the type of measurement I was grasping for. I’ve read my share of gloom-and-doom feature stories over the years about book publishing but obviously hadn’t captured any of the stats cited for reference in my blog.

    You and Nick Hornby are in accord when you state in your comment, “Do we in fact have a problem: do people dislike reading books as they are offered today?” I am a book lover. I love the feel, the heft, the very analog nature of books. Perhaps when I long gone there will be sufficient generations who look at printed books as so many vacuum tube radio tuners, and ebook readers will be the run and not the exception. Until then, the love affair with the printed book continues, regardless of how irrational that love is.

    Who said emotions had to make sense, huh?

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